Huge Payout in French Oil Giant’s Bribery Case

     ALEXANDRIA, Va. (CN) – Total S.A. will pay $245.2 million to resolve charges that it won oil and gas contracts in Iran by bribing a government official, prosecutors said Wednesday.
     The scheme allegedly took off in 1995 while France-based Total had its eye on developing the Sirri A and E oil and gas fields to re-enter the Iranian market.
     Prosecutors said Total made this happen by getting into bed with an Iranian official who chaired an Iranian state-owned and state-controlled engineering company.
     In a subsequent deal it characterized as a consulting agreement, Total paid an intermediary designated by the Iranian official, and the National Iranian Oil Company (NIOC) signed a development agreement with Total for the Sirri A and E project in July 1995.
     Over the next 2 1/2 years, Total paid approximately $16 million in bribes under the purported consulting agreement, according to the deferred prosecution agreement the United States filed Wednesday in Virginia.
     Total allegedly struck another consulting agreement in 1997 when it wanted NIOC to let it develop a portion of the world’s largest gas field, South Pars.
     After NIOC granted Total a 40 percent interest in developing the second and third phases of the South Pars gas field, Total spent the next seven years paying out approximately $44 million through the second purported consulting agreement, prosecutors said.
     Total allegedly characterized the $60 million it spent on these agreements between 1995 and 2004 as “business development expenses.”
     Prosecutors said the company failed to implement effective internal accounting controls, permitting the mischaracterization of the true nature and true participants of the consulting agreements and thus failing to maintain asset accountability.
     The Justice Department filed a criminal information in Virginia on Wednesday as part of the agreed resolution. It charges Total with one count of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA), one count of violating the internal controls provision of the FCPA, and one count of violating the books and records provision of the FCPA.
     Total’s deferred prosecution agreement has a three-year term. During this period, Total must retain an independent corporate compliance monitor and to continue to implement an enhanced compliance program and internal controls.
     The Securities and Exchange Commission meanwhile entered a cease-and-desist order against Total in which the company has agreed to pay an additional $153 million in disgorgement and prejudgment interest.
     Total also agreed with the SEC to comply with certain undertakings regarding its FCPA compliance program, including the retention of a compliance consultant.
     France announced Wednesday that it also plans to prosecute Total, its chairman and CEO, and two additional individuals for violation the foreign bribery law and other statutes.
     The Justice Department heralded the prosecution as “the first coordinated action by French and U.S. law enforcement in a major foreign bribery case.”

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