Halliburton is not the most corrupt US Oil Services Company.


This is a subject you will not see in the Mainstream Media. You will not see it pushed on blogs either. The main reason is that there is no tie directly between Halliburton and Willbros International Inc. There is no tie between either President Bush, Vice-President Cheney and Willbros International Inc. Two of the current Executive Officers at Willbros International Inc. did indeed previously work for Kellogg Brown & Root. That would be Randy Harl (currently CEO) and Van Welch (currently Senior V.P. and CFO). But, let's face it. If it doesn't implicate the Bush administration in any way, why even put it into print. It won't raise any eyebrows. It won't launch talk at the Bush-bashing water cooler. However, if you could get a connection between either Harl and/or Welch and Cheney, you would get a story into the NYT or the LATimes.

The story is this: Willbros International Inc. provides engineering services to the oil and gas industry. After 45 years in Nigeria, the company is selling the Nigerian end of their business. And according to this Forbes article, approximately 1/3 or $706 million of Willbros' sales come from there. That is a tremendous amount of revenue to give up. The problem is ethical. Because of illegal activities starting in the 1990s in Nigeria, Bolivia, and Ecuador, the company faces U.S. Securities & Exchange Commission and U.S. Justice Department investigations into potential violations of the Foreign Corrupt Practices Act, a U.S. law that prohibits bribery. The Act carries stiff penalties, among them civil fines of up to $650,000 per violation and exclusion from U.S. government contracts.

Willbros International Inc. (“WII”) is alleged to have made improper payments to government officials in Bolivia, Nigeria, and Ecuador, in exchange for construction contracts.Willbros’ internal investigation revealed that James Tillery, the former president of WII, and about twelve other employees and consultants owned interests in entities with whom WII did business.This allowed them to give and receive improper payments, corporate opportunities, and benefits.

But in September of 2006, Jim Bob Brown, a former executive of a subsidiary of Houston-based Willbros Group Inc. who worked in Nigeria and South America, had pleaded guilty to violating the Foreign Corrupt Practices Act (FCPA) by conspiring with others to bribe officials of the governments of Nigeria and Ecuador. The plea is a bit staggering:

During his guilty plea hearing, Brown, 45, admitted that in February 2005, he and another Nigeria-based WII executive arranged for the payment of approximately $1.5 million in cash in Nigeria as part of a conspiracy to make corrupt payments to, among others, officials of Nigerian National Petroleum Corporation (the Nigerian government-owned oil company) and a joint venture effectively controlled by that company, in order to obtain and retain gas pipeline construction business in Nigeria. The payment was part of a larger, multi-million dollar foreign bribery scheme involving, among others, a former senior Willbros executive officer, a U.S. national acting as a purported "consultant" to Willbros, and Nigeria-based employees of a major German engineering, and construction company. Brown also admitted that, from at least 1996 to early 2005, he and other mid and senior- level WII executives approved of a scheme in which WII's Nigerian operations submitted fictitious invoices for payment by Willbros. These funds were used, in part, to make corrupt payments to officials of the Nigerian revenue agencies and courts in order to lower taxes that would otherwise have been assessed, and to influence favorably litigation in Nigeria affecting the business of Willbros.

Brown further admitted that, in June 2004, he conspired with the former senior Willbros executive officer and the "consultant," in addition to local WII Ecuador employees, to pay at least $300,000 to officials of PetroEcuador, the Ecuadorian government oil company, to obtain a gas pipeline rehabilitation contract and potential future business.

There is a more detailed description of the case from LawProfessors.com.

The Commission alleges in its complaint that Brown, a former supervisory employee in Willbros's Nigerian and Latin American operations, participated in three separate schemes to bribe foreign officials. First, the complaint alleges that, in February and March 2005, Brown procured $1 million on behalf of a Willbros affiliate and delivered that money as partial payment of previously-made commitments to Nigerian government officials and to employees of the operator of a joint venture majority owned by an arm of the Nigerian government. He also assisted, according to the complaint, in the payment of an additional $550,000 that was also used to satisfy the earlier commitments. Second, Brown, in return for the granting to Willbros of a $3 million contract, knowingly assisted a scheme to pay a $300,000 bribe to officials of an oil and gas company owned by the government of Ecuador and its subsidiary. Finally, Brown knowingly assisted a long-running scheme in which employees of Willbros affiliates used fabricated invoices to procure cash from the company's administrative headquarters in Houston that was used to, among other things, bribe Nigerian tax and court officials.

Back in May of 2005 Willbros acknowledged evidence of corruption in Nigeria and elsewhere. Willbros alleged in SEC filings that Tillery and other employees owned interests in companies in Nigeria with whom Willbros did business and "may have received kickbacks" and other payments from consultants, suppliers and competitors. Tillery himself may have promised to make the payments to government officials in Nigeria, as well as in Bolivia and Ecuador, the company determined.

I didn't see any of this kind of attacks made against Hallibruton. Although the Washington Post reported in July of 2006 that work from their contract in Iraq is to be split by the Pentagon between three companies; with an additional one to help monitor the performance of the other three. But the Pentagon will allow Halliburton to be eligible to bid on the work. If you check the Iraq Revenue Watch you can find some enlightening information about this. It should be unbiased seeing as how George Soros started this site. Contracting info, what countries are involved (before and after), the structure of the Iraqi oil industry, etc., are all located here.

Forbes notes that with all the unrest in Nigeria currently, it is uncertain who will take over the engineering of the oil industry there from Willbros. They note: Willbros found that refusal to make improper payments, or permitting others to do so, "may negatively affect ongoing international operations." Put more bluntly: In Nigeria, these days, corruption is just another expense.