On May 29, 2013, the U.S. Department of Justice announced the settlement of a major criminal and civil case involving the Foreign Corrupt Practices Act. In this case, the Securities and Exchange Commission and the DOJ, along with French authorities, announced charges against Total S.A., a French-based oil and gas company.
Total agreed to pay $153 million in disgorgement of profits to settle the SEC’s civil case. In addition, the DOJ and Total agreed to a deferred prosecution agreement in which a criminal information was filed against Total, but which also provided that the case would be dismissed if Total did not engage in foreign bribery for three years. The criminal fine against Total was $245 million, for a total payment by Total of $398 million. Total has also been referred to French authorities for a possible violation of French bribery law.
The facts in the case were quite indicative of guilt. In 1995 Total, which wanted to re-enter the Iranian oil and gas market, entered into a “consulting agreement” with an Iranian official that essentially amounted to a bribe. Over the years, Total made about $60 million in payments that, according to French and U.S. authorities, constituted bribery of Iranian government officials.
Total also did not implement effective internal accounting systems and permitted the true nature of the payments to be concealed.
Of particular interest to us is not the conduct itself but the fact that the United States and France both asserted jurisdiction and worked together on the case. Although the United States has worked with French authorities before on FCPA cases, this case may be a harbinger of a new era of cooperation.
The Department of Justice highlighted this aspect of the investigation in a statement.
“Today we announce the first coordinated action by French and U.S. law enforcement in a major foreign bribery case,” said Acting Assistant Attorney General Mythili Raman. “Our two countries are working more closely today than ever before to combat corporate corruption, and Total, which bought business through bribes, now faces the criminal consequences across two continents.”
What we conclude from this matter is that companies that do business abroad that can have some impact on U.S. commerce – even those that are not based here and don’t do a great deal of business here – must be aware of the possibility of “double-barreled” anti-bribery enforcement, including an FCPA investigation by the U.S. Department of Justice and a similar probe by foreign authorities.
Enforcement agencies are willing to go well beyond national boundaries to root out corruption. Any company that wants to make sure it does not run afoul of the FCPA must put into place compliance procedures that are designed to prevent behavior such as Total engaged in. For the FCPA, it is better to be safe than sorry.