News Archive
Prison for KBR chief who bribed and stole millions
Released on 04/09/2008
Albert “Jack” Stanley, former chief executive and chairman of KBR, pleaded guilty September 3rd to participating in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts and, in a separate kickback scheme, to defrauding his own company and others of US$10.8 million.
As a result of a plea agreement Stanley, 65, faces seven years in prison and the payment of US$10.8 million in restitution.
Stanley was CEO of KBR– a subsidiary until last year of Halliburton Co., the oil services conglomerate whose chief executive from 1995 to 2000 was Dick Cheney, now US vice president – until 2001, and chairman of the company until 2004.
His sentence is said to be the most severe to date under the Foreign Corrupt Practices Act (FCPA). As part of his plea agreement, he agreed to cooperate with law enforcement authorities in the ongoing investigations.
The EPC contracts were to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, and were valued at more than $6 billion.
KBR was part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. The government-owned Nigerian National Petroleum Corporation was the largest shareholder of NLNG, owning 49 percent of the company.
Stanley was the senior KBR representative on the joint venture’s steering committee, which had responsibility for the hiring of agents to help win business. According to the US Department of Justice (DOJ), he admitted that he authorized the joint venture to hire two agents to pay bribes to a range of Nigerian government officials to help win the EPC contracts. The joint venture paid approximately US$132 million to one agent and more than US$50 million to the other during the course of the bribery scheme. Stanley admitted theses fees were intended to be used in part for bribes.
But Stanley’s involvement was more hands-on than that. The DOJ said he further admitted that he and others met with “three successive former holders of a top-level office in the executive branch of the Nigerian government to ask the office holder to designate a representative with whom the joint venture should negotiate bribes to Nigerian government officials”.
Stanley also pleaded guilty to mail and wire fraud to defraud his former employer and others. Stanley admitted to receiving approximately $10.8 million in kickbacks from a consultant whom he caused his former employer and its predecessor company to hire in connection with LNG projects around the world.
“The Department of Justice is committed to aggressively enforcing the Foreign Corrupt Practices Act,” said Acting Assistant Attorney General Matthew Friedrich. "Today’s plea demonstrates that corporate executives who bribe foreign government officials in return for lucrative business deals can expect to face prosecution."
In a related civil action, the Securities and Exchange Commission (SEC) today charged Stanley with violating the anti-bribery provisions of the FCPA and related provisions of the federal securities laws.
"As this case demonstrates, the Securities and Exchange Commission is committed to holding violators accountable when they engage in illegal conduct to obtain business in foreign countries," said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.
The case is being prosecuted by DOJ attorneys in the Criminal Division’s Fraud Section, with investigative assistance from the FBI and the Internal Revenue Service, Criminal Investigative Division. The Criminal Division’s Office of International Affairs provided substantial assistance in gathering evidence abroad and facilitating international cooperation. Significant assistance was provided by the SEC’s Division of Enforcement and by the authorities in France, Italy, Switzerland and the United Kingdom.
