In what seems like a weekly event, the Justice Department is investigating whether former employees of Houston-based Halliburton Co. conspired with other companies to rig bids for large overseas construction projects. Halliburton disclosed the bid-rigging investigation in its annual 10K filing with the Securities and Exchange Commission. This new antitrust investigation has grown out of an earlier investigation into whether a consortium of companies bribed Nigerian officials to win a lucrative contract to build a liquefied natural-gas plant there.
Although Halliburton is a major provider of oilfield services, it also owns the giant construction and government-contracting unit called Kellogg Brown & Root. KBR is one of the world’s largest overseas construction firms and specializes in building large and complex projects in foreign countries. Halliburton announced in late 2004 that it would likely sell its KBR unit, but that such a sale would take considerable time to finalize and consummate.
The antitrust and Nigeria investigations are focused on Albert J. “Jack” Stanley, who was the former chairman of the Halliburton unit Kellogg Brown & Root. Halliburton canned Mr. Stanley this past June for allegedly receiving improper payments from an agent of the Nigeria construction consortium. The Justice Department is looking into Mr. Stanley’s activities dating back to the mid-1980s when he worked for construction firm M.W. Kellogg. Dresser Industries acquired Kellogg in 1988 and then Halliburton bought Dresser in 1998 while U.S. Vice-President Dick Cheney was CEO of Halliburton.
This current probe is just one of many investigations that are confronting Halliburton, which appears to be defense lawyer’s dream client. Another federal grand jury is investigating whether the company violated U.S. sanctions against doing business in Iran, while another investigation is attemptting to determine whether Halliburton overcharged the U.S. military for running dining halls in Iraq.