The legal hurdles which has attended Halliburton's over work in Nigeria, Iraq and Iran continues to mount following the company's latest filings with the Securities and Exchange Commission which disclosed that a federal grand jury is probing possible criminal wrongdoing regarding payments to secure construction work in Nigeria.
Halliburton reported for the first time that "payments may have been made to Nigerian officials" by an agent representing Halliburton and three other construction firms who are building the liquefied natural gas plant.
Another grand jury is hearing evidence in Houston about the company's dealings in Iran, and a third is meeting in Illinois to look at Halliburton's contracts with the Pentagon for work in Iraq.
The quarterly report with the SEC, filed last Friday, also disclosed that the Justice Department "and others" are investigating Halliburton's Iraq contracts.
Some of that work apparently involves allegations last month from a top civilian contracting official of improper conduct at the U.S. Army Corps of Engineers. These involved awards of multibillion-dollar contracts to Halliburton for restoring Iraq's oil production and supporting the Army's work in the Balkans.
The allegations by contracting manager Bunnatine Greenhouse are being investigated by the FBI. Halliburton again reported that its work in Iran was in compliance with sanctions barring U.S. firms from doing business with the Iranian regime.
On its Iraq contracts, the company said it has notified the Pentagon's Inspector General of possible wrongdoing by two former employees. "Halliburton's on-going investigation has still not found any evidence that supports there were any bribes paid," said Wendy Hall, a Halliburton spokeswoman.
Poe Fratt, an energy analyst with A.G. Edwards & Sons, Inc. in St. Louis, puts all three probes into the category of "headline risk" rather than financial warning signs. On Oct. 27, Mr. Fratt upgraded Halliburton shares from a hold to a buy recommendation, largely because the company seems to be emerging from a four-year struggle with asbestos exposure liabilities.
Halliburton shares hit a 52-week high on Wednesday, rising 92 cents to close at $37.31. Democratic presidential candidate John Kerry railed against the company during the campaign because of its ties to the Bush administration, and several congressional Democrats have pressed for investigations. Vice President Dick Cheney was Halliburton's chief executive officer from 1995 until 2000, when he became George W. Bush's running mate. "With the election passing, it takes an element of the politicization out of this equation," Mr. Fratt said. "It's not going to go away completely."
Ms. Hall said: "Not many companies could have successfully withstood the kinds of attacks launched against us. Our audiences; customers, shareholders, and employees, understand the attacks for what they are.
They have found strength and not weakness in our response." Rep. Henry Waxman, D-Calif., asked Wednesday for additional hearings on Halliburton's Iraq contracts by the House Government Reform Committee.
Mr. Waxman, in a letter to committee chairman Rep. Tom Davis, R-Va., sought to reopen an investigation into Halliburton's purchases in 2003 of high-priced gasoline for the Iraqi market from a Kuwaiti company.
Mr. Waxman cited State Department documents indicating the U.S. Ambassador to Kuwait, Richard Jones, intervened to direct the gasoline contract to the Altanmia Commercial Marketing Company, the Kuwaiti subcontractor.
Other documents showed Altanmia employees told U.S. embassy officials that it was "common knowledge" that Halliburton and U.S. occupation officials in Iraq "solicit bribes openly." Halliburton paid $2.64 a gallon for the fuel bought from Altanmia. A draft Pentagon audit found Altanmia overcharged for the fuel by at least $61 million.
A State Department spokesman, Kurtis Cooper, said an e-mail from Mr. Jones was sent in his capacity as deputy administrator of the Coalition Provisional Authority, the U.S. entity that ran Iraq after the invasion. Mr. Jones "reflected the growing frustration felt by CPA officials over the problem of insuring delivery of badly needed fuel for Iraqi civilians," Mr. Cooper said.
Department officials never "participated in decision making regarding the contracts," Mr. Cooper said. Mr. Jones is a career State Department employee.
Halliburton's handling of the gasoline contract was also defended by the chief of the U.S. Army Corps of Engineers. But Mr. Waxman said the new documents "require that we examine the evidence that senior administration officials pressured career contracting officers, as well as the new allegations of kickbacks and corruption." The Associated Press contributed to this report.