IE 11 is not supported. For an optimal experience visit our site on another browser.

Halliburton tackles legal woes with ads

Vice President Dick Cheney's old firm Halliburton, under scrutiny for possibly overcharging in Iraq and alleged kickbacks in Nigeria, fought back on Thursday with television ads defending itself.
/ Source: Reuters

Vice President Dick Cheney's old firm Halliburton, under scrutiny for possibly overcharging in Iraq and alleged kickbacks in Nigeria, fought back on Thursday with television ads defending itself.

The U.S. Justice Department said on Wednesday it had asked the Texas-based company to hand over documents in connection with allegations that bribes worth $180 million were paid to win a multibillion dollar natural gas plant deal in Nigeria. Cheney headed the company at the time of the project.

Halliburton unit Kellogg Brown and Root, America's biggest contractor in Iraq, is part of a joint venture in Nigeria along with France's Technip, ENI SpA of Italy and Japan Gasoline Corp.

As news of the Justice Department's inquiries emerged, Halliburton launched 30-second television ads to address what it said were "misrepresentations ... that have been part of the national political debate during the presidential campaign."

"We are clearing up the record," said Halliburton spokeswoman Wendy Hall of the ads.

In the ad, Halliburton chairman David Lesar says of the company's work in Iraq. "Will things go wrong? Sure they will. It's a war zone. But when they do, we'll fix it, We always have -- for 60 years for both political parties."

The oil services company is being examined by several government departments for a range of issues. The Pentagon's inspector general is looking into whether it charged too much for fuel taken into Iraq and the Securities and Exchange Commission is looking into the Nigerian kickbacks issue.

Military auditors are also examining KBR's pricing for meals it served to troops in Iraq and Kuwait. This week, Halliburton said it would hold back on billing for $27 million while working out with auditors whether it charged too much.

In addition, the company handed over a check for $6.3 million to cover alleged kickbacks paid by one or two of its employees to a Kuwaiti subcontractor.

French probe
The Nigerian kickbacks issue has also extended to France, where a French magistrate has opened a probe into alleged bribes. The office of the French judge probing this issue said he was barred by law from discussing an ongoing investigation.

"It has been reported that a French magistrate is investigating $180 million in payments made by TSKJ (the consortium) in connection with a multibillion dollar project to build and expand a liquefied natural gas plant in Nigeria," said a filing made by Halliburton to the SEC on Jan. 23.

The filing said the Justice Department and the SEC had asked Halliburton to report on these matters and were reviewing the allegations in light of the U.S. Foreign Corrupt Practices Act. The payments were allegedly made to Nigerian government officials.

This Act provides for both civil and criminal penalties in connection with payment of bribes and can result in holding senior company executives liable for such actions. Cheney headed the company between 1995-2000.

Asked about the Justice Department's inquiries, Cheney spokesman Kevin Kellems said he had no information. "We have not been contacted by anyone on this," he said. Halliburton also said it had not contacted Cheney on the issue.

In a separate Nigerian issue, Halliburton has also informed the SEC one of the company's subsidiaries made "improper payments" of about $2.4 million to an entity owned by a Nigerian national who purported to be a tax consultant.

"The payments were made to obtain favorable tax treatment and clearly violated our Code of Business Conduct and our internal control procedures," said the SEC filing last month.