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Enforcement Action Dataset

 

Initiation Date:    01/09/2009  Information

Prosecuting Agency:    U.S. Securities and Exchange Commission

Type of Action:    SEC Federal Court Proceeding

Docket or Case Number:    09-cv-00399

Court:    S.D. Texas

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

US Assisting Agencies:   

  • U.S. Department of Justice
  • Federal Bureau of Investigation

Foreign Enforcement Action/Investigation:    Unknown

Foreign Assistance:   

  • Foreign Law Enforcement Agency ()

Origin of the Proceeding:    Unknown

Whistleblower:    Unknown

Case Status:    Resolved


Summary  Information

Halliburton Company ("Halliburton") was a Delaware energy services corporation headquartered in Houston, Texas and Dubai, United Arab Emirates. Its common stock was registered under Section 12(b) of the Exchange Act and traded on the New York Stock Exchange.

In September 1998, Halliburton acquired Dresser Industries, Inc. ("Dresser"), including Dresser's subsidiary, The M.W. Kellogg Company ("Kellogg"). After the acquisition, Kellogg was combined with Halliburton's subsidiary, Brown & Root, Inc., to form Kellogg, Brown & Root, Inc., which later became Kellogg Brown & Root, LLC, now a wholly-owned subsidiary of KBR, Inc. In 2007, Halliburton separated from KBR, Inc. KBR, Inc., its subsidiaries and predecessor entities, including Kellogg, are referred to collectively as "KBR."

KBR's predecessor companies were 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, 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.

On February 11, 2009, without admitting or denying the SEC's allegations, Halliburton and KBR consented to the entry of a final judgment permanently enjoining them from violating the books and records and internal controls provisions of the FCPA, and permanently enjoining KBR from aiding and abetting violations of the books and records and internal control provisions of the FCPA. By the terms of the final judgment, Halliburton and KBR, Inc. are jointly and severally liable for the disgorgement of $177 million (however, pursuant to the master separation agreement between Halliburton and KBR, Halliburton agreed to indemnify KBR for certain FCPA-related matters). KBR, Inc. and Halliburton are also required to retain an independent monitor to review their FCPA-related policies and procedures.

Halliburton also agreed to pay Nigeria $35 million to settle bribery allegations that led to charges against former Vice President Dick Cheney and other executives. Cheney was Halliburton's CEO in the 1990's. The $35 million includes $2.5 million to pay legal fees and aid in its efforts to recover funds frozen in a Swiss bank account of a former joint-venture agent. Cheney was investigated by Nigerian Prosecution, as well as Nigeria's own anti-graft Economic and Financial Crimes Commission (EFCC) and anti-fraud police.

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