Total to pay $398 million in bribery cases involving Iran
Total has agreed to pay $398.2 million to settle US Foreign Corrupt Practices Act charges related to its acquisition of rights to develop oil and gas fields offshore Iran in the 1990s.
In a separate action coordinated by the US and French governments, French authorities said they have requested that Total, its chairman and chief executive officer, and two other persons be referred to Criminal Court for possible violations of French law related to the company’s Iranian dealings.
“These [US] settlements, the outcome of which are customary in the United States, allow us to put an end to this investigation,” Total Chief Financial Officer Patrick de La Chevardiere said in a press statement. “We look forward to continuing our work and in demonstrating our strong commitment to ensuring ethical and legal compliance with the laws around the world.”
In the same statement, Total said the French investigation had “reached a stage of resolution.” It said it “has not committed any offense under applicable French law.”
The settlements
The US charges capped an investigation begun in 2003 into a scheme through which Total is said to have made more than $150 million in profits.
In a 3-year deferred prosecution agreement with the Justice Department, Total agreed to pay a $245.2 million monetary penalty. It also agreed to cooperate on a monitoring and compliance program.
With the SEC, Total agreed to a cease-and-desist order in which it will pay disgorgement of $153 million in illicit profits and make compliance efforts in addition to those agreed with the Justice Department.
Consulting agreement
According to the deferred-prosecution agreement with Justice, Total in 1995 entered a purported consulting agreement with the chairman of a state-owned engineering company in Iran while seeking a contract with National Iranian Oil Co. (NIOC) to develop offshore Sirri A and Sirri E oil and gas fields.
Under that agreement it made payments to an intermediary that helped it secure the NIOC contract. Justice said those bribes totaled about $16 million bribes.
In 1997, Total entered a similar arrangement involving a different intermediary to win a contract with NIOC to develop parts of South Pars gas field. Over 7 years after securing a 40% interest in two South Pars development phases, Total made unlawful payments totaling about $44 million, Justice said.
“Total mischaracterized the unlawful payments as ‘business development expenses’ when they were, in fact, bribes designed to corruptly influence a foreign official,” the Justice Department said.
The department also said Total “failed to implement effective internal accounting controls, permitting the consulting agreements’ true nature and true participants to be concealed and thereby failing to maintain accountability for assets.”