Weatherford International, one of the world’s largest oil-field services companies, agreed on Tuesday to pay the U.S. government nearly $253 million to settle charges that it bribed foreign officials and sold products to countries facing sanctions, including Iran.
The deal — which is subject to court approval — includes agreements with several law enforcement and regulatory agencies, all of which accused the Geneva-based company of having lax internal controls that enabled bribery and corruption to flourish at various subsidiaries around the globe for years.
The investigations led to the conviction of three Weatherford subsidiaries as well as two deferred-prosecution agreements and a civil settlement with the parent company. The government alleges that Weatherford failed to keep watch over its subsidiaries even though it knew they were operating in areas vulnerable to corruption.
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The conduct of Weatherford’s subsidiaries “allowed it to earn millions of dollars in illicit profits, for which it is now paying the price,” Mythili Raman, acting assistant attorney general for the Justice Department’s criminal division, said in a statement.
Another oil industry giant took a hit this year for violating anti-bribery laws. In May, Total of France agreed to pay $398 million as part of a deal with the Securities and Exchange Commission, which accused the firm of paying $60 million in bribes in 1995 to intermediaries of an Iranian government official. That official then used his influence to help the company secure lucrative contracts to develop oil and gas fields in Iran.
The SEC was also a key player in the agreement with Weatherford, which trades on the New York Stock Exchange and maintains large operations in Houston. Weatherford agreed to pay the SEC $65.5 million, nearly $2 million of it as a penalty for the company’s lack of cooperation at the start of the agency’s investigation.
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The Justice Department negotiated $87 million in criminal fines as part of its deferred prosecution agreement with the company. Weatherford agreed to pay an additional $100 million to resolve the investigations conducted by the U.S. Attorney’s Office in Houston, the Commerce Department’s Bureau of Industry and the Treasury Department’s Office of Foreign Assets Control.
Share this articleShareOn Tuesday, the company said it is moving past its legal troubles.
“This matter is now behind us,” Bernard J. Duroc-Danner, Weatherford’s chief executive, said in a statement. “We move forward fully committed to a sustainable culture of compliance.”
More than half of the fines and penalties Weatherford is paying will settle charges related to violations of anti-bribery laws from at least 2002 through mid-2011.
In its complaint, filed in federal court in Houston, the SEC said Weatherford authorized bribes for foreign officials in the Middle East and Africa. Those allegedly included paying for two officials in Algeria to attend the 2006 FIFA World Cup, and picking up the tab for the 2006 honeymoon of another official’s daughter.
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About $100 million of the fines and penalties will go toward settling charges that for at least six years Weatherford sold products to prohibited countries — including Cuba, Syria, Sudan and Iran — without authorization. The company then tried to hide the transactions, the SEC said.
“They used code names like ‘Dubai across the water’ to conceal references to Iran in internal correspondence, placed key transaction documents in mislabeled binders and created whatever bogus accounting and inventory records were necessary to hide illegal transactions,” Andrew Ceresney, co-director of the SEC’s enforcement division, said in a statement.
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