Dick
Cheney Fitted For New Halliburton Uniform -
Striped Jumpsuit
By Evelyn Pringle
03 November, 2006
Countercurrents.org
The
US Securities and Exchange Commission is conducting a formal investigation
into whether Halliburton made improper payments to government officials
in Nigeria in connection with the construction and expansion by TSKJ
of a natural gas liquefaction complex and facilities at Bonny Island
in Rivers State, Nigeria.
TSKJ is a company registered
in Portugal whose members include Technip SA of France, Snamprogetti
Netherlands BV, a subsidiary of Saipem SpA of Italy, JGC Corporation
of Japan, and Kellogg Brown & Root, a successor to the MW Kellogg
Company, each of which has a 25% interest in the venture.
TSKJ entered into various
contracts to build and expand the liquefied natural gas project for
Nigeria LNG Limited, which is owned by the Nigerian National Petroleum
Corp, Shell Gas BV, Cleag Limited, and Agip International BV, an affiliate
of ENI SpA of Italy.
MW Kellogg Limited is a joint
venture in which Halliburton has a 55% interest; and MW Kellogg Limited
and the MW Kellogg Company were subsidiaries of Dresser Industries before
Halliburton's 1998 acquisition of Dresser Industries. The MW Kellogg
Company was later merged with a Halliburton subsidiary to form Kellogg
Brown & Root.
The US Department of Justice
is also conducting a related criminal investigation of the Nigerian
bribery matter pursuant to the US Foreign Corrupt Practices Act (FCPA).
In addition to the SEC and
the DOJ investigations, other investigations are being conducted in
France, Nigeria and Switzerland and in Nigeria, a legislative committee
of the National Assembly and the Economic and Financial Crimes Commission
are also investigating the matter.
And last but not least, on
August 7, 2006, the Financial Times of London reported that KBR, a subsidiary
of Halliburton, is being investigated by Britain's Serious Fraud Office
over the company's role in an alleged plot to pay more than $170 million
in bribes to win $7 billion worth of contracts at a Nigerian oil plant.
For part of the period under
investigation, the newspaper reported, Halliburton was headed by Vice
President Dick Cheney.
The SFO said it had conducted
searches at business and residential premises as part of its investigation
into KBR, which it said was opened in March 2006. The probe comes after
criticism that the SFO was doing too little on the case even though
a British-based company and a British lawyer were at the centre of a
plot, the Times noted.
During the investigations,
information has surfaced suggesting that at least 10 years ago, members
of TSKJ planned to make bribery payments to Nigerian officials.
According the Times article,
documents from the French investigation show the payments relate to
four separate contracts under which the consortium agreed to pay a total
of just over $170 million to an offshore company controlled by London-based
attorney, Jeffrey Tesler.
Investigators in the US,
France and Nigeria, the Times said, have looked with particular interest
at handwritten meeting minutes surrendered by Halliburton, in which
the consortium partners use highly suggestive language about how they
plan to do business.
"One note," the
Times reports, "from December 1994 says that “all services”
will cost the consortium $180m, with a further $60m allocated to “culture”.
"Elsewhere in the notes,"
the article says, "KBR and its consortium partners – Technip
of France, Italy’s Snamprogetti and JGC of Japan – discuss
the pros and cons of a series of possible “secret” and “open”
payments to agents."
The payments were made during
Cheney's tenure, and according to the Boson Globe, "If such payments
were made and Cheney approved them, he could be guilty of violating
the U.S. Foreign Corrupt Practices Act."
Mr Tesler swears that Cheney
knew about the bribes. He testified under oath in May, 2004 that he
made payments to Jack Stanley, while Stanley was president of KBR, and
specifically testified that Cheney approved the payments.
His testimony is backed up
by banking records that show that at least $5 million in payments were
wired to Stanley through a secret bank account in Zurich. Mr Tesler
also testified that he paid $350,000 to another Halliburton executive,
William Chaudran, through a secret bank account on the isle of Jersey.
A French magistrate has officially
placed Mr Tesler under investigation for corruption of a foreign public
official and is said to be offering him a deal if he implicates Dick
Cheney.
Sources within the French
legal system contend that there is more than enough evidence to indict
Cheney on charges of bribery, money laundering and misuse of corporate
assets.
In connection with the Bonny
Island project, TSKJ entered into a series of agreements, including
with Tri-Star Investments, of which Mr Tesler is a principal, beginning
in 1995, and a series of subcontracts with a Japanese trading company
beginning in 1996.
The SEC and DOJ are seeking
to determine whether TSKJ’s engaged Tri-Star as an agent, and
the Japanese company as a subcontractor, to make improper payments to
Nigerian officials.
According to Halliburton's
SEC filing, company representatives have met with the French magistrate
and Nigerian officials and in October 2004, representatives of TSKJ
testified before the Nigerian legislative committee.
If violations of the FCPA
are found in these investigations, a guilty person or entity could be
subject to fines, and civil penalties of up to $500,000 for each violation,
as well as equitable remedies, including disgorgement, and injunctive
relief.
Under the statute, criminal
penalties could range from up to the greater of $2 million per violation
or twice the gross pecuniary gain or loss. The SEC and the DOJ could
also decide that continuing conduct constitutes multiple violations
for purposes of assessing the penalty amounts for each violation.
Potential consequences of
a criminal indictment to Halliburton could include suspension by the
US Department of Defense, or other federal, state, or local government
agencies, of KBR and its affiliates from their ability to contract with
government agencies.
If a criminal or civil violation
is found, KBR and its affiliates could be debarred from receiving future
contracts and also from receiving new orders under existing contracts
to provide services to any such entities, which would naturally include
current KBR contracts in Iraq and Afghanistan.
And this would be no small
penalty for Halliburton. According to the company's SEC filing for the
quarter ending June 30, 2006, during 2005, "KBR and its affiliates
had revenue of approximately $6.6 billion from its government contracts
work with agencies of the United States or state or local governments."
"Suspension or debarment
from the government contracts business," the filing states, "would
have a material adverse effect on the business, results of operations,
and cash flows of KBR and Halliburton."
The investigations could
also result in third-party claims against the company, "which may
include claims for special, indirect, derivative or consequential damages,
damage to our business or reputation, loss of, or adverse effect on,
cash flow, assets, goodwill, results of operations, business, prospects,
profits or business value, adverse consequences on our ability to obtain
or continue financing for current or future projects or claims by directors,
officers, employees, affiliates, advisors, attorneys, agents, debt holders
or other interest holders or constituents of us or our subsidiaries,"
the SEC filing says.
In addition, Halliburton
"could incur costs and expenses for any monitor required by or
agreed to with governmental authority to review our continued compliance
with FCPA law," it notes.
On another front, during
the investigation into the Bonny Island project, the SEC filing states,
"information has been uncovered suggesting that Mr. Stanley and
other former employees may have engaged in coordinated bidding with
one or more competitors on certain foreign construction projects, and
that such coordination possibly began as early as the mid-1980s."
On the basis of this information,
the DOJ is reportedly seeking to determine the nature of any improper
bidding practices, whether antitrust laws were violated, and whether
Halliburton employees have received payments as a result of such bidding
practices on foreign projects.
If violations of antitrust
laws are found to have occurred, according to Halliburton's SEC filing,
"the range of possible penalties includes criminal fines, which
could range up to the greater of $10 million in fines per count for
a corporation, or twice the gross pecuniary gain or loss, and treble
civil damages in favor of any persons financially injured by such violations."
"Criminal prosecutions,"
the filing states, "under applicable laws of relevant foreign jurisdictions
and civil claims by, or relationship issues with customers, are also
possible."
As part of the investigation,
the SEC has issued subpoenas seeking information regarding current and
former agents used in connection with projects over the past 20 years
located in and outside of Nigeria in which MW Kellogg Company, MW Kellogg,
Ltd, KBR or their joint ventures, as well as the Halliburton energy
services business, were participants.
Halliburton says it has "produced
documents to the SEC and the DOJ both voluntarily and pursuant to company
subpoenas from the files of numerous officers of Halliburton and KBR,
including current and former executives of Halliburton and KBR, and
we are making our employees available to the SEC and the DOJ for interviews."
In addition, the SEC has
issued a subpoena to Jack Stanley, and to other current and former KBR
employees, former executive officers of KBR, and at least one subcontractor
of KBR.
The DOJ has invoked its authority
under a sitting grand jury to issue subpoenas for the purpose of obtaining
information abroad, and other partners in TSKJ have provided information
to the DOJ and the SEC related to the investigations.
Back in May of 2003, Halliburton
was forced to admit to the SEC that it had paid $2.4 million in bribes
to officials of Nigeria's Federal Inland Revenue Service in 2001 and
2002 "to obtain favorable tax treatment."
Of course Halliburton pointed
the finger of blame at a couple of lowly employees for bribing the Nigerian
IRS, and claimed that none of its senior officers were involved in the
bribery plot. But as the Houston Chronicle pointed out at the time,
"left unanswered is how a 'low-level employee' could channel that
much money from the company to the pockets of a corrupt official."
The current investigation
into the payment of $170 million in bribes could be near to a conclusion
because Halliburton seems to be ready to throw in the towel.
"We have reason to believe,"
Halliburton said in its SEC filing, "based on the ongoing investigations,
that payments may have been made to Nigerian officials."
So if Dick Cheney goes missing
again, it probably just means that he's off being fitted for a new Halliburton
uniform - a striped jumpsuit.
(Evelyn Pringle is a columnist for OpEd News and an investigative journalist
focused on exposing corruption in government and corporate America.
[email protected])
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