The Wall Street Journal: Halliburton Says SEC Probing Nigerian Venture

The Wall Street Journal: Halliburton Says SEC Probing Nigerian Venture

DOW JONES NEWSWIRES

June 11, 2004 3:20 p.m.

Posted 12 June 04

HOUSTON (AP)–The Securities and Exchange Commission is formally investigating allegations that a Halliburton Co. (HAL) subsidiary was involved in paying $180 million in bribes to get a natural gas project contract in Nigeria.

Vice President Dick Cheney was head of the oil services conglomerate at the time.

Halliburton on Friday announced that the SEC has started a formal probe. The SEC’s informal investigation of the contract was disclosed in February.

The SEC isn’t alone in examining the contract, in which Halliburton subsidiary KBR, formerly known as Kellogg, Brown & Root, is a 25% owner. Nigeria in February ordered an investigation, and a French magistrate has been probing the payments for months. The Justice Department is reviewing documents voluntarily provided by Halliburton.

The company also has been under fire for allegedly overcharging the government on contracts related to the U.S. invasion of Iraq. Halliburton says the company is a political target and denies wrongdoing.

The other partners in the Nigerian project under scrutiny were Technip SA (TKP) of France, ENI SpA (E) of Italy and Japan Gasoline Corp. Halliburton refers to the consortium as TSKJ.

The allegations center on a $4 billion Nigerian liquefied natural gas plant built in the 1990s by the four partners. The payments for the gas plant contract were allegedly made to Nigerian officials.

Cheney was Halliburton’s CEO from 1995 to 2000 – five of the seven years in which the clandestine payments were allegedly made. He resigned in 2000 to be President Bush’s running mate.

Halliburton said the SEC and the Justice Department have asked the company to cooperate and provide information in reviewing matters related to the project in light of requirements of the U.S. Foreign Corrupt Practices Act. Halliburton spokeswoman Wendy Hall said Friday that the company will continue cooperating with the agencies, and noted an internal investigation into the matter is continuing.

Company representatives also recently met with the French magistrate to express willingness to cooperate with that investigation, Halliburton said.

“It is important to our company that our clients, suppliers and host countries know that Halliburton’s code of business conduct is expected to be followed in every country in which we operate,” Hall said. That code sets standards that, at a minimum, comply with U.S. laws.

Halliburton officials don’t believe the company has violated the Foreign Corrupt Practices Act, but the company said “there can be no assurance that government authorities would not conclude otherwise.”

The company also said TSKJ and other similarly owned entities have entered into various contracts to build and expand the liquefied natural gas project for Nigeria LNG Ltd., which is owned by the Nigerian National Petroleum Corp., Shell Gaqs B.V., Total affiliate Cleag Ltd. and Agip International B.V.

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