Legal News

With $579M Payment, Halliburton, KBR Close ?Unfortunate Chapter?

By Ashby Jones

Down in Houston yesterday, Kellogg Brown & Root, an erstwhile subsidiary of Halliburton, pleaded guilty to violating the Foreign Corrupt Practices Act — the federal law that bans bribery payments overseas. Together, the companies agreed to pay $579 million in fines to settle SEC and DOJ charges, the largest ever paid by U.S. companies in a foreign corruption case.

Click here for the WaPo story; here for the WSJ account. (The WaPo story has some especially good details, gleaned from court documents, on how the scheme was hatched: suitcases stuffed with cash; accounts in Switzerland and Monaco; and the like.)

Federal authorities had alleged that the companies were part of a joint venture that spent $182 million to bribe Nigerian government officials over a 10-year period to win more than $6 billion in construction contracts. Halliburton, which owned KBR during the time of the alleged actions and spun it off in April 2007, will be paying all but $20 million of the penalty. (While KBR pleaded guilty yesterday, Halliburton did not admit or deny wrongdoing.)

News of the deal broke last month, though the agreed-upon settlement figure turned out to be about $20 million higher than the originally reported $559 million figure. Click here for more on the situation, from the FCPA blog.

KBR chief executive William Utt said yesterday he was pleased “to finally conclude this very difficult but necessary settlement.” He said it closes a “regrettable and unfortunate chapter in KBR’s rich and storied history. KBR has fully cooperated with the U.S. government through the extensive investigations over the last five years.”

Full post as published by Law Blog - WSJ.com on February 12, 2009 (boomark / email).