Enforcement Action

 

Docket or Case Number:    08-cv-02680

Court:    S.D. Texas

Initiation Date:    09/03/2008  Information

Prosecuting Agency:    US Securities and Exchange Commission

Name of Prosecuting Attorneys:   

  • Mark A. Adler, SEC Headquarters
  • Antonia Chion, SEC Headquarters
  • Kara N. Brockmeyer, SEC Headquarters
  • Robert G. Wilson, SEC Headquarters
  • Stanley M. Cichinski, SEC Headquarters
  • Ansu N. Banerjee, SEC Headquarters

Assisting Agencies:    US Department of Justice , France's Government Agency , Switzerland's Government Agency , United Kingdom's Government Agency , Italy's Government Agency

Type of Action:    SEC Federal Court Proceeding

Origin of the Proceeding:    N/A

Whistleblower:    Unknown

Case Status:    Resolved


Summary

Albert Jackson Stanley was the former chairman and chief executive officer of Kellogg, Brown & Root Inc. (KBR).

KBR was part of a four-company joint venture called TSKJ, which was comprised of Technip of France, Snamprogetti Netherlands B.V. of the Netherlands, Kellogg Brown & Root of the United States, and JGC Corporation of Japan. Between 1995 and 2004, members of the joint venture devised and implemented a scheme to bribe Nigerian government officials to obtain contracts worth over $6 billion to build liquefied natural gas (LNG) production facilities. on Bonny Island in Nigeria The joint venture partners formed a "cultural committee" comprised of senior sales executives at each company, to consider how to carry out the bribery scheme. To conceal the illicit payments, the joint venture entered into sham contracts with a shell company controlled by a U.K. solicitor (Jeffrey Tesler, who was given $132 million for the purpose of bribing high-level Nigerian officials) and a Japanese trading company (Marubeni Corporation, which was given $51 million for the purpose of bribing low-level Nigerian officials) as conduits for the bribes. Total payments to the two agents exceeded $180 million. Stanley admitted that he authorized the joint venture to hire the two agents.

On September 25, 2008, without admitting or denying the SEC's allegations, Albert Jackson Stanley consented to the entry of a final judgment permanently enjoining him from violating the anti-bribery, books and records, and internal controls provisions of the FCPA.

Stanley separately entered into a plea deal with the DOJ. Stanley was ordered to pay $10.8 million in restitution and was sentenced to 30 months in prision, followed by 3 years of supervised probation.

Country(ies) involved:    Nigeria

Sanction to Bribe Ratio:    N/A

Sanction to Revenue Ratio:    N/A

Sanction to Profit Ratio:    N/A

Number of Related Enforcement Actions (Including This Enforcement Action):    11

Country(ies) involved:    Nigeria

Total $ Bribery Payments:    $183,000,000

Total $ Revenue Generated from Bribery:    $6,000,000,000

Total $ Profit Earned or Expenses Avoided from Bribery:    N/A

Total $ Monetary Sanctions:    $1,715,938,854

Sanction to Bribe Ratio:    $1,715,938,854 / $183,000,000 = (937.67 %)

Sanction to Revenue Ratio:    $1,715,938,854 / $6,000,000,000 = (28.60 %)

Sanction to Profit Ratio:    N/A

Name:    Albert Jackson Stanley

Employers & Positions:    Kellogg Brown and Root Inc. - Employee

Country:    United States

FCPA Claims:    Anti-Bribery, Primary, Issuer (15 U.S.C. § 78dd-1) ; Books & Records, Primary, Knowing Violation (15 U.S.C. § 78m (b)(5)) ; Internal Controls, Primary, Knowing Violation (15 U.S.C. § 78m(b)(5)) ; Books & Records, Primary, Falsification of accounting records (17 C.F.R. § 240.13b2–1)

Related Claims:    N/A

Statutory Basis for FCPA Jurisdiction:    Issuer (Agent) ; Issuer (Director) ; Issuer (Employee) ; Issuer (Officer) ; Person (Books & Records, Internal Controls)

Period of Bribery:   1994 - 2004

Total Bribery Payments:    $182,000,000

Total Revenue Generated from Bribery:    $6,000,000,000

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization): 

  • Name N/A, Officials; Nigerian National Petroleum Corporation ("NNPC")
  • Name N/A, Officials; Nigeria LNG Limited ("NLNG")

Defendant-Related Entities Involved in the Misconduct:    N/A

Third-Party Intermediary:   

  • Marubeni Corporation , Agent/Consultant/Broker
  • Tri-Star Investments Ltd. , Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments made by the Joint Venture to Tesler for engineering contracts in Nigeria

Period of Bribery:   1994 – 2004

Total Bribery Payments:    $132,000,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Nigerian National Petroleum Corporation ("NNPC");
  • Name N/A, Officials; Nigeria LNG Limited ("NLNG");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Tri-Star Investments Ltd. - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

TRANSACTION OVERVIEW
Payments made by the Joint Venture to Marubeni for engineering contracts in Nigeria

Period of Bribery:   1994 – 2004

Total Bribery Payments:    $50,000,000

Total Revenue Generated from Bribery:    N/A

Total Profit Earned or Expenses Avoided from Bribery:    N/A

Country(ies) involved:    Nigeria

Officials Potentially Influenced (Name; Title; Organization):  

  • Name N/A, Officials; Nigerian National Petroleum Corporation ("NNPC");
  • Name N/A, Officials; Nigeria LNG Limited ("NLNG");

Defendant-Related Entities Involved in the Misconduct:    N/A

Third Party Intermediary:    Marubeni Corporation - Agent/Consultant/Broker

Type of Bribe:   Money

Cash, Wire or Check:    N/A

Purpose of Bribe:    Obtain/retain business

Misconduct by Subsidiary?  Yes


Parent(s):   Halliburton

Subsidiary:  Kellogg Brown and Root LLC

  • Percentage of Ownership:    100.00 %
  • Direct or Indirect Ownership:    Unknown
  • Parent Had Knowledge of Sub’s Bribery?:    No
  • Subsidiary Expressly Alleged to Be Parent's Agent:    No
  • Parent Liable for Sub Misconduct?:    No

M&A Negotiated or Completed During Misconduct, Investigation, or Resolution?     Yes

Type of Transaction:    Acquisition


Successor(s):   Halliburton; Kellogg Brown and Root LLC

Predecessor:  The M.W. Kellogg Company

  • Nature of Misconduct   
    • Misconduct Occurred Solely Pre-acquisition:    No
    • Misconduct Occurred Pre- and Post-acquisition, with NO Knowledge and/or Involvement of Successor:    Yes
    • Misconduct Occurred Pre and Post-acquisition, with Knowledge and/or Involvement of Successor:    No
  • Quality of Due Diligence:   
    • Poor Due Diligence Cited:    Yes
    • Good Due Diligence Cited /(e.g. as mitigating factor/):    No
  • Voluntary Disclosure by Successor in Connection with the Transaction:    No
  • DOJ Opinion Sought in Connection with Transaction:    No
  • Successor Liable for Predecessor Misconduct? :    No

  

N/A

Mitigating Factors Referenced by the Government (Individual Defendants):

Defendant Cooperation
Albert Jackson Stanley

Aggravating Factors Referenced by the Government (Individual Defendants):

Defendant Insufficient Cooperation
Albert Jackson Stanley  

Total Monetary Sanctions for the Action:    $0

Case Status:    Resolved


Disposition:    Consent Agreement

Date of Disposition:    09/03/2008

Albert Jackson Stanley

—  Total Monetary Sanctions for Defendant:    $0

—  Admission of Guilt/Acceptance of Responsibility:    No

No Document Title Date Category