Financial Times: Whiff of scandal returns to haunt Total (ShellNews.net)

By Martin Arnold in Paris

Posted 4 Oct 04

The whiff of scandal is returning to haunt Total, the French oil company. French police have detained several of its current and former executives for questioning as part of an investigation into suspected bribes paid to foreign government officials.

The world's fourth-largest oil company admitted that police carried out a search last week in the offices of several executives at its headquarters in the La Défense area of Paris.

Le Monde, the French newspaper that first reported the judicial investigation, on Friday quoted a former Total executive, who claimed that the oil group had used Teliac, a Geneva-based company, to pay bribes“to certain beneficiaries”in return for access to oil reserves in Iraq and Russia.

Jean-Michel Tournier, former head of operations at Total, told Le Monde: “Behind these beneficiaries, there was Russia and Iraq. If we had not paid,we would not have had anycrude oil.” He said the payments were made through Total International Limited, its Bermuda subsidiary.

The revelations are embarrassing for Total, which has only recently recovered from the long-running scandal over corruption at Elf, the former state oil group acquired by Total in 1999.

Total said: “Several current and former members of ourstaff have been questionedin the inquiry over money laundering. But the inquiry is not targeting Total.”

The “Elf affair” became France's biggest corruption trial. An eight-year investigation exposed rampant corruption in the final years of François Mitterrand's second term as president.

The latest probe, led by Philippe Courroye, one of France's best-known investigative magistrates, is examining the suspected payment of several million dollars worth of bribes through Teliac to political figures between 1996 and 2001.

Other companies that Le Monde said were suspected of making similar payments through the Teliac network were Vivendi Water, the utility since renamed Veolia Water, and Alcatel, the telecoms equipment group. It said they had gained access to markets in Iraq and Tanzania respectively.

However, Veolia denied the report, claiming that it did not have any contracts in Iraq and had not been active there for “several decades”. Alcatel declined to comment.

Total has no contracts in Iraq. Although the French group negotiated with Saddam Hussein, the former Iraqi leader, over two oil fields, the talks were cut short by the first Gulf war.