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Oops! Bribing Nigeria for Cheney’s Freedom Not Legal

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A lawyer in Nigeria has reminded the country’s anti-corruption watchdog that the recent deal buying Cheney’s freedom for $35 million is not legal.

In a letter to Nigeria’s anti-corruption watchdog, Osuagwu Ugochukwu, a prominent lawyer in Abuja, said the withdrawal of charges against Cheney was a breach of the law.

“We know as a point of law that once a criminal charge has been filed in a competent court, issue of penalty of fine is for the courts to impose and not parties,” he wrote. “Hence, we are shocked to hear that EFCC imposed a fine on an accused person. We also know as a point of law that criminal matters cannot be settled out of court as in civil matters in Nigeria.”

And a newspaper editorial makes the fairly obvious point that if corporations can keep buying the freedom of its executives, then those executives will never have an incentive to follow the law.

The risk of solving one criminal act through the plea bargain option amounts to a mere slap on the wrist and subtly telling the guilty firm and its personnel to “go and sin no more”. It does not paint a good image for Nigeria, especially in the world’s corrupt nations index where we are currently featuring notoriously.

We therefore condemn in strong terms this kind of under the table settlement. The same thing happened in the Siemens bribery scam, and this is making Nigeria look like a country where money can buy justice. More importantly, the Halliburton case questions the seriousness of government in holding corrupt foreign firms and their officials accountable for their action, while on the other hand encouraging and patronizing companies that have not only confessed corrupt practices, but are not known to respect wholesome business ethics.

Only a painstaking trial and possible conviction, if found guilty, would have forced Halliburton to change its corrupt ways of doing business in Nigeria.

But Nigeria’s anti-corruption watchdog, in response to Ugochukwu, pointed out that such plea bargains are standard in countries like the UK and US.

And, without addressing the move’s legality, the head of the anti-corruption watchdog agency defended the move, saying that it is a “best world practice” used in more developed countries.

“The US and the UK governments are practicing it. Where you cannot successfully sustain a charge in court and you want to recover, then instead of losing the case, losing the money, then you opt for plea bargaining,” Farida Waziri, head of the watchdog agency, said,

Of course, the US got an even bigger bribe from KBR — $402 million — to dismiss these charges, without even having to threaten Cheney with jail time. So I guess Nigeria is left only to aspire to the “best world practice” of getting bigger bribes from corporations guarding the freedom of their executives.

It Starts With: “Hello. I am a Prosecutor in Nigeria …

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[Ed. note: Mary provides some background on what may be up with Nigeria’s announced plan to charge Dick Cheney.]

… ready to sue your Vice President. Please send 130 Million Dollars by reply mail to …”

After the news about charges against Dick Cheney relating to the Nigerian bribery scandal it may be worthwhile to sip some coffee and swap clues on what the heck might (or might not) be going on. Let’s start with a little background on one sliver of a very complicated matter.

In 1995-2004, KBR was involved in a joint venture in Nigeria that included KBR/Halliburton; a Dutch subsidiary Snamprogetti Netherlands B.V/Italian parent ENI S.p.A. (aka Snamprogetti, ENI), a Paris-based oilfield engineering company Technip S.A., and a Japanese company, JGC. The joint venture set up some special purpose corporations (not that unusual when companies joint venture) in Portugal (okay, maybe they don’t always use Portugal). The business entities and structures are pretty much oversimplified here, but since these pretty much track the pleas deals the Department of Justice worked out, let’s not make it more complicated.

This joint venture wanted to split up some liquefied natural gas (LNG) contracts in Nigeria that were going to be worth around $6 billion to them.  Those kinds of big contract almost always get split up, for various (and some actually pretty darn good) reasons.  When the “TSKJ” group was trying to get the liquefied natural gas (LNG) contracts, their bidding rival was another consortium, BCSA (Bechtel, Chiyoda, Spibat, Ansaldo).

Not to jump around, but for context, you need to know how the Nigeria scandal (arrangements to bribe Nigerian officials to get the LNG contract)  was “exposed.”  A former “Director General” of Technip, Georges Krammer, was accused of wrongdoing in a different deal (involving France’s Elf) and argued that he was just following company policy.  Supposedly, Technip hung him out to dry and he decided to return the favor by offering up info against Technip, regarding deals that included the Nigerian LNG bribes.  .

When the French began investigating, the Swiss and US and Nigeria also started investigations.  If, by investigation, you mean the thing that happens when you throw a hunk of raw meat into a pen of well fed dogs and see which one grabs it and growls loudest, whether it plans on doing anything much with it or not.  Read more →

KBR’s Cayman Island Scam

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I recommend you read the whole article detailing KBR’s Cayman Island scam. A lot of people have linked to the lede, explaining how KBR created a shell company in Cayman Islands so it didn’t have to pay social security and unemployment benefits for workers hired through the shell company. But there are several details of note that appear further down in the story.

For example, KBR would like you to believe that it set up this shell company to help you, Mr. and Ms. American Taxpayer. It saves you money, it claims, by making these workers pay their own social security and go without unemployment insurance.

It’s bogus on its face. But deep in the article, an anonymous former KBR exec reveals that it’s actually using the shell company so it can compete against its rivals Fluor and Bechtel.

A former Halliburton executive who was in a senior position at the company in the early 1990s said construction companies that avoid taxes by setting up foreign subsidiaries have obvious advantages in bidding for military contracts.

Payroll taxes can be a significant cost, he said, speaking on the condition of anonymity. "If you are bidding against [rival construction firms] Fluor and Bechtel, it might give you a competitive advantage."

So you, Mr. and Ms. American Taxpayer, can pay one fee to Fluor for drivers in Iraq who will will have some safety net when they return to the US. Or you can pay a slightly smaller fee–not enough to make a difference on the cost of the war, but enough such that KBR can beat out Fluor on pricing–and have that same driver return from Iraq with no unemployment benefits.

And KBR nets the difference.

Read more →