PARIS — The public prosecutor's office in Paris said yesterday it was opening a formal judicial inquiry into alleged corruption by a French engineering firm and the American oil services giant Halliburton, which was headed until two years ago by Dick Cheney, the vice-president of the United States. The investigation is the first of its kind in France under laws introduced as part of an international convention on cross-border corruption signed in 1997 by some 35 countries, including the US.
The financial crimes squad in Paris believes a French oil and gas engineering firm, Technip, and particularly the Halliburton subsidiary KBR were jointly involved during the 1990s in the payment of up to $200m (£120m) of under-the-counter "commissions" in relation to a huge gas contract in Nigeria.
The convention, under the auspices of the Organization for Economic Cooperation and Development, aims to fight corporate attempts to buy the favors of public authorities abroad.
It allows the police forces of signatory countries to investigate any company suspected of offering commercial sweeteners of any kind to elected or unelected public officials anywhere in the world.
According to Le Figaro newspaper, French police believe KBR was behind a web of off-shore companies and bank accounts set up to "facilitate" the work of TSKJ, a joint venture between four engineering companies that had won a lucrative contract from international oil companies to build a large liquefied natural gas plant on Bonny Island in the eastern Niger delta.
TSKJ, in which KBR was the leading player, allegedly paid a second off-shore company at least $180m in commissions - most of which was transferred to a score of different off-shore bank accounts - for "mediating" with the Nigerian authorities. It is alleged that much of that money wound up in the pockets of public officials.
The French judicial investigation into "corruption of foreign public officials, abuse of funds, complicity and receiving misappropriated monies" targets KBR but will inevitably involve Halliburton, KBR's parent company, which recently won around $1.7bn worth of contracts from the Bush administration to help rebuild Iraq's oil industry.
Some observers, however, said that the potentially embarrassing French investigation into such a well-connected American company could merely be a cynical tit-for-tat response to an equally sensitive investigation in the US into alleged wrongdoing by Crédit Lyonnais during the French bank's buyout of Executive Life Insurance Co, a failed US insurance company.
French judicial officials said on Wednesday that the US was seeking the extradition of four former senior French executives in the case.
Crédit Lyonnais has been under investigation in the US since 1998, when American authorities discovered it had secretly - and illegally - acquired Executive Life's assets in the 1990s.
At the time, banks were barred from owning insurance companies in America. Executive Life's assets included California junk bonds, which the French bank later sold at a profit of at least $2bn.
The French government and Crédit Lyonnais last month struck a preliminary deal to settle the long-running case.
© Guardian Newspapers Limited 2003