KBR, Halliburton resolve federal charges of bribing Nigerian officials
Kellogg Brown & Root LLC pleaded guilty on Feb. 11 to violating the Foreign Corrupt Practices Act as it sought contracts for a Nigerian liquefied natural gas project, the US Department of Justice said.
KBR and its former parent, Halliburton Co., also settled US Securities and Exchange Commission charges that they allegedly bribed Nigerian government officials over 10 years to obtain more than $6 billon of contracts to build LNG facilities at Bonny Island, Nigeria, the SEC said in a separate announcement.
KBR entered guilty pleas to a five-count criminal information in federal court in Houston and agreed to pay a $402 million criminal fine, DOJ said.
It said that according to court documents, KBR's predecessor entities, Kellogg Brown & Root Inc. and the MW Kellogg Co., were part of a four-company joint venture which was awarded contracts by Nigerian LNG Ltd. between 1995 and 2004 to build LNG facilities at Bonny Island. The government-owned Nigerian National Petroleum Corp. was the largest shareholder with a 49% interest, DOJ said.
It said that KBR pleaded guilty to conspiring with its joint-venture partners and others to violate the FCPA by authorizing, promising and paying bribes to a range of Nigerian government officials, including officials of the executive branch of the Nigerian government, NNPC officials and NLNG officials, to obtain the engineering, procurement and construction (EPC) contracts. KBR also pleaded guilty to four counts of violating the FCPA related to the joint venture's payment of tens of millions of dollars in "consulting fees" to two agents for use in bribing Nigerian government officials.
Met with officials
DOJ said that KBR admitted that, at crucial junctures before the award of the EPC contracts, KBR's former chief executive, Albert (Jack) Stanley, and others met with three successive former holders of a top-level office in the Nigerian government's executive branch to ask the office holder to designate a representative with whom the joint venture should negotiate bribes to Nigerian government officials. Stanley and others negotiated bribe amounts with the office holders' representatives and agreed to hire the two agents to pay the bribes, the charges said.
According to court documents, the joint venture paid approximately $132 million to the first agent, a consulting company incorporated in Gibraltar, and more than $50 million to the second agent, a global trading company headquartered in Tokyo, during the course of the bribery scheme. KBR admitted that it had intended for these agents' fees to be used, in part, to bribe Nigerian government officials.
DOJ said that under the plea agreement's terms, KBR agreed to retain an independent compliance monitor for a three-year period to review the design and implementation of KBR's compliance program and to make reports to KBR and the DOJ. KBR also agreed to cooperate with the DOJ in its ongoing investigations, it added.
It said that in a related criminal case, Stanley pleaded guilty in September to conspiring to violate the FCPA for his participation in the bribery scheme. His sentencing is currently scheduled for May 6, DOJ said.
In the settlement with the SEC, KBR and Halliburton agreed to pay $177 million in disgorgement, the securities regulator said. They also consented to a court order which permanently enjoins the companies from violating federal securities regulations' anti-bribery, records keeping and records falsification provisions, imposes an independent monitor for KBR for three years to review its FCPA compliance program, and imposes an independent consultant for Halliburton to review its policies and procedures as they relate to compliance with the FCPA.
The proposed settlements are subject to federal court approval, the SEC said.
Contact Nick Snow at [email protected]
