Some companies do end up praising the monitor system. The three-year monitorship for KBR Inc. worked out well from the company’s standpoint, according to general counsel Andrew Farley, though he admits that he was indeed leery at first. “Obviously, having a monitor is an unwelcome experience, but we embraced it,” Farley says.
The government charged that KBR, the Houston-based engineering giant, along with Halliburton Company (the parent of KBR’s predecessor, Kellogg, Brown & Root Inc.), had channeled $180 million in bribes to Nigerian government officials to obtain business contracts worth $6 billion [“The Secrets of Bonny Island,” Focus Europe, Fall 2011]. In a February 2009 FCPA settlement KBR consented to a three-year monitorship, as well as to a $400 million fine. Former CEO Albert Stanley pled guilty to bribery charges this past February and was sentenced to two-and-a-half years in prison.
Farley was part of a new management team injected into KBR in 2004 after the allegations surfaced. He says that the new regime “set a tone from the top in terms of transparency.”
When it came time to select a monitor, KBR suggested three candidates. Kathryn Atkinson, a Miller & Chevalier partner who specializes in international corporate compliance, was picked. Farley says that Atkinson appealed to KBR because she had wide FCPA experience, and came across in an interview as sensible and cost-conscious. She began by vetting KBR’s anticorruption policies and procedures. According to Farley, Atkinson interviewed senior executives, participated in audits, drafted training materials, and visited locations in some of the 70 countries where KBR does business. She then recommended a number of anticorruption safeguards, such as more timely investigative procedures and a more rigorous internal auditing system.
Atkinson submitted her third and final report last year to KBR and the government.
Atkinson’s total bill came to millions of dollars, Farley says, though he declined to be more specific. Despite the cost, he says that KBR was pleased. The company gained, in Farley’s words, unyielding pressure to “get religion.”