SEC Charges Ashland Oil With Bribery
Ashland Oil and its former chairman were formally accused Tuesday by the Securities and Exchange Commission of bribing a foreign official in a scheme to obtain precious Middle East oil at discount prices in 1980-82.
Ashland Oil and Orin E. Atkins, now a Florida businessman, signed a consent decree stipulating that they aren’t contesting the allegations in court and neither admit nor deny them. The SEC agreed that it won’t pursue any other civil actions stemming from its investigation.
In a civil complaint filed in U.S. District Court in Washington, the SEC accused Atkins and the big Ashland, Ky.-based oil refiner of paying $29 million to get oil from the tiny Persian Gulf nation of Oman, thus violating the foreign corrupt practices law enacted in 1977.
The violation carries no penalty unless the defendants do it again or unless the matter is referred to the Justice Department for criminal action. Attorneys for Atkins and the SEC wouldn’t comment on that possibility.
The SEC decided on April 1 to file a complaint against Ashland Oil. That was an unusual reversal of a decision in early March, when the commission overruled a staff recommendation and voted against proceeding. SEC officials wouldn’t comment on the reasons for the reversal.
“Although it would be my personal preference to litigate this matter, I have agreed to settle this action so that the company can put this lingering dispute behind it and because to contest this matter would have involved disproportionate trouble and expense,” Atkins said Tuesday in a statement from his West Palm Beach, Fla., office.
Ashland Oil noted that the complaint doesn’t involve any current officers of the company and said it wanted to avoid the cost and trouble of fighting the SEC’s findings in court. Ashland said: “The company believes this is a significant step in putting these old matters behind it.”
The case arose from Ashland Oil’s 1980 purchase of chrome and nickel mining claims in Zimbabwe that hadn’t produced revenue in years. The main owner was James T. W. Landon, then a key government official in Oman, the SEC complaint said.
Atkins, who was directly involved in the Zimbabwe negotiations, contended that it was a normal business transaction for Ashland. But the company’s own experts advised against it because of a weak market for chrome.
The SEC said Ashland’s subsequent purchase of oil from Oman at a $3-a-barrel discount was the quid pro quo for the company’s investment in Zimbabwe. The SEC quoted a company analysis that with the discount, Ashland could have turned a profit of more than $40 million in a single year by simply reselling the Oman crude on the spot market.
