A few weeks ago a former senior executive at Halliburton pleaded guilty to paying bribes to Nigerian officials to win a mammoth energy project in that country. The executive, Jack Stanley, also copped to taking millions of dollars in kickbacks on deals in countries ranging from Malaysia to Yemen.
Halliburton’s project in Nigeria is the subject of a number of international investigations, including one by the British Serious Fraud Office (SFO). I’ve heard from several sources that the SFO recently questioned another former Halliburton employee involved in the affair, a murky, long-time African hand named Wojciech Chodan.
Here’s a brief update and summary of the case – and pay attention because Dick Cheney has more than a cameo role:
Back in 1995, an international consortium in which Houston-based M.W. Kellogg played a central role, won a $2.2 billion contract to build a liquefied natural gas (LNG) plant in Nigeria. The consortium, which was known as TSKJ and included French, Italian and Japanese partners, subsequently won billions more in additional contracts associated with the plant.
Halliburton became a partner to the deal in 1998, when it bought Dresser Industries, Kellogg’s parent company. “Cheney, then-CEO of Halliburton, arranged the merger during a quail hunting trip,” ProPublica recently noted. Cheney named Stanley to head KBR, the Halliburton subsidiary that grew of the merger and which handled the Nigerian project.
TSKJ reportedly paid more than $100 million in bribes to secure the Nigeria contracts. The suspected bagman in the scheme is Jeffrey Tesler, a British attorney who served as the consortium’s agent in Nigeria. LNG Servicos, an offshore firm that TSKJ established in Madeira, funneled the alleged bribe money to Tesler through Tri-Star, a company he registered in Gibraltar.
Tesler has always denied any wrongdoing. He has not disputed receiving the money from LNG Servicos, but says most of it represented his fees.
For its part, Halliburton has always said that it inherited the Nigeria deal when it bought Dresser, and was shocked to later discover that bribes had been paid. Back in 2004, following news reports about the case, it fired Stanley and Wojciech Chodan, a consultant also intimately involved in the Nigeria project. The company later turned over hundreds of pages of Chodan’s notes to the Justice Department.
Chodan – who resides in England and who the newsletter Africa Confidential has described as “the Samuel Pepys of the Nigeria gas scandal” – was recently called in for questioning by the Serious Fraud Office. He and Tesler, I’ve been told by sources familiar with the story, worked in Nigeria for decades, and both were involved in a Kellogg-built fertilizer plant project that dates to the 1980s. It was during the fertilizer project that the two men established the close relationships with Nigerian officials that later proved so valuable to the TSKJ consortium.
So what about Cheney, who headed Halliburton between 1995 and 2000, when he left to become George W. Bush’s running mate? No evidence has emerged that he was aware of any bribes being paid in the case, but there are a few curiosities.
In 1999, four years after the original Nigeria deal was signed, TSKJ won an additional $1.4 billion contract to build facilities at the natural gas complex. Twelve days later, the consortium agreed to pay $37.5 million to Tesler’s Tri-Star, part of the suspected bribe slush fund. Also in 1999, Tesler was reappointed as the consortium’s Nigeria agent at a TSKJ meeting in London. (Tesler has said in a deposition that the French member of the consortium wanted to fire him, but he was retained at the insistence of Halliburton.)
The LNG plant in Nigeria – one of the most notoriously corrupt countries in the world — was a huge moneymaker for Halliburton and one of its biggest international projects. Yet Cheney, who personally selected Stanley to head KBR, never apparently suspected there was anything amiss with the project or its elaborate offshore financial arrangements. For a man who has been so proactive and hands-on as vice president, that’s a surprisingly passive posture.