Saturday, February 07, 2004

Dick Cheney's Nigerian Connection

This is hot news; I wonder why it's gotten so little play amongst even the left-leaning bloggerati?

Feb. 4 - The Justice Department has opened up an inquiry into whether Halliburton Co. was involved in the payment of $180 million in possible kickbacks to obtain contracts to build a natural gas plant in Nigeria during a period in the late 1990’s when Vice President Dick Cheney was chairman of the company, Newsweek has learned.

There is no evidence that Cheney was aware of the payments in question and an aide said today the vice president has not been contacted about the probe. Still, the inquiry by the Justice Department’s fraud section—which prosecutes federal anti-bribery law violations—is likely to bring new public attention to the vice president’s past at the giant oil-services firm. Halliburton has been under intense scrutiny in recent months over its handling of hundreds of millions of dollars contracts relating to the rebuilding of Iraq.

The Justice inquiry, along with a related probe by the Securities and Exchange Commission, parallels a separate investigation into the Nigerian payments that is being conducted by a French magistrate and has received widespread attention in recent months in the European press. But the Justice Department and SEC probes have not previously been reported, although they were briefly mentioned by Halliburton last week near the end of a lengthy filing with the SEC.

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The Justice Department inquiry involves a trail of payments to unknown recipients that were routed through off-shore bank accounts and were allegedly handled by a longtime Halliburton lawyer in London who, according to French press reports, was also a financial advisor to Nigeria’s late dictator Gen. Sani Abacha. The payments were made in connection with the construction of a giant liquefied natural gas plant on a remote island in Nigeria.

The plant, one of the largest in the world, was built by TSKJ, a consortium of four major international construction firms, including Kellogg, Brown & Root, a major Halliburton subsidiary that has been the principal recipient of the company’s contracts in Iraq. Halliburton touted its role in the Nigerian project in a March, 2000 press release headlined: “Four Industry Leaders United to Execute World Class Project in Nigeria.”

The question Justice is probing is how exactly Halliburton’s subsidiary came to play that role. According to lengthy accounts of the probe in the French newspaper, Le Figaro, the TSKJ consortium in 1994 had created a subsidiary called LNG Services on Madeira, a Portuguese island in the Atlantic where companies are not required to pay any taxes. The French investigation was triggered, according to Le Figaro, when an official of one of the consortium’s French partners, Technip, was charged two years ago with embezzlement growing out of a separate, long-running corruption case involving the French oil company Elf Aquitaine.

According to Le Figaro, George Krammer, the accused Technip official, was outraged when Technip refused to defend him and turned state’s evidence. The paper reported that he told French authorities about an alleged $180 million “slush fund” that TSKJ maintained to bribe Nigerian officials relating to the natural gas plant in Nigeria. French authorities then tracked close to the same amount in “support contracts” from LNG Services—the subsidiary on the Portuguese island—to yet another obscure entity called Tri-Star, which was located on the British tax haven of Gibraltar. Tri Star, according to Le Figaro, was headed by a London lawyer named Jeffrey Tesler, who has long done work for Halliburton, and was known to have close relations with officials in Abacha’s Nigerian government. Tesler did not respond to a request for comment from NEWSWEEK.

If there's one thing that can be said for sure about the oil business in Nigeria, it's that it is out of the question for one to be a major player without paying massive bribes as a matter of course. This was especially true during the 1995 to 1997 period, when Abacha was in office - and Cheney was Halliburton CEO. This report actually underplays Jeffrey Tesler's connections with the military junta ruling Nigeria at the time, as Tesler was actually Abacha's personal financial advisor. I have a feeling that the Justice Department enquiry won't really go anywhere, given the GOP's hold on all levers of power and the apathetic nature of Democratic opposition. Still, it will be interesting to see where the French probe leads.

UPDATE: The Nigerian government has also launched its own investigation into Halliburton's activities.