The Securities and Exchange Commission reversed itself yesterday and voted to authorize its staff to file a civil enforcement action against Ashland Oil Inc.
The company announced in Ashland, Ky., that it had been told by the SEC staff that the commission had reconsidered its March 12 decision not to authorize any action involving the company and had decided instead to authorize the staff to file an action in connection with an acquisition of chrome properties in Zimbabwe in early 1980.
An SEC spokesman declined to comment. Ashland and its former chief executive officer and chairman, Orin E. Atkins, repeatedly have denied any improper conduct.
On March 12, the commission voted 2 to 1 to reject a staff recommendation to sue Ashland and Atkins in connection with alleged bribes to obtain crude oil from Oman in early 1980, sources told The Washington Post.
The sources also said that Commissioners Charles C. Cox and Edward A. Fleischman voted to reject the staff recommendation, that Commissioner Aulana L. Peters voted for it, and that Chairman John S. R. Shad and Commissioner Joseph A. Grundfest abstained. This tally could not be verified.
The sources said the staff, surprised by the initial vote, decided to try to turn the commission around.
At issue are possible violations of the Foreign Corrupt Practices Act of 1977 and of 1975 consent decrees in which the company and Atkins were enjoined from using company funds for any illegal purposes, including foreign payments.
In three pending lawsuits, Ashland is accused of making more than $40 million in illegal payments to foreign officials in the Mideast in 1980 and 1981, while Atkins was CEO and chairman.
The transactions cited in the lawsuits include Ashland's purchase in April 1980 of a controlling stake in a Zimbabwean chrome mine that turned out to be worthless. Seven months later, Ashland entered into a joint venture with a Liechtenstein company to develop reusable Gore-Tex sausage casings. The process never worked, and Ashland lost $2.3 million.
The owner of the Liechtenstein company was Yehia Omar, a friend of the Atkins family who was an economic consultant to the sultan of Oman, and who was said to have persuaded Atkins that he (Omar) had the influence to help land contracts for crude from the sultanate.
Oman did sign an agreement in September 1980 to provide 20,000 barrels of crude a day.