HOUSTON -- In the world of Big Oil, Albert "Jack" Stanley was legendary for winning billion-dollar contracts in third world countries, the Halliburton executive who knew all the secrets of deals in places like Malaysia, Egypt and Yemen.
In the wake of his admission in a guilty plea (PDF) last week that he resorted to bribes, kickbacks and high-level corruption to secure deals in Nigeria, however, Stanley now lies at the center of a widening scandal in the oil industry that has implications for corporations and governments across the globe.
Stanley's case is the first in what federal officials believe will be a string of indictments in coming months against U.S. corporate executives who have participated in bribing foreign officials in recent years.
By agreeing to cooperate with prosecutors, Stanley, who ran KBR when it was a subsidiary to Halliburton, promises to become a hammer for federal investigators seeking to crack open additional cases under a 30-year-old statute designed to halt overseas corporate corruption. Around 80 cases involving major corporations accused of overseas bribery were under investigation as of last year, a high-level Justice Department official said.
In addition, Stanley's cooperation may provide a new tool for encouraging industrial countries in Europe and Asia to get more serious about enforcing anti-bribery laws against corporations based there. The $182 million in bribes were allegedly paid not just by Halliburton, but by its partners, an international consortium of engineering companies from France, Italy and Japan. The U.K. has jurisdiction as well because much of the bribery scheme was, according to court documents, hatched in London where Stanley maintained a sumptuous home.
"We are very pleased to see that there has been an uptick in enforcement not only in the U.S. but in other countries as well," said Patrick McCormick, a spokesman for Transparency International USA, an anti-corruption group funded by donations from government development agencies and private businesses and foundations. "We are hoping that it [this case] is a sign of things to come."
The intensifying level of this government effort, pushed by a Republican administration normally friendly to business, cuts two ways for American business executives.
For those who may have been involved in bribery to secure construction contracts or equipment sales in developing countries around the world, it represents a nightmare.
The active involvement of the FBI is particularly worrisome to such people. In contrast to white-collar investigations handled by Justice and the Securities and Exchange Commission, the FBI is believed to be prepared to use techniques more familiar to investigations of organized crime, including wiretapping and undercover agents.
Stanley's high profile and punishment -- he faces a potential seven-year sentence, the longest in the history of the federal statute outlawing bribing foreign officials -- also signal the federal government's willingness to seek long jail terms rather than fines and court injunctions.
For those who fret they have been losing out to foreign competitors in jurisdictions less likely to prosecute bribery, it offers hope that the playing field will soon be leveled.
Stanley has already acknowledged paying bribes to unnamed senior Nigerian officials, although reports have identified the primary recipient as the late president of Nigeria, Sani Abacha. He also admitted to receiving kickbacks of $10.8 million from contracts that Halliburton and predecessor companies signed with governments in Nigeria, Malaysia, Egypt, Yemen. Government officials in those countries, with the exception of President Abacha, have not yet been implicated, according to a person familiar with the investigation.
Stanley's testimony may also pose concerns for Vice President Dick Cheney, who ran Halliburton between 1995 and 2000, when Stanley was appointed as KBR's chief executive officer. Cheney has consistently denied wrongdoing.
Law enforcement officials familiar with the investigation said that in previous interviews, Stanley repeatedly said that then-CEO Cheney had no knowledge of the bribes. At the time, however, Stanley was not a cooperating witness, a stance which changed in June when he was confronted with evidence of his involvement in the bribery scheme. The officials said they had not ruled out pursuing Cheney and other executives as the investigation continues.
The Vice President's office declined comment, citing the ongoing litigation.
Larry Veselka, Stanley's lawyer, said that his client would cooperate fully in any investigation. A judge will determine Stanley's final sentence depending on his compliance with the plea agreement (PDF).
"He's going to cooperate with wherever they want to go and whatever they want him to do," Veselka said on Thursday.
Stanley's rise and fall, detailed in U.S. and leaked French court documents, show what can happen when corporate greed mixes with the autocratic governments that control valuable natural resources like oil and copper in lawless corners of the globe.
Now 65, Stanley spent nearly his entire career in the oil business, a globetrotting high-level roustabout who made a specialty of dealing with governments in resource rich, accountability poor countries. He owned a million-dollar home in Texas and a property in one of London's swankest neighborhoods -- a residence that he will now have to sell under his plea agreement.
A fearsome competitor, Stanley had a reputation as a hard drinker. At his hearing in Texas, Stanley held himself up by gripping the podium, and appeared frail. He appeared to wince at references to alcoholism as a mitigating factor for his actions, and to statements by the government prosecutor William Stuckwisch who characterized Stanley's behavior as "egregious."
"Jack was an extremely capable, smart and totally dedicated to the company," said one former colleague, who declined to be named because of the ongoing investigation. "I was shocked like everyone else when we heard about the bribes."
Others expressed less surprise that Halliburton was involved. Walter Carrington was the U.S. Ambassador to Nigeria in 1994, when Stanley acknowledged making the first bribe payments to the Nigerian government.
"I used to brag that because of our Foreign Corrupt Practices Act Americans weren't involved as other countries were. American businessmen would complain that it wasn't fair, other countries really ought to be doing more to keep people from doing this. It was a competitive disadvantage," said Carrington, who did not recall meeting Stanley. "Halliburton was a different kettle of fish. There were always stories going on about the way in which their people operated."
Stanley began his rise up the corporate ladder with M.W. Kellogg, an oil infrastructure company then owned by Dresser Industries. Dresser would later merge with Halliburton and Kellogg would become KBR.
Stanley was working as a senior executive at Kellogg in the 1990s when the firm formed a joint venture called TSKJ to pursue contracts to construct a liquefied natural gas plant on Bonny Island off Nigeria's oil-rich coast. Besides Kellogg, the TSKJ companies were France's Technip SA, Snamprogetti Netherlands B.V., an affiliate of Italy's ENI SpA, and Japan's JGC Corporation.
As Nigerian officials weighed the consortium's bid against a competing group led by San Francisco-based Bechtel Engineering, Stanley decided to improve the chances of winning by offering bribes, according to court documents filed by the Justice Department and the Securities and Exchange Commission.
He hatched a plan to hire consultants who could direct the money to Nigerian officials, the court documents said. One consultant, from England, would pay off higher-level Nigerian officials while a second, from Japan, would be responsible for bribing lower-ranking officials.
In November 1994, the U.K. consultant, who was not identified, allegedly told an associate that it would take $60 million to secure the contract, the court documents said. Of that money, $40 million to $45 million would go to the "first top-level executive branch" of Nigerian officials, while another $15 million to $20 million would go to other Nigerian officials.
Later that month, Stanley himself traveled to the Nigerian capital to meet with senior officials and confirm that the U.K. consultant would serve as a go-between, according to court documents and officials familiar with the investigation.
Over the next year, TSKJ, operating through subsidiary companies in the Portuguese offshore tax haven of Madeira Island, signed agreements to transfer millions of dollars to the U.K. consultant, according to court documents and people familiar with the investigation.
In December 1995, the Nigerian government awarded the first of the gas plant contracts to TSKJ. Over the next decade, the government awarded TSKJ four contracts worth a total of $6 billion to build and expand the plant.
Throughout that time, Stanley continued traveling to Nigeria to meet with senior officials and continued arranging payments through the U.K. and Japanese consultant firms, according to the court documents.
Abacha died suddenly in 1998. His death, according to Nigerian press accounts, was either the result of a marathon orgy with four prostitutes fueled by Viagra, or a conspiracy among his closest confidantes to poison him. No autopsy was ever performed. In the decade since Abacha's death, Switzerland alone has returned at least $500 million in his bank accounts to the government of Nigeria.
All told, Stanley traveled to Nigeria to meet with top officials on four occasions between 1994 and 2001 as part of the bribery scheme. TSKJ paid out $130 million in bribes through the U.K. consultant and $50 million through the Japanese firm, according to the court documents.
Although he was not identified or charged in U.S. court documents, French and Nigerian investigators have identified the primary consultant to the consortium as Jeffrey Tesler, a London attorney who worked with Nigerian immigrants, according to a transcript of testimony from the French case.
Tesler, who has been investigated by British and French authorities, has never been charged with wrongdoing. Last year, British authorities conducted a search of his London office at the urging of U.S. officials. A woman who answered the phone at Tesler's law office on Thursday said the attorney could not be reached and would have no comment.
In the middle of the bribery and plant construction, Kellogg changed hands. In 1998, Kellogg's parent company, Dresser Industries, merged with Halliburton, the oil services giant.
Cheney, then-CEO of Halliburton, arranged the merger during a quail hunting trip. Afterwards, Cheney appointed Stanley to head KBR, a newly formed construction and logistics subsidiary that grew out of the merger.
In a 1999 article in Middle East Economic Digest, Cheney praised Stanley: "We took Jack Stanley [and a colleague]...to head up the organization and that has helped tremendously."
As allegations of corruption mounted, however, Halliburton conducted its own internal investigation into the charges. In June 2004, the company publicly fired Stanley, then working as a consultant, for improper personal enrichment. The company also severed all relations with Tesler's firm, Tri-Star Investments.
The bribery scandal is one of many involving Halliburton's KBR subsidiary in the past several years. KBR has repeatedly been criticized for overbilling the U.S. government for providing food, fuel and other services to U.S. soldiers in Iraq. Last year, Halliburton spun off KBR into a separate corporation.
KBR spokeswoman Heather Browne said the company had not yet reviewed the plea agreement. "KBR does not in any way condone or tolerate illegal or unethical behavior. The company stands firm in its unwavering commitment to conduct business with the utmost integrity," she said in a prepared statement.
Halliburton spokeswoman Cathy Mann declined comment, saying the company had not yet reviewed the plea agreement. Earlier this year, Halliburton reported that the Securities and Exchange Commission was dramatically widening the scope of the investigation to cover projects in multiple countries built during the last 20 years.
Those investigation may focus on Stanley's activities in other countries. Court documents show that Stanley worked with another consultant, identified as a dual national Lebanese and American citizen, in an elaborate kickback scheme.
Under the scheme, Stanley hired the consultant to help Halliburton and its predecessor firms arrange deals to build liquid natural gas projects not only in Nigeria, but also in Egypt, Yemen and Malaysia. From 1991 to 2004, the consultant directed a total of $10.8 million of the proceeds back to Stanley through a Swiss bank account. These deals involved Mr. Stanley's original employer, M.W. Kellogg, as well as KBR.
Reporting: This story is part of a joint reporting project between PBS's Frontline and ProPublica on international bribery, the subject of a coming documentary production. Marlena Telvick and Oriana Zill de Granados reported from Houston, Texas. Additional reporting contributed by Lowell Bergman, Jake Bernstein and T. Christian Miller. The story was written by T. Christian Miller.