Posted on 09/04/2003 4:14:28 PM PDT by fight_truth_decay
Prominent attorneys to face off as $677M trial over Republic of Kazhakstan oil field gets messy
Jury selection kicked off this week in a $677 million case filed by Houston-based Anglo-Dutch Petroleum International Inc. against Halliburton Co. and several other defendants that will bring two heavyweight attorneys head to head over the next few weeks.
The case, first filed in 2000, centers around the development of an oil field in the Republic of Kazhakstan, a central Asian country sandwiched between Russia to the north and China to the southeast.
The suit alleges that Anglo-Dutch was undermined by Houston-based Halliburton and several other players in the petroleum industry in its attempt to develop the oil field. Anglo-Dutch has brought in famed local attorney John O'Quinn of O'Quinn, Laminack & Pirtle to defend its claim to $677 million in lost profits it argues would have been forthcoming if the deal had not soured.
O'Quinn, who was part of a group of lawyers that represented the State of Texas in a successful $17.3 billion lawsuit against tobacco companies, could not be reached for comment on this suit.
Representing Halliburton is Don Godwin of Dallas law firm Godwin Gruber LP. Godwin made headlines last year as the lead negotiator in the nearly 340,000 asbestos cases filed against Halliburton. That landmark settlement resulted in a multibillion-dollar hit for Halliburton.
In December 2002, Halliburton announced an agreement on the asbestos claims whereby it would put its DII Industries LLC unit, which includes its Kellogg Brown & Root Inc. engineering and construction business, under bankruptcy supervision. As part of the unit's reorganization, Halliburton will contribute $2.78 billion and 59.5 million shares of stock -- valued at about $1.2 billion -- to a fund that will be used to pay current and future asbestos claims.
And just seven months after the asbestos suits were settled, Halliburton finds itself in court again -- this time over oil.
Godwin declined to comment on the pending suit.
But a Halliburton spokeswoman says the company disagrees with Anglo-Dutch's allegations.
"Halliburton believes the plaintiffs' claims to be without merit," says spokeswoman Wendy Hall. "We honored and strictly performed all of our obligations under the contract between us and the plaintiffs and we are confident the jury will see that and render their verdict accordingly."
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Alleged Violations Could Cost Lucent Millions D
25 Aug 17:15
By Tom Becker
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Lucent Technologies Inc.'s (LU) alleged violation of a federal statute could cost the company millions of dollars and land some of its employees in jail.
The Justice Department and the Securities and Exchange Commission are investigating whether Lucent violated a provision of the Foreign Corrupt Practices Act of 1977 by bribing a Saudi Arabian official with money, gifts and free use of private jets to make business decisions in Lucent's favor. The alleged bribes are valued at roughly $15 million.
Any employee found guilty of violating the statute could face up to five years in prison and the telecommunications-maker could be forced to shell out millions to cover a large fine, a spokesman with the U.S. Department of Justice said.
Lucent denies the allegations, which were originally made in a lawsuit filed by National Group for Communications and Computers Ltd., a Saudi telecommunications company, and said it is cooperating with the Justice Department and SEC investigations.
The Foreign Corrupt Practices Act was penned to discourage U.S. businesses from bribing foreign officials to steer business their way. Along with bribery, entities can be charged with failing to properly book the payments made to foreign officials and for failing to have adequate controls in place to prevent such acts, legal experts said.
Two of the biggest cases under the act involved General Electric Co. (GE), which paid $69 million in penalties in 1992 after an employee was found to have bribed a former Israeli general, and Lockheed Martin Corp. (LMT), which paid $24.8 million in 1995 after an executive was found to have bribed an Egyptian politician to win a contract.
The Justice Department is currently investigating whether Exxon Mobil Corp.
(XOM), formerly known as Mobil Oil Corp., participated in a scheme to route $78 million to Swiss bank accounts belonging to Kazakhstan's president and others.
A former Mobil vice president, J. Bryan Williams, recently pleaded guilty to tax evasion after he neglected to pay taxes on $2 million he allegedly received in association with the scheme.
"This is not slap-on-the-wrist type stuff," said Robert N. Kaplan, a partner with the law firm of Kaplan & Fox, which has defended entities accused of violating the act. "When the government investigates you for violating this act, it's serious business and it comes with serious penalties."
The Securities and Exchange Commission can levy its own fines and place restrictions on the violating businesses. The fines are typically smaller than the Justice Department fines. Only violations pursued by the Justice Department can result in jail time.
Kaplan said Lucent's best bet is to cooperate with the federal investigations. Fines are generally smaller in cases where settlements are reached.
The attorney said a typical defense is for an entity to claim it didn't know it was actually bribing anyone when it made the payments.
"You'll hear companies say we hired this consultant because he is a guy who knows his way around and said he could help put us in a position to get business but we had no idea he was just putting money into some official's bank account," Kaplan said.
In addition to the federal investigations, Lucent executives may wind up defending themselves from derivative actions for their role in the alleged violation, Kaplan said. In a derivative action, a shareholder can sue officers and directors of a corporation on behalf of the company for failing to instill proper controls to prevent the violations. The shareholder can seek to recover monetary damages from the officers and directors.
-By Tom Becker; Dow Jones Newswires; 201-938-2020
(END) Dow Jones Newswires
08-25-03 1715ET
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