Halliburton Shrugs Off Bribe Probe

New questions about Halliburton HAL keep bubbling to the surface.

The Securities and Exchange Commission has launched a formal investigation of the company for possible violation of antibribery laws. The probe focuses on payments made years ago in Nigeria by Kellogg Brown & Root, a division that -- thanks to controversial contracts in Iraq -- currently generates the bulk of Halliburton's revenue.

Separately, a congressional watchdog is making fresh suggestions that Vice President Dick Cheney's office may have improperly favored Halliburton for multibillion-dollar oil projects in Iraq. Cheney spent five years as Halliburton's CEO before joining President Bush's campaign in 2000.

The company's stock, down 17 cents to $19.02 on Monday, barely registered the latest wave of headlines.

"The impact of these investigations on what analysts think the company is worth is pretty small," explained Peter Cohan, a Massachusetts investment strategist with no position in the stock. "That's sort of the bottom line: None of these things matter very much."

Happy Jack

Halliburton disclosed the new SEC probe when the market was closed in observation of the death of former President Ronald Reagan on Friday. The company said that both the SEC and the Department of Justice -- together with a French magistrate -- already had been questioning payments related to the Nigerian natural gas project before the regulatory probe turned formal.

Government officials "have met with Halliburton to discuss these matters and have asked Halliburton for cooperation and access to information in reviewing these matters in light of the requirements of the United States Foreign Corrupt Practices Act," the company stated. "While Halliburton does not believe it has violated the [act], Halliburton's own internal investigation of these matters is ongoing, and there can be no assurance that government authorities would not conclude otherwise."

The Wall Street Journal elaborated on Monday. The newspaper reported that federal regulators are scrutinizing more than $100 million in payments -- including $5 million to a former KBR executive -- made in the 1990s by a joint venture partially owned by KBR. Authorities are seeking to determine whether the payments were bribes, offered to win contracts in Nigeria, or legitimate business expenses.