PDF《EXCHANGE COMMISSION,》

Reid A.

Muoio (RMz Z ~ Cheryl J. Scarboro Tracy L. Price Denise Hansberry Attorneys for Plaintiff U.S. Securitiesand Exchange Commission 100F Street, NE Washington, DC 20549-6030 (202) 551-4403 (Scarboro) UNITED STATESDISTRICT COURT FOR THE SOUTHERNDISTRICT OF NEW YORK UNITED STATES SECURITIESAND ) EXCHANGE COMMISSION, ) Plaintiff, COMPLArNT

1 v. ) Civil Action No. CHEVRON CORPORATION, ) Defendant. Plaintiff, United States Securities and Exchange Commission (the . Commission ), alleges that: NATURE OF THE ACTION 1. From approximatelyApril

2001 through May 2002, Chevron Corporation violated the books and records and internal controls provisions of'

the Foreign Corrupt Practices Act (the FCPA ) when third parties with which Chevron contracted made approximately $20 million in illegal surchargepayments in connectionwith Chevron'

s purchases of crude oil under the United Nations Oil for Food Program. The third parties paid kickbacks to Iraq in the form of surchargeson shipments of crudeoil from Iraq'

s State Oil Marketing Organization( SOMO). Chevron knew or should have known that third parties paid a portion of the premiums they received from Chevron to Iraq as illegal surcharges. Chevron knew that surchargepaymentswere prohibited by the Oil for Food Program and U.S. and international trade sanctionson Iraq. 2. The Oil for Food Program provided humanitarian relief to the Iraqi population during the time that Iraq was subjectto international trade sanctions. The program required that all payments for Iraqi crude oil be made to a United Nations escrow account, so that Iraq could purchase necessaryhumanitarian goods. The surchargespaid by third parties in connection with Chevron'

s purchases of oil bypassed the escrow account and were instead paid to Iraqi-controlled accounts at banks in Jordan and Lebanon. 3. In purchasing Iraqi crude oil fi-omthird parties, Chevron paid a premium above the Official Selling Price ( OSP ) establishedby the United Nations and SOMO. Chevron failed to accuratelyrecord in its books and records the approximately$20 million in surchargesthat were included in the premiums. Although Chevrontook certain steps designed to prevent the purchase of Iraqi oil fi-omthird parties on which illegal surchargeshad been paid, suchprocedures proved inadequate. Thus, Chevron failed to devise and maintain a system of infernalaccountingcontrolsto detect and prevent such illicit payments. 4. As a result of this conduct, Chevron violated Sections 13(b)(2)(A)and 13(b)(2)(B)of the Securities ExchangeAct of 1934(the Exchange Act ) [15 U.S.C. JURISDICTION 5. This Court hasjurisdiction over this action pursuant to Exchange Act Sections21(d), 21(e) and

27 [15 U.S.C. $8 78u(d), 78u(e) and 78aaI. Chevronmade use of the mails or the means or instrumentalitiesof interstate commercein furtheranceof the conduct alleged in this Complaint. 6. Certain of the acts or transactions constitutingthe violations alleged in this Complaint occurred within thisjudicial district, and venue is thereforeproper under Section27 of the Exchange Act. [I5 U.S.C. $78aa]. DEFENDANT 7. Defendant Chevron Corporation (includingall predecessors and related entities) is a Delaware corporation with its headquartersin San Ramon, California. The company is involved in the production, processing, marketing and transportationof crude oil, natural gas and petroleum products. Chevron conductsbusiness in the United States and approximately 180other countries. It is registered with the Commission under Section 12(b)of the Exchange Act [15 U.S.C. $ 781(b)] and its common stock trades on the New York Stock Exchangeunder the symbol CVX. Chevron operates five oil refineries within the United States, includingtwo in California(the West Coast refineries ). During the relevant period, Chevronpurchased approximately78 million barrels of crude oil from Iraq, primarily for use at its West Coast refineries. FACTS The UnitedNations Oil for Food Procram 8. On August 2, 1990,the government of Iraq, under SaddarnHussein, invaded Kuwait. Four days later the United Nations SecurityCouncilvoted to enact U.N. Resolution 661, which prohibited member states from trading in any Iraqi commodities or products. The United Nations continued to enforce these sanctions until 2003. 9. On April 14, 1995,the United Nations SecurityCouncil adopted Resolution 986, which authorized the Government of Iraq to sell oil on the condition that the proceeds of all of its oil sales were deposited in a bank account monitored by the United Nations and used only to purchase designated humanitarian goods for the benefit of the Iraqi people. In May 1996,the Government of Iraq entered into a written Memorandumof Understanding to implement Resolution 986. 10. The United Nations Office of Iraq Program, Oil for Food (the Oil for Food Program or Program ) was subsequentlyestablished to administer Iraq'