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FCPA Blog Daily News

« SEC awards whistleblower $1.7 million | Main | OFAC fines Singapore firm $12 million for Iran sanction violations »
Thursday
Jul272017

Halliburton pays $29 million to settle Angola FCPA offenses

Halliburton Company paid the SEC $29.2 million in disgorgement and penalties Thursday for violating the FCPA's books and records and internal accounting controls provisions.

The SEC said Halliburton gave business to a friend of an Angolan official. The official eventually approved the award to Halliburton of seven oilfield services contracts.

In the settlement, Halliburton paid the SEC $14 million in disgorgement plus $1.2 million in prejudgment interest, and a $14 million penalty. 

The company will retain an independent compliance consultant for 18 months.

Halliburton said in a statement Thursday that the DOJ advised the company "that it has closed its investigation and will not be taking any action."

Halliburton made about $14 million in profit from the Angola deals, the SEC said.

In a related enforcement action Thursday, Halliburton’s former vice president, Jeannot Lorenz, agreed to pay a $75,000 penalty for causing the company’s violations, circumventing internal accounting controls, and falsifying books and records, the SEC said.

In 2010, a whistleblower alerted Halliburton to potential FCPA and conflict violations through an Angolan vendor. The company then launched an investigation into the allegations.

In February 2009, Halliburton and its former subsidiary KBR settled FCPA violations for $579 million. That's still the third biggest FCPA-related settlement of all time. KBR admitted paying Nigerian officials at least $182 million in bribes on behalf of itself and three partners for contracts to build liquefied natural gas facilities on Bonny Island, Nigeria.

Houston-based Halliburton has about 50,000 employees in 70 countries. Revenues last year were nearly $16 billion.

The SEC and Halliburton settled Thursday's enforcement action through an administrative action and without going to court. The company didn't admit or deny the SEC's findings.

According to the SEC’s order (pdf), officials at Angola’s state oil company Sonangol told Halliburton in 2008 that it was required to partner with more local Angolan-owned businesses to satisfy local content regulations.

Lorenz, the former Halliburton executive also charged Thursday, retained an Angolan company owned by a former Halliburton employee. The former employee was "a friend and neighbor of the Sonangol official who would ultimately approve the award of the contracts," the SEC said. 

Halliburton outsourced more than $13 million worth of business to the local Angolan company, according to the SEC.

Sonangol eventually approved the award of "seven lucrative subcontracts to Halliburton."

"Lorenz violated Halliburton’s internal accounting controls by starting with the local Angolan company and then backing into a list of contract services rather than first determining the services and then selecting an appropriate supplier," the SEC said. 

Lorenz didn't conduct competitive bidding or substantiate the need for a single source of supply. He avoided an internal accounting control that required contracts of more than $10,000 in countries like Angola with high corruption risks to be reviewed and approved by a special committee within Halliburton, the SEC said.

Lorenz also settled with the SEC without admitting or denying the agency's findings.

____

Richard L. Cassin is the publisher and editor of the FCPA Blog.

Reader Comments (3)

Almost 6 years after self-reporting. How complex can it be for it to take that long? Hard to imagine.
July 27, 2017 | Unregistered Commenterdurban
@durban. Good point.
July 27, 2017 | Unregistered CommenterMonica Arruda
@durban
The complaint and the article both say whistleblower, not selfreporting.
July 29, 2017 | Unregistered CommenterJim
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