TERROR WATCH
Michael Isikoff and
Mark Hosenball
Terror Watch: Another Halliburton Probe
Already under fire for its contracts in Iraq, the company now faces a Justice Department inquiry about business done during Dick Cheney's tenure
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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.
In the filing, the Houston-based company disclosed that the French magistrate was investigating the Nigerian payments and then added: "The U.S. Department of Justice and the SEC have asked Halliburton for a report on these matters and are reviewing the allegations in light of the US. Foreign Corrupt Practices Act. Halliburton has engaged outside counsel to investigate any allegations and is cooperating with the government's inquiries... If illegal payments were made, this matter could have a material adverse effect on our business and results of operations."
A Justice Department official confirmed to NEWSWEEK today that prosecutors have been seeking information from Halliburton related to the Nigerian contract and that the company was cooperating. But the official said the company's reference to being asked for "a report" by Justice was "not accurate." Rather than a report, Justice has sought documents from the company--and Halliburton has been turning them over, the official said. Another Justice official described the inquiry as a review of documents supplied by Halliburton and said it was still in its early stages.
In an e-mail response to questions from NEWSWEEK about its disclosure, a Halliburton official, Cathy Gist, said: "Management made the decision to include these statements because of the politically charged environment in which we now operate. We are trying to keep the investment community informed of the accurate facts about the company's business." She added that that "while Halliburton has no basis to assume that any of its employees...have ever done anything in violation of the FCPA (Foreign Corrupt Practices Act), it has undertaken an examination and intends to cooperate with officials of the U.S. government." (In a later e-mail response, Gist added: "In future SEC filings, Halliburton will include more precise language regarding the nature of this examination as well as our continued commitment to cooperate with U.S. government officials regarding this matter.")
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