Total Ends U.S. Bribe Probe as France Seeks CEO Charges
Total SA (FP) agreed to pay $398 million to settle U.S. allegations it made illegal payments to an Iranian official for oil and gas contracts as French prosecutors said they’ll seek charges against the company’s chief executive officer.
Total, France’s largest oil producer, was charged in federal court in Alexandria, Virginia, today with three counts of violating the Foreign Corrupt Practices Act as part of a deferred-prosecution agreement. The company also resolved related allegations with the Securities and Exchange Commission in an administrative case.
The Paris prosecutor recommended that the company and its CEO, Christophe de Margerie, stand trial on corruption charges along with two other people, the office said in a statement today. The investigating judge now has to decide whether a trial should go ahead.
“Today we announce the first coordinated action by French and U.S. law enforcement in a major foreign bribery case,” Acting Assistant Attorney General Mythili Raman said in an e-mailed statement. “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 $245.2 million criminal penalty is the fourth-largest obtained by the U.S. under the anti-bribery law, according to Peter Carr, a Justice Department spokesman. The settlement with the SEC includes disgorgement of $153 million.
The criminal charges will be dismissed after three years if the company abides by the terms of the agreement, which includes hiring an independent compliance monitor, according to court filings.
The Paris-based company said in its latest annual report that provisions for a $398 million settlement were made in June 2012.
In a statement today, Total confirmed it had been informed of the French prosecutor’s decision and said the company and de Margerie would prove they “acted legally.”
The French judicial probe started in 2006, Total has said.
De Margerie was placed under formal investigation in 2007 by French judges looking into allegations Total, Europe’s third-largest oil company, paid bribes to win contracts signed in 1997 with National Iranian Oil Co. to develop South Pars, one of the world’s largest natural gas fields.
From 1995 to 2004, Total made about $60 million in bribe payments to an Iranian official in order to obtain oil rights in three oil and gas fields, including South Pars, according to the statement of facts contained in the deferred prosecution agreement. Total admitted to the conduct described in the statement of facts, according to the agreement, which was signed by Peter Herbel, Total’s general counsel.
Total “mischaracterized” the payments in its books and records under various consulting agreements as business development expenses, according to the statement of facts.
Total made more than $150 million in profits from the scheme, according to a statement from the SEC.
In more than three decades at Total, de Margerie has held positions including head of exploration and production, the company’s largest division. He was head of Middle East operations between 1990 and 1995.
De Margerie took over as head of Total in February 2007. Just over a month after he took the helm, he was placed under formal investigation for alleged misuse of funds and corrupting foreign civil servants after being held in custody for two days for questioning.
The case is U.S. v. Total SA (FP), 13-cr-00239, U.S. District Court, Eastern District of Virginia (Alexandria).