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12.04.10

Nigeria's Hunt for Dick Cheney

The former VP is fingered in a massive cash-for-contract scandal in the African country's oil-rich Niger Delta. Pratap Chatterjee on how much the then-CEO of Halliburton knew.

Bonny Island in Nigeria and St. Michael's in Maryland had much in common in colonial times. Both were village trading posts for European traders in the mid-1600s but today the two could not more dissimilar. Bonny is the heart of a sprawling natural gas plant while St. Michael's is a tranquil little fishing town that well-heeled Washingtonians escape to. There is one thing the two communities still share though—Dick Cheney.

Cheney is a welcome retiree in the Chesapeake Bay community and he would be most welcome in Nigeria due to an invitation by government authorities who want to ask him some questions about a $180 million bribe that was paid for the construction of the multibillion-dollar facility on Bonny Island. To be precise, Godwin Obla, prosecuting counsel at the Economic and Financial Crimes Commission in the Nigerian capital of Abuja, is shortly expected to issue via Interpol an arrest warrant for the former vice president.

From 1995 to 2000, Dick Cheney was CEO of Halliburton, the time period in which the bribe was paid out. Just before Cheney joined the company, a consortium known as TSKJ was incorporated in Madeira, Portugal, that consisted of M.W. Kellogg, Technip of France, Italy's Snamprogetti, and Japan Gasoline Corp. The partnership submitted a bid to Nigeria LNG, a company partly owned by the Nigerian government, to work on a multibillion-dollar natural gas liquefaction complex and related facilities at Bonny Island in Rivers State. In December 1995, TSKJ was awarded the contract.

A little more than two years later, M.W. Kellogg was acquired by Halliburton and merged with Brown & Root to create Kellogg, Brown & Root, an acquisition directed by Dick Cheney. Albert Jack Stanley, the chairman, president, and chief executive of Kellogg, was appointed to head up the new company. Cheney told the Middle East Economic Digest in 1999, "We took Jack Stanley... to head up the organization, and that has helped tremendously."

Investigators would later reveal that between 1995 and 2002, Stanley's business associates had paid more than $166 million in "advisory fees"—part of which was paid out during Cheney's time at Halliburton. It is difficult to figure out who knew what at the time, but Stanley, as chairman of KBR, was definitely part of Cheney's inner circle. Stanley reported directly to David Lesar, Halliburton's president and chief operating officer at the time, who in turn reported to Cheney.

Indeed notes written by M.W. Kellogg employees during the mid-1990s mention bribing Nigerian officials, evidence that, according to the Financial Times, "raises questions over what Mr. Cheney knew—or should have known—about one of the largest contracts awarded to a Halliburton subsidiary."

Stanley stayed in his job as chairman of KBR until December 2003 when he retired, at which point he became a consultant to Halliburton. In June 2004, Halliburton fired Stanley after investigators turned up evidence that he had violated the company's "code of business conduct" by accepting "improper personal benefits" of $5 million related to construction work in Nigeria.

In May 2006, I arranged for Michael Keania Karikpo—a lawyer who represents Environmental Rights Action in Nigeria—to come to Halliburton's annual shareholder meeting in Duncan, Oklahoma, as my guest and to press current CEO David Lesar about the bribery charges. (I own one share each in both Halliburton and KBR.) Lesar shook our hands but refused to answer Karikpo's questions.

But over time, the U.S. Department of Justice has forced the company and its senior executives to admit their role in the bribery scandal. In September 2008, Stanley pleaded guilty to participating in the decade-long scheme to pay $182 million in bribes and agreed to serve 84 months in prison and make a restitution payment of $10.8 million. ( He has yet to serve time in jail though, as Judge Keith Ellison has deferred his sentencing hearing till January, the eighth such delay in the case.)

I don’t see Cheney agreeing to leave Ballintober, his nine-acre spread in St. Michael’s that includes extensive gardens [and] ornamental pools…for the prison cells of Nigeria.

In February 2009, KBR (which was spun off as a separate company in 2007) pleaded guilty to the Department of Justice of conspiring to violate the Foreign Corrupt Practices Act in connection with the Bonny Island project. Halliburton agreed to cover the majority of $579 million in criminal fines and fees that the two companies were assessed to resolve the matter. Snamprogetti has agreed to pay $365 million, Technip will pay $338 million and Japan Gasoline Corp. is also expected to settle for a large sum of money.

But court authorities both in this country and Nigeria are not satisfied that all the guilty parties have been brought to justice. To that end, U.S. authorities have issued Interpol arrest warrants for Jeffrey Tesler and Wojciech Chodan, two British men who allegedly arranged the bribes. The men are expected to be deported from the U.K. in the next fortnight unless they can win appeals against the Serious Fraud Office decision to comply with the U.S. request.

Whether or not the U.S. authorities will honor the Interpol warrant issued by the Economic and Financial Crimes Commission in Nigeria remains to be seen. But, somehow, I don't see Cheney agreeing to leave Ballintober, his nine-acre spread in St. Michael's that includes extensive gardens, ornamental pools, and spectacular views from a large, glass-walled waterside room, for the prison cells of Nigeria.

Pratap Chatterjee is a visiting fellow at the Center for American Progress in Washington, D.C. and the author of Halliburton's Army: How a Well-Connected Texas Oil Company Revolutionized the Way America Makes War