US regulators have begun a formal inquiry into allegations that a Halliburton joint venture paid bribes to win a multibillion dollar construction project in Nigeria.
The US Securities and Exchange Commission had requested information to determine whether Halliburton broke US laws against bribing officials abroad, the oil services firm disclosed yesterday. It said it was co-operating with the inquiry.
"While Halliburton does not believe it has violated the Foreign Corrupt Practices Act, Halliburton's own internal investigation of these matters is ongoing and there can be no assurance that government authorities would not conclude otherwise," the firm warned investors.
Kellogg, Brown & Root, a unit of Halliburton, owns one-quarter of a Madeira-based joint venture called TSKJ, which has been responsible for building the Nigeria Liquefied Natural Gas project. The three other equal partners are Technip of France, Snamprogetti of Italy and JGC of Japan.
The allegations were unearthed by a French investigating magistrate, Judge Renaud van Ruymbeke, last year. According to people familiar with the investigation, the judge has several contracts signed by TSKJ with a company named Tristar, operated by a British lawyer, Mr Jeffrey Tesler. Mr Tesler has not responded to requests for comment.
Yesterday, Halliburton acknowledged that Mr Tesler's firm had acted as an agent for TSKJ in connection with the Nigerian project since its inception in 1995. But it suggested there was nothing untoward about the payments to Mr Tesler, believed to be up to $180 million (€150 million).
"We believe the percentage payment was customary for a project of this size and complexity," it said.
According to French press reports, Mr Tesler told the investigating judge he visited Nigeria only once in his career, fuelling suspicions about the true nature of his role in brokering successive multibillion dollar deals.
The judge has also secured Mr Tesler's bank records from Swiss authorities, which reportedly show several large payments into the bank account of Albert "Jack" Stanley, the former KBR president. Mr Stanley resigned from the firm last year, although Halliburton said his departure was unconnected with these allegations. The firm referred questions to Mr Stanley's lawyer, who did not respond.
