Halliburton to pay US$ 559 million fine for KBR bribes
By Chris Sleight27 January 2009
Halliburton has agreed to pay fines totalling US$ 559 million in relation to bribes paid by its former subsidiary KBR. The settlement follows an investigation by the US Department of Justice (DoJ) and Securities and Exchange Commission (SEC) into bribes paid by KBR to Nigerian government officials to secdure construction contracts while the company was part of Halliburton.
The investigation was carried out under US Foreign Corrupt Practices Act (FCPA) legislation and started before Halliburton spun-off KBR in April 2007. In order for the initial public offering (IPO) to go ahead, Halliburton agreed to indemnify KBR against any fines relating to the investigation.
Under the agreement it has negotiated with the DoJ, Halliburton will pay it a US$ 382 million fine in eight instalments over the next two years. It will also pay a one-off of US$ 177 million to the SEC.
A further condition of the settlement is that Halliburton employ an independent consultant to evaluate its anti-bribery controls, and that the company implements any necessary improvements to these processes.
KBR was working in Nigeria as part of the TSKJ consortium, which included Technip and Snamprogetti from Italy and Japan's JGC Corp, and these companies are thought to still be under investigation by US authorities.
The consortium worked on the construction of a US$ 2 billion liquified natural gas (LNG) plant in Nigeria from the mid- to late-1990s. It subsequently won a further US$ 1.2 billion contract to expand the facility.