By Tara Patel
April 6 (Bloomberg) -- Total SA, Europe’s third-largest oil company, was placed under formal investigation in February on bribery charges related to oil deliveries from Iraq during the rule of Saddam Hussein.
French Judge Serge Tournaire is examining charges of corrupting a foreign public official and influence-peddling, Isabelle Montagne, a spokeswoman for the Paris prosecutors’ office, said today, confirming information in Total’s annual review.
The decision to place Total under formal investigation comes eight years after the beginning of the probe and “without any new evidence being added to the affair,” the company said in the review on its Web site. “We are confident in the result of the inquiry and that Total will be exonerated,” it said in a separate e-mailed statement. “This is in no way a new case.”
The case centers on allegations that current and former employees of Total and politicians received vouchers for Iraqi oil in exchange for lobbying to loosen sanctions against Saddam Hussein’s regime. In 2006, Chief Executive Officer Christophe de Margerie was placed under investigation over possible violations under the United Nations Oil for Food program in Iraq.
The new judge heading the probe is studying whether Total corrupted Iraqi officials to buy crude in violation of the embargo, the Paris-based company said in the statement.
Prosecutor Recommendation
In 2009, the prosecutors’ office recommended dismissing the case against employees including de Margerie, who was head of Middle East operations in the 1990s when Oil for Food was set up, and against former Interior Minister Charles Pasqua.
De Margerie had also been placed under investigation in March 2007 by Judge Philippe Courroye, who with Judge Xaviere Simeoni studied allegations that Total paid bribes to secure contracts that it signed in 1997 with National Iranian Oil Co. for South Pars, one of the world’s largest natural-gas fields.
“The company believes that its activities related to the Oil for Food program have been in compliance with this program,” Total said in the annual report. Total’s lawyer, Jean Veil, didn’t respond to messages left on his mobile telephone.
The prosecutor advised dropping charges against eight other people besides de Margerie and Pasqua and prosecuting 11 others, mostly retired French diplomats, Montagne said Sept. 3. The formal investigation started Feb. 22 and is part of the same probe, she said today. The information was reported earlier by Les Echos.
Oil for Food
The Oil for Food program was established by the UN in 1996, five years after the first Gulf War, to allow Iraq to sell a certain amount of oil and spend the proceeds on humanitarian goods. Until the program was suspended just before the U.S.-led invasion in 2003, Iraq sold $65 billion worth of oil.
A series of investigations by the UN and the U.S. after the 2003 war determined that Iraq generated $10 billion in illegal revenue outside the program through oil smuggling and demanding surcharges.
--Editors: Amanda Jordan, Stephen Cunningham
To contact the reporter on this story: Tara Patel in Paris at tpatel2@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
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