Texas Supplier Fined $500m for Bribing Nigerian Officials

Published on 17th February 2009

A major US engineering and military contractor has agreed to pay more than $500-million in penalties and fees to settle bribery allegations against one of its subsidiaries that operates in Nigeria.Halliburton Company, which until 2007 controlled the Houston, Texas-based KBR (also known as Kellogg, Brown, and Root), has agreed to pay $382-million of a $402-million fine and $177-million in fees incurred through US federal charges lodged against KBR by the Securities and Exchange Commission (SEC).  KBR will pay $20 million.


The SEC alleges that KBR disbursed millions of dollars in bribes to Nigerian officials to win contracts for building a $6-billion gas liquefaction plant on Nigeria’s Bonny Island.In 2005, KBR was able to emerge from US Chapter 11 bankruptcy and show profitability as a corporation.In spinning off KBR two years later, Halliburton agreed to cover the contingent liabilities of its former subsidiary.Houston-based Nigerian journalist Chido Nwangwu, who publishes USAfrica Online, says that the liquefaction plant is in some ways detrimental to Nigerian economic gains in that it facilitates and encourages international oil giants to ship Nigerian crude out of the country for refining, which lowers the profit that the Africans can obtain for their valuable resource.


“The refining capacity and the refining competence has been a major problem in Nigeria.The sad part of it is that some people would rather have the crude oil to be refined abroad and re-imported into Nigeria so that they will make more money,” he noted.


The alleged bribes took place over a decade, between 1994 and 2004.During part of that time, KBR’s parent company, Halliburton was headed by Dick Cheney, who stepped down as CEO in 2000 to become Vice President of the United States.  While neither KBR nor its parent company are admitting or denying wrongdoing under this week’s settlement, Chido Nwangwu explains that Halliburton’s payment of the bulk of the fines and the additional fees is an acknowledgement of gross misappropriation of overseas spending by a US firm.


“At the end of the day, spinning it off reflected their later-day efforts to mask a number of the operational excesses, corporate deviousness, corruption imposed and fertilized by the firm, which clearly violate the US Foreign Corrupt Practices Act,” he said.


Nigeria relies heavily on its oil and gas-related resources, which account for 87 percent of its foreign exchange. Coincidentally, Houston, which is a major oil industry center in the United States, has attracted a large Nigerian expatriate community, some of whom are employed by the corporate oil giants headquartered there.Nwangwu points out that neither KBR nor most of the Houston oil companies have set up significant community institutions or charitable services to help revitalize Nigerians, either in Texas or in the oil-rich Niger Delta, who have endured the foreign extraction of their local resource wealth.


“The sad part of it is that these companies do not show any level of clear conscience or commitment or efforts in building the communities of African peoples or Nigerians.There are some minor efforts by Shell.Companies like Exxon-Mobil don’t show up at all, Chevron….You know, there are, of course, some Nigerians who work for them.But in terms of throwing the weight of the massive profits that they make towards creating an institutional structure for Nigerian youth in different parts of Houston or in the United States, on a scale of one to ten, many of them score 1.5. It’s that bad,” he said.


As for the political impact of the bribes being felt in Nigeria itself, Nwangwu looks to the administration of President Umaru Yar’Adua to address future concerns that would make Nigerian government more responsible for monitoring and regulating corrupt mishandling of national projects and illegitimate pocketing of public funds.


“The Yar’Adua government should see to the fact that foreign organizations do not corrupt even more so, the structures of economic revitalization of Nigeria,” said Nwangwu.


He indicates he is hopeful that a reform-minded Yar’Adua government will see fit to implement an initiative to monitor the performance of multinational oil companies and the local partners they work with in the Niger Delta. Such a body, Nwangu suggests, would ensure that contracts will be honored and that those who extract massive wealth from the region will replenish structures and rehabilitate the population that has contributed so much to the companies’ profits.


By Howard Lesser

VOA, Washington DC


Submitted by Chido Nwangu, Founder &  Publisher, USAfrica

[email protected]

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