Skip to content


Harry Cassin
Publisher and Editor

Andy Spalding
Senior Editor

Jessica Tillipman
Senior Editor

Bill Steinman
Senior Editor

Richard L. Cassin
Editor at Large

Elizabeth K. Spahn
Editor Emeritus

Cody Worthington
Contributing Editor

Julie DiMauro
Contributing Editor

Thomas Fox
Contributing Editor

Marc Alain Bohn
Contributing Editor

Bill Waite
Contributing Editor

Russell A. Stamets
Contributing Editor

Richard Bistrong
Contributing Editor

Eric Carlson
Contributing Editor

KBR In £7 Million UK Settlement

KBR’s wholly-owned subsidiary, M.W. Kellogg Limited, has settled civil corruption charges with the U.K. Serious Fraud Office.

Kellogg will pay US$11,238,886 (£7,000,028). The civil fine — similar to an SEC-imposed disgorgement — equals Kellogg’s share of dividends payable from profits generated by contracts for work on Nigeria’s Bonny Island project.

The SFO said Kellogg self-reported “concerns” and cooperated in the subsequent investigation. “The SFO, working in partnership with the U.S. Department of Justice, reviewed the conduct of [Kellogg] and decided that the most appropriate approach was to remove the funds which will become due to the company through the unlawful conduct. This reflects the finding that [Kellogg] was used by the parent company and was not a willing participant in the corruption.”

KBR, Technip S.A., Snamprogetti Netherlands B.V., and JGC, a Japanese engineering and construction company, were part of a four-company joint venture known as TSKJ. It paid about $180 million in bribes to Nigerian officials and was awarded contracts worth $6 billion by Nigeria LNG Ltd. between 1995 and 2004 to build the Bonny Island facilities.

In the U.S., the DOJ and SEC have recovered $1.28 billion in FCPA-related penalties and disgorgement from the TSKJ consortium members: $579 million from KBR / Halliburton, $365 million from Snamprogetti / ENI, and $338 million from Technip. The final TSKJ partner, JGC corporation, a Japanese construction firm, said in January it has reserved around $220 million for an expected settlement with U.S. authorities.

KBR tried to insulate itself from FCPA exposure by creating a special purpose vehicle for the Bonny Island project that was owned by Kellogg.

Former KBR boss Albert “Jack” Stanley pleaded guilty in Houston in 2008 to a two-count criminal information charging him with conspiracy to violate the FCPA and to commit mail and wire fraud. He’s free on bail until at least March 30. His 84-month prison sentence is subject to review based on his cooperation. He was also ordered to pay $10.8 million in restitution.

Wojciech Chodan, KBR’s former employee in the U.K., pleaded guilty in December last year to one count of conspiracy to violate the FCPA. Chodan, who holds a Polish passport, is set to be sentenced on April 27.

Chodan’s co-defendant, Jeffrey Tesler, a London lawyer, was also charged with helping KBR and its partners bribe Nigerian officials. Last month, the British High Court refused to block Tesler’s extradition to the U.S.

The Director of the Serious Fraud Office, Richard Alderman, said today: “The SFO will continue to encourage companies to engage with us over issues of bribery and corruption in the expectation of being treated fairly. In cases such as this a prosecution is not appropriate. Our goal is to prevent bribery and corruption or remove any of the benefits generated by such activities. This case demonstrates the range of tools we are prepared to use.”

View the SFO’s February 16, 2011 release here.

Share this post


Comments are closed for this article!