Oil Services Firm Weatherford to Pay $252 Million to Settle FCPA, Export Control Violations
Oil services company Weatherford International will pay $252 million to settle charges that it violated the Foreign Corrupt Practices Act and the International Emergency Economic Powers Act export control provisions, said the Justice Department Nov. 26. The company will resolve charges that it didn’t have adequate internal controls, which resulted in bribery and corruption by its subsidiaries. The Office of Foreign Assets Controls announced its settlement with the company on Nov. 26 (see 13112631).
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In one of several instances of corruption alleged by the government, subsidiary Weatherford Services' employees in Africa bribed a foreign official to approve the renewal of an oil services contract. A freight forwarder acted as the intermediary, having been paid for consulting services that were never performed and instead passing along some of the money to the foreign official as bribes. Weatherford Services won the contract renewal.
In another bribery allegation, the government said Weatherford’s deficient internal controls permitted corrupt conduct relating to the United Nations’ Oil for Food Program. In 2002, another Weatherford subsidiary paid about $1.5 million in kickbacks to the government of Iraq for contracts to provide oil drilling and refining equipment. It concealed the kickbacks from the U.S. by inflating contract prices by 10 percent.
The government also alleged Weatherford committed export controls violations. According to the Justice Department, Weatherford subsidiaries based in Canada, the United Arab Emirates and the U.K. illegally exported, reexported, or conducted business in Cuba, Iran, Sudan and Syria. The company’s settlement of its export control violations alone will result in the payment of $100 million in penalties to the Bureau of Industry and Security.