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Monday
May022016

KBR cooperating with DOJ investigation of Unaoil

Image courtesy of KBROil and gas services firm KBR said in its quarterly report Friday that the DOJ has contacted the company in connection with an investigation of Unaoil. 

The Huffington Post/Fairfax Media reported a month ago that Monaco-based Unaoil acted as an intermediary to pay bribes for big international companies, mainly from the oil and gas sector.

The report cited information in files allegedly leaked from Unaoil.

Police in Monaco raided Unaoil's offices after the report appeared.

Unaoil has denied the bribery allegations.

Citing leaked documents, the Huffington Post said KBR hired Unaoil "to help it win oil and gas contracts in Kazakhstan."

In 2009, KBR and its former parent Halliburton paid $579 million to the DOJ and SEC to resolve FCPA offenses in Nigeria. The settlement still ranks as the third biggest FCPA enforcement action ever.

Houston-based KBR admitted paying Nigerian officials at least $182 million in bribes for contracts awarded between 1995 and 2004 to build liquefied natural gas facilities on Bonny Island, Nigeria.

The contracts won by a KBR-led international joint venture were worth more than $6 billion.

KBR's former CEO, Albert "Jack" Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA. He was sentenced to thirty months in prison.

The HuffPo reported in late March that while the DOJ investigated the Nigeria bribes, "a KBR employee emailed Unaoil to warn [that] the American company was 'tightening' anti-corruption controls in response to the federal probe."

"Despite this, KBR continued to pay Unaoil for work in Kazakhstan for years afterward," the story said.

KBR has denied wrongdoing, the HuffPo said.

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The disclosure in KBR Inc.'s Form 10-Q filed with the SEC on April 29, 2016 said:

Recently, there have been news reports related to Unaoil, a Monaco based company, and activities Unaoil may have engaged in related to international projects involving several global companies, including KBR. It has also been reported that the U.S. DOJ is conducting an investigation of Unaoil related to the information reported in these news articles. The DOJ has contacted the Company in connection with that investigation and the Company is cooperating with its requests for information.

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.