(In sixth paragraph, corrects figure to $228.8 million, instead
* Total head says didn't know about illegal allocation
* Vitol in spotlight, accused of corrupting foreign agents
By Chine Labbé and Alexandria Sage
PARIS, Feb 5 The chief executive of Total
told a French court on Tuesday he had no knowledge
that the French oil giant was buying illegally procured oil
during the United Nations oil-for-food programme over a decade
CEO Christophe de Margerie - who before taking the top post
at Total headed its Middle East operations and its exploration
and production unit - is accused of complicity in the misuse of
corporate assets. He risks up to five years imprisonment and a
fine of 375,000 euros ($499,300).
De Margerie, 61, is one of 18 individual defendants, along
with Total and Swiss top oil trader Vitol, to face
French criminal charges in the far-ranging corruption scandal.
"I have a great memory," de Margerie calmly told the three
magistrates in the Paris criminal court. "I dispute this
completely, I'm ready to state it yet again."
The 1996-2003 oil-for-food programme, which was intended to
allow Iraq to buy humanitarian goods through U.N.-controlled
sales of oil despite international economic sanctions, was
undermined by kickbacks and influence peddling, according to an
independent inquiry led by former U.S. Federal Reserve head Paul
Some 139 companies that bought oil from Baghdad paid illegal
surcharges or kickbacks that reaped $228.8 million for the Iraqi
government between 2000-2002, according to the report. French
companies were the top buyers after Russia.
Baghdad also allocated oil to influential individuals it
believed could lobby on its behalf to reduce sanctions.
The non-transparent system relied on little-known companies
as intermediaries that entered into contracts with Iraq or
political beneficiaries who held oil allocations and
subsequently sold oil to traders or oil companies, it found.
Prosecutors accuse de Margerie of introducing a Lebanese
attorney with connections to the Iraqi government and to its
oil, Elias Firzli, to Total's trading unit.
They say de Margerie could not have ignored the fact that
Firzli was selling his illegal allocations of oil in violation
of the oil-for-food programme's rules.
While de Margerie did not deny having introduced Firzli, now
deceased, to Total, he told the court he knew nothing about
Baghdad's system of oil allocations to influential individuals.
"I must be an idiot, but I didn't know the word
'allocations,'" de Margerie said, adding that Firzli never told
him he was the recipient of such illegal supplies of oil.
De Margerie was placed under formal investigation in his
role in the oil-for-food scandal in October 2006, just four
months before being appointed to the top post at Total, now
France's second-largest company by market capitalization.
VITOL IN SPOTLIGHT
Total, which faces up to a 1.88 million euro ($2.55
million)fine, has denied corruption and influence-peddling
The case also comes at an awkward time for Vitol, which has
recently made headlines for dealing in Iranian fuel oil
While Vitol's Iran deal was not illegal since it was
executed by a trading branch outside the jurisdiction of
European sanctions, it raised scrutiny of the traditionally
secretive company and its British CEO, Ian Taylor.
In the Iraq-related case, Vitol is accused of corrupting
foreign public agents between 2000-2003 and faces a fine of
750,000 euros ($1.02 million).
Two weeks ago, a judge overruled a constitutional challenge
brought by Vitol's attorney, who had argued the company could
not be judged in France as it had already been convicted of
oil-for-food offences in a New York court.
According to the investigation, Vitol paid about $582,000 to
Serge Boidevaix, a French ex-diplomat and former Total
executive, to presumably procure oil allocations from Iraq.
The investigation found that Taylor asked that payments for
the oil be made through an intermediary named Peakville which
prosecutors say was intended for "discreet payments."
Vitol declined further comment on the case.
The trial is scheduled to run until Feb. 20.
($1 = 0.7376 euros)
(Writing By Alexandria Sage; Editing by Leslie Adler)