"The big companies found out that this guy can deliver. If you talk to him, it's as good as talking to thepresident," says Nuhu Ribadu, executive chairman of Nigeria's Economic and Financial Crimes Commission,which is leading the Nigerian investigation. The Nigerian government is trying to recover the billions lootedby dictator Gen. Abacha, who died of a heart attack in 1998.
Vice President Dick Cheney was Halliburton's chief executive from 1995 to 2000 and named Mr. Stanley, therecently fired executive, to a top post at the company in 1998. Otherwise Mr. Cheney hasn't been linked tothe Nigerian dealings. Halliburton bought the parent of the company involved in the dealings, M.W. Kellogg,in 1998. Mr. Cheney's lawyer didn't respond to requests for comment.
Authorities have yet to prove bribery took place. Mr. Tesler declined to be interviewed but his lawyer in Parissays Mr. Tesler did nothing wrong. The lawyer acknowledges that Mr. Tesler received large sums from theconsortium including Kellogg, which became part of Halliburton's Kellogg Brown &Root unit. But he says themoney -- $132 million, according to Halliburton -- represented advisory and other legitimate fees. No one in the affair has been charged with any crime.
Mr. Tesler's London office offers no hint of the huge fees he has received over the past decade. The law firmof Kaye Tesler &Co. stands next door to a Somali butcher. A prominent sign in the firm's windows advertisesthe use of a photocopier and fax machine, available to passers-by for 15 pence. Michael Kaye, who foundedthe firm with Mr. Tesler in 1975, still works in the office, although he said in a brief telephone interview thatthe two have ended their partnership.
Mr. Tesler has told French investigators that he helped some 20 or 30 senior Nigerian government andmilitary officials with their London affairs, including a former member of the Nigerian cabinet who purchaseda large house in Surrey, according to people familiar with the investigation.
Mr. Tesler's relationship with M.W. Kellogg began in the mid-1980s when he unsuccessfully tried to broker the sale of Kellogg's minority interest in a Nigerian fertilizer plant to the Nigerian government. By 1994,Kellogg's interest had turned to a long-delayed proposal to build a natural-gas complex on the Nigeriancoast. Kellogg and three other firms formed a consortium bidding to become the complex's generalcontractor.
Each of the four firms held a 25% stake in the consortium and veto power over its decisions. Kelloggengineers and financial officials held many top positions. Two of the partners, Technip SA of France andJGC Corp. of Japan, have said Kellogg managed the consortium. The fourth member, the Snamprogetti unitof Italy's ENI SpA, declined to comment other than to say it has been contacted by the SEC.
Halliburton says it was an equal partnership, with none of the four having more power than the others. Theconsortium was competing against a group led by U.S. construction giant Bechtel Group Inc.
The Nigerian state oil company teamed up with Royal Dutch/Shell Group to form a company called NigeriaLNG Ltd. (LNG stands for liquefied natural gas.) Nigeria LNG put the contract up for bidding. The bids wereopened in Lagos on Sept. 12, 1994, and the Kellogg consortium's was for about $2 billion -- 5% lower thanBechtel's, according to a briefing paper sent to Nigeria LNG's full board by a board committee examining thebids.
It looked as if the Kellogg consortium had the inside track to land the deal. But negotiations on a finalcontract failed to get rolling. Nigeria's oil minister had a falling-out with the dictator, Gen. Abacha, and wasreplaced on March 20, 1995, by Dan Etete.
Two days later, Mr. Tesler signed a contract to serve as a consultant to the Kellogg consortium. The six-page contract, signed by an M.W. Kellogg executive on behalf of the consortium, called on Mr. Tesler toobtain government permits, maintain good relations with government officials and provide advice on salesstrategy. Mr. Tesler agreed in the contract not to bribe any government officials, a standard proviso.
Halliburton says Mr. Tesler had already been working behind the scenes to convince Nigerian officials thatthe plant was a good idea. The contract was a reward for that work and an incentive to keep up theprodding, says James Doty, an outside lawyer conducting an internal investigation at Halliburton. "He wasinvesting sweat equity and he wanted a contract," says Mr. Doty. The two sides agreed on a fee of $60million, payable to Mr. Tesler only after the Kellogg consortium began to get paid.
But Mr. Etete, the new oil minister, was a tough customer. He immediately began to use his influence over the natural-gas complex for personal gain, according to Michael Weston, a Shell technical adviser to theproject. Mr. Etete "asked at every meeting for something," including plane tickets for his son to travel to theU.S. and payments for a medical treatment abroad, says Mr. Weston, adding that Shell turned down therequests.
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