CHICAGO (CN) – A former employee filed a state RICO complaint against BP, claiming the oil giant fired her for reporting the bribes it paid to run a joint venture in Ukraine.
Lillian Borich sued British Petroleum, three of its U.S. subsidiaries, and Robert Dudley, former CEO of BP and of TNK-BP, Russia’s third-largest oil company, which she says is 50 percent owed by BP. The other half is owned by a group of Russian businessmen, the Alfa-Access-Renova (AAR) consortium, according to the complaint in Cook County Court.
Borich claims she worked in BP’s Warrenville, Ill. office, from 2004 to 2007, when she was offered a job as a commercial marketing manager in Kiev, Ukraine.
Unbeknown to Borich, she says, that job would put her at the focal point of a corporate “civil war” initiated by BP’s attempt to take over the entire venture. Accepting the job was “career suicide,” Borich says in her complaint.
“BP Defendants scheme was coordinated by Robert Dudley and is referred to in this complaint as the Dudley Plan,” according to the complaint.
The complaint states: “The Dudley Plan was essentially BP p.l.c.’s attempts to impose its will on TNK-BP with an eye to ultimately taking it over, and was facilitated by an ostensible Western-style sales and distribution network conjured up by the Boston Consulting Group and Robert Dudley in early 2006. The Dudley Plan was introduced into an environment that was not only unreceptive to such strategy, but one in which such a strategy created significant and substantial tension between BP p.l.c. and AAR and ultimately caused a civil war within TNK-BP. By the time Ms. Borich was tasked with the role of commercial marketing manager in Kiev, Ukraine the AAR partners had recognized BP p.l.c.’s power play for what it was and had implemented a counterstrategy to thwart BP p.l.c.’s attempts to gain control of BP-TNK.
“The Dudley Plan for TNK-BP was also vigorously contested by the AAR partners who comprised TNK because they viewed the Dudley Plan as incompatible with the Russian/Ukranian marketplace. The Russian/Ukrainian marketplace was then and on information and belief remains governed by personal relationships, protected territories and previously established written and unwritten rules and agreements, many of which were of questionable legality under United States law and the Laws of England and Wales, irrespective of their legality (or lack of legality), propriety or acceptance in Russia and Ukraine. BP defendants and Robert Dudley were at all times relevant to the allegations and claims contained in this complaint aware of these facts but never disclosed them to anyone, including Ms. Borich.”
Borich says she was “tasked with carrying out the ulterior motives of the Dudley plan (i.e. favoring BP p.l.c. over AAR) by circumventing TNK’s existing personal relationships with its re-sellers, jobbers and joint venture partners by marketing BP-TNK products directly to end customers and consumers, with no regard for these existing personal relationships, protected territories, established rules or agreements or the illegalities associated with this activity.”
She adds: “Robert Dudley and BP p.l.c. knew, or should have known, that the Dudley Plan was no longer viable, if it ever was, and that it was never legitimate and would never succeed in the Russian or Ukrainian markets. On information and belief, others employed by BP defendants also knew of the Dudley Plan and its ulterior purpose, and that it was not only unachievable at the time Ms. Borich was offered the commercial marketing manager position, but that by placing her into this position Ms. Borich was being asked to commit career suicide and imperil her personal safety.”
She adds: “Had Ms. Borich been told the true facts and circumstances by defendants, Ms. Borich would not have accepted the position.”
After she arrived in Kiev, Borich says, “the utter failure that was the Dudley Plan was evidenced in part by AAR subsequently overturning Robert Dudley’s strategy for TNK-BP with AAR’s rogue purchase or a Ukrainian retail chain, Golden Cheetah, in the traditional ways of doing business in Russia and Ukraine. On information and belief, these traditional ways of doing business in Russia and Ukraine included acts and omissions that are illegal under U.S. law and the laws of the United Kingdom and Wales, including illegal payments, protection schemes and other forms of nefarious activity. Indeed, this way of doing business is well-known in the Ukraine and Russia and is euphemistically referred to as ‘krysha,’ which literally translates from Russian to English to ‘roof’. It is under this roof that business is sometimes done in Russia and Ukraine and was specifically the system under which TNK-BP operated a t the
time that Ms. Borich arrived in Kiev, Ukraine in June of 2007. The implementation of the purchase of the Golden Cheetah retail chain became known internally as ‘Project Jupiter’ and was headed by a Russian-speaking implementation manager named Felix Lunev. The purchase of the Golden Cheetah retail chain signaled the inflection point of AAR’s internal takeover within TNK-BP.
“The Dudley Plan’s fraudulent nature was covered up by Robert Dudley and BP defendants who were unwilling to convey the true facts publicly, instead using Ms. Borich as a pawn to continue Robert Dudley and BP defendants’ attempt to defraud the public, including BP shareholders and investors, into thinking (a) that the Dudley Plan for the TNK-BP joint venture was legitimate and viable; (b) that the Dudley Plan for the joint venture enjoyed continued success; and (c) that the Dudley Plan for the joint venture could legitimately and legally exploit the Russian and Ukrainian markets and provide valuable economic returns to BP through its investment in to the TNK-BP joint venture.”
Borich claims that BP knew its operations were illegal: “After Ms. Borich transferred to Kiev, Ukraine, she became aware of a number of improprieties that were already occurring including illegal payments to various persons in Russia and Ukraine that were rationalized by BP defendants to Ms. Borich as being the necessary way that business was done in Ukraine.”
She claims that “meeting notes make clear that bribes and kickbacks were a necessary component to obtaining government contracts, by providing 50 percent of profits to individuals solely because of their relationship with local officials, and setting up a business front through third-party intermediaries in an attempt to legitimize illegal activity.
“Thus while BP p.l.c. was holding itself out to the world as conducting legitimate and legal business practices through its participation in the TNK-BP joint venture, BP p.l.c. and Robert Dudley, on information and belief, either actively participated in illegal payments and bribes or was fully aware that these illegal payments and bribes were being made.”
Borich says her contract was canceled in March 2008, and she was placed on “garden leave.” She claims that “‘garden leave’ is not an official documented policy by BP defendants, but is instead a procedural device that BP defendants use arbitrarily and capriciously in an attempt to weed out employees from BP when BP defendants do not have legitimate grounds for termination, demotion or for other adverse employment actions.”
Borich says she was fired in November 2008.
“BP defendants were clearly using all means available to it to rid itself of Ms. Borich and her knowledge of the events transpiring in Ukraine and the improprieties that BP defendants perpetrated there,” the complaint states. “BP defendants’ stated reason for terminating Ms. Borich was job redundancy, but in reality Ms. Borich was retaliated against for what she learned about TNK-BP’s operation in Ukraine, the abject failure of the Dudley Plan and her reporting of the improprieties to BP’s ombudsman, Judge Stanley Sporkin, in August of 2008.”
Borich seeks punitive damages for racketeering, fraud, conspiracy, and breach of contract.
She is represented by Joseph Kish of the Synergy Law Group.