Saturday, April 26, 2008

 

Evidence Found in Halliburton Bribe Probe

Russell Gold, Wall Street Journal, reports that Government investigators in a long-running bribery probe have evidence that agents of a construction consortium led by a former Halliburton Co. unit made payments to Nigerian officials. The investigation has expanded beyond the initial effort to determine whether $132 million paid by the Halliburton-led consortium to a British lawyer was used to bribe Nigerian officials. Payments to the lawyer, Jeffrey Tesler, date back to 1995. The payments in question were made by a consortium of four companies led by the former Halliburton unit KBR.

So I poked around a bit and found the Halliburton SEC filing in question for the quarter ended March 31st. Relevant part of the filing excerpted below (Note 8, Page 9 - Foreign Corrupt Practices Act investigations). You can see the original Halliburton document here. (pdf file - 200 pages. Relevant information on page 131)

The SEC and DOJ investigations include an examination of whether TSKJ’s engagements of Tri-Star Investments as an agent and a Japanese trading company as a subcontractor to provide services to TSKJ were utilized to make improper payments to Nigerian government officials. In connection with the Bonny Island project, TSKJ entered into a series of agency agreements, including with Tri-Star Investments, of which Jeffrey Tesler is a principal, commencing in 1995 and a series of subcontracts with a Japanese trading company commencing in 1996. We understand that a French magistrate has officially placed Mr. Tesler under investigation for corruption of a foreign public official. In Nigeria, a legislative committee of the National Assembly and the Economic and Financial Crimes Commission, which is organized as part of the executive branch of the government, are also investigating these matters. Our representatives have met with the French magistrate and Nigerian officials. In October 2004, representatives of TSKJ voluntarily testified before the Nigerian legislative committee.

TSKJ suspended the receipt of services from and payments to Tri-Star Investments and the Japanese trading company and has considered instituting legal proceedings to declare all agency agreements with Tri-Star Investments terminated and to recover all amounts previously paid under those agreements. In February 2005, TSKJ notified the Attorney General of Nigeria that TSKJ would not oppose the Attorney General’s efforts to have sums of money held on deposit in accounts of Tri-Star Investments in banks in Switzerland transferred to Nigeria and to have the legal ownership of such sums determined in the Nigerian courts.

As a result of these investigations, information has been uncovered suggesting that, commencing at least 10 years ago, members of TSKJ planned payments to Nigerian officials. We have reason to believe that, based on the ongoing investigations, payments may have been made by agents of TSKJ to Nigerian officials. The government has recently confirmed that it has evidence of such payments. The government has also recently advised Halliburton and KBR that it has evidence of payments to Nigerian officials by another agent in connection with a separate KBR-managed project in Nigeria called the Shell EA project and possibly evidence of payments in connection with other projects in Nigeria, potentially including energy services projects. In addition, information uncovered in the summer of 2006 suggests that, prior to 1998, plans may have been made by employees of The M.W. Kellogg Company (a predecessor of a KBR subsidiary) to make payments to government officials in connection with the pursuit of a number of other projects in countries outside of Nigeria. We are reviewing a number of more recently discovered documents related to KBR’s activities in countries outside of Nigeria with respect to agents for projects after 1998. Certain activities discussed in this paragraph involve current or former employees or persons who were or are consultants to KBR, and our investigation is continuing.

Wow! Basically, they're admitting that bribes were made in connection with the Nigerian Bonny Island project, and that kickbacks may be involved with a Royal Dutch offshore Shell EA project, and that plans for bribing government officials may have been made in relation to a number of other projects outside Nigeria. I'm telling you, if all these countries and projects are named, and all the people, and all the companies involved are named, well...There's going to be a massive fallout, with lots of firings and resignations and indictments going on all around the world.

Reference & background:
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=5619883
http://topics.nytimes.com/top/news/business/companies/halliburton_company/index.html?query=NIGERIA
http://www.halliburtonwatch.org/about_hal/nigeria_timeline.html
http://www.halliburton.com/public/pubsdata/ir/pdf/proxy_statement08.pdf

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