Monday, February 9, 2009
For those of you who cover the Foreign Corrupt Practices Act (FCPA) in your courses, you may be interested in the recent charges brought by the U.S. government against KBR (formerly Kellogg, Brown & Root), a Halliburton subsidiary until it was spun off in 2007. The U.S. government charged KBR last Friday in U.S. District Court in Houston, Texas with conspiracy to violate the FCPA (among other charges), in connection with a $180 million scheme to bribe Nigerian officials to secure $6 billion in contracts. KBR allegedly paid the bribes between 1994 and 2004 to secure four contracts to build and expand Nigeria's Bonny Island liquified natural gas terminal. That time period covers two administrations in Nigeria - that of former Presidents Abacha and Obasanjo - but no Nigerian officials have been charged with any wrongdoing. The time period at issue also overlaps the time when former U.S. Vice President Dick Cheney was CEO of Halliburton. He has not been charged. Albert Stanley, who was the CEO of KBR until 2003, pled guilty to bribery last fall. He admitted to hiring international consultants and paying them tens of millions of dollars to be used to bribe the Nigerian government. Stanley also admitted to receiving kickbacks of some of that money. The KBR scheme was truly multinational in scope involving KBR partner companies in Italy, France and Japan, as well as KBR shell companies in Portugal. The U.S. government is seeking the largest penalty against a U.S. company for bribery charges under federal law.