The S.E.C. charged Total S.A.—a France-based oil and gas company—with violating the Foreign Corrupt practices Act by paying more than $60 million in illegal payments to an intermediary of an Iranian official who then utilized his influence to help the company procure valuable contracts to develop substantial gas and oil fields in the nation of Iran. 

The S.E.C. alleges that the company made more than $150 million in profits through this scheme. Total S.A. attempted to cover up the nature of their illegal payments by entering into phony consulting agreements with the intermediaries of the Iranian official and mis-categorizing the bribes in its records as legitimate business expenses relating to the consulting agreements. 

 

Total S.A., whose securities are publicly traded on the NYSE, agreed to pay roughly $400 million to settle the SEC’s charges. “Total S.A., used illegal payments to secure business in Iran, and reaped considerable financial benefits as a result,” claimed Andrew Calamari, the Director of the SEC’s New York Regional Office. “Total is now required to pay back all of its profits from the company’s illegal conduct and its criminal penalties on top of that.”

 

The SEC’s order requires the oil company to pay disgorgement of $153 million in illegal profits and retain an independent consultant to review and report the company’s compliance with the FCPA. The company is also required to cease and desist from causing or committing any violations of Section 13(b), Section 30A, and Section 13(b) of the United States Securities Exchange Act of 1934. 

 

According to the agency’s order, Total S.A. negotiated an agreement with the National Iranian Oil Company in 1995 for a series of gas fields. Prior to executing the agreement, Total took a meeting with the Iranian Official and agreed to enter a phony consulting agreement with an individual the official designated. The two parties agreed that Total would provide payments to the intermediary under the guise of a consulting relationship when the true purpose was to induce the official to use his influence to help procure NIOC’s approval of the development contract. After the contract was undertaken, Total made bribes that resulted in the NIOC permitting Total to develop the gas fields and procure more than $150 million in profits.

 

In addition to these fines, the company is also required to pay a fine of $245.2 million as part of a deferred prosecution agreement. Total S.A. was charged by the lead prosecutor of Paris of the nation’s Tribune. 

 

 

Source: SEC.gov