(Adds related SEC settlement, KBR and Halliburton comment)
By Chris Baltimore
HOUSTON Feb 11 KBR Inc (KBR.N), the former
engineering subsidiary of Halliburton Co (HAL.N), pleaded
guilty on Wednesday to federal charges it paid $180 million in
bribes to Nigerian officials in a decade-long scheme to secure
$6 billion in contracts.
Appearing in U.S. District Court in Houston, KBR General
Counsel Andrew Farley admitted that the company paid bribes to
high-ranking Nigerian officials between 1994 and 2004 to secure
four contracts for a KBR joint venture to build and expand
Nigeria's Bonny Island liquefied natural gas terminal.
Under a deal reached with the U.S. Justice Department,
Houston-based KBR and Halliburton will pay a $402 million fine,
of which Halliburton has agreed to pay $382 million.
In a separate settlement with the U.S. Securities and
Exchange Commission, Halliburton will disgorge $177 million in
profits to settle parallel criminal charges that its former
subsidiary violated the Foreign Corrupt Practices Act (FCPA).
Together, the $579 million in sanctions is the highest
combined settlement ever paid by U.S. companies under the act,
the SEC said.
Halliburton was not directly charged with any crimes, and
had agreed, as a condition for the two firms to separate in
2007, to indemnify KBR against potential fines from the federal
probe, which was launched in 2003.
"KBR has agreed that Halliburton's indemnification
obligations with respect to the DOJ and SEC investigations have
been fully satisfied," Halliburton said in a statement.
KBR Chief Executive William Utt said the violations were "a
regrettable and unfortunate chapter in KBR's rich and storied
history," and said none of the allegations involved current KBR
managers or employees.
After a Justice Department attorney summarized the five
counts in the government's case in an art-filled Houston
courtroom, U.S. District Judge Keith Ellison asked KBR's
Farley, "Is that true?"
"Yes, your honor," Farley replied, entering a guilty plea
on behalf of the company.
The bribes -- some delivered in a briefcase stuffed with
$100 bills -- were paid to officials in Nigeria's executive
branch as well as the state-owned Nigerian National Petroleum
Corp, the Justice Department said.
The scheme involved partner companies from Italy, France
and Japan, and huge sums of money wired through banks in
Amsterdam and New York to accounts in Monaco and Switzerland.
KBR also used shell companies in Portugal, referred to by
the government as Madeira Companies 1, 2 and 3, in an effort to
avoid breaking the FCPA law, the government said.
Albert "Jack" Stanley, a former KBR chief executive,
pleaded guilty last September to charges stemming from the
Nigeria bribes and agreed to cooperate with investigators.
Stanley, who had worked under former U.S. vice president Dick
Cheney when he headed Halliburton, will be sentenced on May 6.
(Reporting by Chris Baltimore; Editing by Jeffrey Benkoe, Gary