Chevron Corporation headquarters in San Ramon, California, is involved in the production, processing, marketing and transportation of crude oil, natural gas and petroleum products.
Established in 1995, the Oil for Food Program provided humanitarian relief to the Iraqi population during the time that Iraq was subject to international trade sanctions. The program required that all payments for Iraqi crude oil be made to a United Nations escrow account, so that Iraq could purchase necessary humanitarian goods. From approximately August 2000 to March 2003, Iraqi government officials of the State Oil Marketing Organization ("SOMO"), conditioned the distribution of allocations of oil under the Oil for Food Program on the agreement to pay kickbacks. The kickbacks were paid in the form of a surcharge on each barrel of oil sold. Iraqi officials demanded that oil customers pay surcharges ranging from $0.10 to as much as $0.50 per barrel. If a company did not agree to pay the required surcharge it did not receive oil allocations.
From approximately April 17, 2001 to May 2002, Chevron Corporation made approximately $20,000,000 in illegal surcharge payments in order to purchase 78 million barrels of crude oil from Iraq pursuant to 36 contracts with third parties.
On November 14, 2007, the SEC filed a complaint against Chevron, charging the company with violating the internal controls and books and records provisions of the FCPA. On November 20, 2007, Chevron consented to the entry of a final judgment permanently enjoining the company from future violations of the FCPA's books and records and internal controls provisions. Chevron was liable for disgorgement of $25,000,000, and a civil penalty in the amount of $3,000,000. Chevron will satisfy its obligation to pay $25,000,000 in disgorgement by paying $20,000,000 to the U.S. Attorney's Office for the Southern District of New York and its forfeiture payment of $5,000,000 to the Manhattan District Attorney's Office, pursuant to the non-prosecution agreement.
In a related action, the DOJ entered into a Non-Prosecution Agreement with Chevron Corporation. Under the terms of the agreement, the United States Attorney for the Southern District of New York ("SDNY"), and the New York County District Attorney's Office ("DANY") agreed not to prosecute Chevron and its subsidiaries for any crimes (except for criminal tax violations). In exchange, Chevron agrees to forfeit to the United States $20,000,000, which will be transferred to the Developmment Fund of lraq. Chevron will also pay $5,000,000 to the New York County District Attorney's Office, and $2,000,000 to the Office of Foreign Assets Control ("OFAC") in settlement of any civil penalties.
