Michigan Democrat Gary Peters Invested in Oil Company that Bribed Iran

Paid $400 million fine for bribing Iranian officials

Rep. Gary Peters (D., Mich.) / AP
September 16, 2014

Michigan Democrat Gary Peters profited from a French oil company that admitted to bribing Iranian officials for access to their oil fields.

Total S.A., the fourth largest oil company in the world, paid $60 million to an influential Iranian administrator over a nine-year period to gain access to lucrative oil contracts, according to a joint investigation by the Securities and Exchange Commission and the Department of Justice.

"During the course of its unlawful scheme, Total and others corruptly made certain payments and took certain acts for the purpose of inducing the Iranian Official to use his influence to assist Total," the SEC said in allegations against the company.

The Iranian contracts netted Total $150 million in profits. The company admitted to using fake consulting contracts through a Bermuda-based subsidiary to bribe the official.

The company was charged with violating the Foreign Corrupt Practices Act, which aims to curb international bribery, as well as numerous federal bookkeeping and securities laws. In 2013, Total agreed to pay nearly $400 million in fines—the largest FCPA fine of the year and the fourth largest in history.

The Peters campaign did not return requests for comment about whether he was aware of the bribery scandal.

Peters has been criticized for investing nearly $20,000 in the oil giant even as he runs on an environmentalist platform. Republican Senate nominee Terri Lynn Land called on him to divest from the company, but the three-term congressman refused.

Total's ties to the Iranian regime point to yet another disconnect between Peters' political positions and his portfolio.

He has supported more stringent sanctions against Iran and co-sponsored the 2009 Iran Sanctions Enabling Act, which encouraged state and local governments to divest from banks and companies that invest more than $20 million in Iran.

Peters also sits on the House Financial Services Committee, which works closely with the SEC. The agency has discussed its renewed focus on enforcing the Foreign Corrupt Practices Act before the committee multiple times in recent years, though he skipped a 2012 hearing on the SEC’s enforcement strategies.

Peters has also backed tougher regulations on energy companies working overseas. The Dodd-Frank Act, which increased government oversight on the financial industry, also forces oil companies to disclose all payments made to foreign operators to cut down on bribery. Peters helped write Dodd-Frank and has championed it as a victory against financial corruption.

The Land campaign said that Total's disregard of the threat posed by the Iranian regime, as well as its corruption call into question Peters' judgment.

"Gary Peters will do anything to make a dollar and say anything to win an election," Land spokesman Heather Swift said in a statement. "The more Michigan voters learn about Gary Peters the more they know they can't trust him to put Michigan first."

Democrats and liberal groups have tried to make environmental issues a centerpiece of the Michigan campaign. The Democratic Senatorial Campaign Committee has come under fire from Michigan media for dubiously attempting to connect Land to a Detroit-based storage facility of oil byproduct pet coke.

A Lansing State Journal analysis dismissed those claims and ruled that Peters is the only candidate with direct ties to pet coke. Total stores pet coke, which Peters has said is "dirtier than the dirtiest fuel," in a Texas facility.

"Peters’ ownership of shares in Total Petrochemicals, the French company’s U.S. subsidiary, is fair game for questions. … He still presumably stands to profit from its products, including pet coke," the Journal said.

Peters and Land are running to replace retiring Democratic Sen. Carl Levin, who won reelection by 30 points in 2008. Peters leads the race by 5 points, according to a Real Clear Politics poll average.