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Saturday, February 14, 2009

KBR, Halliburton Fined $579 m. for Nigerian Bribery Scheme

clipped from www.govexec.com

The government's top contractor in Iraq, KBR, Inc., has pleaded guilty to bribing high-level officials in the Nigerian government during a decade-long scheme to win more than $6 billion in overseas construction contracts, federal authorities announced on Wednesday.

KBR and its former parent company, Halliburton, agreed to pay the government a combined $579 million in fines to settle the criminal and civil charges, the most ever paid by a U.S. firm in a foreign corruption case.

"Today's guilty plea by KBR ends one chapter in the department's long-running investigation of corruption in the award of $6 billion in construction contracts in Nigeria," said Rita Glavin, acting assistant attorney general in the Justice Department's criminal division. "This bribery scheme involved both senior foreign government officials and KBR corporate executives who took actions to insulate themselves from the reach of U.S. law enforcement."

Of course, $579 million isn't much of a punishment for a crime that earned them $6 billion. In fact, it's kind of a sweet deal -- almost an investment, really.

GovExec tells us:

CEO William Utt said the agreement closes "both a regrettable and unfortunate chapter in KBR's rich and storied history." He added that the settlement was "very difficult but necessary."
Yeah, I'm sure your $5.4 billion overall profit here is a real hardship in this tough economy, Bill. Don't spend it all in one place.

3 comments:

Anonymous said...

The article states the contracts were worth 6 billion, not that they made 6 billion in profits. Your math is way off.

Michael said...

Without knowing anything about the contracts it is impossible to know how much of the 6 billion was profit, although it is clear that KBR are criminals.

Anonymous said...

This is SOP for these big companies.

In 1971 an oil company (I think it was ARCO) paid a one million dollar fine for an oil spill on the beaches at Santa Barbara. C'mon, a million? Pocket change, even in 1971 considering the vastness and damage of the spill.

In 1981 (I believe it was Merrill Lynch) paid a 20 million dollar fine for holding their customers interest back by a day, thereby saving themselves hundreds of millions of dollars over the years. Why weren't they fined 200 million?

It's like finding your son smoking cigars, torturing the cat, burning your house down then lying about it, then punishing him by taking away his 8th most favorite comic book.

Ridiculous, insulting and inappropriate punishment for the scale of crime committed.

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