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U.S. v. Total, S.A.

 
:
Total, S.A.
:
DOJ Criminal
:
May 29, 2013
:
U.S. v. Total, S.A.
:
U.S. v. Total, S.A., 1:13-CR-239 (E.D. Va. 2013)
:
Acting Assistant Attorney General Mythili Raman of the U.S. Department of Justice’s Criminal Division described the matter as “the first coordinated action by French and U.S. law enforcement in a major foreign bribery case.”
:
Energy (Non-Utility)-Oil & Gas-Exploration/Production
:
Iran
:
1995; 1996; 1997; 1998; 1999; 2000; 2001; 2002; 2003; 2004
:
“Head” of a wholly-owned subsidiary of the National Iranian Oil Company and Chairman of an Iranian engineering company that was majority-owned and controlled by the Iranian government.
:
Total, S.A. is a French corporation that explores for and develops oil and gas resources world-wide, with American Depositary Shares that are registered with the SEC and listed on the New York Stock Exchange. In 1995 and 1997, Total entered into purported consulting agreements with an official of Iranian government entities (the “Iranian Official”) and with the Iranian Official’s designated intermediaries, through which Total made payments to obtain contracts with the National Iranian Oil Company (“NIOC”) for the development of oil and gas fields in Iran. From 1995 through 2004, Total paid approximately $60 million in bribes through this scheme.

Specifically, in 1995, Total sought to re-enter the Iranian oil and gas market, and, in July of that year, Total entered into a contract with the NIOC to develop the Sirri A and E oil and gas fields on Sirri Island, in Iranian territorial waters. To secure the Sirri A and E contract, Total met with an Iranian Official, who was then Chairman of an Iranian engineering company that was majority-owned and controlled by the Iranian government, to discuss unlawful payments to an intermediary (“Intermediary I”), whom the Iranian Official designated. Total then entered into an Umbrella Agreement with Intermediary I, which included no specific payment terms, but instead provided that from time to time the parties would execute “Consulting Service Requests,” which were to detail Total’s bribe payments at the direction of the Iranian Official.

In 1997, Total began negotiating with the NIOC to acquire the rights to develop the South Pars gas field in the Persian Gulf. In July 1997, Total entered into another agreement to assign the consulting agreement to separate intermediary (“Intermediary II”) who was also designated by the Iranian Official. Following the assignment, Total was awarded a 40% interest in the development of the South Pars gas field.

According to the Deferred Prosecution Agreement, Total mischaracterized these payments as “business development expenses” and failed to implement adequate internal controls to identify these as bribe payments. The DPA also alleges various other internal failures that contributed to continuation of the scheme, including that Total performed no due diligence concerning the parties to the consulting agreements and failed to regularly evaluate the strength of its compliance and ethics program.

French officials have also announced charges against Total in the Tribunal de Grande Instance de Paris for violations of French Laws.
:
Books and records (Issuer), Conspiracy - Anti-Bribery, Internal controls (Issuer)
:
Compliance Monitor, Deferred-prosecution Agreement, Fine
:
$245.2 million penalty and appointment of independent compliance monitor for three-year term.

In the related SEC civil action, Total was ordered to pay disgorgement of $153 million.
:
245,200,000
:
0
:
Total Culpability Score: 8 (Base Score of 5 plus Willfulness of 5 minus Cooperation of 2).
:
Issuer
:
Foreign
:
France
:
Contract Procurement/Retention
:
147,000,000
:
Cash, Wire/check
:
Sales Agent/Consultant, Shell entity
:
60,000,000
:
Iran
:
Switzerland, United States
:
No
:
No
:
France