18 Corporate Crime Reporter 7(1), Monday February 16, 2004
BUSH FAMILY LAWYER JAMES DOTY HIRED TO CONDUCT INTERNAL PROBE OF HALLIBURTON INVOLVEMENT IN NIGERIA PAYMENTS
Halliburton Co. has hired Bush family lawyer James Doty to investigate allegedly corrupt payments made in Nigeria at a time when Vice President Dick Cheney was CEO of the company, the Corporate Crime Reporter has learned.
Doty is lead partner in the Washington, D.C. office of Baker Botts. Halliburton announced earlier this month that it had hired an outside law firm to conduct an internal investigation into the brewing scandal, but the company refused to name the law firm or the lawyer conducting the inquiry.
That might be because of the law firm’s and the lawyer’s close ties to the Bush family and administration.
The Baker in Baker Botts is of course Bush family lawyer James Baker the lawyer credited with winning Florida for Bush Jr. over Gore and Secretary of State under Bush Sr.
James Doty represented Bush Jr. when he bought the Texas Rangers.
Doty was general counsel to the Securities and Exchange Commission (SEC) under Bush Sr. He was SEC general counsel at a time when the SEC was investigating Bush Jr. for insider trading. Doty recused himself from the case, which was eventually closed without action. Bush Jr. was never interviewed.
Last year, Doty was also on the short list of candidates to replace Harvey Pitt as chairman of the SEC. Doty and Halliburton did not return calls seeking comment for this story.
In a meeting with reporters last week, Halliburton chairman and president David J. Lesar refused to identify the law firm conducting the investigation, but Lesar said that Halliburton had given the law firm “unlimited authority” to investigate $180 million in payments made in Nigeria by a joint venture that includes a Halliburton subsidiary, Kellogg Brown & Root.
The payments are being investigated by the SEC, the Justice Department, French prosecutors and Nigerian authorities. Doty is the consummate Washington insider and is no stranger to corporate internal investigations.
Last year, he was hired by the Federal Home Loan Mortgage Corp. to produce a report into the financial giant’s troubles. He reported to the Freddie Mac board that it had been abusing accounting rules to manage earnings and appease Wall Street. Professor Baruch Lev of the Stern School of Business at New York University called the report in general “outstanding,” but told Congress last year that "You read parts of the report and get the impression that no harm was done."
Doty has also represented Baker Hughes in a corrupt payments scandal in Nigeria, Angola and Kazakhstan. And last year, he defended Reliant Resources against charges that the company artificially increased trading volume. The case was resolved without any fines being levied against the company.
Halliburton has said that it "has no basis to assume that any of its employees, or employees of the joint venture, has violated the U.S. Foreign Corrupt Practices Act."
Public interest activists questioned the independence of the Doty investigation.
"Would anyone have trusted partners at Vinson & Elkins to independently investigate Enron?" asks Charlie Cray, director of the Center for Corporate Policy in Washington, D.C. "No. It's obvious that a firm that already has had a long-standing, close relationship with both the company and top members of the administration is incapable of independently investigating a case that is as complicated and potentially controversial as this one. Given these factors and the Justice Department's failure to act on similar cases such as a recent case involving Enron officials in Guatemala, we believe that an independent counsel or grand jury should be empaneled with full subpoena powers, and the mandate to work with the Nigerians, French and possibly Interpol, insulated from political pressure or contact by any interested party."