S.E.C. Begins Formal Investigation of Halliburton's Accounting

[radfringe]

Source: New York Times

The Securities and Exchange Commission has begun a formal investigation into the Halliburton Company's disclosure and accounting of cost overruns on engineering and construction jobs, the company said tonight.

Halliburton, the world's No. 2 oil field services company, is cooperating with the S.E.C., the company said in a statement. Halliburton believes that the formal investigation is a step forward in resolving the matter, said a spokeswoman, Wendy Hall. She declined to elaborate further on the nature of the investigation.

In May, the company, based in Houston, reported that the S.E.C. had started a preliminary inquiry into whether the company improperly accelerated the booking of revenue from construction work, a practice that began when Vice President Dick Cheney was the company's chief executive.

Much of Halliburton's business comes from big construction projects, like natural gas processing plants, which sometimes run over budget.



Read more: http://query.nytimes.com/gst/fullpage.html?res=9F0CE5DD1E3DF933A15751C1A9649C8B63

---

see more in addition to article: http://www.sec.gov/Archives/edgar/data/45012/000126947608000003/trickortreatearly.htm

[WCGreen]

1. Boy this guy can't do anything by the books...

A pathological corner cutter...

[radfringe]

5. nope and if wasn't for

_______ passing along information to SEC we would probably not have know any of this was going on

[radfringe]

2. In the fourth quarter of 1998

under cheney:

---snip---

In the fourth quarter of 1998, Halliburton began to book revenue on the assumption that its customers would pay at least part of the cost overruns, although they remained in dispute. Before that, Halliburton had been more conservative, reporting revenue from overruns only after settling with its customers.

---snip---

On Wednesday, Halliburton said that it would pay $4 billion in cash and stock to resolve 300,000 asbestos-related personal injury lawsuits in one of the largest settlements ever. Most of the liabilities come from Dresser Industries Inc., which Halliburton bought in 1998.

As part of the settlement, two units -- DDI Industries, a successor to Dresser, and Kellogg Brown & Root -- will file pre-negotiated bankruptcy plans by March, the company said. The Halliburton units will not file for Chapter 11 until banks have agreed to finance the settlement. The company is negotiating with lenders now.

[Gman]

3. I thought they ran for the border and moved to Dubai

a year or so ago. Of course, they're still traded on the NYSE so they would still come under the SEC. There's all kinds of stuff related to (the divested) KBR and fraud in Iraq including stolen oil if the SEC cares to look that far. But that might be outside their scope.

[radfringe]

4. maybe outside of SEC scope

but overcharging pentagon and ripping off taxpayers is within Justice Department's scope

this is just getting started

[dkofos]

6. I would rather they wait until 1/21/09. At least we will have competent

people in charge of the SEC then.

[radfringe]

7. waxman is on the job

he's investigating this too - so while SEC may drag their feet or play games - WAXMAN won't

[Cassandra]

8. "sometimes run over budget"?

That's their business plan; a feature, not a bug.

[radfringe]

9. if mccain really wanted to fix government

he's be taking an axe to these no-bid contracts

[Selatius]

10. You're 5 years late and 20 billion short, but better late than never, I guess. nt

[radfringe]

11. you betcha :wink:... lol

[radfringe]

12. also keep an eye on this

State Street to receive $2B Treasury investment
Monday, October 27, 2008 - 2:52 PM EDT
Boston Buisness Journal
http://www.bizjournals.com/boston/stories/2008/10/27/daily8.html

State Street Corp. announced Monday that the U.S. Treasury will invest $2 billion in the company as part of its previously announced plan to prop up the nation’s largest banks.

The State Street (NYSE: STT) plan will see Treasury acquire 20,000 shares of the company’s preferred stock as well as a 10-year warrant to purchase more than 5.5 million common shares at an exercise price of $53.80 a share. The Boston-based money custodian’s stock was trading around $36 a share Monday afternoon.

The transaction is expected to close within the “next several days,” the company said.

-----

it's all connected to bush-cheney and various repubs and their buddies - BANKROLLS FIRST

-----------
http://sttpresscenter.blogspot.com/

[NV Whino]

13. Good thing the mods moved this out of Latest Breaking News

It's not only late, it's way overdue.

[radfringe]

14. my mistake

date at top of page was today's date, didn't notice the original publish date


none the less, SEC is looking into this again or still.... hopefully with a new congress Waxman will have the support to investigate further and unravel this web

[radfringe]

15. good source

http://www.halliburtonwatch.org/home.html

Bribery conviction spurs call to terminate KBR contracts -- http://www.halliburtonwatch.org/reports/exim.pdf

[radfringe]

16. more

http://www.sec.gov/Archives/edgar/data/45012/000004501208000480/edsept200810q_final.htm

http://www.sec.gov/Archives/edgar/data/1357615/000114036108024084/form10-q.htm

suggested google search terms: FCPA, SEC, and DOJ with halliburton kbr

[The Magistrate]

17. Some Further Background Might Be Helpful Here, Ma'am

This report gives a much fuller account.

http://articles.moneycentral.msn.com/Investing/Extra/bribery-scandal-rocks-big-oil.aspx?page=1

The plea agreement may be available on-line, but my machine has balked at opening the extensive pdf file involved.

[radfringe]

18. had no problem opening it on my computer

sorry if your's can't handle it, I'll try to find a synopsis for you, sir

[radfringe]

19. ..plea bargain

http://www.nytimes.com/2008/09/04/business/04bribe.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1225571918-gRimX2RqLPqcmZDkhkENrA

Under a plea agreement entered in United States District Court in Houston, Mr. Stanley admitted that he authorized the hiring of two consulting companies to pay bribes to several Nigerian government officials while KBR entered into four contracts with a Nigerian liquefied natural gas company whose largest shareholder was the government-owned Nigerian National Petroleum Corporation.

Mr. Stanley pleaded guilty to paying $132 million to one consulting company and more than $50 million to the other. He said that he intended that the fees would be used to bribe Nigerian government officials. Mr. Stanley also admitted that he had received $10.8 million in kickbacks from a consultant he had hired.

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

The plea agreement said that Mr. Stanley and other unidentified executives “met with three successive holders of a top-level office in the executive branch of the government of Nigeria” to ask them to designate representatives with whom to negotiate bribes to Nigerian officials.

The payments were made between 1995 and 2004 while KBR was working in a consortium with three companies from Japan, France and Italy. Mr. Stanley had been KBR’s senior representative on the joint venture’s steering committee for the project.

“Today’s plea demonstrates that corporate executives who bribe foreign government officials in return for lucrative business deals can expect to face prosecution,” said Matthew Friedrich, an acting assistant attorney general.

[The Magistrate]

20. No Problem, Ma'am: Sometimes It Gets Balky, And Exhausts My Patience

Primary documents are always the best.

This has been a massive investigation, conducted on three continents over many years, with tremendous sums at stake, and obviously a tremendous wealth of information has been available to the investigators in France and Nigeria, as well as in the United States. Rivalries at the highest levels of the oil business lie at the root of the exposure Mr. Stanley.

[radfringe]

21. true, sir

all the more reason to raise this issue and any new developments - like the bumper sticker says - if you're not outraged, you haven't been paying attention.

depending on the outcome of the election, if our hopes are realized and expectations exceeded with a new administration and new congress this is going to have great ramifications for our economy and how we conduct business for years to come

[radfringe]

22. regarding primary docs

I'd post them, but......well, as a mod you know the rules

[bluesmail]

23. They did pack up and moved to Dubai.

No extradition treaty. I don't know if that applies to Corporations Limited Liability, but then the congress did grant them personhood.

[SoCalDem]

24. way too little...waaaay too late.. I almost wish they would wait until AFTER Jan 20, '09

They'll do a cursory "investigation", get a few flunkies to take a fall (they get pardoned by GWB) and the case is "over"..

BUT......

At this late date, the best tack is to WAIT... wait until the DOJ, SEC, FCC, etc swamps have been drained, and responsible people put into place, and THEN start launching real investigations...with teeth..

[conscious evolution]

25. The real investigation has been going on for a while now.

Since 2006 at least.Probably before that.
What is happening now is the fangs about to sink in.

[radfringe]

26. High-Level Executives Targeted for FCPA

High-Level Executives Targeted for FCPA Enforcement; Continued Scrutiny of Foreign Subsidiary Operations
October 8, 2008 : steptoe & Johnson LLP
http://www.steptoe.com/publications-5615.html

The past two months have seen a continued high level of Foreign Corrupt Practices Act (“FCPA”) enforcement activity by both the DoJ and the SEC. The following reviews two of the more significant recent enforcement actions, involving (1) Jack Stanley, a former executive of Kellogg, Brown & Root, and (2) a settlement with Con-Way regarding improper payments made by a subsidiary, and highlights several other enforcement actions in this period.

1. Jack Stanley

The Stanley case,1 announced on September 3, 2008, involved Jack Stanley ("Stanley"), a former high-ranking executive at Kellogg, Brown & Root (“KBR”), a global engineering and construction company, and former wholly-owned subsidiary of Halliburton. This case is noteworthy for several reasons: the continued targeting of individuals for prosecution; the sheer scope of the alleged improper payments, amounting to over US $180 million; the lengthy sentence agreed to by the defendant; and the amount of disgorgement.

Stanley plead guilty to conspiring to violate the FCPA, and to conspiracy to commit mail and wire fraud. Between 1995 and 2004, Stanley devised and implemented a scheme to bribe Nigerian government officials to assist in obtaining six contracts on behalf of a four-company joint venture (“TSKJ”) worth over $6 billion to build liquefied natural gas (“LNG”) production facilities at Bonny Island, Nigeria.


----snip----

2. Con-Way

Not all recent prosecutions have focused on individuals, however. The SEC continues to hold parent issuers responsible for the activities of the foreign subsidiaries, including small but recurring operating payments deemed improper. The Con-Way case, announced in late August 2008,5 involved allegations that a former majority-owned subsidiary of Con-Way in the Philippines, Emery International, a company engaged in the freight forwarding business, made a large number of small payments to Philippine customs officials and to officials of state-owned airlines in connection with freight forwarding and customs brokerage activities in that country. The payments totaled $417,000. Con-Way was prosecuted by the SEC for violations of the FCPA’s books and records and internal control provisions. It agreed to pay a civil penalty of $300,000 to settle the allegations. The payments were made not to expedite the shipment of cargo, but to induce actions that would lower shipping costs or cause the officials to overlook violations of law or regulations, or to resolve disputes.6

The settlement documents made no mention of Con-Way’s customers. It is not known at this writing whether or not the SEC or other authorities plan on targeting those customers, or even whether they have jurisdiction to do so. In light of other pending cases involving customs issues and customs brokers, this case is of particular interest.

----snip----

3. Other Recent Actions

The DoJ has also recently announced several additional indictments and sentences of individuals and entities for FCPA-related violations. On September 4, 2008, four employees of Nexus Technologies Inc. (“Nexus”), and Nexus itself, were indicted on charges of both conspiring to bribe Vietnamese public officials in violation of the FCPA and of violating the FCPA itself.7 The indictment alleges that between 1999 and 2008, the defendants conspired to, and did, bribe Vietnamese government officials to secure contracts for Nexus. They are alleged to have paid at least $150,000 in bribes to Vietnamese officials.

Further, on September 24, 2008, in a case that pairs export violations with FCPA issues, Shu Quan-Sheng (“Shu”), the President, Secretary and Treasurer of AMAC International, a high-tech company located in Newport News, Virginia, was arrested and charged with illegally exporting space launch technical data and offering bribes to Chinese government officials.8

Also, on September 24, 2008, Christian Sapsizian, a former Alcatel executive and non-US national, was sentenced to 2.5 years in prison and the forfeiture of $261,500 for his participation in the payment of $2.5 million in bribes to Costa Rican government officials in order to obtain a mobile telephone contract from Costa Rica’s state-owned telecommunications authority.9 This is one of the largest penalties assessed against a foreign national under the FCPA to date.


=====

also see: http://finapps.forbes.com/finapps/jsp/finance/compinfo/secfilings/SECFilingsSummary.jsp?cn=HALLIBURTON+CO+HLDG+CO&tkr=HAL&secn=0000045012-07-000309&frm=10-Q

[barbtries]

27. "which sometimes run over budget"

:argh: :argh: :argh:

[annabanana]

28. Are there suddenly new people at the SEC or what?

Have they been locked in a closet all these years? What?

[SacredCow]

29. I spent a week with the whistleblower in question...

after he got out of the hospital this spring. He gives a pretty good tour of DC. If I know him, he's probably setting up a new message board of his own - that whole Harvard/Yale rivalry thing.

[Laurab]

30. I hope you're right!

I don't care about the rivalry thing at all, but I sure do miss the "whistleblower" and his posts.

I must say I'm jealous - No doubt he gives an interesting and educational tour, and also an amusing one, if I know him!

[radfringe]

31. I'll do what I can to

keep everyone up to date on the doings with halliburton etc

[SacredCow]

33. I suspect it'll be all over the news very soon......

The "whistleblower in question" and the authorities seem to have timed the revelations of indictments, etc. very strategically. My guess is that there are already MSM stories in the can about this....

[SacredCow]

32. He's got a head full of knowledge...

on every topic imaginable... I don't know where he keeps it all.

[Laurab]

34. Did you happen to see

what was in his pockets? Was he carrying one of those papoose-type things? OR was there a full grown man following him around everywhere you went?

I'm thinking the elusive Ides of October may carry around some of his knowledge for him. I've never seen Ides, so he could come in any form...he might be a "little" person who the "whistleblower" passes off as a baby - NOTHING would surprise me about those guys! Think back....was there anything suspicious at all - a covered stroller, or baby buggy, a large knapsack that moved around a lot......?

[SacredCow]

36. No, I've not seen Ides....

and I'm not going to hazard any guesses as to the true nature of Ides at this point...

[radfringe]

35. Nigeria: Halliburton Scam - EFCC Seeks Clues From Abroad 10/27/08

Nigeria: Halliburton Scam - EFCC Seeks Clues From Abroad
27 October 2008
Posted to the web 27 October 2008
Ejiofor Alike | Lagos | allafrica.com
http://allafrica.com/stories/200810270616.html

The Economic and Financial Crimes Commission (EFCC) is at present seeking evidence from abroad in a bid to nail Nigerian officials alleged to have received bribes in order to help some foreign companies secure juicy oil and gas contracts in the country.

Top on the cases on which the anti-graft body is seeking clues is the $180 million bribe allegedly paid some government officials by Halliburton to secure Liquefied Natural Gas (LNG) contracts.

EFCC Spokesman Femi Babafemi confirmed to THISDAY last night that the anti-graft agency had commenced investigation into the matter but now needed clues from the alleged foreign collaborators in the illicit oil and gas deals to assist in tracking down their Nigerian counterparts.

---snip---

The Halliburton bribe scandal has been rocking the country since the revelation emerged in 2003 that some Nigerian government officials had collected $180 million bribe to ensure that the company got the juicy LNG contracts.

TSKJ, a Portugal-registered company, owned jointly by Halliburton's Kellogg Brown & Root (KBR), Technip SA of France, Eni's Snampro-getti Netherlands and Japan Gas Corporation (JGC) built Trains 1, 2, 3, 4, 5 and 6 of the Nigeria LNG plants in Bonny Island.

THISDAY checks reveal that after the formation of the TKSJ consortium, it created LNG Services, a subsidiary based in the Portuguese Island of Madeira, a place where tax laws allegedly exempt businesses.

This consortium of engineering firms was awarded a turnkey engineering, procurement and construction (EPC) contract for the construction of the first phase of the plant in December 1995.

However, TSKJ was alleged to have given bribes to some government officials to facilitate the contract.

The scandal came to the public domain after a French court launched an investigation in October 2003 to look into allegations that one of the firms, KBR, paid $180 million to Federal Government officials to win contracts for the construction of the first two trains of the NLNG plant in late 1990s.

This was followed by the probe of US oil service companies operating in Nigeria by the United States Department of Justice (DOJ) and US Securities and Exchange Commission (SEC).

----snip----

But the Nigerian officials allegedly named in the scam were not prosecuted despite the assurance given in 2004 by the Federal Government that the matter had been handed over to the then newly-inaugurated EFCC.