David Kirkpatrick

February 14, 2009

Halliburton settles bribery charge

Filed under: Business — Tags: , , , , , , — David Kirkpatrick @ 12:14 pm

KBR, back when it was still part of Halliburton, bribed Nigerian officials during the construction of a natural gas plant. Halliburton recently settled with the U.S. government in the case to the tune of almost $560M. It still faces charged in the EU and Africa.

Here’s an EnerMax post of mine from this week on the settlement:

Oil and gas services company, Halliburton, settled charges that one of its divisions engaged in bribing Nigerian officials. The settlement came to a $559 million payout to the Justice Department and the SEC. This figure is the largest paid by any U.S. company facing bribery charges.

The charges stemmed from the construction of a gas plant in Nigeria. The investigation began back in 2003 and the matter is still being pursued in Europe and Nigeria so Halliburton still faces potential additional fines and possible sanctions.

From the Wall Street Journal:

The U.S. government’s case received a boost in September when former Halliburton executive Albert J. “Jack” Stanley agreed to plead guilty to orchestrating $180 million in bribes to senior Nigerian officials. Mr. Cheney promoted Mr. Stanley to run KBR in 1998.The charges against Mr. Stanley relate to work done by former Halliburton unit Kellogg, Brown & Root, which was spun off in 2007 into a separate company, KBR Inc. Halliburton agreed to pay penalties stemming from the case even after KBR was independent.

It is unclear whether the proposed settlement will affect KBR’s ability to land future government contracts. A KBR spokeswoman said it would discuss the impact of the proposed settlement in February, when it files its earnings.

News of the large settlement comes on the heels of Halliburton reporting a 43 percent drop in fourth-quarter earnings. The settlement includes a payment of $382 million on behalf of KBR to the U.S. Justice Department and $177 million to the Securities and Exchange Commission.

The charges against KBR originated during the construction of a large liquefied natural gas plant near Port Harcourt on the Nigerian Coast. This project began in 1996 and ran through the mid-2000s. The gas plant was the largest industrial investment ever made in Africa at that time.

The previous U.S. record for a bribery investigation also involved the oil and gas industry. Oil-services firm Baker Hughes was fined $44 million in 2007 for improper payments in Kazakhstan.

The Silver is the New Black Theme. Blog at WordPress.com.

Follow

Get every new post delivered to your Inbox.

Join 26 other followers