Posted by: Susan Hawley | February 18, 2010

Extradition of UK nationals to the US on bribery charges

Court rules that agent in Nigerian bribe scandal can be extradited to the US

A British court ruled on March 25th that Jeffrey Tesler, a British lawyer who acted as the agent for KBR and has been indicted in the US (see  tesler-indictment[1]) for violating the US Foreign Corruption Practices Act (FCPA) for corruption, may be extradited from the UK to the US. Judge Caroline Tubbs ruled that she was satisfied that Tesler’s conduct would have been criminal under UK law; that there was a ‘substantial link‘ with the US because of the financial benefit accrued from Tesler’s actions, despite the fact that most of Tesler’s conduct occurred in the UK; and that the public interest in extraditing Tesler outweighed his rights under article 8 of the European Human Rights Act to respect for family and private life.

The extradition request now goes to the Secretary of State to determine whether the extradition should proceed. It will be open for Tesler to appeal that decision. If he is extradited, he faces a maximum prison sentence of 55 years. In the UK, he would receive a maximum sentence of 10 years.


Tesler acted as the agent for a joint venture, TSKJ, involving KBR (formerly owned by Halliburton), Technip from France, Snamproggeti Netherlands – a subsidiary of Saipem from Italy, and JGC from Japan. Tesler was paid over $130 million in agency fees between 1995 and 2004, which it is alleged he passed on to high ranking officials in order to win $6 billion worth of engineering, procurement and construction contracts for the joint venture on an LNG plant, the Bonny Island Project, in Nigeria.

Another UK citizen, Wojciech Chodan, is facing an extradition trial on 20th April. Chodan acted as a consultant to the UK subsidiary of KBR, MW Kellogg, and is said to have helped organise the bribery scheme operated by KBR. Chodan reported to Albert Jackson Stanley, former CEO of KBR in the US, who pleaded guilty to corruption in September 2008 and is due to be sentenced this May. Judge Caroline Tubbs said she had taken into account Stanley’s conviction in the US in making her extradition decision.  

In February 2009, a US subsidiary of KBR, KBR LLC, pleaded guilty to violating the FCPA, and paid a $402 million criminal fine. The Securities and Exchange Commission fined the parent companies, KBR Inc and Halliburton, $177 million. 

In the UK, KBR’s subsidiary MW Kellogg has been under investigation by the SFO for some time for its role in the bribery scandal. MW Kellogg owned KBR’s share and represented KBR in the Madeira based company, LNG Servicos e Gestao, which made the payments to Tesler and it was MW Kellogg’s executives who signed agency agreements with Tesler. According to the plea agreement between the Department of Justice and KBR LLC, “KBR held its interest in [the Madeira company]  indirectly through MW Kellogg Ltd, rather than directly, as part of KBR’s intentional effort to insulate itself from FCPA liability.

KBR announced at the end of February 2010 in its annual report that its UK subsidiary MW Kellogg had “informed the SFO that it intends to self report corporate liability for corruption-related offenses arising out of the Bonny Island project and expects to enter into a plea negotiation process under the “Attorney General’s Guidelines on Plea Discussions in Cases of Serious and Complex Fraud” issued by the Attorney General for England and Wales. MWKL is in the process of responding to inquiries and providing information as requested by the SFO. As a result of the unique factors associated with this matter and in light of MWKL’s cooperation, the SFO has confirmed it is prepared to treat MWKL as making an early self report in accordance with the SFO’s guidelines.”  This means that MW Kellogg will potentially be eligible for a civil rather than a criminal settlement.

Corruption Watch believes that MW Kellogg must receive an appropriate criminal penalty for its role in organising the bribes. Corruption Watch is deeply concerned at the suggestion that MW Kellogg can be classified as a making an early ‘self-report’ under the SFO’s guidelines on overseas corruption. The company has been under investigation by the SFO for three years. The SFO’s decision makes a mockery of its self-reporting system.



%d bloggers like this: