Halliburton Will Settle KBR Suit for $559 Million
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Tuesday, January 27, 2009
Halliburton, the huge oil services company in Houston, said yesterday that it has agreed to pay $559 million to settle corruption charges with the U.S. government linked to its former subsidiary KBR.
Halliburton said it will pay $382 million on behalf of KBR over the next two years to the Department of Justice and will pay another $177 million to the Securities and Exchange Commission.
The company said it has negotiated its deal with the Justice Department but is awaiting official approval from the government. Halliburton's payment to the SEC has been approved contingent on its settlement with the Justice Department.
In 2007, KBR received about $4.7 billion in government contracts, according to FedSpending.org, a group that tracks government spending. Much of that work related to contracts it got for helping to repair the oil fields and provide logistical support work to the military in Iraq.
Halliburton has since spun off KBR, which was one of the largest contractors doing business in Iraq and Afghanistan.
A Justice Department spokesman said he could not comment on Halliburton's charges.
The agency has prosecuted several individuals who worked for the company in Iraq and Afghanistan on charges of fraud, conspiracy and bribery as well as allegations that KBR overbilled the U.S. military on work it did in Iraq.
KBR has also come under scrutiny by the Special Inspector General for Iraq Reconstruction.
For the fourth quarter, Halliburton said its net income fell 32 percent to $468 million, or 53 cents per share. That compared with $690 million (75 cents) during the same time period a year ago. Revenue was up nearly 18 percent to $4.9 billion from $4.1 billion in 2007.
Halliburton's net income for the year was $1.5 billion on sales of $18.3 billion. That compared with net income of $3.5 billion on sales of $15.3 billion in 2007.
The company's shares yesterday closed up 62 cents, or 3.4 percent, to $18.87.
