Halliburton Paying $29.2 Million to Settle FCPA Violations
Halliburton and its former VP Jeannot Lorenz violated the FCPA by improperly selecting a locally connected Angolan firm to satisfy fake local content requirements, circumventing internal controls and paying $3.7M to secure $14M in profits, resulting in a $29.2M settlement for Halliburton and a $75K penalty for Lorenz.
Halliburton was charged by the SEC with violating the FCPA’s books and records and internal accounting controls provisions after selecting a local Angolan company linked to a Sonangol official to secure lucrative oilfield contracts. The company paid $3.705 million to the firm, which was selected without competitive bidding or proper justification, and ultimately profited $14 million from seven subcontracts awarded by Sonangol. Halliburton agreed to pay $29.2 million in total—$14 million in disgorgement, $1.2 million in prejudgment interest, and a $14 million penalty—and must retain an independent compliance consultant for 18 months, while Lorenz paid a $75,000 penalty for circumventing controls and falsifying records.
Halliburton Company and its former vice president Jeannot Lorenz were charged by the SEC with violating the Foreign Corrupt Practices Act’s books and records and internal accounting controls provisions by improperly selecting a local Angolan company owned by a former Halliburton employee who was a friend and neighbor of a Sonangol official. Lorenz, tasked with meeting local content regulations, bypassed internal controls by starting with the preferred vendor and back-fitting contract services, avoiding competitive bidding, failing to justify single-source procurement, and circumventing a required approval committee for high-risk contracts over $10,000. Despite the lack of legitimate business need, Halliburton awarded over $13 million in contracts to the firm and paid $3.705 million, leading to $14 million in profits from seven Sonangol subcontracts approved under false pretenses. To settle the case, Halliburton agreed to pay $29.2 million—$14 million in disgorgement, $1.2 million in prejudgment interest, and a $14 million penalty—and must retain an independent compliance consultant for 18 months to review its Africa-related anti-corruption policies. Lorenz separately agreed to pay a $75,000 penalty for causing the violations and falsifying records. Neither party admitted or denied the findings, but both consented to a cease-and-desist order. The SEC’s investigation was supported by the DOJ and FBI, underscoring the seriousness of corporate corruption in high-risk jurisdictions.
Exhibits & Attached Documents (1)
Extracted insights
- $29.20M $29.2 million $10M–$100M
- $14.00M $14 million $10M–$100M
- $13.00M $13 million $10M–$100M
- $3.71M $3.705 million $1M–$10M
- $1.20M $1.2 million $1M–$10M
- $75K $75,000 $10K–$100K
- $10K $10,000 $10K–$100K
- person halliburton internal accounting controls
- person Jeannot Lorenz
- company more than $13 million worth of business to local angolan company
- agency more than $29.2 million to settle sec case
- agency sec investigation
- agency Securities and Exchange Commission
- person sonangol officials
- Securities And Exchange Commission Charged Halliburton Company With Violating FCPA Provisions
- Halliburton Agreed To Pay More Than $29.2 Million To Settle SEC Case
- Halliburton Agreed To Obtain Independent Compliance Consultant To Oversee Anti-Corruption Policies In Africa
- Jeannot Lorenz Agreed To Pay $75,000 Penalty For Causing Company Violations
- Sonangol Officials Advised Halliburton Management In 2008 To Partner With Local Angolan-Owned Businesses
- Halliburton Tasked Lorenz To Spearhead Local Content Efforts
- Halliburton Outsourced More Than $13 Million Worth Of Business To Local Angolan Company
- Halliburton Entered Into Contracts With Local Angolan Company To Meet Local Content Requirements
- Lorenz Violated Halliburton Internal Accounting Controls
- Halliburton Paid $3.705 Million To Local Angolan Firm
- Sonangol Approved Award Of Seven Lucrative Subcontracts To Halliburton
- Halliburton And Lorenz Consented To Order Requiring Cease And Desist From Future FCPA Violations
- Halliburton Agreed To Pay $14 Million Disgorgement Plus $1.2 Million Prejudgment Interest And $14 Million Penalty
- Halliburton Must Retain Independent Compliance Consultant For 18 Months
- SEC Investigation Conducted By Ansu N. Banerjee And Steven A. Susswein
The Securities and Exchange Commission today charged Halliburton Company with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) while selecting and making payments to a local company in Angola in the course of winning lucrative oilfield services contracts. Halliburton, which profited by approximately $14 million from the deals, has agreed to pay more than $29.2 million to settle the SEC’s case. The company also agreed to obtain an independent compliance consultant to oversee its anti-corruption policies and procedures in Africa. Halliburton’s former vice president Jeannot Lorenz has agreed to pay a $75,000 penalty for causing the company’s violations, circumventing internal accounting controls, and falsifying books and records. According to the SEC’s order, officials at Angola’s state oil company Sonangol advised Halliburton management in 2008 that it was required to partner with more local Angolan-owned businesses to satisfy local content regulations for foreign firms operating in Angola. Halliburton tasked Lorenz to spearhead these efforts. When a new round of oil company projects came up for bid, Lorenz began a lengthy effort to retain a local Angolan company owned by a former Halliburton employee who was a friend and neighbor of the Sonangol official who would ultimately approve the award of the contracts. It took three attempts but Halliburton ultimately outsourced more than $13 million worth of business to the local Angolan company. The SEC’s order finds that Halliburton entered into contracts with the local Angolan company that were intended to meet local content requirements rather than the stated scope of work. Lorenz violated Halliburton’s internal accounting controls by starting with the local Angolan company and then backing into a list of contract services rather than first determining the services and then selecting an appropriate supplier. Lorenz also failed to conduct competitive bidding or substantiate the need for a single source of supply, and he avoided an internal accounting control that required contracts of more than $10,000 in countries like Angola with high corruption risks to be reviewed and approved by a special committee within Halliburton. The company eventually paid $3.705 million to the local Angolan firm, and Sonangol approved the award of seven lucrative subcontracts to Halliburton. “Halliburton committed to using a particular supplier that posed significant FCPA risks and a company vice president circumvented important internal accounting controls to get the deal done quickly,” said Antonia Chion, Associate Director in the SEC’s Enforcement Division. “Companies and their executives must comply with these internal accounting controls that help ensure the integrity of corporate transactions.” Without admitting or denying the findings, Halliburton and Lorenz consented to the order requiring them to cease and desist from committing or causing any violations or any future violations of the books and records and internal accounting controls provisions of the FCPA. Halliburton agreed to pay $14 million in disgorgement plus $1.2 million in prejudgment interest and a $14 million penalty. Halliburton must retain an independent compliance consultant for 18 months to review and evaluate its anti-corruption policies and procedures, particularly in regard to local content obligations for business operations in Africa. The SEC’s investigation was conducted by Ansu N. Banerjee and Steven A. Susswein with assistance from Alfred Day and Thomas Bednar. The case was supervised by Melissa R. Hodgman and Ms. Chion. The SEC appreciates the assistance of the U.S. Department of Justice and the Federal Bureau of Investigation.
The Securities and Exchange Commission today charged Halliburton Company with violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (FCPA) while selecting and making payments to a local company in Angola in the course of winning lucrative oilfield services contracts. Halliburton, which profited by approximately $14 million from the deals, has agreed to pay more than $29.2 million to settle the SEC’s case. The company also agreed to obtain an independent compliance consultant to oversee its anti-corruption policies and procedures in Africa. Halliburton’s former vice president Jeannot Lorenz has agreed to pay a $75,000 penalty for causing the company’s violations, circumventing internal accounting controls, and falsifying books and records. According to the SEC’s order, officials at Angola’s state oil company Sonangol advised Halliburton management in 2008 that it was required to partner with more local Angolan-owned businesses to satisfy local content regulations for foreign firms operating in Angola. Halliburton tasked Lorenz to spearhead these efforts. When a new round of oil company projects came up for bid, Lorenz began a lengthy effort to retain a local Angolan company owned by a former Halliburton employee who was a friend and neighbor of the Sonangol official who would ultimately approve the award of the contracts. It took three attempts but Halliburton ultimately outsourced more than $13 million worth of business to the local Angolan company. The SEC’s order finds that Halliburton entered into contracts with the local Angolan company that were intended to meet local content requirements rather than the stated scope of work. Lorenz violated Halliburton’s internal accounting controls by starting with the local Angolan company and then backing into a list of contract services rather than first determining the services and then selecting an appropriate supplier. Lorenz also failed to conduct competitive bidding or substantiate the need for a single source of supply, and he avoided an internal accounting control that required contracts of more than $10,000 in countries like Angola with high corruption risks to be reviewed and approved by a special committee within Halliburton. The company eventually paid $3.705 million to the local Angolan firm, and Sonangol approved the award of seven lucrative subcontracts to Halliburton. “Halliburton committed to using a particular supplier that posed significant FCPA risks and a company vice president circumvented important internal accounting controls to get the deal done quickly,” said Antonia Chion, Associate Director in the SEC’s Enforcement Division. “Companies and their executives must comply with these internal accounting controls that help ensure the integrity of corporate transactions.” Without admitting or denying the findings, Halliburton and Lorenz consented to the order requiring them to cease and desist from committing or causing any violations or any future violations of the books and records and internal accounting controls provisions of the FCPA. Halliburton agreed to pay $14 million in disgorgement plus $1.2 million in prejudgment interest and a $14 million penalty. Halliburton must retain an independent compliance consultant for 18 months to review and evaluate its anti-corruption policies and procedures, particularly in regard to local content obligations for business operations in Africa. The SEC’s investigation was conducted by Ansu N. Banerjee and Steven A. Susswein with assistance from Alfred Day and Thomas Bednar. The case was supervised by Melissa R. Hodgman and Ms. Chion. The SEC appreciates the assistance of the U.S. Department of Justice and the Federal Bureau of Investigation.