New York (HedgeCo.Net) – Halliburton and KBR, Inc. have settled with the Securities and Exchange Commission after allegations that KBR subsidiary Kellogg Brown & Root illegally obtained construction contracts in Nigeria by bribing government officials.
KBR and Halliburton will pay $177 to settle the charges brought on by the SEC. In addition, Kellogg Brown & Root has pled guilty to criminal charges brought forth by the U.S. Department of Justice. Those charges include one count of conspiring to violate the Foreign Corrupt Practices Act and four counts of violating the anti-bribery provisions of the FCPA. Kellogg Brown & Root has agreed to pay $402 million to settle these charges in addition to succumbing to stricter oversight.
"Today’s guilty plea by KBR ends one chapter in the Department’s long-running investigation of corruption in the award of $6 billion in construction contracts in Nigeria,” said Assistant Attorney General Rita M. Glavin of the Department of Justice. “This bribery scheme involved both senior foreign government officials and KBR corporate executives who took actions to insulate themselves from the reach of U.S. law enforcement.”
The complaint alleged that Halliburton, who was the parent company of KBR at the time, failed to detect or prevent the bribes. The KBR companies reportedly set up fake contracts with agents in the United Kingdom and Japan to launder the money to the Nigerian officials, after deciding it was necessary to use bribery in 1994. The payoffs took place for the next 10 years. Halliburton failed to perform adequate due diligence on the false agents, and as a result, their records contained false information about the payments.
Total bribes to Nigerian officials totaled $180 million. Albert “Jack” Stanley, one-time KBR CEO under former Halliburton head Dick Cheney, pleaded guilty to bribery charges in September after it was discovered he met with high-ranking Nigerian officials at least four times to make payments in exchange for the construction contracts. Stanley faces seven years in prison and fines totaling almost $11 million.
Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net
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