KBR lawyer fined US$ 150 million

14 March 2011

Former KBR consultant and lawyer Jeffrey Tesler was extradited from the UK to the US on 10 March

Jeffrey Tesler, a former consultant to Kellogg, Brown & Root (KBR) and its joint venture partners, has been fined US$ 150 million after pleading guilty to violating the US Foreign Corrupt Practices Act (FCPA).

Mr Tesler, who is also a lawyer, admitted participating in a decade-long scheme bribing Nigerian government officials in order to secure construction contracts worth over US$ 6 billion on the Bonny Island Liquefied Natural Gas (LNG) facilities.

KBR was part of the TSKJ joint venture which also included construction companies JGC, Technip, and Snaprogetti. The companies have already signed settlement agreements with the US Department of Justice (DoJ) totalling over US$ 1.3 billion for their roles in the bribery scheme, while KBR reached a £ 7 million (US$ 11.2 million) settlement with the UK Serious Fraud Office (SFO) in February over the enrichment gained by its UK subsidiary, MW Kellogg.

A UK citizen, Mr Tesler was extradited to the US on 10 March, 2011 and pleaded guilty a day later to one count of conspiracy and one count of violating the FCPA. He agreed to the US$ 150 million fine as part of a plea bargain ahead of his sentencing, which is scheduled to take place on 22 June. He faces up to ten years in prison.

According to DoJ documents, Mr Tesler admitted that from 1994 through June 2004, he and his co-conspirators in the TSKJ joint venture paid US$ 180 million in bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the lucrative construction contracts.

During the course of the bribery scheme, the joint venture paid approximately US$ 132 million in consulting fees to a Gibraltar corporation controlled by Mr Tesler - funds which he admitted were used, in part, to pay the bribes.

Mr Tesler is the third former senior KBR representative to plead guilty to violations of the FCPA in relation to the Bonny Island bribery scheme.

In related cases, KBR's former CEO, Albert Stanley, pleaded guilty in the US in September 2008 and was fined US$ 10.5 million. Mr Stanley is still awaiting sentencing and faces at least seven years in prison.

Meanwhile, former commercial vice president of MW Kellogg, Wojciech Chodan, is also awaiting sentencing after admitting to his role in the scheme in December last year and agreeing to US$ 730000 in restitution.