The federal government’s probe into Weatherford International Ltd’s dealings in foreign countries has burgeoned far beyond a simple bribe inquiry by the Securities and Exchange Commission. It is now a multi-agency civil and criminal investigation into allegations that Weatherford did business with terrorist-friendly countries that are under U.S. trade sanctions.
Weatherford is one of the world’s largest oilfield service companies, operating in over 100 countries.
In an unusual twist to the tale last year, Weatherford general counsel Burt Martin left his job in mid-probe, and the company decided to move its headquarters from Houston to Geneva, Switzerland. It still has U.S. operations in Houston.
The company conceded in its 10-Q financial report to the SEC on May 3 that the federal inquiry that began in 2006 has now grown to include the Department of Justice, the Department of Commerce’s Bureau of Industry & Security, and the U.S. Treasury’s Office of Foreign Assets Control. The latter two agencies handle matters of national security.
The report said the feds are looking at allegations on three fronts. They include Weatherford’s participation in the scandal-plagued Oil-for-Food program, the possible misuse of $175,000 at a European subsidiary for alleged bribes in violation of the Foreign Corrupt Practices Act, and the sales of services and products “in certain sanctioned countries.”
It specifically cited Cuba, Iran, Sudan, and Syria — four countries under U.S. sanctions due to their support of terrorism and/or violations of human rights.
The company said it is cooperating with the multi-faceted probe. The report said it has incurred $53 million in costs related to its exit from sanctioned countries and incurred $108 million for legal and professional fees in connection with the ongoing investigations.
