KBR & Halliburton Agree to $579 Million Settlement for FCPA Violations

The DOJ announced on February 11, 2009, that Kellogg Brown & Root LLC (KBR), a global engineering, construction and services company based in Houston, pleaded guilty to charges related to the Foreign Corrupt Practices Act (FCPA) for its participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts. The contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.

KBR agreed to pay a $402 million criminal fine. According to court documents, 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 (NNPC) was the largest shareholder of NLNG, owning 49 percent of the company.

Under the terms of the plea agreement, KBR agreed to retain an independent compliance monitor for a three-year period to review the design and implementation of KBR's compliance program and to make reports to KBR and the Department of Justice. KBR also agreed to cooperate with the Department in its ongoing investigations.  KBR's parent company, KBR Inc., and its former parent company, Halliburton Company, also reached a settlement of a related civil complaint filed by the U.S. Securities and Exchange Commission (SEC). The SEC's complaint charged KBR Inc. with violating the FCPA's anti-bribery provisions, and charged KBR and Halliburton with engaging in books and records and internal controls violations related to the bribery.  KBR Inc. and Halliburton jointly agreed to pay $177 million in disgorgement of profits relating to those violations.

Combined, the $579 million in fines constitutes the largest settlement of FCPA violations by any U.S. company in history.