LawFuel.com – American Business Law News
PREET BHARARA, the United States Attorney for the
Southern District of New York, and Assistant Attorney General
LANNY BREUER, announced that STATOIL, ASA (“Statoil”), an
international oil company headquartered in Norway and listed on
the New York Stock Exchange, successfully fulfilled its
obligations under the three-year deferred prosecution agreement
it executed on October 13, 2006, with the United States
Attorney’s Office for the Southern District of New York and the
Fraud Section of the United States Department of Justice. The
deferred prosecution agreement was entered in connection with a
criminal Information that was also filed on October 13, 2006,
against Statoil in United States District Court for the Southern
District of New York. The Information charged Statoil with one
substantive violation of the Foreign Corrupt Practices Act of
1977 (“FCPA”) and one count of falsification of books and
records. As a result of yesterday’s finding that Statoil has
satisfied the terms of the deferred prosecution agreement, the
United States Attorney’s Office and the Fraud Section agreed to
dismiss the Information against Statoil.
The Information alleged that in 2001 and 2002, Statoil
sought to expand its business internationally and focused
specifically on Iran as a country in which to secure oil and gas
development rights. At the time, Iran was awarding contracts for
the development of the South Pars field, one of the world’s
largest natural gas fields. In 2001, Statoil developed contacts
with and began negotiating with an Iranian government official
who could influence the award of oil and gas contracts in Iran.
Statoil then entered into a “consulting contract” with an
offshore intermediary company. The purpose of that “consulting
contract” – which called for the payment of more than $15 million
over 11 years – was to induce the Iranian official to use his
influence to help Statoil obtain a contract to develop portions
of the South Pars field, and to open doors to future Iranian oil
and gas projects. Two bribe payments, totaling more than $5
million, were actually made by wire transfer, and Statoil was
awarded a South Pars development contract that was expected to
yield millions of dollars in profit. The Information charges
that Statoil violated the FCPA by making the corrupt payments,
and also committed securities fraud by falsifying its books and
records in characterizing the bribe payments as “consulting
fees.”
Three years ago, as part of the deferred prosecution
agreement, Statoil acknowledged making the bribe payments to the
Iranian official. It also acknowledged that its conduct violated
the anti-bribery and accounting provisions of the FCPA. Statoil
also agreed to pay a $10.5 million penalty and to enter into a
three-year deferred prosecution agreement. Pursuant to the terms
of the deferred prosecution agreement, Statoil agreed to
cooperate fully with the United States Attorney’s Office, the
Criminal Division and the Securities and Exchange Commission (the
“SEC”) in connection with inquiries concerning corrupt payments,
false books and records, and inadequate internal controls.
Statoil also agreed to the appointment of an independent
compliance consultant to review and periodically report on
Statoil’s internal controls, record-keeping, and financial
reporting policies and procedures as they relate to the company’s
compliance with the books and records, internal accounting
controls, and anti-bribery provisions of the FCPA during the
three-year term of the agreement. The United States Attorney’s
Office, the Fraud Section, and the SEC have received the final
report of the compliance consultant and determined that Statoil
has fulfilled its obligations under the deferred prosecution
agreement, including the obligation to adopt the compliancerelated
recommendations of the compliance consultant.
Accordingly, yesterday the United States Attorney’s Office filed
a motion with the Honorable RICHARD J. HOLWELL of the United
States District Court in the Southern District of New York to
dismiss with prejudice the criminal Information filed against
Statoil in 2006. That motion was granted by order of the Court
yesterday.
Mr. BHARARA thanked the Criminal Division of the United
States Department of Justice and the SEC.
United States Attorney BHARARA said: “This case shows
that deferred prosecution agreements against corporations can
work as an important middle ground between declining prosecution
and obtaining the conviction of a corporation. The deferred
prosecution in this case helped restore the integrity of
Statoil’s operations and preserve its financial viability while
at the same time ensuring that it improved what was obviously a
failed compliance and anti-corruption program.”
Assistant Attorney General BREUER said: “Three years of
diligent efforts by Statoil to address past misconduct and
serious compliance failures have today led to the dismissal of
foreign bribery charges against the company. Bribing foreign
government officials and then covering it up by concealing the
payments as legitimate fees cannot be standard operating
procedure. Companies that have vigorous compliance programs, as
Statoil has now created, risk far less than those that choose to
ignore the fundamental tenets of the Foreign Corrupt Practices
Act.”
This case has been handled jointly by the Securities
and Commodities Fraud Task Force of the United States Attorney’s
Office for the Southern District of New York and the Fraud
Section of the United States Department of Justice. Assistant
United States Attorney RAY LOHIER and Deputy Chief MARK F.
MENDELSOHN of the Fraud Section are in charge of the matter.
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