Halliburton Hires Law Firm To Look Into Bribe Charges
February 17, 2004
Wall Street Journal
By Russell Gold
Staff Reporter of The Wall Street Journal
DALLAS -- Halliburton Co. has retained Baker Botts LLP, a Houston law firm with longstanding ties with the Bush family, to handle its internal investigation into allegation that illegal payments were made to secure a Nigerian construction contract.
The Justice Department, as well as investigators in France and Nigeria, are looking into allegations that a Halliburton-led consortium made $180 million in illegal payments between 1995 and 2002 in connection with the construction of a $4.9 billion natural gas plant in Nigeria. From 1995 to 2000, Vice President Dick Cheney was Halliburton's chief executive officer.
The U.S. investigation follows a French probe made public late last year. In addition to Halliburton, the consortium includes the construction unit of Eni SpA, Technip SA and Japan Gasoline Corp.
Houston-based Halliburton disclosed in a Securities and Exchange Commission filing earlier this month that it had hired an outside law firm to investigate the allegations. In subsequent interviews, Halliburton Chief Executive Dave Lesar declined to identify the firm. "If illegal payments were made, this matter could have a material adverse affect on our business," the company said in the SEC filing.
The company confirmed Friday that it had retained Baker Botts. Corporate Crime Reporter, a weekly publication, reported the investigation was being led by Baker Botts partner James Doty. One of the law firm's name partners is James Baker, who served as Secretary of State under former President George H. W. Bush and led the Florida recount effort for current President Bush.
Halliburton spokeswoman Cathy Gist wouldn't confirm whether Mr. Doty was involved. "It serves no purpose to disclose this information," she said.
A former SEC general counsel, Mr. Doty has an impressive Washington D.C. pedigree and longtime ties to the Bush family. He was the current President Bush's lawyer in the 1980s when he bought a stake in the Texas Rangers baseball team. In 2002, Mr. Doty was on a short list as a possible replacement for SEC Commissioner Harvey Pitt. When contacted at his office, Mr. Doty declined to comment.
Last year, the Federal Home Loan Mortgage Corporation, or Freddie Mac, hired Mr. Doty to lead an internal investigation of accounting problems. Oilfield services firm Baker Hughes Inc. retained him as a legal advisor in 2002 after the SEC opened an investigation the company allegedly paid kickbacks to obtain work in Nigeria.
Halliburton has recently agreed to repay the government $28 million for overcharges in its military support contract in Iraq. Two former employees of Kellogg Brown & Root, Halliburton's construction and logistics unit, have alleged their bosses urged them to drive up costs to boost revenue. In addition, Halliburton repaid $6.3 million to government after firing two employees for taking kickbacks from vendors.