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Leaked Emails Reveal Widespread Corruption in Global Oil Industry (theage.com.au)

Posted by msmash on from the information-wants-to-be-free dept.

Nick McKenzie, Richard Baker, Michael Bachelard, and Daniel Quinlan report on a widespread corruption in the global oil industry for The Huffington Post: In the list of the world's great companies, Unaoil is nowhere to be seen. But for the best part of the past two decades, the family business from Monaco has systematically corrupted the global oil industry, distributing many millions of dollars worth of bribes on behalf of corporate behemoths including Samsung, Rolls-Royce, Halliburton and Australia's own Leighton Holdings. A massive leak of confidential documents has for the first time exposed the true extent of corruption within the oil industry, implicating dozens of leading companies, bureaucrats and politicians in a sophisticated global web of bribery and graft. After a six-month investigation across two continents, Fairfax Media and The Huffington Post can reveal that billions of dollars of government contracts were awarded as the direct result of bribes paid on behalf of firms including British icon Rolls-Royce, US giant Halliburton, Australia's Leighton Holdings and Korean heavyweights Samsung and Hyundai.

42 of 204 comments (clear)

  1. Shocking! by AmiMoJo · · Score: 4, Insightful

    Big oil is corrupt?! I'm shocked! Shocked I tell you!

    --
    const int one = 65536; (Silvermoon, Texture.cs)
    SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    1. Re:Shocking! by MightyMartian · · Score: 4, Funny

      Shut the fuck up! Oil is Jesus juice! God loves oil! Do not ever question oil. It is holy beyond all other things. God wants us to burn it. The mighty Koch Brothers have decreed it, and they are billionaires, which makes them better than everyone else. If I were in charge, I would outlaw alternative energies, execute all climatologists, and all skeptics would be given a million dollars and a dozen 19 year old hookers as reward for promoting the use of completely harmless hydrocarbons for energy production.

      Oil is good, alternatives are evil and a sign of Satan. You wouldn't wan tot be on the side of Satan by questioning the righteousness of oil companies, would you?

      --
      The world's burning. Moped Jesus spotted on I50. Details at 11.
    2. Re:Shocking! by sconeu · · Score: 5, Funny

      Here's your oil stock dividends, Captain Renault....

      --
      General Relativity: Space-time tells matter where to go; Matter tells space-time what shape to be.
    3. Re:Shocking! by mi · · Score: 4, Insightful

      Yeah. This would never, ever happen to solar-panel manufacturers — nor any other government-sponsored industry.

      --
      In Soviet Washington the swamp drains you.
    4. Re:Shocking! by Anonymous Coward · · Score: 3, Funny

      skeptics would be given a million dollars and a dozen 19 year old hookers

      Oh thank god. I can't tell you how skeptical I am.

    5. Re:Shocking! by Anonymous Coward · · Score: 2, Interesting

      Institutions that are the major state-run industry of the most authoritarian and least free countries in the world? Corrupt? You don't say!

      (And before you go making snarky comparisons to the US, Europe, etc. We get it. Ha ha ha. Way to go internet edgelord with that stinging social commentary. We aren't perfect but we're whole worlds away from the institutionalized corruption that is the system of government in said places)

      There really isn't a line between business and criminal enterprise in these places.. And the companies that do business with them play the game. Including the western ones.

      Of course, it's no coincidence that this is coming out now. In the US we've decided that our interest no longer lie in looking the other way.. And that the low price of oil quite conveniently serves our interests by harming our political and economic enemies.

    6. Re:Shocking! by PopeRatzo · · Score: 4, Insightful

      Institutions that are the major state-run industry of the most authoritarian and least free countries in the world?

      I think you may have that backwards. At least in the case of the US, the oil industry isn't state run. The state is run by the oil industry.

      --
      You are welcome on my lawn.
    7. Re:Shocking! by sycodon · · Score: 2

      Here ya go.

      --
      When Fascism comes to America, it will call itself Anti-Fascism, and tell you to give up your guns.
    8. Re:Shocking! by sdinfoserv · · Score: 4, Funny

      You mean "Shell Shocked" , don't you?

    9. Re:Shocking! by mi · · Score: 4, Interesting

      Solyndra

      More like this. And, yeah, it is true — if Politifact would not flat-out deny it, you can be certain, it is true.

      But the point was not to blame a particular industry — only to remind, that any case of government bureaucrats either spending taxpayers' money or being in a position to allow or disallow something is fertile ground for corruption. Which, of course, leads to the immediate conclusion, that the fewer there are of such situations, the better.

      --
      In Soviet Washington the swamp drains you.
    10. Re:Shocking! by MightyMartian · · Score: 2

      I'm not clear. What is your problem? Surely you don't think using sacred holy fossil fuels to create energy is bad, do you? You're not one of those evil disgusting Commie greenies are you? I'm sure you and I both agree that the AGW crowd should have a gun put to their heads and it politely explained to them that oil is just wonderful. Right?

      --
      The world's burning. Moped Jesus spotted on I50. Details at 11.
    11. Re:Shocking! by Moof123 · · Score: 4, Insightful

      Now if anyone of note actually goes to jail, then I actually will be shocked.

      I won't be holding my breath.

    12. Re:Shocking! by davesays · · Score: 2

      Indeed! I was about to post that I was shocked 76 ways (66 if you're east of the Rockies). Then I realized this was probably the 'Standard' all along. Sent from my 'Mobil.' I'll just e making my 'Exxit.'

    13. Re:Shocking! by rtb61 · · Score: 3, Interesting

      Unfortunately to reflect the true reality of the nature of the corrupt individuals involved you statement should have read "I'll bet you a dozen 14 year old hookers, male or female", they really are that sick and that is exactly how the ensure the control of the politicians they buy. This with the backing of the corrupted espionage/military industrial complex, the core of which now appears to reside in NATO over which the US government had largely lost control, they were doing pretty much what ever they felt like be purposefully feeding false information up the line and striving to create chaos and conflict. Once the scandal truly breaks, oh my, will the current line up of the rich and famous shrink.

      --
      Chaos - everything, everywhere, everywhen
    14. Re:Shocking! by RuffMasterD · · Score: 2

      Pretty much. Iranian billionaire Babak Zanjani was sentenced to death last month for corruption and embezzlement. He helped Iran circumvent international sanctions by selling oil via a complex web of companies while Ahmadinejad was running the country. Didn't seem to bother anyone in Iran at the time. Now the new government claims he owes them $1.9bn in oil money. I guess he didn't pay the right people. There are others of course, so the new cart^H^H^H^H government is sending a strong message.

      --
      Human Rights, Article 12: Freedom from Interference with Privacy, Family, Home and Correspondence
    15. Re:Shocking! by LWATCDR · · Score: 2

      funny rant but the simple truth is that.
      1. There is no real alternative for oil in many areas. Oil is used for transportation, solar and wind are used for electrical production.
      2. Oil is not the biggest problem when it comes to CO2. Coal is the real problem.

      --
      See my blog http://ilovecookes.blogspot.com/ for light hearted technical information.
  2. other citations by Geoffrey.landis · · Score: 4, Informative

    Some citations (other than Huff Post):
    http://www.smh.com.au/interact...
    http://www.dailymail.co.uk/new...
    http://www.stuff.co.nz/busines...
    http://www.stuff.co.nz/busines...
    http://www.stuff.co.nz/busines...

    --
    http://www.geoffreylandis.com
    1. Re:other citations by Aighearach · · Score: 3

      Why would you be averse to Huffington Post when they're the ones who did the reporting?

      Seems a bit irrational.

      It is one thing to prefer wire news from a particular source... or to avoid the story entirely because you don't trust the investigative reporters. But to prefer to hear it second hand is... insane. Does it become more truthy if your friend repeats it to you?

      The linked article from The Age who is the other investigator than Huffington Post, and the Huffington Post links to that article too as the "full investigation."

      See: http://www.huffingtonpost.com/...

    2. Re:other citations by Archangel+Michael · · Score: 3, Interesting

      Same reason certain people call one source "Faux News".

      When people get reporting they don't like, they tend to dismiss the source.

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    3. Re:other citations by radarskiy · · Score: 2

      Those are not other citations.

      a) The Sydney Morning Herald and Stuff are published by Fairfax Media, who are the co-authors with The Huffington Post of the cited report.
      b) The Daily Mail cites only the Sydney Morning Herald.

      All 5 of those articles cite only the same report. They are not separate.

  3. bribery go-between by phantomfive · · Score: 3, Insightful

    It looks like the company (Unaoil) is acting as a "bribery go-between," when oil companies want to drill in oil-rich countries, they contract out the necessary bribery to Unaoil.

    Is it really necessary to bribe officials in oil-rich countries?

    --
    "First they came for the slanderers and i said nothing."
    1. Re:bribery go-between by Aighearach · · Score: 2

      Yeah, think about it... look how much effort Saudi Arabia is putting into maintaining market share. Price isn't everything.

      It isn't enough to walk to the gas station and make a purchase. If you're a big user, you need to arrange deliveries far in advance, and the current spot price isn't that important. Companies like Halliburton are military suppliers. You don't just sign a contract with whoever has the lowest rate, you also have to worry about if they will be able to fulfill their promises. So there are legitimate reasons why it would be necessary for this to be done contractually, and for governments to be involved; after all they are often the final recipient. That sets the stage for corruption to determine which finalist actually gets the contract.

    2. Re:bribery go-between by Archangel+Michael · · Score: 5, Insightful

      Bribes in some countries are required "business expenses". They are required, because to not include them prevents deals. The fact that the US outlaws this practice doesn't stop those countries from expecting it. It is how you get it soccer in Qatar (Thanks FIFA!) Pay enough tot he right people, and shit gets done.

      Which is pretty much the opposite of the US, where you pay government huge amounts of money to have shit stopped up and prevented, we call them Campaign Contributions, or donations to ExPresidents (and presidential candidate) "Foundation" and they are perfectly legal .

      Why do we act shocked? Because we're simply ignorant of how the real world actually works.

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
  4. This is news how? by sehlat · · Score: 2

    Teapot Dome

    The Teapot Dome scandal was a bribery incident that took place in the United States from 1921 to 1922, during the administration of President Warren G. Harding. Secretary of the Interior Albert Bacon Fall had leased Navy petroleum reserves at Teapot Dome in Wyoming and two other locations in California to private oil companies at low rates without competitive bidding. In 1922 and 1923, the leases became the subject of a sensational investigation by Senator Thomas J. Walsh. Fall was later convicted of accepting bribes from the oil companies and became the first Cabinet member to go to prison. No person was ever convicted of paying a bribe, however.

  5. Re:Disingenuous HuffPo Trash passing as journalism by MightyMartian · · Score: 2, Insightful

    What exactly is your point?

    --
    The world's burning. Moped Jesus spotted on I50. Details at 11.
  6. Keep in mind by axewolf · · Score: 2

    What are bribes really?

    I propose a definition: They are various sorts of financial transactions that society lacks the concrete mechanism to define.

    They are supported and accepted by society as a whole, especially by those high in the hierarchy.
    But why is the concrete mechanism of definition lacking?
    Is there a lack of academic resources to create such a mechanism in accordance with the other mechanisms of financial transaction?
    No, it is not the cost of the academic resources that is prohibitive, it is the cost of having such a mechanism in the open.

    Take this opportunity to soak in the fact that the economy is completely fixed. Bribes are a sign of information that is vital to economic function being withheld from the public.

    Presently there is no opportunity for hard work, creativity, and vision to pay off in a lasting way on their own. There is no freedom in this world without united awareness of this fact of the current circumstances.
    But there used to be, and there could be.

    Now scoff at this, forget about it, and go back to your labor, slave.

    1. Re:Keep in mind by bluefoxlucid · · Score: 2

      We have a lot of meaningless political words. Corruption and Bribery are somewhere in the gray wastes: these are real things, but the words aren't exactly fixed. Patriotism, freedom, liberty, and rights are actually wholly meaningless, pretty much name-dropped when someone wants to label something as good or bad (usually when they have no concrete argument other than that it's something they want).

      Meaningless dialogue comes up regardless of any real merit of argument: even privacy rights arguments, which have solid and definite importance behind them, sort of wargarble about rights and handwave a bunch of smoke and mirrors in most discussions. That's why you get people screaming that a service which reports back what applications they install is invading their privacy in a Microsoft OS (which supplies patches for those softwares!), yet completely ignoring that `apt-get upgrade` generates piles of httpd logs telling the server admins your IP address and what software you installed. Then they go send all their e-mail through gmail. You'd think it'd be easy for someone to hide major abuses in all the noise....

      --
      Support my political activism on Patreon.
    2. Re:Keep in mind by guruevi · · Score: 2

      Bribery is well defined, the problem is that in many countries what we would consider bribes are legalized therefore no longer bribes legally speaking (you can't go to jail for giving/receiving them).

      They are similar to 16th century pirates or 20th century war crimes; it is illegal as long as it is not your country doing it.

      --
      Custom electronics and digital signage for your business: www.evcircuits.com
    3. Re:Keep in mind by JimFive · · Score: 2

      Of course bribes can be defined. A bribe is a payment to a functionary to encourage them to do their job in a way that is favorable to you. (See TIP). This is distinct from licensing fees, etc, in that the bribe is paid to an individual as an individual while a fee is paid to a company or government division. In addition, bribes are ad hoc while fees are contractual or defined by law.
      --
      JimFive

      --
      Please stop using the word theory when you mean hypothesis.
    4. Re:Keep in mind by MightyMartian · · Score: 4, Insightful

      Financial or other types of inducements that invite a person in a position of authority to abuse their lawful or fiduciary obligations in return for special treatment or favors.

      If you're on trial and I give your lawyer $100,000 to deliberately undermine your case, I have committed bribery. If I go to a county or municipal building inspector and hand him the keys to a new Rolls Royce in return for him rubber stamping a building I'm constructing, that is a bribe. If I give a government procurement agent a million dollars to assure that I win the bidding on a government contract, that is a bribe.

      You will notice that in all these cases the act involves the inducement an individual to compromise their legal or fiduciary duty, not to mention that others are directly harmed. In the first case, you, as the defendant, are very seriously harmed by your lawyer taking the bribe and screwing you over. In the second and third cases, it involves suborning a public official who has a legal duty to act only in the best interests of the state (and by extension, society as a whole).

      You are certainly free to try to tell a judge that bribery has no real meaning, but I can assure you, it does, and your defense would amount to little more than standing up and going "DUHHHHHH..."

      --
      The world's burning. Moped Jesus spotted on I50. Details at 11.
  7. Re: Only climate deniers should be upset by Anonymous Coward · · Score: 2, Funny

    I'm a climate denier. I emphatically deny the existence of any climate on this or any other world.

  8. OPEC by NotInHere · · Score: 3

    its a cartel, and even wikipedia knows it.

  9. Sounds like a "facilitator" company by dj245 · · Score: 5, Informative

    I'm not surprised at all. To play in most Middle East countries requires a local company and a physical office. This can be hard to set up for foreigners due to local law. Certain countries basically require kickbacks and bribes to get anything done. Legitimate companies often get around both of these issues by partnering with a "facilitator" company.

    The Facilitator company will sometimes act as the agent (sales representative) for the legitimate company, collecting a commission on goods and services sold. The commission may be deliberately higher than normal in order to have the cash to pay whoever needs to be paid. This can be discovered by examining the commission amount/percentage and comparing it to other parts of the world for similar services. The foreign company can be held responsible if it knew, or should have known, that something fishy was going on.

    Another way to do the same thing is to retain such a company for consulting services. Looking at contract deliverables and the contract amount usually gives an indication if the consulting services are legitimate or a cover for something else. Again, the foreign company can be held responsible if they knew, or should have known that something was up.

    Yet another way to do the same thing is to subcontract to one of these facilitating companies. The facilitating company then marks up the price to whatever they need in order to pay their sales staff, pay bribes, or negotiate legal hurdles. The customer's contract is between the customer and the facilitating company, and the foreign company never sees it. Done right, the foreign company has no idea what the final customer price is, or if it was reasonable, etc. This is the best way to protect a foreign company since any improper or illegal actions that the facilitating company takes fall solely on the facilitating company. The facilitating company can also accept contract provisions that a foreign company could not legally accept (Israeli goods boycott, as an example). The foreign company never has the information required to see that something was amiss, so proving that they "knew or should have known" is substantially harder.

    One last thing to keep in mind is that certain types of payments are actually legal. Generally, you can pay someone to "hurry up" and complete something that is included in their official duties, and which they would have done for you anyway without the payment. If the payment is just to expedite something that would have happened anyway, it is not considered a bribe, even if it is paid directly to an individual. The prime example of this is paying a customs officer to release cargo which has all the correct paperwork. The officer would have done this anyway, eventually. The payment is just to expedite the legal and inevitable action.

    --
    Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
    1. Re:Sounds like a "facilitator" company by Sumus+Semper+Una · · Score: 2

      I hadn't realized facilitator companies existed, but, after it's explained, their presence seems like an obvious necessity of doing business in a country with a large degree of corruption. Now I'm really more intrigued and curious about the economic implications to this news than I am shocked in any way.

      I wonder how the size of the bribe is decided. It would pretty much have to be what the market would bear, wouldn't it? So, not enough to raise eyebrows from other sources or cause the briber to take their business elsewhere instead, but as much as you can get away with. And is the incidence of bribery correlatable with how laissez-faire and unregulated an economy is? Directly or inversely? Does it act as an inflationary force, deflationary force, or does it instead react to inflation/deflation?

      As someone who has never paid or been paid a bribe, I'm really curious about how they fit into the larger picture of an economy.

    2. Re:Sounds like a "facilitator" company by Anonymous Coward · · Score: 2, Informative

      I hadn't realized facilitator companies existed, but, after it's explained, their presence seems like an obvious necessity of doing business in a country with a large degree of corruption. Now I'm really more intrigued and curious about the economic implications to this news than I am shocked in any way.

      I wonder how the size of the bribe is decided. It would pretty much have to be what the market would bear, wouldn't it? So, not enough to raise eyebrows from other sources or cause the briber to take their business elsewhere instead, but as much as you can get away with. And is the incidence of bribery correlatable with how laissez-faire and unregulated an economy is? Directly or inversely? Does it act as an inflationary force, deflationary force, or does it instead react to inflation/deflation?

      As someone who has never paid or been paid a bribe, I'm really curious about how they fit into the larger picture of an economy.

      I've been part of several, largely penny-ante stuff but a few larger. I hate them, but they are a necessary part of doing business in some parts of the world. In Indonesia in the 90s, the going rate was typically 10% of the contract value for consulting work, but it could be negotiated if, say, out-of-pocket costs were a big chunk of the contract value. That 10% figure was remarkably common. You didn't get preferential treatment for that fee; anyone who won the competitive bidding process would be expected to pay, and foreigners paid the same or less than locals. After Soeharto was forced to step down there was a bit of a free-for-all, as bureaucrats were afraid the "goose who laid the golden egg" was leaving the station, and they wanted to get as much as possible before that happened. She never left, and things pretty came back to normal.

      After around 2004, the game shifted somewhat, so that the elites in business, judiciary, executive and legislative circled their wagons and it became progressively harder for foreigners to work there. There is always a trade-off between economic growth and protecting established businesses, and it seemed nobody cared much for growth. There has been a lot of progress in law enforcement, with the Corruption Eradication Commission bringing hundreds of charges against politicians, executive officials and businesspeople, but that's just a drop in the bucket of a horribly corrupt society.

      I left last year, and although I miss many friends and have many fond memories, it's just too hard a place to do business with your morals intact.

  10. Are you surprised by the following headlines? by irrational_design · · Score: 3, Insightful

    Leaked Emails Reveal Widespread Corruption in Global Oil Industry
    Leaked Emails Reveal Widespread Corruption in Government
    Leaked Emails Reveal Widespread Corruption in Major Corporation
    Leaked Emails Reveal Widespread Corruption in Academic Research
    Leaked Emails Reveal Widespread Corruption in Some Church
    Leaked Emails Reveal Widespread Corruption in Scientific Community
    Leaked Emails Reveal Widespread Corruption in HOA
    Leaked Emails Reveal Widespread Corruption in Any Human Organization

  11. The dull surprise is almost overwhelming! by Chas · · Score: 3, Insightful

    I'm not sure if I'll be able to concentrate after being THIS gobsmacked...

    Fuck. This is like saying "Water is wet." or "Fire is hot." or "Politicians are full of shit."

    It's pretty much a given. Like gravity.

    --


    Chas - The one, the only.
    THANK GOD!!!
    1. Re:The dull surprise is almost overwhelming! by Anonymous Coward · · Score: 4, Insightful

      And that's precisely what the oil industry is relying on: your contempt of them. Since you're already used to the fact that they're corrupt, they get to live with it and keep making $$$. Not like you're going to do anything about it because you're already treating it like a fact of life.

  12. Comment removed by account_deleted · · Score: 2

    Comment removed based on user account deletion

  13. Industrial or State? by Etherwalk · · Score: 2

    Was this industrial espionage or state espionage that leaked it? Or a disgruntled employee?

    We've had a few seemingly random leaks of criminal conspiracies since NSA spying got big... information you couldn't use in court if it came directly from a government action.

  14. And the winner is? by duckintheface · · Score: 5, Insightful

    Former Vice President Dick Cheney, who at the time referenced in the leaked documents was CEO of Halliburton. Oh, he is also a war criminal.

    --
    "He took a duck in the face at 250 knots." -- William Gibson, Pattern Recognition
  15. Cut it OUT with the Capt. Renault attitude by rbrander · · Score: 5, Insightful

    What if everybody had the attitude of "well, this is a screwed-up world we live in, what can you do, (nothing), let's turn to the sports" about everything?

    "King George wants us to suffer taxation without representation, surprise, surprise, well, duh." - there'd be no America.

    "Big deal, this stuff happens, no need for major efforts to change" was the attitude of all those Bishops and Cardinals to kids getting buggered.

    We SHOULD react with shock and disgust to lying and fraud in the financial industry, to corruption in oil, to military vendors promoting war; we should tell our politicians they're unemployed unless they act and can have all the money they need to sic 10,000 FBI agents on them.

    The S&L crisis in the 80's prompted the assignment of 1000 FBI agents to the case. They brought in about one conviction each: 1000 convictions, a 90% success rate, after winnowing down 30,000 referrals to 1100-odd trials. It brought about real results.

    By contrast, the 2008 crisis prompted no such effort despite being 70X as large a set of frauds.

    We can tackle these large problems; you just put out the same effort you'd put into a new highway interchange or skyscraper: $100M budget per year and a few thousand people working on it. The US Justice System has nearly one million employees; only 2300 on white-collar crime.