The United States oil energy contractor, Halliburton, on Thursday agreed to pay a fine of $29.2 million imposed on it by the country’s Securities and Exchange Commission (SEC) for bribing Angolan officials to obtain a series of deals.
The SEC announced that the company violated the sections of the Foreign Corrupt Practices Act (FCPA), a US legislation forbidding the country’s firms from sharp practices in their operations abroad.
Apart from the penalty imposed on the company, its former vice president, Jeannot Lorenz, also agreed to pay a $75,000 fine for causing violating the internal accounting controls and falsifying books and records, the SEC said.
Further, the company also agreed to hire an independent consultant to clean up its anti-corruption policies and procedure in Africa.
Halliburton is, however, not new to bribery in Africa. In fact, it had done something similar in Nigeria.
In what is now infamously known as the “Halliburton Bribery Scandal”, a consortium of companies made up of KBR, a subsidiary of Halliburton, Technip of France; Snamprogetti, a subsidiary of ENI of Italy; and Gasoline Corp, now JGC corporation, a Japanese company, paid over $180 million in bribe to Nigerian officials, including pasts heads of states and NNPC top brass, between 1993 and 2004 to secure a construction contract for a liquefied natural gas plant in Bonny Island in the Niger Delta.
The four companies were made to pay a total $1.65 billion dollars in fine to the United States under FCPA laws.
Although several foreigners involved in the matter have been prosecuted in their home countries, Nigerian authorities have failed to prosecute the country’s citizens involved in the matter.
Jeffery Tesler, who was used as conduit to pay the bribe, pleaded guilty and was sentenced to 21 months in prison in the US in 2012. He also forfeited $149 million to US authorities.
No Nigerian official has been convicted for the bribes.
A statement by the US SEC on Thursday claimed that in 2008 in its bid to satisfy local content requirements, Mr. Lorenz led the company into a partnership with an Angolan firm owned by a former Halliburton employee.
The SEC claimed that the former Angolan employee was a friend of an official of Sonangol, Angolan state-owned oil company, who would approve the contracts. The contracts were awarded and Halliburton outsourced more than $13 million worth of business to the Angolan company.
However, the SEC investigations revealed that Halliburton entered into the partnership with the Angolan firm merely to meet local content requirements rather than the scope of work.
Mr. Lorenz failed to conduct competitive bidding but merely shipped the contracts to its local partners, making it its single source of supply. The SEC said the decision was a violation of Halliburton’s own internal accounting control that requires contracts of more than $10,000 in countries with high corruption risk like Angola to be reviewed and approved by a special committee.
Halliburton eventually paid the local Angolan firm $3.705 million while Sonangol approved the award of seven lucrative subcontracts to Halliburton in return.
“Halliburton committed to using a particular supplier that posed significant FCPA risks and a company vice president circumvented important internal accounting controls to get the deal done quickly,” said Antonia Chion, Associate Director in the SEC’s Enforcement Division.
“Companies and their executives must comply with these internal accounting controls that help ensure the integrity of corporate transactions.
“Without admitting or denying the findings, Halliburton agreed to pay $14 million in disgorgement plus $1.2 million in prejudgment interest and a $14 million penalty,” the statement reads.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To advertise here . Call Willie +2347088095401...