The FCPA Files: R. Eugene Holley and Roy J. Carver (Holcar Oil Company) (1979)
It must have seemed like a great opportunity: three offshore wells in Qatar, pre-drilled, just waiting for someone to reopen them and carry the oil away. When he learned of the concession’s availability in 1975, Gene Holley—chairman of the Georgia Senate Banking and Finance Committee—reached out to an acquaintance, Roy Carver, from whom he had recently bought a private airplane. Holley was paper-rich thanks to some lucky pre-embargo investments in Texas oilfields, but he was also highly leveraged. Carver, a yacht enthusiast who had long-since made his fortune in retread tires, could provide enough liquidity to seize the moment.
As it turns out, the whole thing was a bit of a setup. The wells did have oil, but a sulfurous “sour” type that couldn’t be extracted without exorbitant precautions. That’s why the original investors had walked away—a fact surely known to Qatar’s Director of Petroleum Affairs, Ali Jaideh, when he first pitched the idea to Holley. Ali’s brother, Kassem, had been local agent for Sedco, the abandoned project’s Texas-based drilling contractor. After the project faltered, it was a Sedco executive who found Holley, introduced him to the Jaidehs, and helped hype the wells to the prospective new investors.
Carver and his estate would eventually countersue Sedco for the money he had sunk into the doomed venture, prevailing to the tune of about $13 million. What he couldn’t recover was the $1.5 million Ali had demanded be paid into his brother’s Swiss bank account as a condition of the deal’s approval.
The fact of the payment came to light when an ill-advised attempt to refinance the project was thwarted by the refusal of the new Director of Petroleum Affairs to renew the lease. (Ali Jaideh had moved on to become OPEC’s Secretary General in 1977.) Voicing his frustration in a side meeting with the U.S. Ambassador to Qatar and another foreign service officer, Carver recounted the earlier illicit payment and blurted out: “Who do I go see now, how do I get it done?” The Ambassador balked and the meeting soon ended. A year later, the DOJ obtained a permanent consent injunction.
Carver went back to his globetrotting lifestyle, passing away in Marbella, Spain in 1981. Holley got caught up in a bank fraud scheme and spent 16 months in prison before returning to his home in Augusta and a life of religious contemplation.
This post is part of "The FCPA Files" series, examining key enforcement cases under the Foreign Corrupt Practices Act and the lessons they offer for modern compliance. |