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Bribery of Nigerian officials fueled by ambition, ego and alcohol

Ego, Alcohol to Blame, Says KBR’s Ex-Chief


HOUSTON—Former Halliburton Co. executive Albert “Jack” Stanley told a federal court on Thursday his decision to bribe Nigerian officials in order to win enormous construction contracts was fueled by “ambition, ego and alcohol.”

Mr. Stanley was sentenced to 2½ years in prison, three years after he pleaded guilty to orchestrating $180 million in bribes to Nigerian officials between 1995 and 2004. He oversaw the bribes and made several trips to Nigeria to meet with senior officials where his role, according to federal prosecutors, was to figure out who to bribe.

After a nearly decadelong investigation that spanned four continents, the U.S. Justice Department wrapped up prosecutions that sent a top American business executive and a British lawyer to prison, and issued a message that it was serious about prosecuting foreign bribery cases.

Mr. Stanley, 69 years old, cooperated with the U.S. government, providing a critical boost to investigations that have secured about $1.7 billion in fines and settlements. Those include a settlement with Halliburton and its former subsidiary, Kellogg Brown & Root, for a combined $579 million. A Halliburton spokeswoman said the sentencing was “an individual matter” that did not involve the company.

A spokeswoman for what is now KBR Inc. said the company has completed its settlement agreement with the government and “implemented an extensive compliance and training program” to prevent future violations.

As the first executive to admit guilt in the case, Mr. Stanley’s cooperation won him leniency. Prosecutors had recommended he serve seven years in prison, which at the time would have been the longest sentence in a case prosecuted under the U.S. Foreign Corrupt Practices Act.

Mr. Stanley stood slightly stooped as he addressed the court, accepting responsibility and saying he allowed his values to be compromised. Judge Keith Ellison commended Mr. Stanley for his sobriety. “You’ve shown remarkable fortitude in front of your demons, and I do honor you for that,” the judge told a small courtroom filled with about two dozen well-wishers.

Also sentenced Thursday was Jeffrey Tesler, 63, a British lawyer who pleaded guilty to fraud and corruption charges and will serve 21 months in prison. Mr. Tesler had developed connections with Nigerian’s ruling elite, helping them buy property and make investments in Britain. From his office in a rundown north London immigrant neighborhood, adjacent to a Somali butcher, he took payments from Western companies, stashed the money in Swiss bank accounts and then made sure ranking Nigerian officials were bribed.

On Wednesday, a federal judge sentenced Wojciech J. Chodan, a British consultant for KBR who also pleaded guilty, to a year of supervised probation and to forfeit $726,885. Mr. Tesler agreed to give up a much larger amount: $148.9 million.

The Justice Department’s criminal prosecution exposed the corruption that can accompany oil-industry investments in countries where officials with the power to approve projects seek out bribes.

At the heart of the Nigeria scheme was a consortium of four companies—Halliburton’s then-subsidiary KBR, Technip SA, Snamprogetti Netherlands BV and JGC Corp.—which sought to build a facility that would cool natural gas into a liquid to export in oceangoing tankers.

The contracts were worth $6 billion, according to federal prosecutors.

Mr. Stanley, according to his plea agreement, traveled to the Nigerian capital of Abuja on several occasions to meet with high-level government officials. His mission, according to the agreement, was to ask Nigerian officials to appoint a representative with whom his emissary and the other joint venture partners could negotiate bribes.

In a strategy that suggested the pervasiveness of the corruption in Nigeria, Mr. Tesler funneled payments to senior government officials, while Marubeni Corp. doled out cash to lower-level officials on behalf of the consortium, according to the government.

Last month, Japan-based Marubeni agreed to pay a criminal penalty of $54.6 million to the Justice Department.

At the time of the bribes, Mr. Stanley ran KBR. He was promoted to the job in 1998 by former U.S. Vice President Dick Cheney, who then ran Halliburton.

Some of the bribes were paid during Mr. Cheney’s tenure at Halliburton, but there was no evidence that he knew of the scheme. Mr. Cheney’s lawyer, Terrence O’Donnell, didn’t return calls seeking comment.

Mr. Stanley not only orchestrated bribes, he also enriched himself. He pleaded guilty to taking $10.8 million in kickbacks from Mr. Tesler and must pay that amount to KBR.

According to the federal filing in the case, the bribery scheme moved money through a series of banks, in Amsterdam, New York City and Switzerland, before it was paid to senior Nigerian officials.

Among legal observers, the U.S. government’s decision to go after foreign companies sent a message that it was dissatisfied with lack of prosecution for bribery by other governments.

“This shows that the U.S. will reach out and can reach out to grab and prosecute foreign companies,” said Philip Urofsky, a former federal prosecutor who was involved in the early stages of the investigation who is now a partner at Shearman & Sterling LLP. “They really stretched to reach these companies, and got them.”

Write to Daniel Gilbert at [email protected]


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