Topics in Global Markets Mired in Corruption MASSA Massimiliano PALAZZI Cristina HAUGAN Anders Steinsland WORKMAN Sydney
'Kellogg, Brown & Root' (KBR)
Controversy and “some” problems Political connections and corruption Bribing Nigerian officials Waxman allegations Professional negligence Employee safety Sexual assault and abuse Human trafficking lawsuit The Army's actions came under fire from California Congressman Henry Waxman, who, along with Michigan Congressman John Dingell, asked the General Accounting Office to investigate whether the U. S. Agency for International Development and The Pentagon were circumventing government contracting procedures and favoring companies with ties to the Bush administration KBR's maintenance work in Iraq has been criticized after reports of soldiers electrocuted from faulty wiring. [29] Specifically, KBR has been charged by the Army for improper installation of electrical units in bathrooms throughout U. S. bases. CNN reported that an Army Special Forces soldier, Staff Sergeant Ryan Maseth, died by electrocution in his shower stall on January 2, 2008. Army documents showed that KBR inspected the building and found serious electrical problems a full 11 months before his death. As of June 9, 2008, 81 American and foreign KBR employees and subcontractors have been killed, and more than 380 have been wounded by hostile action while performing services under the company's government contracts in Iraq, Afghanistan and Kuwait. Family members of injured or killed employees have sued the company in relation to the 2004 Iraq KBR convoy ambush Jamie Leigh Jones testified at a Congressional hearing that she had been gang-raped by as many as seven co-workers in Iraq in 2005 when she was an employee of KBR, and then falsely imprisoned in a shipping container for 24 hours without food or drink. [35][36] KBR was a subsidiary of Halliburton at the time. Jones and her lawyers said that 38 women have contacted her reporting similar experiences while working as contractors in Iraq, Kuwait, and other countries. On August 28, 2008, defense contractor KBR, Inc. and a Jordanian subcontractor were accused of human trafficking in a federal lawsuit filed in Los Angeles. [40] The suit alleged that 13 Nepali men were recruited by Daoud & Partners to work in hotels and restaurants in Jordan, but upon arrival all 13 men had their passports seized by the contractor and were sent to Iraq to work on the Al Asad Airbase
Level of Corruption in Nigeria 1996
Political connection Dick Cheney Richard Bruce "Dick" Cheney (b. 30 January 1941) was Vice President of the United States to George W. Bush. Albert “Jack” Stanley Albert 'Jack' Stanley was, until December 2003, chairman of Halliburton Company subsidiary Kellogg Brown and Root. For several months afterwards, until his termination, he served as a "consultant. " He is also a longtime friend associate of US vice -president Dick Cheney. August 1995: Dick Cheney is hired as CEO of Halliburton, three years before he directs the merger of Halliburton with Dresser Industries and M. W. Kellogg. February 1998: Halliburton and M. W. Kellogg's parent, Dresser Industries, agree to a $7. 7 billion merger directed by Dick Cheney. M. W. Kellogg is merged with Halliburton's Brown & Root subsidiary to form Kellogg, Brown & Root. Albert Jack Stanley is named as chairman of the new subsidiary. June 1995: Albert Jack Stanley is promoted to president and chief operating officer of M. W. Kellogg after serving as executive vice president since 1991 July 1996: M. W. Kellogg promotes Albert Jack Stanley to chairman, president and chief executive officer ; he also becomes vice president of operations for the parent, Dresser Industries. December 2003: Albert Jack Stanley retires as chairman of Kellogg Brown & Root, but retains a position as consultant for Halliburton.
Political connection Jefferey Tesler Sani Abacha The lawyer Jefferey Tesler (1948), who is known for his contacts and friendly relations with the Nigerian government, including its dictator Gen. Sani Abacha (1993 -1998) November 1994: Wojciech Chodan, an executive at Kellogg and later a consultant for Kellogg Brown & Root, meets with London lawyer Jefferey Tesler March 1995: TSKJ formally hires Mr. Tesler as agent Wojciech Chodan
The “story” 1994: M. W. Kellogg and three other companies form a partnership known as TSKJ submit a bid to Nigeria LNG to build a natural gas plant in Nigeria owned by the Nigerian government The beginning Starting tension inside 1995: TSKJ formally hires Mr. Tesler as agent; TSKJ's bid has still not been accepted by Nigeria LNG. The employment contract was given to Mr. Tesler as a reward for his prodding of Nigerian officials. The employment contract provided that Mr. Tesler would be paid $60 million if Nigeria awarded the construction contract to TSKJ is finally awarded the $2 billion contract. 1999: • The TSKJ partners, with KBR acting as the lead partner, agree to reappoint Mr. Tesler as its agent. Kellogg wanted Mr. Tesler, with whom it had a longterm relationship. But the representative from the French partner, wanted a different agent. • Halliburton announces the Nigerian government awarded a $1. 2 billion contract to TSKJ to expand the construction of the natural gas plant
The “story” Investigation 2003: French magistrate initiates investigation of suspicious payments made by TSKJ. A preliminary investigation by the Police Judiciaire of France found that LNG Services, a company indirectly owned by the four partners in the Nigerian joint venture, made four payments totaling at least $166 million at times that roughly coincide with the award of contracts. 2004: Halliburton fires Albert Jack Stanley after investigators say he received $5 million in "improper" payments from Mr. Tesler. Evidences 2004: Nigeria's parliament votes unanimously to summon Halliburton CEO to answer questions over its bribery investigation. It issues a report recommending that Halliburton and TSKJ be disqualified from bidding on future government projects. The Wall Street Journal reports on newly disclosed evidence by Halliburton, including notes written by M. W. Kellogg employees during the mid-1990 s in which they discussed bribing Nigerian officials. 2006: A former Halliburton employee says he has evidence proving the company has embarked on a campaign to cover-up all wrongdoing,
The judgement THE COMPANY: • • • Halliburton and its former subsidiary Kellogg Brown & Root (KBR) agreed to pay a $579 million penalty after allegations that KBR bribed Nigerian government officials to obtain contracts This was the largest corruption settlement ever paid by a U. S. company The second biggest fines ever imposed, after the $800 million US settlement by Siemens, the German conglomerate
JEFFREY TESLER AND WOJCIECH CHODAN • • • The United Kingdom Government has set the pace in bringing Jeffrey Tesler, and Wojciech Chodan, indicted in the case of the U. S. Justice Department Both have been charged in the US with one count of conspiracy to violate and ten counts of violating the FCPA. They face a maximum sentence of 55 years in federal prison, if convicted ALBERT “JACK” STANLEY, • • Former CEO of KBR, Albert "Jack" Stanley pleaded guilty to bribery. He was accused of securing a massive natural gas contract in Nigeria, which involved 180 million U. S. dollars in the payment of bribes He now has a sentence of seven years in prison and forfeiture of about $10 million
Sources • • Next: http: //234 next. com/csp/cms/sites/Next/News/5395403147/The_Halliburton_bribe_takers__. csp Truthout: http: //www. truth-out. org/021209 T Frontline/world: http: //www. pbs. org/frontlineworld/stories/bribe/2009/04/nigeriacorruptions-collateral-damage. html Revenuewacth: http: //www. revenuewatch. org/news-article/nigeriahalliburton-bribes-and-deceit-zero-tolerance-corruption The punch: http: //www. punchng. com/Articl. aspx? theartic=Art 200904125181789 All business: http: //www. allbusiness. com/crime-law/criminal-offenses-crimesagainst/12146780 -1. html http: //www. halliburtonwatch. org/about_hal/nigeria_timeline. html
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