A former executive with a United Kingdom subsidiary of the then-Kellogg, Brown & Root Inc. has pleaded guilty to a charge that he conspired to bribe Nigerian government officials to win contracts for a $6-billion project in that country, the U.S. Dept. of Justice said.
Wojciech J. Chodan, a former commercial vice president and consultant to the KBR subsidiary, entered a guilty plea on Dec. 6 in federal district court in Houston on one count of conspiracy to violate the Foreign Corrupt Practices Act, DOJ said.
Chodan's plea is the latest development in a federal probe dating from about 2004 of alleged bribery connected to the contracts to build a liquified natural gas project on Bonny Island, Nigeria.
According to Chodan's plea agreement, from about 1994 through June 2004, he and co-conspirators agreed to pay bribes to Nigerian government officials to get contracts for the project.
Between 1995 and 2004, a joint venture of KBR, Technip S.A., Snamprogetti Netherlands B.V. and a Japanese firm won four engineering-procurement-construction contracts from Nigeria LNG Ltd. for the project.
Chodan also recommended and agreed to have the joint venture hire two agents�Jeffrey Tesler and a Japanese trading company�to pay the bribes, according to the plea agreement. The document identifies the Japanese company only as "Consulting Company B" but says it is headquartered in Tokyo.
The joint venture paid about $132 million to a company controlled by Tesler and more than $50 million to the Japanese company, DOJ said.
The 72-year-old Chodan, a U.K. citizen, faces a maximum of 60 months in prison on the charge. His sentencing is scheduled for Feb. 22. Choban agreed to forfeit $726,885 as part of his plea agreement.
In earlier developments, as part of a February 2009 settlement agreement with DOJ, the then-Kellogg Brown and Root LLC pleaded guilty to charges related to the Foreign Corrupt Practices Act and was ordered to pay a $402-million fine, DOJ said.
KBR said in its most recent quarterly filing with the Securities and Exchange Commission that its share of the payments was $20 million and that Halliburton Co., its former parent company, is paying the remaining $382 million.
Halliburton acquired Brown and Root in 1962 and added the former M.W. Kellogg Co. through the 1998 acquisition of Dresser Industries Inc., Kellogg's parent.
Halliburton later combined the two construction units into Kellogg, Brown & Root.
KBR split off from from Halliburton in 2007 and since then has been a separate company, KBR Inc., based in Houston.
KBR said in the SEC filing that it paid its final installment of the $20 million on Oct. 1. A KBR spokesperson says that Halliburton also has made the final payment of its $382-million share.
In February 2009, KBR also reached a settlement with the SEC on a related civil enforcement action. KBR and Halliburton agreed to pay $177 million, all of which Halliburton has paid, according to KBR's SEC filing.
In February 2008, KBR's former chief executive, Albert Jackson "Jack" Stanley pleaded guilty for conspiring to violate the Foreign Corrupt Practices Act for his role in the bribery.
Choban reported to Stanley, among others, according to Choban's plea agreement.
The KBR spokesperson says, "KBR's position remains that the company in no way condones or tolerates illegal or unethical behavior."
The spokesperson referred to a statement that the company issued at the time of its 2009 settlements with DOJ and the SEC, in which William P. Utt, KBR's chairman president and CEO, said the alleged actions involved people who formerly worked for the company or as agents of KBR subsidiaries or predecessor units. "None of the allegations involved current KBR management and/or employees," Utt said.
DOJ this summer also filed "deferred prosecution agreements" with two other partners of the joint venture, Snamprogetti and Technip, in which each company agreed to pay a $240-million criminal penalty.
Tesler in 2009 was indicted on Foreign Corrupt Practices Act charges and the U.S. has asked to have him extradited from the U.K., DOJ said.