//
you're reading...
Construction Industry, General Corruption

Bribery – #Halliburton/#Dresser Construction Companies – will the #Yemen angle ever be investigated?

Halliburton: A Case Study in International Bribery

Original article posted HERE

9/9/08

The News…  “Albert Jackson Stanley now lies at the center of a widening scandal in the oil industry that has implications for corporations and governments across the globe. Stanley’s case is the first in what federal officials believe will be a string of indictments in coming months against U.S. corporate executives who have participated in bribing foreign officials in recent years,” according to Propublica.org

The information in this report is based largely on facts that have been disclosed in U.S. court documents and in official statements by the U.S. Securities and Exchange Commission. They serve as the basis for a case study of the intricacies and the scale of bribery of public officials today by major multinational corporations.

U.S. Government’s Case Against Stanley

SEC Complaint Against Stanley

Plea Agreement Made by Stanley

 

The Villain: Albert Jackson Stanley has pleaded guilty in U.S. court to violations of the U.S. Foreign Corrupt Practices Act (FCPA) and now faces a seven-year prison term and a personal fine of $10.8 million. Mr. Stanley, a former top executive of a major wholly owned subsidiary of Halliburton Company, a leading U.S. energy and construction company, was the central figure in an international bribery scheme.

The Bribes:  Mr. Stanley arranged for $182 million in bribes to be paid to senior government officials in Nigeria and to leading executives of a Nigerian energy company controlled by the Nigerian Government. The only Nigerian official to be named in documents is former President General Sani Abacha. In return, it appears that four companies involved in joint ventures received $6 billion in contracts from the Nigerian company and government.  Mr. Stanley arranged for a portion of the bribes to be kicked back into his personal bank accounts.

The Bribery Channels: The main channel for passing the bribes from the U.S. firms, for which Mr. Stanley worked, back to the Nigerians was via an agent based in the U.K., who accounted for $132 million of the total. An agent based in Japan accounted for the remaining $50 million. The bribery payments were transferred via Bank accounts in Gibraltar, London, Tokyo, Amsterdam, New York and possibly other cities as well and it would appear that a considerable amount of the proceeds may have ended in accounts in Switzerland.

The Companies: When Mr. Stanley started to pay bribes in 1995 he worked for a U.S. company called M.W. Kellogg that was a subsidiary of the then large Dresser Industries. This latter company was acquired by Halliburton in 1998 and the Kellogg-Brown & Root division (in 2002 renamed to KBR) was formed with Mr. Stanley as this subsidiary’s chief executive officer and then, until 2004, its chairman. KBR is a major international construction company and became a separately publicly listed company on 5 April 2007. Halliburton’s acquisition of Dresser Industries and the restructuring of KBR took place during the time (1995-2000) when the current Vice President of the United States, Richard Cheney, served as Halliburton’s CEO and Chairman. Kellogg, and subsequently KBR, was the lead firm in the joint venture that sought construction contracts on the liquefied natural gas projects on Bonny Island, Nigeria that involved the bribes. Other firms that were involved in at least one of the major consortia engaged in securing the Nigerian contracts with KBR were France’s Technip SA, Snamprogetti Netherlands B.V., an affiliate of Italy’s ENI SpA, and Japan’s JGC Corporation.

Other Deals:  The official U.S. government documents hint, but do not specify, that additional suspect contracts involving Mr. Stanley and Kellogg/KBR involve projects in Yemen, Malaysia and Egypt. Bank accounts in Lebanon may also have been involved.

Consequences:  Mr. Stanley’s plea of guilty in court involves his agreement to fully cooperate with U.S. public prosecutors. They are further investigating all aspects of this case. The original information that triggered the U.S. investigation came from French authorities, who had come across suspicious banking transactions while investigating another case. It is likely that the French are also pursuing investigations into this bribery affair, while it is possible that Japanese and British authorities are also engaged. So far, there are no indications of money laundering investigations, although the range of banks involved in channeling the illicit payments does raise money-laundering concerns.

Speculation: The story is likely to continue to achieve quite a high public profile as a documentary on this matter for national U.S. public television, to appear on the Public Broadcasting Station’s “Frontline,” is being completed. One of the key questions relates to whether Mr. Cheney, as the head of Halliburton at the time of many of Mr. Stanley’s transactions, was aware of the bribery.

About yemenexposed

Exposing the corruption in Yemen

Discussion

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: