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Leaked Emails Reveal Widespread Corruption in Global Oil Industry (theage.com.au) 204

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.
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Leaked Emails Reveal Widespread Corruption in Global Oil Industry

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  • Shocking! (Score:5, Insightful)

    by AmiMoJo ( 196126 ) <mojo.world3@net> on Wednesday March 30, 2016 @03:04PM (#51809979) Homepage

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

    • by MightyMartian ( 840721 ) on Wednesday March 30, 2016 @03:06PM (#51809997) Journal

      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?

      • Re: (Score:3, Funny)

        by Anonymous Coward

        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.

        • And the winner is? (Score:5, Insightful)

          by duckintheface ( 710137 ) on Wednesday March 30, 2016 @05:15PM (#51810985)

          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.

      • You sure like making stuff up don't you.
      • bitter sarcasm much?
        comes from tasting too much sour grapes. best not to be a loser ... always.

        • 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?

      • ...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.

        Hmm.....

        /me raises a hand and says "I'm a skeptic...and for an extra million, I"ll create plenty of good video and other promotional media proving how good oil is for us!!"

        Hey...c'mon, everyone has their price!!

        ;)

        • Indeed, Just ask Frank Spencer

        • It's the hookers that er hooked you, isn't it ?

      • I am Donald Trump and I approve this message.

      • by LWATCDR ( 28044 )

        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.

    • by sconeu ( 64226 ) on Wednesday March 30, 2016 @03:10PM (#51810035) Homepage Journal

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

    • Re:Shocking! (Score:4, Insightful)

      by mi ( 197448 ) <slashdot-2016q1@virtual-estates.net> on Wednesday March 30, 2016 @03:12PM (#51810061) Homepage Journal

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

      • Or anything 'us' apparently. Countries listed are 'our enemies'. I suspect another analyst would highlight different aspects in the leaked emails,

        The leaked files expose as corrupt two Iraqi oil ministers, a fixer linked to Syrian dictator Bashar al-Assad, senior officials from Libya’s Gaddafi regime, Iranian oil figures, powerful officials in the United Arab Emirates and a Kuwaiti operator known as “the big cheese”.

    • Re: (Score:2, Interesting)

      by Anonymous Coward

      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..

      • Re:Shocking! (Score:5, Insightful)

        by PopeRatzo ( 965947 ) on Wednesday March 30, 2016 @03:48PM (#51810361) Journal

        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.

        • At least in the case of the US, the oil industry isn't state run.

          Officially. Unofficially, well, let's just say hookers and blow can outright purchase representation. So from that aspect, yeah, what difference doest it make?

    • by Chas ( 5144 ) on Wednesday March 30, 2016 @03:36PM (#51810257) Homepage Journal

      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.

    • by sycodon ( 149926 )

      Big (Insert Industry Here) is corrupt? I'm shocked! Shocked I tell you!

    • Only thing shocking is they put it in plain text in emails.

    • by sdinfoserv ( 1793266 ) on Wednesday March 30, 2016 @04:12PM (#51810547) Homepage
      You mean "Shell Shocked" , don't you?
      • 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.'
    • 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.

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

      I could hardly believe it myself!

    • Re:Shocking! (Score:5, Insightful)

      by Moof123 ( 1292134 ) on Wednesday March 30, 2016 @05:19PM (#51811005)

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

      I won't be holding my breath.

    • by Livius ( 318358 )

      I find it remarkable how I really knew nothing about these players beforehand and yet how unsurprised I am.

    • by LWATCDR ( 28044 )

      More to the point.
      "We will conclude the three-part investigation by showing how corrupt practices have extended deep into Asia and Africa."
      Doing business in Asia and Africa involves bribes? Shocking I tell you.

  • other citations (Score:5, Informative)

    by Geoffrey.landis ( 926948 ) on Wednesday March 30, 2016 @03:06PM (#51810005) Homepage

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

    • I get wanting to avoid HuffPo, but Daily Mail is about as bad, just on the other end of the political spectrum and without even trying to pretend that they are helping.
    • by Aighearach ( 97333 ) on Wednesday March 30, 2016 @03:19PM (#51810121) Homepage

      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/... [huffingtonpost.com]

      • Re:other citations (Score:4, Interesting)

        by Archangel Michael ( 180766 ) on Wednesday March 30, 2016 @03:33PM (#51810231) Journal

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

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

      • Re: (Score:2, Flamebait)

        by cayenne8 ( 626475 )

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

        Well, the HuffPo is pretty well known for having a leftist, liberal slant to most of their stories...in both choice of subject and type of coverage.

        Much the same as in how Fox News tips a bit to the right.

        With either, if you find a source more centrist, it adds to the authenticity of the story as published.

      • 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.

        Not really. HuffPo does some good reporting but they also do bad. Their worst stuff was posting really whacky and dangerous BS like the whole anti-vaxx nonsense. But even on politics they post articles suggesting that Bernie Sanders is winning the Democratic primary [huffingtonpost.com] when the vast majority of expert analysis suggests it's almost impossible for him to come back.

        The fact is that HuffPo will post articles completely out of step with overwhelming expert consensus and seriously misleads its readers to promote it

    • 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.

      • by skegg ( 666571 )

        Good pick-up ... this appears to be mostly a Fairfax story.
        I've noticed Fairfax has collaborated with HuffPo the last couple of years, so this may be considered a "collaborative" effort for the purposes of gaining HuffPo's global reach.

        But back to the main story ... clearly the rules around lobbyists need to be locked-down much, much more.

        Australia's federal government has a lobbyist register [pmc.gov.au] but from what I can see there's no penalty (financial, custodial) if one doesn't register. Not good enough.

        Secondly,

  • bribery go-between (Score:4, Insightful)

    by phantomfive ( 622387 ) on Wednesday March 30, 2016 @03:10PM (#51810031) Journal
    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?
    • 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 l

    • by Archangel Michael ( 180766 ) on Wednesday March 30, 2016 @03:26PM (#51810181) Journal

      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.

      • I think you mean Qatar bribed FIFA. We're both talking about the same FIFA here, right? Otherwise point well made.
    • Pretty much all business activity in the second and third world involves bribing government officials. It's so pervasive that it's no surprise that an abstracted and streamlined bribery services business would develop.
  • Teapot Dome [wikipedia.org]

    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 convict

    • Because this isn't even the same decade as that stuff, and is unrelated.

      The word "news" that you ask about... it is stuff that is new. That is why it is news. Teapot Dome? That is olds. Also known as history.

  • 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 c

    • 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, w

    • by guruevi ( 827432 )

      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.

    • What are bribes really?

      Bribe: verb,persuade (someone) to act in one's favor, typically illegally or dishonestly, by a gift of money or other inducement
      noun, a sum of money or other inducement offered or given in this way.
      Emphasis on illegally or dishonestly.

      Take this opportunity to soak in the fact that the economy is completely fixed.

      citation needed.

    • 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
    • Re:Keep in mind (Score:5, Insightful)

      by MightyMartian ( 840721 ) on Wednesday March 30, 2016 @04:33PM (#51810681) Journal

      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..."

  • by NotInHere ( 3654617 ) on Wednesday March 30, 2016 @03:19PM (#51810125)

    its a cartel, and even wikipedia knows it.

    • I doubt if that is the same issue. A cartel is a form of monopoly. That's independent of bribery issues . One could almost say it makes bribery superfluous.
      Finally, it's clear that OPEC is currently not functioning as a cartel, with the Saudis dumping their oil.

  • by dj245 ( 732906 ) on Wednesday March 30, 2016 @03:28PM (#51810195) Homepage
    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.
    • 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 thei

      • Re: (Score:2, Informative)

        by Anonymous Coward

        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 expec

  • by irrational_design ( 1895848 ) on Wednesday March 30, 2016 @03:34PM (#51810237)

    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

    • Leaked Emails Reveal Widespread Corruption in HOA

      Woah, woah, HOAs are the epitome of justice and high human ideals. They do no wrong.

    • 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

      Headlines you never see
      Leaked Emails Reveal Widespread Corruption in Hell

  • So the articles are very light on details so I could have this very wrong but it appears it's the various governments that want the companies to pay them something to do business in their countries? Not sure that really equates to big oil corruption but like I said the article, as per HuffPo standard, is kind of light on details but I might have missed something.
  • by rbrander ( 73222 ) on Wednesday March 30, 2016 @06:10PM (#51811319) Homepage

    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.

    • 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.

      Capt. Citroen:

  • ...robbing my computer of CPU cycles!
  • by tsotha ( 720379 )
    I can't get to excited over this. There are a whole lot of countries in the world in which bribing public officials is expected, and if you don't you'll never do business there.
  • 30 years in the game and I'm not in the least astonished.
  • A leak from an oil company, that turns out to be documents? Thank the Lord.

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