Sun, May 11, 2003 - Page 11 News List

Halliburton admits complicity in scandal

WELL-CONNECTED The company once run by US Vice President Dick Cheney has become embroiled in another imbroglio concerning the bribing of Nigerian tax officials

AFP , WASHINGTON

Halliburton headquarters near downtown Houston.

PHOTO: AFP

Oil services giant Halliburton, already under fire over accusations that its White House ties helped win a major Iraqi oil contract, has admitted that a subsidiary paid a multi-million dollar bribe to a Nigerian tax official.

Halliburton, once run by US Vice President Richard Cheney, revealed the illicit payments, worth US$2.4 million, in a filing Thursday with the US Securities and Exchange Commission (SEC).

"The payments were made to obtain favorable tax treatment and clearly violated our code of business conduct and our internal control procedures," Halliburton said.

Halliburton subsidiary Kellogg Brown and Root (KBR), which paid the bribe, has been in the political spotlight since it was awarded a no-bid US government oil contract in Iraq in March.

KBR is building a liquefied natural gas plant and an offshore oil and gas terminal in Nigeria.

Halliburton told the SEC the bribe was discovered during an audit of KBR's Nigerian office.

The payments were made in 2001 and 2002, Halliburton spokeswoman Zelma Branch said.

Cheney led the company as chief executive from 1995 until August 2000, when he became US President George W. Bush's running mate.

"Based on the findings of the investigation we have terminated several employees," Halliburton said in the filing, adding that none of its senior officers was involved in the bribe.

"We are cooperating with the SEC in its review of the matter," Halliburton said.

"We plan to take further action to ensure that our foreign subsidiary pays all taxes owed in Nigeria, which may be as much as an additional five million dollars, which has been fully accrued."

Halliburton said its code of business conduct and internal control procedures were "essential" to the way it ran its business.

The group is already facing questions over its business in Iraq and its accounting practices.

On Tuesday, a US lawmaker said the military had revealed for the first time that KBR had a contract encompassing the operation of Iraqi oil fields.

Previously, the US Army Corps of Engineers had described the contract given to Halliburton as involving oil well firefighting.

But in a May 2 letter replying to questions from Henry Waxman, a Democrat, the army said the contract also included "operation of facilities and distribution of products."

Waxman, the top-ranking Democrat in the House of Representatives' commitee on government reform, asked for an explanation.

The US Army Corps of Engineers had said it decided to forgo competitive bidding on the first contract because of time constraints.

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