Weatherford Pays $253 Million To Settle FCPA, Sanctions Probes

WASHINGTON – U.S. authorities announced an array of settlements with oilfield-services company Weatherford International Ltd. to resolve investigations into foreign bribery, export control and sanctions violations.

The combined investigations and settlements resulted in two deferred-prosecution agreements with Weatherford, guilty pleas from three Weatherford units and the payment of $252.7 million in penalties and fines, the U.S. Justice Department said.

“This case demonstrates how loose controls and an anemic compliance environment can foster foreign bribery and fraud by a company’s subsidiaries around the globe,” said Acting Assistant Attorney General Mythili Raman in a statement.

Weatherford, which was founded in Texas but relocated its headquarters to Geneva in 2008, had budgeted $253 million to resolve the probes. The company operates in more than 100 countries, and it employs more than 65,000 people worldwide.

WeatherfordThe company agreed to pay $87.2 million as part of a deferred-prosecution agreement with the Justice Department over the foreign bribery allegations. It also settled with the Securities and Exchange Commission, agreeing to pay $65.6 million in disgorgement and civil penalties. Weatherford has to retain an independent compliance monitor for 18 months.

In a separate settlement, the company and four of its subsidiaries agreed to pay a combined $100 million as part of a deferred-prosecution agreement to resolve a probe into sanctions violations conducted by the U.S. Attorney’s Office in Houston, the U.S. Commerce Department’s Bureau of Industry and Security and the U.S. Treasury Department’s Office of Foreign Assets Control.

“This matter is now behind us,” said Bernard J. Duroc-Danner, chairman, president and chief executive of Weatherford, in a statement. “We move forward fully committed to a sustainable culture of compliance.”

Weatherford authorized bribes and improper travel and entertainment intended for foreign officials in multiple countries to get or keep business for nearly a decade, according to a complaint filed by the Securities and Exchange Commission.

For example, the company paid for a trip to the 2006 World Cup by two officials at Sonatrach, an Algerian state-owned oil company. It also paid for the July 2006 honeymoon of a Sonatrach official’s daughter.

The company and its subsidiaries authorized illicit payments to obtain business in Congo and approved kickbacks in Iraq to get United Nations Oil for Food contracts, the complaint said.

It made more than $59 million in profits through illicit payments, the SEC complaint said.

In addition, Weatherford engaged in transactions from 2002 to 2007 with countries designated as state sponsors of terror, including Cuba, Iran, Sudan and Syria. Staffers employed various schemes to conceal the dealings, including creating false books and records, the complaint said.

Weatherford’s sales to sanctioned countries generated more than $30 million in profits, the complaint said.


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