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Halliburton Under Investigation for Fraud

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    Probe Into Halliburton Subsidiary Role in Nigeria Bribe Case By Michael Peel The Financial Times UK Monday 07 August 2006
    Message 1 of 1 , Sep 2, 2006
      Probe Into Halliburton Subsidiary Role in Nigeria Bribe Case
      By Michael Peel
      The Financial Times UK
      Monday 07 August 2006

      A subsidiary of Halliburton is under investigation by the UK's
      Serious Fraud Office over the US oil service company's part in an
      alleged plot to pay more than $170m (£89m) of bribes to win billions
      of dollars of work at a giant Nigerian gas plant.

      The SFO said it had carried out searches at business and
      residential premises as part of the probe into KBR, whose work on the
      project was underwritten partly by British government money.

      The SFO's action opens a fresh front in a high-profile case being
      investigated in the US, France and Nigeria. For part of the period
      under investigation, Halliburton was headed by Dick Cheney, the US

      The SFO gave few details about its probe, which it said opened in
      March. The searches were carried out on July 20 at three residential
      addresses and one company office in London, and at a house in Somerset.

      Halliburton said it continued to co-operate and was "committed to
      getting resolution". It declined further comment.

      The Nigerian bribery allegations erupted three years ago, when a
      former executive of the consortium working on the gas plant told a
      French judge it had operated an offshore slush fund to win contracts
      since the mid-1990s. The consortium is quarter-owned by KBR, through
      its 55 per cent-controlled British joint venture, MW Kellogg.

      More than $12bn has so far been invested in the gas plant, which
      supercools natural gas into liquid form so it can be shipped. Royal
      Dutch/Shell is the project's biggest private shareholder, partnered by
      Total of France, Italy's Eni and the Nigerian government.

      In 2004, Halliburton severed links with two former employees
      including Jack Stanley, the former KBR chairman, for having taken
      "improper personal benefits" in connection with the project. Lee
      Kaplan, Mr Stanley's lawyer, declined to comment.

      The bribery allegations centre on the construction of the Nigeria LNG
      natural gas liquefaction plant. The plant is 49 per cent owned by the
      Nigerian government, 25.6 per cent by Royal Dutch/Shell, 15 per cent
      by Total of France and 10.4 per cent by Italy's Eni.
      What the SFO Is Investigating

      The SFO investigation comes after the launch of investigations by a
      French magistrate, the US Department of Justice and Nigeria's Economic
      and Financial Crimes Commission.

      Investigators are looking into allegations that TSKJ, the plant's main
      construction consortium for the past decade, agreed between 1994 and
      2003 to pay more than $170m in bribes to win billions of dollars of
      building work.

      One of the consortium members is MW Kellogg, a British joint venture
      in which Halliburton's KBR subsidiary has a 55 per cent stake. The
      other companies involved are JGC of Japan, Technip of France and
      Italy's Snamprogetti.

      The payments in question were made by the consortium to an offshore
      company controlled by Jeffrey Tesler, a London-based lawyer, who has
      declined to comment. His lawyer has denied the money was used for bribes.

      The contracts are for services such as promoting the consortium,
      advising on contractors and helping to maintain good relations with
      the client, government authorities and business representatives. They
      include a no-bribery clause.

      Halliburton has severed ties with two former employees including Jack
      Stanley, a former KBR chairman, for allegedly receiving 'improper
      personal benefit.'

      Halliburton has said minutes of internal meetings show the consortium
      had 'considered payments to Nigerian officials.'



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