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Kellogg Brown & Root guilty plea and KBR and Halliburton SEC settlement (2009)

Last checked: 23 October 2026 · Case records

On 11 February 2009 Kellogg Brown & Root LLC pleaded guilty in federal court in Houston to one count of conspiracy and four counts of violating the FCPA 1. The charges concerned bribes to Nigerian officials to win contracts for the Bonny Island LNG facilities 1. It agreed to a US$402 million criminal fine 1. KBR, Inc. and Halliburton settled SEC charges without admitting or denying them and agreed to pay US$177 million in disgorgement 4,5. The DOJ and SEC amounts totalled US$579 million 1.
Resolution type
Guilty plea under Rule 11(c)(1)(C) by Kellogg Brown & Root LLC (DOJ) 2. Consent settlement by KBR, Inc. and Halliburton Company (SEC) 5
Date
11 February 2009 1,3 5
Court
U.S. District Court for the Southern District of Texas, Houston. Criminal case 4:09-cr-00071 before Judge Keith P. Ellison 2,3. SEC civil action 4:09-CV-399 5
Agencies
U.S. Department of Justice Criminal Division Fraud Section, FBI, IRS Criminal Investigation and the SEC 1
Total
US$579 million 1,5
DOJ fine
US$402 million, paid as US$52 million within five business days of sentencing and seven quarterly payments of US$50 million to 1 October 2010 2,3
SEC
US$177 million disgorgement owed by KBR, Inc. and Halliburton together 4,5
Statutes
18 U.S.C. 371 and 15 U.S.C. 78dd-2 (DOJ) 2. Exchange Act sections 30A, 13(b)(5), 13(b)(2)(A) and 13(b)(2)(B) and Rule 13b2-1 (SEC) 4,5
Admission
Plea agreement: KBR pleads guilty and "is guilty of the charges contained in Counts 1 through 5" 2. SEC: "Without admitting or denying the SEC's allegations" 5
Monitor
Independent monitor for three years (KBR). Independent consultant (Halliburton) 1,4
Nigeria
Halliburton agreed in December 2010 to pay the Federal Government of Nigeria US$32.5 million plus US$2.5 million in fees and expenses, company statement 6

The guilty plea

DOJ said Kellogg Brown & Root LLC (KBR), a Houston engineering and construction company, pleaded guilty before U.S. District Judge Keith P. Ellison on 11 February 2009 1. The five-count information charged one count of conspiracy under 18 U.S.C. 371 and four counts under the FCPA, 15 U.S.C. 78dd-2 2.

The plea agreement was made under Rule 11(c)(1)(C), which binds the court to the agreed sentence if it accepts the agreement 2. It set a guidelines fine range of US$376.8 million to US$753.6 million 2. The court imposed sentence the same day 3.

TermWhat the judgment says
Fine 3US$402,000,000 in total 3
Special assessment 3US$400 per count, US$2,000 in total 3
Probation 3Three years of unsupervised probation on each count, to run concurrently 3
Monitor 3Retain and cooperate with an independent corporate monitor and follow its written recommendations 3

What KBR admitted

Paragraph 12 of the plea agreement says the defendant is pleading guilty as it "is guilty of the charges contained in Counts 1 through 5 of the Information" 2. The parties stipulated that the attached statement of facts is true and accurate 2.

DOJ said a four-company joint venture won four contracts from Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island, valued at more than US$6 billion 1. The Nigerian National Petroleum Corporation, a government-owned company, owned 49 percent of NLNG 1.

DOJ said KBR's former chief executive Albert "Jack" Stanley and others met three successive holders of a top executive branch office and asked each to name a representative to negotiate bribes 1. The joint venture paid about US$132 million to a Gibraltar consulting company and more than US$50 million to a Tokyo trading company 1. DOJ said KBR admitted it intended part of those fees to fund bribes to Nigerian officials 1.

The SEC case against KBR, Inc. and Halliburton

The SEC charged KBR, Inc. with anti-bribery and records violations and charged Halliburton, KBR's parent from 1998 to 2006, with books and records and internal controls violations 4,5. The SEC alleged that bribes began as early as 1994 and that payments to the two agents exceeded US$180 million 5. It alleged that from 2002 the UK agent paid US$5 million in cash to a Nigerian political party 4.

The SEC alleged that Halliburton's due diligence on the UK agent did not detect the scheme and that it did no due diligence on the Japanese agent 4. The companies consented to the court order "Without admitting or denying the SEC's allegations" 5. KBR agreed to an independent monitor for three years and Halliburton agreed to an independent consultant to review its FCPA policies and procedures 4.

Nigerian proceedings

In a company statement filed with the SEC on 21 December 2010, Halliburton said it had agreed to pay US$32.5 million to the Federal Government of Nigeria and US$2.5 million for its attorneys' fees and other expenses 6. Halliburton said "all lawsuits and charges against KBR and Halliburton corporate entities and associated persons have been withdrawn" 6. It said Nigeria agreed not to bring further criminal charges or civil claims against those entities or persons 6.

As reported by Eric Watkins of Oil & Gas Journal on 22 December 2010, Nigerian officials had sought US$250 million 7. As reported by Helen Wright of KHL Group the same day, the settlements were non-prosecution agreements with Nigeria's federal government 8. This page has not read a Nigerian government document on the settlement.

Status and related cases

The judgment set the last fine payment for 1 October 2010 3. This page has not confirmed the end of the KBR monitorship from a DOJ or SEC document, so it does not report it.

The other joint venture members resolved separately. See the records for Technip (June 2010), Snamprogetti and ENI (July 2010), JGC (April 2011) and the agent Marubeni (January 2012). DOJ said Stanley pleaded guilty in September 2008 to conspiring to violate the FCPA 1.

Common questions

Did KBR plead guilty to bribery?

Yes. Kellogg Brown & Root LLC pleaded guilty to conspiracy and four FCPA anti-bribery counts and stated in its plea agreement that it is guilty of those charges 2,3.

Did Halliburton plead guilty?

No. Halliburton was a defendant in the SEC civil case only and settled it without admitting or denying the allegations 5.

How much did KBR and Halliburton pay?

US$402 million in criminal fines and US$177 million in SEC disgorgement, US$579 million in total 1. Halliburton said it paid Nigeria US$35 million in 2010, company statement 6.

Who were the agents?

DOJ described a Gibraltar consulting company paid about US$132 million and a Tokyo trading company paid more than US$50 million 1.

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Sources

  1. U.S. Department of Justice: Kellogg Brown & Root LLC Pleads Guilty to Foreign Bribery Charges and Agrees to Pay $402 Million Criminal Fine, press release 09-112 (11 February 2009)
  2. U.S. Department of Justice: United States v. Kellogg Brown & Root LLC, plea agreement, 4:09-cr-00071, S.D. Tex. (11 February 2009)
  3. U.S. Department of Justice: United States v. Kellogg Brown & Root LLC, judgment, 4:09-cr-00071, S.D. Tex. (11 February 2009)
  4. U.S. Securities and Exchange Commission: press release 2009-23, KBR and Halliburton settlement (11 February 2009)
  5. U.S. Securities and Exchange Commission: Litigation Release No. 20897A, SEC v. Halliburton Company and KBR, Inc. (11 February 2009)
  6. Halliburton Company: Form 8-K, settlement with the Federal Government of Nigeria, company statement (21 December 2010)
  7. Oil & Gas Journal, Eric Watkins: Halliburton agrees to settle with Nigeria's government (22 December 2010)
  8. KHL Group, Helen Wright: Halliburton and Saipem pay penalties in Nigerian bribery probe (22 December 2010)

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