DOJ investigation resolved with criminal plea by a KBR, Inc. subsidiary,and without charges against Halliburton or requirement for a Halliburton monitor
HOUSTON--(BUSINESS WIRE)--Feb. 11, 2009--
Halliburton Company (NYSE:HAL) Halliburton announced today the
resolution of the previously disclosed Foreign Corrupt Practices Act
(FCPA) investigations by the Department of Justice (DOJ) and the
Securities and Exchange Commission (SEC).
These investigations commenced in 2003 as a result of allegations of
improper payments to government officials in Nigeria through the use of
agents or subcontractors in connection with the construction and
subsequent expansion by a joint venture known as TSKJ of a natural gas
liquefaction project on Bonny Island, Nigeria, in which Halliburton’s
former subsidiary KBR, Inc. has an approximate 25 percent interest.
On February 11, a subsidiary of KBR pleaded guilty to conspiring to
violate the FCPA and to substantive counts charging violations of the
anti-bribery provisions of the FCPA in connection with the Bonny Island
project. The scheme commenced in the 1990’s prior to Halliburton’s 1998
acquisition of Dresser Industries, Inc.
To enhance KBR’s financial stability and solvency, making possible the
separation of KBR, Halliburton indemnified KBR from fines or other
monetary penalties or direct monetary damages, including disgorgement,
as a result of a claim made or assessed by a governmental authority in
the United States and certain other countries related to alleged or
actual violations occurring prior to November 20, 2006 of the FCPA or
particular, analogous applicable foreign statutes, laws, rules, and
regulations in connection with investigations pending as of that date.
The DOJ investigation was resolved with respect to Halliburton with a
non-prosecution agreement in which the DOJ agreed not to bring FCPA or
bid coordination-related charges against Halliburton, and in which
Halliburton agreed to continue to cooperate with the DOJ’s ongoing
investigation and to refrain from and self-report certain FCPA
violations. That agreement does not provide for a monitor.
As a result of the indemnity and the KBR subsidiary’s criminal plea,
Halliburton has agreed to pay in eight installments over the next two
years $382 million of $402 million in criminal fines payable by KBR as
part of KBR’s resolution of the DOJ investigation, with KBR consenting
to pay the remaining $20 million.
With respect to the SEC, without admitting or denying the allegations in
the complaint, Halliburton consented to the entry of a final judgment
that permanently enjoins Halliburton from violating the record-keeping
and internal control provisions of the FCPA. KBR also entered into a
related settlement with the SEC. As part of Halliburton’s settlement,
Halliburton agreed to be jointly and severally liable with KBR for and,
as a result of the indemnity, to pay to the SEC, $177 million in
disgorgement. KBR has agreed that Halliburton’s indemnification
obligations with respect to the DOJ and SEC investigations have been
fully satisfied.
In addition, as part of the resolution of the SEC investigation,
Halliburton will retain an independent consultant to perform a 60-day
initial and, approximately one year later, a 30-day follow-up review and
evaluation of Halliburton's anti-bribery and foreign agent internal
controls and record-keeping policies and to adopt any necessary
improvements.
As previously announced on January 26, as a result of these settlements,
Halliburton recorded in the fourth quarter of 2008 an additional charge
to discontinued operations of $303 million or $0.34 per diluted share.
About Halliburton
Founded in 1919, Halliburton is one of the world’s largest providers of
products and services to the energy industry. With more than 55,000
employees in approximately 70 countries, the company serves the upstream
oil and gas industry throughout the lifecycle of the reservoir – from
locating hydrocarbons and managing geological data, to drilling and
formation evaluation, well construction and completion, and optimizing
production through the life of the field. Visit the company’s Web site
at www.halliburton.com.
NOTE: The statements in this press release that are not historical
statements are forward-looking statements within the meaning of the
federal securities laws. These statements are subject to numerous risks
and uncertainties, many of which are beyond the company's control, which
could cause actual results to differ materially from the results
expressed or implied by the statements. These risks and uncertainties
include, but are not limited to: consequences of audits and
investigations by domestic and foreign government agencies and
legislative bodies and related publicity. Halliburton's Form 10-K
for the year ended December 31, 2007, Form 10-Q for the period ended
September 30, 2008, recent Current Reports on Form 8-K, and other SEC
filings discuss some of the important risk factors identified that may
affect the business, results of operations, and financial condition.
Halliburton undertakes no obligation to revise or update publicly any
forward-looking statements for any reason.
Source: Halliburton Company
Halliburton Company
Vice President, Investor Relations
Christian
Garcia, 713-759-2688
or
Director, Corporate Affairs
Cathy
Mann, 713-759-2605
