November 14, 2007 / 3:34 PM / 11 years ago

Chevron to pay $30 million in oil-for-food settlement

NEW YORK (Reuters) - Chevron Corp (CVX.N) agreed to pay $30 million to resolve criminal and civil liabilities related to procurement of oil under the United Nations oil-for-food program, U.S. prosecutors said on Wednesday.

Chevron, the No. 2 U.S. oil company, obtained Iraqi oil under the program from third parties that paid secret, illegal surcharges to the former government of Iraq, prosecutors said.

Chevron will not be prosecuted and will continue to cooperate with investigators, prosecutors said.

Chevron could not be reached immediately for comment.

The agreement was the result of a joint investigation by the U.S. attorney’s office and the Manhattan district attorney’s office. The Federal Bureau of Investigation, the New York Police Department and the Department of the Treasury’s Office of Foreign Assets Control, or OFAC, also took part in the probe.

Under the agreement, Chevron will pay $20 million in forfeiture to the U.S. attorney’s office, $5 million to the Manhattan DA’s office, and $2 million to OFAC. The company will also pay a penalty of $3 million to the U.S. Securities and Exchange Commission.

The oil-for-food program was established to help Saddam Hussein’s Iraq sell oil to buy humanitarian supplies while it was otherwise under U.N. sanctions due to its 1990 invasion of Kuwait.

But a U.N.-commissioned inquiry headed by former U.S. Federal Reserve Chairman Paul Volcker found the program was corrupted by 2,200 companies in 66 countries that paid $1.8 billion in kickbacks to Iraqi officials to win supply deals.

Reporting by Paritosh Bansal, editing by Gerald E. McCormick and Dave Zimmerman

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