rench oil company Total agreed on Wednesday to fork over $398.2 million in fines to the U.S. government to settle charges that it bribed Iranian officials for lucrative oil contracts.
The Securities and Exchange Commission claims that between 1995 and 2004, Total gave $60 million in bribes to intermediaries of an Iranian government official. The official then used his influence to negotiate a contract with the government-owned National Iranian Oil Company, which gave the French company access to explore Sirri Island in the Persian Gulf and part of the South Pars gas field, two of the region's prominent oil and gas deposits. Total's chief financial officer, Patrick de la Chevardière, said in a statement that the settlements — $245.2 million to the Department of Justice and another $153 million to the SEC — "allow us to put an end to this investigation."
The alleged deals violate the Foreign Corrupt Practices Act (FCPA), a law passed in 1977 to limit the very popular and nearly impossible-to-detect practice of lubricating business transactions with under-the-table payments. Rather than banning all payments, the law distinguishes between bribery and "grease payments." The latter are legal in some countries and sanctioned by the FCPA, but only if used to expedite actions officials are already contractually committed to perform.
Total's case shines a light on global bribery laws, as government agencies around the world — the SEC included — tighten the rules and aggressively pursue cases.
One recent example of this crackdown is the SEC's ongoing investigation of Walmart for bribing Mexican officials to build stores in the country. And in April, Ralph Lauren agreed to pay $882,000 for bribing government officials in Argentina to attain improper customs clearance.
As the SEC keeps a close eye on foreign corruption, the U.S. Chamber of Commerce and businesses are pushing back, says Peter J. Henning at The New York Times, "arguing that [FCPA] hampers American businesses because of how broadly it can be applied. Recent cases against pharmaceutical companies, like Pfizer for payments to foreign doctors who are part of state-controlled health systems show how the law can be used in areas once thought to fall outside its purview."
Still, loosening up international rules on bribery probably won't be a priority on Capitol Hill any time soon, Henning says. The biggest issue is "about what message revising the law would send if Congress gives companies greater leeway to avoid punishment for corrupt payments."
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