Questions:

1. Could the alleged payment of bribes to Nigerian government officials by Jeffrey Tesler be
considered “facilitating payments” or “speed money” under the terms of the Foreign Corrupt
Practices Act?
- Jeffrey’s Tesler’s alleged payment of bribes to the Nigerian government officials was a violationof
the Foreign Corrupt Practices Act by being involved in malicious deals, in which it can be
consideredas speed money. And these alleged acts to support the violation are the transferring of
the $2.5 millioninto Swiss bank accounts held under a false name by the Nigerian oil minister, Dan
Etete. And paymenttransfers into an account controlled by Wojciech Chodan for the payment to
General Abacha. Also, thefact that the company did authorize and recognize those payments as part
of their books.
- Under the terms of the Foreign Corrupt Practices Act, facilitating payments or speed money refer to
payments made to ensure that companies are receiving the standard treatment that a business
ought to receive from a foreign official, but might not receive due to the obstruction of a foreign
official. They do not include payments to secure contracts that would not otherwise be secured, nor
payments to obtain exclusive preferential treatment. Most students will probably agree that the
sheer size of the alleged payments by Jeffrey Tesler would imply that the payments fall outside the
realm of speed money or facilitating payments, and instead suggest a bribe.

2. Irrespective of the legality of any payments that may have been made by Tesler, do you think it
was reasonable for KBR to hire him as an intermediary?
- Irrespective of legality of payments made by Tesler, it is not reasonable for KBR to hire him as
intermediary with an initial cost of services of $60 million and eventually become $132.3 million, which is
a waytoo expensive for company's expense.. KBR may have assigned someone from the company to deal
legally with Nigerian officials for the contract negotiations.
- Jeffrey Tesler was hired by KBR to help the company obtain government permits forthe LNG project.
Tesler’s long-term relationshipswith many senior Nigerian government and military officials made him an
attractive candidate for the job. KBR also had a former connection with Tesler. He had brokered the sale
of Kellogg’s interest in a Nigerian fertilizer plant in the mid-1980s. For these reasons, many students will
probably conclude that it was reasonable for KBR to hire Tesler as an intermediary.
3. Given the known corruption of the Abacha government in Nigeria, should Kellogg and its
successor, KBR, have had a policy in place to deal with bribery and corruption? What might that policy
have looked like?
- Yes, there should be policy in place within the company in dealing with bribery and corruption. The
policy should focus on exerting all efforts first to deal in a legal manner but in the case of no alternative
solution such payments should be documented and recorded in the company's books. It would also
provide penalties for employees or third parties representing the company who deals with bribery and
corruption.. Thus, I would recommend the same policy of Dow Corning; " Dow Corning employees will
not authorized or give payments or give to government employees or their benificiaries."
- Answer:This question will probably generate a fair amount of discussion. Some students will probably
take the perspective that all companies should have clear ethicspolicies in place that govern the behavior
of employees regardless of where they operate. Other students however, may suggest that such a policy
might be too rigid for companies that do business in parts of the world where corrupt governments are
in power. Some students may argue that ethical companies should simply avoid doing business with
governments like the Abacha regime, but still others may note that doing so could severely limit the
opportunities for some companies. In the end, students will probably conclude that Kellogg and KBR
should have had some sort of policy in place to deal with corruption and bribery, but they may not agree
on just what that policy should look like.
 4. Should Kellogg have walked away from the Nigerian LNG project once it became clear that the
payment of bribes might be required to secure the contract?
- Answer:When Dan Etete took over as oil minister, he immediately began to change the terms of a
deal that had been in the final negotiation stage. Many students will probably suggest that KBR’s
willingness to respond to Etete’s demand was reasonable given that the company had already
invested significant effort at securing the LNG project. Students taking this perspective may argue
thatKBR may not have realized just what would be involved in finally securing the contract, and
subsequent events were simply a case of a situation that spiraled out of control. Other students
however, are likely to suggest that KBR should have walked away from the deal. Students taking this
point of view will probably argue that KBRknew that the demands made by Etete were unethical, and
that while it might mean that the company would lose the contract, the company should have taken
a more ethical stance

5. There is evidence that Jack Stanley, the former head of M.W. Kellogg and KBR, may have taken
kickback payments from Tesler. At least one other former Kellogg employee, Wojciech Chodan, may
have taken kickback payments. What does this tell you about the possible nature of the ethical climate
at Kellogg and then KBR?

Answer:Most students will probably conclude that the ethical standards at Kellogg and then KBR were
poor at best. Some students may suggest that the company fought to acquire what it wanted,
regardless of the cost. Some students may suggest that the “win at all costs” mentality of the firm may
have encouraged senior executives to put aside their ethical standards in favor of “making the
numbers.”

6. Should Halliburton be called to account if it is shown that its KBR unit used bribery to gain business in
Nigeria? To what extent should a corporation and its officers be held accountable for ethically suspect
activities by the managers in one of its subsidiaries, particularly given that manyof those activities were
initiated before Halliburton owned the subsidiaries?

Answer:This question islikely to generate mixed responses. Some students will probably suggest that
Halliburton should indeed be held responsible for the behavior of KBR executives in Nigeria. Students
taking this perspective will probably argue that it is the responsibility of a company to know what its
employees are doing, and that to suggest that Halliburton be resolved of responsibility simply because
KBR was a subsidiary, and that because some activities may have taken place prior to the unit be
acquired is unethical in and of itself. Other students however, may point out that Halliburton could
have had no responsibility for actions taken by KBR prior to its acquisition, and so should not be held
responsible for those. Students taking this view will probably agree however, that Halliburton should
have put an end to questionable practices as soon as the unit was acquired.