Halliburton Co. has fired two consultants, including the former chairman of its KBR subsidiary, saying they accepted "improper personal benefits" in connection with a $5 billion project to build a natural gas liquefaction plant in Nigeria, the company announced yesterday.
The announcement came one week after officials at the giant oil-services company acknowledged the Securities and Exchange Commission had opened a formal investigation into whether KBR and several other companies in a partnership called TSKJ paid $180 million in bribes over several years since the mid-1990s to secure the Nigerian deal.
Several U.S. government audit agencies are investigating Halliburton's KBR unit for allegedly overbilling on food and fuel contracts in Iraq.
Vice President Cheney was the head of Halliburton from 1995 to 2000. The company gained an interest in the Nigeria project in 1998, when its acquired Dresser Industries Inc. and its subsidiary, M. W. Kellogg Co. Kellogg was then merged with Halliburton's Brown and Root arm to become KBR.
One of those fired was A. Jack Stanley, the chief executive of Kellogg who Cheney selected as chairman of KBR after the Dresser acquisition. Authorities in the United States and France are examining allegations that Stanley received payments from Tri-Star Investments, a Gibraltar company that had a consulting arrangement with a corporation formed by the TSKJ.
The other consultant fired was William Chaudan, who retired as a Kellogg employee in 1998. Chaudan became a Halliburton consultant on the Nigeria project that same year.
The company's decision to cut ties with the men followed an internal investigation that turned up evidence "of violations of Halliburton's and Dresser's codes of business conduct that, to Halliburton's knowledge, involve the receipt by these persons of improper personal benefits," a company statement said.
Stanley's lawyer declined to comment. Chaudan could not be reached.
Halliburton officials recently met with officials from the SEC and Justice Department, as well as with authorities in France, who are examining whether KBR and its partners in TSKJ violated any bribery or kickback laws. TSKJ is a partnership of four companies registered in Madeira, Portugal, formed to build and expand the Nigerian LNG project.
"As a result of the violations of Halliburton's Code of Business Conduct, however, the Company announced that it will ask TSKJ to terminate immediately all services of TSKJ's agent, Tri-Star Investments, and to pursue all available legal remedies against the agent," Halliburton said in a statement.
"This news is disappointing," said Wendy Hall, a Halliburton spokeswoman. "But it's not representative of how Halliburton or KBR does business."