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Halliburton 'backed' bribes probe agent

Halliburton intervened with its partners in a huge Nigerian gas venture to secure the reappointment of a business agent now at the centre of an international bribery inquiry, a French judge has been told. Evidence before the judge suggests that in 1999 - while US Vice-President Dick Cheney was Halliburton chief executive - a Halliburton subsidiary overrode its partners' objections to rehiring a British lawyer who, it has since been alleged, channelled payments to Nigerian officials and corporate executives.

The evidence comes from a summary of the case obtained by the Financial Times along with a partial record of an interview by the judge of Jeffrey Tesler, the London-based lawyer. Halliburton, the US oil services company, has long denied breaking US laws banning foreign bribery. It admitted this month finding notes that showed executives in the joint venture had discussed bribing Nigerian officials "at least 10 years ago".

But it said there was no evidence bribes were paid and emphasised that the talks had largely pre-dated its own involvement in the venture, called TSKJ. Halliburton entered the consortium only in 1998, when it took over Dresser Industries and its M.W. Kellogg unit, which owned a 25 per cent share in TSKJ.

Nevertheless, the French papers contain claims that Kellogg actively pushed for Mr Tesler's continued role as agent even after the Halliburton takeover. It raises questions over what Mr Cheney knew - or should have known - about one of the largest contracts awarded to a Halliburton subsidiary. Mr Cheney's office did not respond to questions. The decision to reappoint Mr Tesler was taken at a 1999 meeting of the joint venture partners in London.

Kellogg wanted Mr Tesler, with whom it had a long-term relationship, to attend. But the representative from the French partner, Technip, wanted a different agent and insisted that Mr Tesler be excluded from the meeting. Even so, Mr Tesler's contract was renewed.

The case notes quote a March 2003 letter from William Chaudan, the Kellogg representative on the consortium, which said that Mr Tesler had been selected on Kellogg's recommendation and over Technip's "strong opposition". Halliburton said this month that the venture had severed ties with Mr Tesler and threatened court action against him to recover fees paid to his Gibraltar-registered company, Tri-Star.

It has also sackedtwo employees, Jack Stanley, the former head of its KBR unit, and Mr Chaudan, after both were found to have received "improper personal benefits" in connection with the project. In his testimony, Mr Tesler confirmed that he made payments to both men.

Mr Stanley declined to comment through his lawyer. Halliburton was unable to provide any contact details for Mr Chaudan. On Thursday, Halliburton denied that it had overridden Technip's objections. "We have examined the minutes from that meeting and they do not support the thesis that Technip objected to the appointment of Tesler," a spokesperson said. "In fact, the minutes specifically recite that the decision was unanimous. Technip could have blocked the appointment by refusing to sign the minutes."

Technip declined to comment.

Mr Tesler's lawyer did not respond to written questions, but has in the past denied the payments constituted bribes. Mr Tesler told the judge Mr Chaudan had been paid for finding sub-contractors for the project.

TSKJ was established in Madeira in 1994 to build the first two of a series of huge liquefied natural gas production units and was later awarded contracts for the subsequent four. The other partners were JGC of Japan and Snamprogetti of Italy.

Some $9bn (€7.4bn, £5bn) - out of a planned total of $12bn - has been invested in the project, slightly more than half of which has been paid to TSKJ.

According to the French case summary, Judge Renaud van Ruymbeke launched the investigation after being told by a former Technip executive, Georges Krammer, of the "existence of a black box set up in Madeira".

Mr Krammer also told the judge that Tri-Star "is directly linked to corruption in Nigeria". US regulators are also investigating.

Tri-Star was contracted to receive at least $160m in five agreements signed between 1995 and 2002, and the funds were directed to bank accounts in Switzerland and Monaco.

Under the 1999 contract, a copy of which was seen by the FT, Tri-Star was to be paid $32.5m. In the contract, Tri-Star agreed that it would not bribe government officials or provide funds for political campaigns or parties.

It also said that Tri-Star had not breached a no-corruption clause on its first contract signed in 1995. Halliburton pointed out that Mr Tesler signed warrants on four separate occasions declaring that he had not paid any bribes.