A Guilty Plea, But Questions Remain

TYLER, TOO

By Gus Tyler

Published June 13, 2003, issue of June 13, 2003.
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Halliburton, the Texas energy giant, headed by Dick Cheney before his election as vice president, pleaded guilty to a charge of bribery to win tax favors from the West African country of Nigeria. The bribe was substantial: $2.4 million.

The illegal action was carried through by one of Halliburton’s subsidiaries — Kellogg Brown & Root. But Halliburton has publicly taken responsibility for the bribe. In a report to the Securities and Exchange Commission, the company stated:

The payments were made to obtain favorable tax treatment and clearly violated our Code of Business Conduct and our internal control procedures. The payments were discovered during an audit of the foreign subsidiary. Based on the finding, we have terminated several employees. None of our senior officers were involved.

In short, the big boys at Halliburton are in the clear. They didn’t do it. The dirty deed was the doing of some unnamed underling or underlings who have been fired. Indeed, the company declares that it will pay Nigeria the full tax, a sizable additional $5 million.

Since there is no way to know whether this statement is the truth, the whole truth and nothing but the truth, we are obliged to accept it at face value. But, if we do, we must ask just how Halliburton, or its well-known subsidiary, conducts its business?

Whoever did the dastardly deed paid a bribe of $2.4 million. If he — or she — paid it out of his or her own pocket, one must wonder why. The $5 million saved for the company in taxes would not end up in the pocket of the person or persons making the bribe. It would be a savings for Halliburton. But, the bribe would be a costly, crazy, crooked stunt.

But if the $2 million did not come from the pocket of the guilty party, where did it come from? It had to come from the treasury of the company. Somebody had to approve the payment, and somebody had to cut a check. And the check had to be made out to somebody who was either the Nigerian bribe-taker or someone who was his alter ego.

Oh, yes. It may have been a check made out to the bribe-maker — a check in the sum of $2.4 million. Conceivably he could have cashed the check and delivered the bribe in cold cash — maybe even skimming a few bucks for his efforts.

These are questions to which we do not have answers. But, in a well-run company, if a staff member takes a customer out to lunch and picks up the tab, he or she will — in most cases — have to provide evidence that such a bill was paid. How could the bribe-maker have possibly managed to transfer the stunning sum of $2.4 million from a company’s treasury without any kind of evidence at all as to whom the money should and would go?

It may be that to raise such questions is a sign of our times. At probably no time in our country’s history has there been so much corporate corruption. And, over and over again, the big boys get away with it while some fall guy pays the price.

Halliburton says that it is “cooperating with the SEC in its review of the matter.” The resulting details may offer some answers to our questions. Stay tuned!






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