SEC slaps Total with cease-and-desist order, $153M disgorgement payment for bribes to Iranian official
The US Securities and Exchange Commission (SEC) has levied a cease-and-desist order, accompanied by a $153-million disgorgement payment, against Total SA, the France-based oil and gas major, for violations of the Foreign Corrupt Practices Act. Disgorgement is the forced giving up of something—in this case, profits—illegally obtained.
From approximately September 1995 to November 2004, Total and others paid approximately $60 million in unlawful payments to intermediaries for the purpose of inducing an Iranian government official (the “Iranian Official”) to use his influence to assist Total in connection with obtaining contracts to develop the Sirri A and E oil fields and two phases of the South Pars oil and gas field in Iran.
Between 1995 and 2004 the Iranian Official was first the head of one wholly owned subsidiary of the National Iranian Oil Company (“NIOC”) and later the head of another NIOC wholly owned subsidiary. The Iranian Official was also a government advisor to a high-ranking Iranian official. Total made these payments at the direction of the Iranian Official to intermediaries through a consulting and services agreement and subsequent amendments, entered into with an intermediary designated by the Iranian Official (“Intermediary One”).
During the relevant time period, Total and others violated the anti-bribery provisions of the Foreign Corrupt Practices Act by making payments at the direction of the Iranian Official in connection with obtaining contracts. In addition, Total lacked sufficient internal controls and, by mischaracterizing the payments as legitimate consulting fees, Total violated the books and records provisions of the federal securities laws.—SEC Order, Release Nº 69654
Total is required to cease and desist from committing or causing any future violations, and will have to pay disgorgement of $153 million to the United States Treasury.