Investigation of Halliburton Co./TSKJ’s Nigerian Business Practices: Model for Analysis of the Current Anti-Corruption Environment on Foreign Corrupt Practices Act Enforcement

Abstract

The U.S. stood alone in its anti-bribery legislation from 1977 when the Foreign Corrupt Practices Act (“FCPA”) was initially passed until the Organization for Economic Cooperation and Development (the “OECD”) adopted the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (“OECD Convention”) in 1997 resulting in OECD signatory nations adopting implementing legislation. France’s adoption of implementing legislation in 2002 provided the basis for the investigation by one of its magistrates into the allegations that a Halliburton subsidiary, TSKJ, had engaged in bribery activities in Nigeria. The French investigation into allegations of improper payments by a TSKJ agent to Nigerian government officials in exchange for favorable treatment in contracts connected with the construction of a multibillion dollar natural gas liquefaction complex at Bonny Island, Nigeria has widened into an investigation by the Nigerian government and FCPA investigations by the U.S. Department of Justice and Securities and Exchange Commission. An excellent model for examination of the influence of the current anti-corruption environment on FCPA enforcement are the issues raised by the French inquiry into Halliburton/TSKJ’s alleged payments to Nigerian government officials of about $180 million in exchange for securing contractual advantages. The French are examining allegations of illicit payments to Nigerian government officials by the TSKJ joint venture in which Halliburton Company’s subsidiary, Kellogg Brown & Root (“KBR”), is a partner. With an American corporation involved, the French regulators related the information they had obtained to their U.S. compliance counterparts. This paper will 1) discuss the factual background of the alleged Halliburton/TSKJ misconduct and the pending investigations by various government agencies in several countries, 2) identify the relevant FCPA provisions, case law and policy, and 3) examine the anti-corruption environment which has influenced increased enforcement of the FCPA and its potential implications for the pending Halliburton/TSKJ investigation.