History Hour: A Look Back at KBR and Halliburton’s FCPA Violation

As more FCPA violations emerge, it’s important to look back to learn from previous cases. In 2009, Kellog, Brown & Root (KBR) and its parent company, Halliburton, made history by agreeing to pay the largest combined settlement to U.S. authorities of FCPA charges by U.S. companies at the time: a staggering total of $579 million. The amount was paid to the U.S. Department of Justice (DOJ) and U.S. Securities and Exchange Commission (SEC) after the companies were charged with violating the FCPA following a bribery scandal in Nigeria. KBR pled guilty to one count of conspiring to violate the FCPA and four counts of violating anti-bribery provisions of the FCPA.
The DOJ alleged that KBR created a scheme to bribe Nigerian officials to secure construction contracts for natural gas production facilities in Nigeria. Through a complex system of sham consulting agreements with foreign companies, KBR sought to insulate itself from the nearly $200 million in bribes it indirectly paid to Nigerian officials through those consulting agreements. As a result, KBR and Halliburton received more than $6 billion in construction contracts.
According to the SEC filings, Halliburton failed to detect the bribes and lacked sufficient internal compliance controls. When Halliburton was investigating the companies that KBR was doing business with, it often did not follow up with the references these companies provided, many of which were false. Halliburton itself later paid $29.2 million to the SEC for violating the FCPA in 2017 by, again, not having sufficient internal accounting controls.
The KBR enforcement action demonstrates how enforcement agencies have aggressively investigated potential FCPA violations to deter future misconduct, using the FCPA to pierce through complicated shielding efforts that companies use to protect themselves from corruption charges. KBR’s settlement in 2009 and Halliburton’s 2017 settlement show the importance of establishing, and enforcing, internal FCPA compliance and implementing continuous and thorough due diligence monitoring. Companies seeking to prevent both initial or repeat offenses from occurring should utilize consistent employee compliance training, and continuously develop and maintain effective due diligence processes to ensure their internal controls are sufficient to protect against potential improper behavior.
J.D. Candidate, The George Washington University Law School, Class of 2026