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Family, Food, Football . . . And FCPA

Our post yesterday referred to the long-pending Foreign Corrupt Practices Act investigations at Halliburton and DaimlerChrysler (now Daimler AG). For readers wanting to know what the two companies are now saying about their FCPA issues, we've rounded up their latest disclosures. Daimler's is extracted from its Annual Report for December 31, 2007 (here), and Halliburton's is from its Quarterly Report for September 30, 2008 (here).

Daimler's disclosure is brief. It says the DOJ and SEC are investigating possible violations of the Foreign Corrupt Practices Act, and that the company has already determined through its own investigation that it made improper payments in Africa, Asia and Eastern Europe. The internal investigation detected tax liabilities resulting from "misclassifications of, or the failure to record, commissions and other payments and expenses," which have been self-reported to authorities in several jurisdictions. Daimler says it has also taken other corrective action and is working to complete the internal investigation.

(In August 2007, Daimler sold 80.1 percent of Chrysler to private-equity firm Cerberus Capital Management LP and retained the remaining 19.9 percent. Cerberus is now accusing Daimler of "intentionally and materially" misleading it in connection with the sale. FCPA issues have not been mentioned publicly. An AP report about the dispute features our favorite legal pundit, Professor Peter Henning.)

At around 2,500 words, Halliburton's most recent FCPA disclosure is one of the longest on record. It describes two decades of potential compliance problems related to the giant Bonny Island Project and others in Nigeria. The SEC, it says, has subpoenaed information about "current and former agents used in connection with multiple projects, including current and prior projects, over the past 20 years located both in and outside of Nigeria" involving Halliburton's energy services business and its former affiliate KBR. Halliburton says it has agreed with the DOJ and SEC to toll the statute of limitations.

Albert "Jack" Stanely, a past chairman and CEO of KBR, features in the disclosure. He pleaded guilty in September to helping funnel $182 million in bribes to government officials in Nigeria. He was sentenced to a maximum of 84 months in prison (subject to a reduction for future cooperation) and ordered to make restitution of about $11 million.

Research for this post was provided courtesy of Securities Mosaic.

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Full post as published by The FCPA Blog on November 26, 2008 (boomark / email).