Total charged with corruption over Iraqi oil-for-food project
French judge alleges that oil giant paid bribes to Saddam Hussein's officials
Wednesday 07 April 2010
Total, the French oil giant which has hundreds of petrol stations across the UK, was charged with corruption by a Parisian court yesterday over its role in the scandal-ridden Iraqi oil-for-food programme.
A lawyer for the company, Jean Veil, said it was accused of bribing officials in the regime of the former dictator Saddam Hussein and complicity in dealing in stolen property. The charges were first mentioned in the group's annual report, published in February, and said the chief executive, Christophe de Margerie, and a number of former employees had also been indicted.
Mr de Margerie, who was Total's head of exploration and production in the late 1990s, was first indicted in 2006. The Paris prosecutor's office had recommended last September that all charges against the company and its employees be dropped. However, a new judge, who took on the case at the start of the year, has decided to launch fresh proceedings against France's highest-earning company.
Mr Veil said the charges had come "against all odds". In a statement, Total added that it was confident of being cleared of the charges, saying it "believes its activities related to the oil-for-food programme have been in compliance with this programme, as organised by the United Nations in 1996."
A report by Paul Volcker, the former chairman of the US Federal Reserve who chaired a UN-sponsored inquiry into alleged corruption in the oil-for-food scheme, found that some of the companies involved paid bribes and surcharges to Iraqi government officials, and uncovered evidence of "illicit, unethical and corrupt behaviour". However, Total said the Volcker report cleared it of any wrongdoing when it was published five years ago.
The $64bn oil-for-food programme, launched in 1996, was designed to allow Iraq, then subject to crippling international sanctions, to sell limited quantities of oil to buy humanitarian supplies. But the project, which came to an end months after the US-led coalition toppled Saddam's administration in 2003, was plagued with mismanagement and corruption involving UN employees and more than 2,000 firms from some 60 countries.
An inquiry by the US Government Accountability Office in 2003 found that the former Iraqi regime had made $10.1bn in illegal revenues. The case against Total was launched in 2002 but the French investigating judge took no action against the company. Total said yesterday that the inquiry had been restarted "without any new evidence being added to the affair".
Anti-corruption campaigners welcomed the move as a step towards resolving the inquiry. Alexandra Wrage, the president of Trace International, said: "France, the seat of the Organisation for Economic Co-operation and Development (OECD), has been sluggish in enforcing its commitments under that anti-bribery convention. The French have stood on the sidelines while other OECD countries, most notably the US, the UK and Germany, have brought dozens of enforcement actions.
"It will be interesting to see whether the Total matter gets any momentum this time, or whether this is another false start on allegations that are almost a decade old."
Dodgy dealings: The roll of shame
* Total is by no means alone in facing embarrassing bribery allegations. Last month, UK's arms group BAE Systems admitted a charge of "conspiring to make false statements" in a US court over payments made to Czech and Hungarian governments officials, and bribes in connection with Saudi Arabia's £40bn Al-Yamamah fighter jet deal. A Serious Fraud Office investigation in the UK was dropped after then Prime Minister Tony Blair argued that it would threaten national security.
* Three UK board members of French infrastructure company Alstom were arrested in dawn raids two weeks ago on suspicion of bribery, corruption, conspiracy to bribe, money-laundering and false accounting as part of the SFO's "Operation Ruthenium". The arrests followed a complaint by Swiss officials.
* The US chemicals group Innospec, which has a plant in Cheshire, was fined £12.7m in the UK last month after admitting bribing Indonesian officials. The investigation was part of a wider inquiry into the company's role in the oil-for-food programme.
* German car maker Daimler pleaded guilty last week to bribery charges, paying $185m to settle a case concerning its sales practices in Russia, Germany and China.
* Four China-based executives of mining giant Rio Tinto were jailed last week after admitting to bribery and espionage charges. The company sacked the four and said that an internal inquiry had cleared it over any wrongdoing.
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