Fund sues Halliburton, KBR over lack of oversight

By Braden Reddall

SAN FRANCISCO, May 14 (Reuters) - Halliburton Co (HAL.N), KBR Inc (KBR.N) and many of their directors are being sued by a pension fund accusing them of a lack of oversight after a bout of scandals the fund says destroyed value, a court document showed.

The lawsuit, filed in a Texas state court on Thursday by the Policemen and Firemen Retirement System of the City of Detroit, seeks to hold Halliburton and KBR responsible for failing to monitor internal controls while some of the companies' employees committed crimes and paid bribes.

KBR, a Houston-based engineering and construction company that also maintains facilities for U.S. armed forces, was part of Halliburton until two years ago.

Included in the complaint are details of a case in which KBR pleaded guilty to paying $180 million in bribes to Nigerian officials to secure contracts. [ID:nN11379425]

Also mentioned are several state-level lawsuits filed last month accusing Halliburton and KBR of exposing soldiers in Iraq and Afghanistan to toxic smoke; a wrongful death suit filed after a soldier was electrocuted at a base in Iraq; as well as millions of dollars of overcharges to the U.S. government.

"Defendants' failures have caused the Companies to suffer hundreds of millions of dollars in damages, and to be exposed to substantial additional judgments in the future," the fund said in suit filed in the Harris County District Court in Houston.

A Halliburton spokeswoman said it would be inappropriate to comment because the company had not yet been served with the lawsuit and had not evaluated its contents.

KBR also said it could not comment specifically, adding in an emailed statement: "It appears however that the lawsuit is based on unfounded allegations. We intend to vigorously defend ourselves."