http://www.moneyweb.co.za/specials/corp_gov/917387.htmA stinky gas story
Barry Sergeant
Posted: Tue, 08 Aug 2006 17:00 | © Moneyweb Holdings Limited, 1997-2006
The UK?s Serious Fraud Office (SFO) investigation into an alleged Nigerian bribery scandal has taken on a number of new twists, according to information disclosed in the Financial Times in London.
The investigations centre on Halliburton, a US company listed on the New York Stock Exchange, and in particular, on one of its subsidiaries, Kellogg Brown & Root (KBR). The SFO probe followed criticism that London authorities were doing little on the case even though a British-based company and a British lawyer were allegedly at the centre of a plot to pay more than $170m of bribes to win $7bn of building contracts.
Halliburton has declined to comment other than to say it continued to co-operate with the authorities investigating its Nigerian operations. According to company information, Halliburton was founded in 1919 and today ranks as ?one of the world's largest providers of products and services to oil and gas industries. The company adds value through the entire lifecycle of oil and gas reservoirs?.
The most substantial political dimension of the case, so far, is that it relates in part to the period between 1995 and 2000 when Halliburton was headed by Dick Cheney, incumbent US vice-president. Halliburton became involved in the Nigerian consortium through its 1998 takeover of Dresser Industries, after the first gas plant building contract was signed but before later project expansion deals were agreed.
At the heart of the case are allegations made to a French judge by a former executive of an international consortium known as TSKJ, which has for the past decade been building and expanding a giant natural gas liquefaction plant in southern Nigeria. The plant, one of Africa's biggest industrial projects and a natural gas supplier of global significance, is owned by the Nigerian government, Royal Dutch/Shell, Total of France and Eni of Italy.
According to the Financial Times, the former French executive said the consortium, which includes MW Kellogg, a British company 55% owned by KBR, had set up a slush fund to channel pay-offs to help it win a series of building contracts since the mid-1990s.
According to documents from the French investigation, the payments in question relate to four separate contracts under which the consortium agreed to pay a total of just over $170m to an offshore company controlled by a London-based lawyer called Jeffrey Tesler. He has declined comment, although his lawyer has in the past denied the payments constituted bribes.
Investigators in the US, France and Nigeria have looked with particular interest at handwritten meeting minutes surrendered by Halliburton, in which consortium partners use highly suggestive language about how they plan to do business. One note from December 1994 says that "all services" will cost the consortium $180m, with a further $60m allocated to "culture".
The Financial Times says that ?the big money, high politics and strategic oil interests involved in the SFO's new case could make it a quintessential test of the credibility of Britain's anti-corruption pledge?.
