http://www.africa-confidential.com/
NIGERIA/USA:Gas probe widens after new allegations
Statements and documents obtained by Africa Confidential show US company's relations with central figure in investigation
Newly obtained submissions from consultants on Nigeria's gas export plant raise awkward questions about payment orders of US$176 million linked to the $10 billion project, including the latest contract – for a $1.6 bn. unit or 'train' – finally agreed last month. All the payment orders were made by the TSKJ consortium which groups Technip, Snamprogetti, Kellogg Brown & Root (owned by United States' Halliburton since 1998) and the Japanese Gas Corporation. The latest contract in the gas project is already under threat after Nigerian parliamentarians demanded that all new business with the consortium be suspended pending progress in the investigations.
These submissions and documents, in the hands of the French investigators and seen by Africa Confidential, also assert that the recipient of these payments – a Gibraltar company called Tri-Star, controlled by British lawyer Jeffrey Tesler – was strongly backed by Halliburton when France's Technip tried to replace Tesler as the agent in 1999. The documents include transcripts of Tesler's responses to the French investigators on 10 and 11 May this year, and notes based on other submissions and memos received by the officials in Paris.
At least one of the payment orders – for $37.5 mn. on 18 March 1999 – was made while US Vice-President Dick Cheney was Chief Executive of Halliburton, before he resumed active politics in 2000. Halliburton's successful efforts to secure the reappointment of Tesler and Tri-Star as agents for the TSKJ consortium also took place during Cheney's tenure as Chief Executive, as did the appointment as KBR President of Albert Jack Stanley, who, Halliburton now says, received illegal payments on the gas project.
As head of KBR, Stanley was answerable directly to David Lesar (current Chief Executive of Halliburton) and ultimately to Cheney. However, Halliburton officials say, there are no indications that either Cheney or Lesar knew anything of the improper activity that has been reported.
Halliburton's internal probe into the gas plant says it has discovered memos and notes indicating that some in the consortium had considered setting up a corrupt payments system, but no evidence that any payments had been made. All the relevant documentation was said to be dated before Halliburton had joined the consortium.
Investigations into the payments by the US Department of Justice and the US Securities & Exchange Commission are focusing on whether any of the companies in the consortium breached the US Foreign Corrupt Practices Act. Their targets are US-based Halliburton and Technip, which must comply with US law because it is quoted on the New York Stock Exchange. So far the Department of Justice has refused to comment on the case other than to insist that its investigation would not be subject to political pressure.
The provisions of the US anti-graft laws are rigourous in principle: they cover cases where senior managers and company directors knew that bribes had been paid to individuals or where 'it is reasonable to suppose' that they should have known. Companies convicted under the laws face heavy fines and a bar on bidding for government contracts; their senior executives risk substantial gaol terms.
At the centre of the investigations in the US, France and Nigeria is Jeffrey Tesler. The British lawyer has told France's Judge Renaud van Ruymbeke that his company, Tri-Star Investments, received $175 mn. in several instalments from the TSKJ consortium as legitimate recompense for consultancy services.
Halliburton has changed its mind about Tesler. In the initial stage of the French investigation, it continued to back him but after Tesler's submissions to the French investigation, Halliburton changed tack. On 18 June, Halliburton announced that it was severing all ties with Tesler and considering legal action to recover monies paid to Tri-Star.
Tesler is due to speak to the French investigation again this month, as is Jack Stanley. Notes drawn up by the French investigators from interviews with several consultants working on the gas project indicate that payment orders by the TSKJ consortium, documented in bank statements, were apparently linked to each major new element of the gas plant contract.
The payment orders to Tri-Star listed by Tesler were:
i)$60 mn. on 29 March 1995 (linked to the $2.2 bn. contract to TSKJ to build Trains I and II of the Nigeria Liquefied Natural Gas project on 24 September 1994).
ii)$37.5 mn. on 18 March 1999 (linked to the $1.4 bn. contract for Train III on 6 March 1999).
iii)$51 mn. finalised on 24 December 2001 (linked to 'supplementary' contracts on Trains I-III and the $1.7 bn. contract for NLNG Plus - Trains IV & V in March 2002).
iv)$23 mn. on 28 June 2002 (linked to the $1.6 bn contract for Train VI initialled in August 2004).
The payments were made into Tri-Star accounts at Union Bancaire Privée at 96-98 Quai du Rhone, Geneva, Switzerland, and at HSBC, 17 Avenue d'Ostende, Monaco. We understand that the Monaco HSBC account has now been closed.
Tesler's French lawyer, Thierry Marembert, who accompanied his client to interviews with Judge Van Ruymbeke, said that Tesler had been paid such generous fees for his expertise on Nigerian politics and for his influence with local lobby groups. However, when asked by Judge Van Ruymbeke how much time he has spent in Nigeria, Tesler replied that he has visited the country only once and can't recall the exact date, but he says it may be some time in the mid-1980s.
Until his first interview with Juge Van Ruymbeke in May, Tesler enjoyed good relations with senior officials in Halliburton's KBR subsidiary. Indeed, Tesler told Van Ruymbeke that he had paid some of his $176 mn. consultancy fees to KBR's Albert Stanley and a senior KBR consultant, William Chaudan.
According to transcripts of his interview with Van Ruymbeke, Tesler was initially reluctant to identify the beneficiaries. Sitting in front of a schedule of payments from Tesler's Tri-Star company, Judge Van Ruymbeke asked Tesler who was the beneficiary of an account in the name 'Amal'.
Tesler: 'I don't know exactly, I think something like the Fides Trust.'
Van Ruymbeke: 'I didn't ask for the name of a financial establishment or accountant, I asked for the name of the actual beneficiary.'
Tesler: 'I don't know.'
Then after a brief consultation with his lawyer, Thierry Marembert, Tesler changed his mind.
Tesler: 'I believe that the final recipient of the Fides Trust account is Mr A.J. Stanley. I hesitated to mention it because of his links with Kelloggs [now known as KBR, a wholly-owned subsidiary of Halliburton]. Mr Stanley is a senior executive of Kelloggs. I had negotiated currency exchange agreements with him between dollars and nairas. I've known Mr Stanley since 1994-95. I think I met him in London around 1994 or 1995 to discuss the LNG programme [Nigeria gas project]. He was introduced to me by Mr Burrel and Mr Chaudan. Mr Burrel is an employee of Kellogg's. He had a job similar to Mr. Chaudan.'
A month later, in June, Halliburton's management sent emails to all staff distancing the company from Chaudan and Stanley, who were immediately barred from Halliburton headquarters. Although Stanley retired last December as KBR President, his contribution to the company was regarded as so valuable that he had been kept on as a senior consultant with his own luxury Halliburton office.
Tesler also admitted to making a payment to KBR's Chaudan via an account in Jersey because he had introduced 'more than 20 potential sub-contractors' to the gas project. This is bizarre, given that Chaudan was a consultant to the TSKJ consortium who had hired Tesler to identify 'potential sub-contractors'.