The French oil giant Total has agreed to pay $242.5 million to settle criminal charges alleging the company used middlemen to pay bribes to win lucrative contracts in Iran. Total was said to have paid $60 million in bribes between 1995 and 2004 that allowed the company to re-renter the Iranian oil and gas market. The bribes helped Total land contracts with the state-owned National Iranian Oil Company to develop oil and gas fields in and around Iran’s Sirri Island in the Persian Gulf. The bribes also helped Total land a contract to develop a portion of the South Pars gas field, the world’s largest gas field. The case was jointly pursued by the U.S. and French governments and was filed in U.S. District Court in Alexandria, Va.
The Paris prosecutor’s office announced that it wanted to pursue corruption charges against the oil giant and its chief executive after years of investigation. An investigation was opened in 2006 into the Paris-based oil company and its CEO, Christophe de Margerie, for alleged abuse of company assets and corruption of foreign agents in connection with oil and gas contracts. The prosecutor’s office said it was prepared to move forward with the case, but a judge still needs to decide if there is enough evidence. Total has issued a statement claiming that it has not violated French law.
According to a statement of facts filed in the U.S. case, the company admitted that it made $60 million in illegal payments under U.S. law. Acting Assistant Attorney General Mythili Raman, who said this case is the first coordinated action by French and U.S. law enforcement in a major foreign bribery case, added:
Our two countries are working more closely today than ever before to combat corporate corruption, and Total, which bought business through bribes, now faces the criminal consequences across two continents.
The charges were settled under what is called a deferred prosecution agreement, which requires the company to pay the $242.5 million, agree to cooperate with authorities and enter a compliance program for the next three years to avoid further action. Neil MacBride, U.S. Attorney for the Eastern District of Virginia, who prosecuted the case, said the “deferred prosecution agreement, with both its punitive and forward-looking compliance provisions, dovetails with our goals of bringing violators to justice and preventing future misconduct.”
Total, which most recently reported a quarterly profit of $2 billion, had reported last year it had set aside hundreds of millions of dollars because of the U.S. investigation. The case was brought in the U.S. under the Foreign Corrupt Practices Act (FCPA), which prohibits companies that are publicly traded in the U.S. from making corrupt payments to foreign government officials to obtain business.
There have been other similar cases. New York-based Ralph Lauren Corp. paid $1.6 million to settle a case under the FCPA alleging bribe payments to Argentine import officials. Wal-Mart is also under investigation on allegations that company officials authorized millions of dollars in bribes in Mexico and other countries to speed up getting building permits and gain other favors. It should be noted that the U.S. Securities and Exchange Commission has also entered into an order against Total requiring it to pay an additional $153 million.
Source: ABC News
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