Halliburton will pay a fine for bribery

Halliburton to pay $30 m in bribery case

LUANDA, July 28, 2017 – Halliburton agreed to pay USD 29.2 million to settle civil charges related violations of the Foreign Corrupt Practices Act (FCPA) in its Angola operations, the US Securities and Exchange Commission (SEC) announced Thursday.

The company’s former vice-president Jeannot Lorenz will pay an additional USD 75,000 for “causing the company’s violations, circumventing internal accounting controls and falsifying books and records,” the SEC statement read.

The oilfield services giant was accused of profiting USD 14 million from deals that violated the bookkeeping and internal accounting requirements of the FCPA.

According to the SEC’s charges, Lorenz funneled USD 13 million worth of contracts to a company owned by a former Halliburton employee with connections at state-owned Sonangol. The deals were allegedly aimed at meeting local content requirements rather than the stated purpose and awarded without competitive bidding. Lorenz was accused of selecting the company before determining the services required and failing to have the contracts reviewed by the company’s corruption prevention committee, both violations of Halliburton’s internal rules.

 

“Halliburton committed to using a particular supplier that posed significant FCPA risks and a company vice-president circumvented important internal accounting controls to get the deal done quickly,” Antonia Chion, associate director in the SEC’s enforcement division said in a statement. “Companies and their executives must comply with these internal accounting controls that help ensure the integrity of corporate transactions.”

Halliburton settled the case without admitting or denying wrongdoing. In addition to paying USD 29.2 million for disgorgement, prejudgment interest and a civil penalty, the company must hire an independent compliance consultant for 18 months.

“These investigations began after the company received an anonymous allegation in December 2010 of possible violations of the Halliburton code of business conduct and the Foreign Corrupt Practices Act, principally through the use of a vendor to satisfy Angolan local content requirements,” the company statement read.

“Halliburton promptly reported the allegation to the Department of Justice (DOJ), conducted a thorough internal investigation and co-operated with investigations by the Securities and Exchange Commission and the DOJ. Over the intervening years, Halliburton also continuously enhanced its global ethics and compliance programme.”

As Angola’s concessionaire, Sonangol oversees the domestic oil industry. The company is also active as an operator through its E&P subsidiary Sonangol P&P. However, in April 2016, the Ministry of Oil announced that the NOC would be restructured. While Sonangol will still oversee the country’s E&P activities, two new entities will be created to oversee its shareholding and contracts.

For more news and features on Angola, click here.

Read our latest insights on: