Risk & Compliance

SEC Settles Bribery Charges with Statoil

The Norwegian oil company's settlement marks the latest in a string of corporate cases related to alleged violations of the Foreign Corrupt Practic...
Stephen TaubOctober 16, 2006

The Securities and Exchange Commission announced it has settled charges that Norway-based Statoil ASA, a multinational oil company listed on the New York Stock Exchange, violated the Foreign Corrupt Practices Act (FCPA), which prohibits bribery of foreign government officials.

The Commission’s order found that Statoil paid bribes to an Iranian government official in return for his influence in helping Statoil obtain a contract to develop a significant oil and gas field in Iran and to open doors to additional projects in the Iranian oil and gas industry.

Without admitting or denying the Commission’s allegations, Statoil agreed to disgorge $10.5 million.

The order also requires Statoil to cease and desist from committing violations of the antibribery, internal controls and books and records provisions of the FCPA and to retain an independent compliance consultant to review and report on Statoil’s compliance with the FCPA.

In a related criminal proceeding also announced on Friday, Statoil agreed to pay a criminal penalty of $10.5 million related to a deferred prosecution agreement with the US Department of Justice and the US Attorney’s Office for the Southern District of New York. The SEC noted that $3 million of the $10.5 million penalty will be deemed to have been satisfied by a penalty previously paid to Norwegian criminal authorities.

The Statoil case is one among a growing number of FCPA cases in the past few years.

Last September, Jim Bob Brown, an employee of a subsidiary of Houston-based Willbros Group Inc. who worked in Nigeria and South America, pleaded guilty to violating the FCPA “by conspiring with others” to bribe officials of the governments of Nigeria and Ecuador, the Department of Justice announced. The SEC also filed civil charges against Brown, alleging he violated provisions of the FCPA.

CFO.com reported last April that in a single month, the Department of Justice had received 11 voluntary disclosures of either clear or potential violations of the FCPA.

Indeed, in March, we reported that United Parcel Service announced that it was investigating possible violations within its supply chain solutions subsidiary prior to its 2001 acquisition of a freight forwarding business from Fritz Companies Inc. UPS added that a small number of former employees directed the questionable conduct.

Earlier that month, DaimlerChrysler AG disclosed that it had dismissed or suspended several employees after the company determined that “improper payments” were made in a number of jurisdictions, primarily in Africa, Asia, and Eastern Europe.

In March 2005, Titan Corp. agreed to plead guilty to criminal and civil charges and pay $28.5 million in fines stemming from payments to a presidential election campaign in the West African nation of Benin.

That same month, Halliburton disclosed that the DoJ and the SEC broadened their investigations into possible bribery of officials in Nigeria.