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Former Halliburton Subsidiary Chief To Get Jailtime For Cheney-Era Corruption

MARCY GORDON | September 4, 2008 06:55 AM EST | AP

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WASHINGTON — A former chief executive of construction firm KBR Inc. has pleaded guilty to federal bribery charges in connection with the company's natural gas operations in Nigeria from 1995 to 2004.

The Justice Department said Albert "Jack" Stanley entered a guilty plea Wednesday in federal court in Houston to conspiring in a decade-long scheme to bribe Nigerian government officials in return for engineering and construction contracts.

As CEO of Houston-based KBR, Stanley headed a subsidiary within Halliburton Co., the oilfield services conglomerate whose chief executive from 1995 to 2000 was Vice President Dick Cheney.

Stanley also pleaded guilty to a separate count of conspiring to defraud KBR and others, admitting to receiving $10.8 million in kickbacks from a consultant hired by the company at his behest.

Under his plea agreement, Stanley, 65, faces a sentence of seven years and payment of $10.8 million in restitution.

The government said the seven-year term is the longest sentence to date against an individual in a case involving the Foreign Corrupt Practices Act, which makes it unlawful to bribe foreign government officials or company executives to obtain or retain business.

A number of U.S. and foreign companies have been charged with violating the law in recent years, in cases involving payments to officials in Nigeria, Ecuador, Iraq, China, Iran and Kazakhstan.

"Today's plea demonstrates that corporate executives who bribe foreign government officials in return for lucrative business deals can expect to face prosecution," acting Assistant Attorney General Matthew Friedrich said in a statement.

Stanley acknowledged in his plea that a four-company joint venture including KBR paid about $182 million to consulting companies that then paid bribes to several Nigerian government officials.

In a separate settlement with the Securities and Exchange Commission, Stanley agreed to an injunction against future violations of the securities laws and to cooperate in the SEC's ongoing investigation. He neither admitted nor denied wrongdoing in that settlement.

Stanley was chief executive of KBR until 2001, and its chairman until June 2004. He has cooperated "and will continue to cooperate with the government," said his attorney Larry Veselka.

The Justice Department and the SEC have been investigating for some time the alleged bribery scheme in Nigeria involving Kellogg, Brown & Root, now called KBR, and three other companies _ from France, Italy and Japan. The investigation centered on a contract for a $4 billion Nigerian liquefied natural gas plant that was awarded in 1995 to a consortium of the four companies.

KBR, a major engineering and construction services company with operations around the world, was split off as a separate public company from Halliburton last year.

In November 2006, Halliburton agreed to the SEC's request for more time to investigate the alleged bribery scheme. The agreement also gave Halliburton more time to make its case to the SEC against possible civil charges under the foreign corruption law.

Halliburton fired two consultants, including Stanley, for violating the company's business code of conduct by receiving "improper personal benefits" related to the consortium's construction of the Nigerian plant.

Filed by Dave Burdick  |  Report Corrections