An investigation undertaken by the Huffington Post and Fairfax Media has revealed the extent of corruption within one of the largest U.S. oil industry companies. The report shows how a fossil fuel giant paid another firm, Unaoil, to win oil and gas contracts in Kazakhstan. The tens of thousands of leaked emails reveal how Unaoil, which has offices in Monaco and the Virgin Islands, then bribed officials and influential businessmen for the rights to drill oil and gas in these nations, while also supplying bribes on behalf of other companies such as Samsung and Rolls-Royce in countries ranging from Namibia to Yemen.
The emails reveal how the engineering and construction company KBR, which until 2007 was a part of the larger oil giant Halliburton, used another firm implicated in corruption. Now, KBR doesn’t exactly have the best reputation as allegations ranging from sexual assault to human trafficking have been laid against the firm in the past, but these new claims of corruption, if the Huffington Post is correct, could have the paper trail to back them up. They relate to the company paying millions of dollars to Unaoil between 2004 and 2009 to secure oil and gas contracts on the Kashagan oil field, in Kazakhstan, one of the largest reserves discovered in decades.
The Huffington Post reports how Halliburton had been trying for years to get access to the fields, and repeatedly came up against problems. KBR then tried another tack by paying the intermediary Unaoil, who according to the investigation take a percentage of the contract as a fee, and then use a portion of it to pay millions in bribes. Some of these made their way to “the chairman of the board of the Kazakh state oil company’s joint venture with Gazprom,” a man with close ties to the Kazakhstan’s dictator. From purposely misleading the public on climate change, to trying to cover up oil spills, the murky truth about the oil industry seems to be finally surfacing.
All the allegations have been denied by Hallibuton and KBR, with the former telling the Huffington Post that they “maintain an active, comprehensive Ethics & Compliance Program.” Even if the company didn’t explicitly know about the corruption and bribes being paid though, under U.S. law they could still face prosecution. The country’s anti-corruption laws state that if there are red flags, or a company suspects that an intermediary might be performing these practices, but fails to investigate then they can be charged with what the law calls “deliberate ignorance.” According to one expert, just the fact that a small company like Unaoil was based in Monaco should have been enough to pique suspicion.
It also doesn’t matter if the company in question is based outside of the U.S.; if they conduct trading or are floated on the U.S. stock exchange then they are also liable for prosecution within the states. With Hilliburton and KBR already having been charged with bribery in multiple cases, paying fines of $402 million and $177 million, and the former CEO of KBR even being sent to prison for his role in one of these cases, the past reputation of the company and their argument that they had no idea what Unaoil was up to is not looking great.