SEC Charges Total S.A. With FCPA Violations for Payments to Iranian Official

In the Matter of Total S.A., SEC Admin. Proc. No. 3-15338.  On May 29, 2013, the SEC announced it filed a settled administrative proceeding against Total S.A. for violating the FCPA by paying $60 million in bribes to associates of an Iranian government official who helped the company obtain contracts to develop oil and gas fields in Iran.  According to the SEC’s Order, Total made more than $150 million in profits from the bribery scheme.  Total was able to hide the bribes for a time by entering into a fake consulting agreement with associates of the Iranian official and by making the bribes appear as though they were legitimate expenses in the company’s books and records.  In 1995, Total negotiated a contract with the National Iranian Oil Company (“NIOC”).  Before signing the agreement, Total had a meeting with the Iranian official and agreed to enter into the fake consulting agreement.  During the meeting, the parties decided that Total would make payments to the official’s associate pursuant to the fake consulting arrangement and in turn, the Iranian official would help obtain NIOC’s approval of the agreement with Total.  The SEC Order requires Total to pay disgorgement of $153 million and retain an independent compliance consultant to review and report on Total’s compliance with the FCPA.  Total also must cease and desist from committing or causing any violations of Section 30A, Section 13(b)(2)(A), and Section 13(b)(2)(B) of the Exchange Act.  In the parallel criminal proceedings, Total agreed to pay a $245.2 million penalty as part of a deferred prosecution agreement.  French officials have also recommended charges for violations of French laws.

This entry was posted in Securities and tagged , , . Bookmark the permalink.