Halliburton sotto inchiesta:Aschcroft non pone limiti...

[FaGal]

Inquiry Widens to Bid-Rigging at Halliburton
By SIMON ROMERO

HOUSTON, March 1 - The Halliburton Company signaled on Tuesday that an investigation by the Justice Department into bribery charges related to its dealings in Nigeria had broadened to encompass whether its executives had rigged contracts with competing companies in an effort to profit illicitly from large foreign construction projects.

Halliburton, the energy services company, revealed the widened investigation in a filing with the Securities and Exchange Commission, which is also conducting an inquiry into payments made in connection with a natural gas complex in Nigeria. The inquiries have already led to the firing last year of Albert Jack Stanley, the former chairman of Halliburton's KBR subsidiary.

Halliburton attempted on Tuesday to distance itself from the inquiry.

"Based on the information we have today, we do not believe there are any antitrust violations," said Wendy Hall, a spokeswoman. Ms. Hall said the investigation was looking into the activities of people who no longer worked at Halliburton.

Still, if antitrust laws were violated, penalties could include $10 million in fines for each count of wrongdoing and much larger civil damages for any individuals injured by the violations, Halliburton warned in the filing. The disclosure comes as Halliburton is trying to sell or spin off KBR, which also conducts most of the company's work in Iraq.

Halliburton said the Justice Department's investigation had uncovered information suggesting that Mr. Stanley and other former employees may have rigged bids with competitors for foreign projects as early as the mid-1980's. The company acknowledged in November that improper payments may have been made to Nigerian officials in relation to the construction of a natural gas complex and a fertilizer plant in Nigeria in the early 1990's. An attempt to reach Mr. Stanley's lawyer Tuesday night was unsuccessful.

The company also said in the filing that its consortium involved in the Nigerian project had told the attorney general of Nigeria in February that it would not oppose efforts to move money thought to be associated with the payment scheme, now being held in Swiss accounts, to Nigeria, where courts could determine ownership of the funds.

[FaGal]

Justice tees up another investigation of Halliburton

In what seems like a weekly event, the Justice Department is investigating whether former employees of Houston-based Halliburton Co. conspired with other companies to rig bids for large overseas construction projects. Halliburton disclosed the bid-rigging investigation in its annual 10K filing with the Securities and Exchange Commission. This new antitrust investigation has grown out of an earlier investigation into whether a consortium of companies bribed Nigerian officials to win a lucrative contract to build a liquefied natural-gas plant there.

Although Halliburton is a major provider of oilfield services, it also owns the giant construction and government-contracting unit called Kellogg Brown & Root. KBR is one of the world's largest overseas construction firms and specializes in building large and complex projects in foreign countries. Halliburton announced in late 2004 that it would likely sell its KBR unit, but that such a sale would take considerable time to finalize and consummate.

The antitrust and Nigeria investigations are focused on Albert J. "Jack" Stanley, who was the former chairman of the Halliburton unit Kellogg Brown & Root. Halliburton canned Mr. Stanley this past June for allegedly receiving improper payments from an agent of the Nigeria construction consortium. The Justice Department is looking into Mr. Stanley's activities dating back to the mid-1980s when he worked for construction firm M.W. Kellogg. Dresser Industries acquired Kellogg in 1988 and then Halliburton bought Dresser in 1998 while U.S. Vice-President Dick Cheney was CEO of Halliburton.

This current probe is just one of many investigations that are confronting Halliburton, which appears to be defense lawyer's dream client. Another federal grand jury is investigating whether the company violated U.S. sanctions against doing business in Iran, while another investigation is attemptting to determine whether Halliburton overcharged the U.S. military for running dining halls in Iraq.

[FaGal]

La disclosure della Sec: 10k
http://www.sec.gov/Archives/edgar/da...0055-index.htm

[FaGal]

Halliburton Bribery Investigation Expands
www.forbes.com - March 2, 2005


A federal investigation into an alleged $180 million bribery scandal in Nigeria involving a Halliburton Co. subsidiary and other companies has expanded to examine whether former employees may have illegally coordinated bidding on other foreign construction projects as early as the mid-1980s, long before Halliburton acquired the subsidiary.

If the Justice Department determines U.S. antitrust laws were broken, the government could deny future government contracts to Halliburton engineering and construction subsidiary KBR, which is its largest contractor serving U.S. troops in Iraq, the company said in its annual regulatory filing.

"Based on the information we have today, we do not believe there are any antitrust violations," Halliburton spokeswoman Wendy Hall said in an e-mail Wednesday. "We have updated our disclosure to reflect the facts that we know about the situation. There are still more questions than answers, but obviously we take this investigation very seriously and are doing everything we can to help those who are examining our records."

Justice Department spokesman Bryan Sierra declined comment.

The Nigeria allegations center on a contract for a $4 billion Nigerian liquefied natural gas plant awarded in 1995 to TSKJ, a consortium of four partners - M.W. Kellogg Co., a subsidiary of Dresser Industries; Technip AL of France; ENI SpA of Italy; and Japan Gasoline Corp.

Halliburton acquired Dresser in 1998 - three years after Vice President Dick Cheney began his 1995-2000 tenure as Halliburton's chief executive officer - and combined its Brown & Root subsidiary with M.W. Kellogg to form KBR.

The Justice Department, the Securities and Exchange Commission, a French magistrate and Nigerian officials are investigating whether the consortium paid $180 million in bribes to Nigerian officials from 1995 through 2002. The consortium got other contracts involving the Nigerian plant in 1999 and 2002.

Last June Halliburton fired two consultants, including former KBR chairman A. Jack Stanley, for violating the company's business code of conduct by receiving "improper personal benefits" related to TSKJ's construction of the Nigerian plant.

But the company said in Tuesday's filing that Stanley and other former workers "may have engaged in (other) coordinated bidding with one or more competitors on certain foreign construction projects and that such coordination possibly began as early as the mid-1980s, which was significantly before our 1998 acquisition of Dresser Industries."

If the broadened probes determine U.S. antitrust laws were broken, any denial of future contracts to KBR could be based on actions of workers a decade or more before they became KBR employees upon Halliburton's acquisition of Dresser.

Charles M. Yablon, a law professor and corporate governance expert at the Cardozo School of Law in New York, said such potential liability comes with mergers and acquisitions. Buyers are expected to conduct extensive due diligence to ferret out such potential problems, "but if you don't know about it, you don't know to avoid the problem," he said.

Halliburton's acquisition of Dresser also brought expensive liabilities from asbestos and silica claims that resulted in a $5 billion settlement announced in December 2002 and finalized early this year.

Anthony Sabino, an associate business professor and energy law expert at St. John's University, said companies can be hurt by unknowns that come with acquisitions, but potential crimes can be particularly tricky to uncover.

"Potential criminal activity is very hard to uncover when it's contemporary, much less from the past," he said. "How far the Justice Department takes it becomes the real issue."

Halliburton also is considering whether to spin off or sell KBR. Hall said in an e-mail that she wasn't sure if potential liabilities associated with possible antitrust violations would turn buyers away.

"We have said that it will take some time to achieve the separation. We're said before that we're working on it and think we can get it done, though there are no guarantees and it will take time," she said. "We've pointed out, among other things, for a separation to move forward it will require more certainty around KBR."

Halliburton shares rose 81 cents, or 1.9 percent, to $43.66 in afternoon trading Wednesday on the New York Stock Exchange

[FaGal]

Ex-Halliburton Man Charged With Defrauding U.S. of $3.5 Million
www.nytimes.com - By ERIK ECKHOLM - March 18, 2005


A former employee of a Halliburton subsidiary and a Kuwaiti businessman have been indicted in a federal court, charged with defrauding the United States of more than $3.5 million in a subcontract to supply fuel tankers for military operations in Iraq, the Justice Department announced yesterday.

The indictment alleges that Jeff Alex Mazon, a former procurement manager for the Halliburton subsidiary Kellogg Brown & Root, received a $1 million bribe after he helped a Kuwaiti firm reap more than $5.5 million from a contract that should have cost less than $2 million.

The indictment unsealed yesterday involved an apparently isolated case. But the fraud scheme, as outlined by federal prosecutors, suggests how lax financial controls were, in the company and the Pentagon, in the early months of the Iraq war.

Mr. Mazon, 36, was arrested yesterday in Norcross, Ga., the Justice Department said. The Kuwaiti, Ali Hijazi, managing partner of LaNouvelle General Trading and Contracting Company, has not been apprehended.

The indictments on 10 counts of fraud were brought by a grand jury in Peoria, Ill., on Wednesday and announced yesterday by the Justice Department in Washington.

The Halliburton Company, based in Houston, said its own auditors had discovered evidence of the crime more than a year ago and had immediately notified the Justice Department and the Pentagon.

"It was Halliburton's own internal rigorous system of checks and balances that identified the irregularity, which represented a serious violation of our company's philosophy, policy and our code of ethics," said a company spokeswoman, Wendy Hall, in an e-mail message. She added that KBR had barred LaNouvelle from future subcontracts.

The subcontract at the center of the alleged fraud was part of a broad, multibillion-dollar KBR contract, known as Logcap III, to provide housing, meals and other logistical support to the military.

Providing billions of dollars worth of services to the American war effort under noncompetitive contracts, KBR has been a constant focus of scrutiny and criticism. Pentagon auditors have said that KBR overcharged for meal services and are also investigating the high cost of fuel deliveries to Iraq in 2003, under a separate $2.5 billion oil and fuels contract.

[FaGal]

Ex-KBR Worker Tied to Iraq Contract Fraud
www.washingtonpost.com - By Charles R. Babcock - Washington Post Staff Writer - March 18, 2005


A former manager for a Halliburton Co. subsidiary and an alleged accomplice in Kuwait defrauded the U.S. government out of nearly $4 million by inflating the price of supplying fuel tankers for military operations in Kuwait in 2003, prosecutors said yesterday.

The 10-count indictment, returned Wednesday by a federal grand jury in Illinois, is believed to be the first criminal case of contracting fraud stemming from the war in Iraq, officials said. Halliburton, which Vice President Cheney headed from 1995 to 2000, is one of the government's largest contractors there.

Jan Paul Miller, the U.S. attorney for the Central District of Illinois, said in an interview that the investigation began about a year ago after Kellogg Brown & Root Inc., which holds a giant logistics contract to supply military needs in the Middle East, informed the government it had suspicions of wrongdoing.

According to the indictment, Jeff Alex Mazon, 36, who worked for KBR in Kuwait, schemed with Ali Hijazi, of La Nouvelle General Trading & Contracting Co., to assure La Nouvelle would win a contract for storing and dispensing fuel at a military airport in Kuwait. KBR had estimated the work would cost about $685,000, and La Nouvelle bid $1.67 million, the government said. Mazon then allegedly inflated that and another bid by a factor of 3.3 and awarded the contract to Hijazi's firm for $5.5 million -- nearly $4 million more than the company's original bid.

Around September 2003, soon after Mazon left KBR, Hijazi allegedly gave Mazon a $1 million check for his favorable treatment of La Nouvelle. The indictment said the two men used a promissory note to make the payment appear to be a loan.

Each man was charged with four counts of fraud against the United States and six counts of wire fraud.

Mazon, who was arrested Wednesday in Georgia, appeared in court yesterday in Atlanta before being sent to Illinois for an arraignment hearing, according to Sharon Paul, a spokeswoman for Miller's office. An Army command in Rock Island, Ill., administered the logistics contract.

Mazon's attorney, John Scott Arthur, couldn't be reached for comment. Hijazi, who has not been arrested, didn't respond to an e-mail to the La Nouvelle office in Kuwait.

Democrats in Congress have criticized Halliburton's work supporting the war in Iraq, especially a separate $2.5 billion no-bid contract to repair oil fields. Auditors turned up $1.8 billion in "unsupported costs" in the $10.5 billion logistics contract cited in the indictment, which KBR won on a competitive bid. Despite those findings and a recommendation to withhold some of the payments, the Army decided last month to continue paying Halliburton in full, plus performance bonuses.

"The key issue here is self-disclosure and self-reporting," Halliburton spokeswoman Wendy Hall said in an e-mailed statement about the indictment. "Again, it was Halliburton's own internal rigorous system of checks and balances that identified the irregularity. We found it quickly, and immediately reported it to the Inspector General. We do not tolerate this kind of behavior by anyone at any level in any Halliburton company."