The US Securities and Exchange Commission is conducting a formal investigation into whether Halliburton made improper payments to government officials in Nigeria in connection with the construction and expansion by TSKJ of a natural gas liquefaction complex and facilities at Bonny Island in Rivers State, Nigeria.
TSKJ is a company registered in Portugal whose members include Technip SA of France, Snamprogetti Netherlands BV, a subsidiary of Saipem SpA of Italy, JGC Corporation of Japan, and Kellogg Brown & Root, a successor to the MW Kellogg Company, each of which has a 25% interest in the venture.
TSKJ entered into various contracts to build and expand the liquefied natural gas project for Nigeria LNG Limited, which is owned by the Nigerian National Petroleum Corp, Shell Gas BV, Cleag Limited, and Agip International BV, an affiliate of ENI SpA of Italy.
MW Kellogg Limited is a joint venture in which Halliburton has a 55% interest; and MW Kellogg Limited and the MW Kellogg Company were subsidiaries of Dresser Industries before Halliburton's 1998 acquisition of Dresser Industries. The MW Kellogg Company was later merged with a Halliburton subsidiary to form Kellogg Brown & Root.
The US Department of Justice is also conducting a related criminal investigation of the Nigerian bribery matter pursuant to the US Foreign Corrupt Practices Act (FCPA).
In addition to the SEC and the DOJ investigations, other investigations are being conducted in France, Nigeria and Switzerland and in Nigeria, a legislative committee of the National Assembly and the Economic and Financial Crimes Commission are also investigating the matter.
And last but not least, on August 7, 2006, the Financial Times of London reported that KBR, a subsidiary of Halliburton, is being investigated by Britain's Serious Fraud Office over the company's role in an alleged plot to pay more than $170 million in bribes to win $7 billion worth of contracts at a Nigerian oil plant.
For part of the period under investigation, the newspaper reported, Halliburton was headed by Vice President Dick Cheney.
The SFO said it had conducted searches at business and residential premises as part of its investigation into KBR, which it said was opened in March 2006. The probe comes after criticism that the SFO was doing too little on the case even though a British-based company and a British lawyer were at the centre of a plot, the Times noted.
During the investigations, information has surfaced suggesting that at least 10 years ago, members of TSKJ planned to make bribery payments to Nigerian officials.
According the Times article, documents from the French investigation show the payments relate to four separate contracts under which the consortium agreed to pay a total of just over $170 million to an offshore company controlled by London-based attorney, Jeffrey Tesler.
Investigators in the US, France and Nigeria, the Times said, have looked with particular interest at handwritten meeting minutes surrendered by Halliburton, in which the consortium partners use highly suggestive language about how they plan to do business.
"One note," the Times reports, "from December 1994 says that "all services" will cost the consortium $180m, with a further $60m allocated to "culture".
"Elsewhere in the notes," the article says, "KBR and its consortium partners – Technip of France, Italy's Snamprogetti and JGC of Japan – discuss the pros and cons of a series of possible "secret" and "open" payments to agents."
The payments were made during Cheney's tenure, and according to the Boson Globe, "If such payments were made and Cheney approved them, he could be guilty of violating the U.S. Foreign Corrupt Practices Act."
Mr Tesler swears that Cheney knew about the bribes. He testified under oath in May, 2004 that he made payments to Jack Stanley, while Stanley was president of KBR, and specifically testified that Cheney approved the payments.
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