New inquiry into France's Total over alleged bribery

France’s Total oil confirmed on Tuesday that it was under investigation for bribery in connection with the UN oil-for-food programme in Iraq during the Saddam Hussein regime, one of thousands of firms who allegedly paid to secure Iraqi oil contracts.

By Clovis CASALI (video)
FRANCE 24 (text)

France’s leading oil firm Total confirmed on Tuesday that is was under investigation in France for bribery and influence-peddling in connection with the United Nations oil-for-food programme in Iraq during the late 1990s and early 2000s.

Total has been accused of paying kickbacks to Iraqi officials to win contracts for Iraqi oil under former president Saddam Hussein. In its annual report released last week, Total said a formal investigation had been launched in February into its dealings in Iraq but noted that no new proof of Total’s wrongdoing had been brought to light.

"In early 2010, despite the advice of the prosecutor's office, a new investigating judge decided to place Total S.A. under formal investigation on bribery charges as well as complicity and influence peddling," the Total report said. The French oil giant went on to point out that the inquiry was being launched "eight years after the beginning of the investigation without any new evidence”.

Total, France's biggest corporation, has expressed confidence that its activities in Iraq were in line with the rules of the UN programme.

Thousands of firms, billions in kickbacks

The UN’s $64-billion oil-for-food programme was introduced in 1996 to allow Iraq, which was then still under Saddam Hussein and suffering from crippling international sanctions, to sell limited amounts of oil to buy food, medicine and other non-military supplies. But the programme has long been plagued by accusations of corruption involving UN employees, politicians and thousands of international firms.

Under the oil-for-food programme, the Saddam regime sold oil to clients of its choice and most of that revenue went into an Iraqi escrow account in New York that was run and overseen by BNP Paribas.

“The people who got these contracts from Saddam Hussein got to keep a transaction fee, around 50 [US] cents a barrel,” said Douglas Yates, a political science professor at the American University in Paris, in a January interview with FRANCE 24. So a seven-million-barrel contract could yield more than $3 million in transaction fees for Saddam’s chosen customers. “From that money, they would make illegal deposits into bank accounts in Syria [and] in Lebanon to members of the Saddam Hussein regime,” Yates said, which “adds up to between $10 billion and $21 billion [in] kickbacks” to ensure they would win Iraq’s oil supply contracts.

French bank BNP Paribas has also come under fire for failing to adequately monitor where the funds from the Iraqi account were going.

Allegations of mismanagement within the oil-for-food programme followed soon after the 2003 US-led invasion of Iraq and the toppling of the Saddam regime. A 2005 UN inquiry led by former US Federal Reserve chairman Paul Volcker found that more than 2,250 companies, 180 of them French, had paid some $1.8 billion in kickbacks to win the Iraqi supply deals.

A 2002 French investigation focused on several politicians and industry chiefs who allegedly made deals with Saddam to ensure access to Iraqi oil supplies. In September, Paris prosecutors recommended that charges be dropped against former interior minister Charles Pasqua and Total chief executive Christophe de Margerie. But 11 other suspects are due to stand trial, including former French ambassador to the United Nations Jean-Bernard Merimée and a former diplomatic adviser to Pasqua, Bernard Guillet.