KBR pleads guilty in Nigerian bribery scheme

[CptSternn]

http://tinyurl.com/bpvk8l



HOUSTON – A former Halliburton Co. subsidiary pleaded guilty Wednesday to bribing Nigerian officials to obtain contracts valued at more than $6 billion.

Kellogg, Brown & Root LLC pleaded guilty to violating the Foreign Corrupt Practices Act by authorizing and paying bribes from 1995 to 2004 for contracts to build liquefied natural gas facilities on Bonny Island, Nigeria.

"The successful prosecution of KBR, and its agreement to pay a more than $400 million fine, demonstrates that no one is above the law, and that the department is determined to seek penalties that are commensurate with, and will deter, this kind of serious criminal misconduct," said Acting Assistant Attorney General Rita M. Glavin with the Justice Department's criminal division.

Most of those fines, however, will be paid by Halliburton.

In addition to the fine, KBR agreed to cooperate with ongoing investigations and have an independent monitor review and report on the company's compliance program for three years.

KBR, a major engineering and construction services company, was split from Halliburton in 2007. The Houston-based company has operations around the world.

In a statement, William P. Utt, KBR chairman, president and chief executive, said it was important to note that none of the allegations involved current KBR managers or employees.

"Today's settlements ... close both a regrettable and unfortunate chapter in KBR's rich and storied history," Utt said. "KBR in no way condones or tolerates illegal or unethical behavior." In a conference call later Wednesday, Utt said the penalties KBR will have to pay won't significantly impact company operations.

"People understand the context of how this happened, who was responsible for it," he said. "They clearly understand this is a new KBR. They understand we are very sincere about being an abiding citizen in the global community."

KBR entered guilty pleas to five counts in Houston federal court related to bribery and hiring agents to pay bribes.

Also Wednesday, KBR's parent company, KBR Inc., and Halliburton settled a related civil complaint filed by the U.S. Securities and Exchange Commission.

The SEC's complaint charged KBR Inc. with violating the act's anti-bribery provisions, and charged KBR and Halliburton with engaging in books and records and internal controls violations related to the bribery.

KBR Inc. and Halliburton agreed to pay back $177 million in profits related to those violations.

"Any company that seeks to put greed ahead of the law by making illegal payments to win business should beware that we are working vigorously across borders to detect and punish such illicit conduct," said SEC Chairwoman Mary Schapiro.

In its statement, KBR said it will make payments totaling $20 million over the next eight quarters to the Justice Department. Halliburton said Wednesday that it would pay $382 million in fines over the next two years as well as pay back the $177 million in profits related to the SEC violations.

Kevin DeNicola, KBR's chief financial officer, said the $20 million KBR will pay is expected to have a 12 cent per diluted share impact on 2008 fourth quarter earnings.

DeNicola said KBR will have to record the $579 million in penalties on its balance sheet as a liability. But it will also be noted that Halliburton is paying most of that so there will be no income-statement impact except for the $20 million.

In court documents, KBR admitted it intended for more than $180 million given to two individuals to be used in part for bribes to Nigerian government officials.

KBR's former CEO, Albert "Jack" Stanley and others negotiated bribe amounts and agreed to hire two agents to pay the bribes, prosecutors said.

Stanley pleaded guilty in September to conspiring to violate the Foreign Corrupt Practices Act for his participation in the bribery scheme. He is scheduled to be sentenced on May 6.

[Drake Dun]

There's an irony for you. I just got finished playing an environmentally oriented flash game called Oiligarchy. You play the oil industry and guide it in its quest to drag humanity's dependence on oil out as long as possible (you win the game when the world is finally so fucked up that WWIII ensues). One of the locations is Nigeria, and you can do fun stuff like bribe government officials there to reduce royalties, pay the regime to execute Ogoni protestors, etc.

[CptSternn]

What bothers me still is yes they got caught, and yes they paid a fine, but how exactly does that help the Nigerians who were exploited and whose resources were taken illegally?

I mean, KBR got illegal contracts, bypassed health and safety measures to setup their refineries, and then the company that did that pays a fine to the US government.

The Nigerians never see any of the fine or the profits that KBR made illegally. Sure, its great they were caught, but the Nigerian people are still dirt poor, without resources, living in dangerous conditions while the US makes even more profit off the fine, not to mention the money that they made taxing the illegal income to begin with.

[Albert Mond]

Originally Posted by Drake Dun

There's an irony for you. I just got finished playing an environmentally oriented flash game called Oiligarchy. You play the oil industry and guide it in its quest to drag humanity's dependence on oil out as long as possible (you win the game when the world is finally so fucked up that WWIII ensues). One of the locations is Nigeria, and you can do fun stuff like bribe government officials there to reduce royalties, pay the regime to execute Ogoni protestors, etc.

Haha. That game was epic.

[PortraitOfSanity]

I aspire to one day purchase my own third world country.

[Despanan]

Originally Posted by CptSternn

The Nigerians never see any of the fine or the profits that KBR made illegally. Sure, its great they were caught, but the Nigerian people are still dirt poor, without resources, living in dangerous conditions while the US makes even more profit off the fine, not to mention the money that they made taxing the illegal income to begin with.

Fuck the Nigerians. I just got an email from one of their princes asking for help moving a huge chunk of cash. They're doing fine.

[CptSternn]

Actually most of the Nigerian scammers these days aren't Nigerian. Don't get me wrong, a few are and yes, they started this scam, but many are from Eastern Europe and China now.

[Albert Mond]

Originally Posted by Despanan

Fuck the Nigerians. I just got an email from one of their princes asking for help moving a huge chunk of cash. They're doing fine.

Originally Posted by BBC

In November 2003, Leslie Fountain, a senior technician at Anglia Polytechnic University in England, set himself on fire after falling victim to a scam; Mr. Fountain died of his injuries.

Haha. Britons.