Bribery concerns sour
mood at Norway's
two largest firms
 Hydro CEO Eivind Reiten claims he had no involvement in the alleged bribery at Hydro nearly a decade ago. StatoilHydro's probe suggests otherwise. PHOTO: JON HAUGE  Hydro's former CEO Egil Myklebust, who went on to be Hydro chairman and chairman of Scandinavian Airlines (SAS), says he testified that Reiten wasn't involved in any of the deals now believed to have involved bribery. PHOTO: ROLF ØHMAN  Questions have been raised about the motives of the probe ordered by StatoilHydro CEO Helge Lund. PHOTO: TORSTEIN LILLEVIK/STAVANGER AFTENBLAD |
An increasingly bitter conflict between StatoilHydro and Hydro continued to play out last weekend. The conflict, over alleged bribery at Hydro nearly a decade ago, has spread through the ranks of newly merged StatoilHydro, souring relations between former Statoil and Hydro employees and threatening the position of Hydro's chief executive officer.
It came to a head last week when each company issued widely differing results of their separate investigations into the alleged bribery. StatoilHydro immediately fired two top executives who had come from Hydro, while a third was pressured to resign.
Results of the probe by StatoilHydro, anxious to present a clean image after getting caught up in a bribery scandal of its own in Iran a few years ago, also brought Hydro chief executive Eivind Reiten's role into question. One of the key investigators for StatoilHydro, American attorney Karen Popp, even went on national television late last week and said they had no testimony from anyone other than Reiten himself that could confirm he wasn't aware of the alleged bribery payments.
That made former Hydro chairman Egil Myklebust, a highly respected elder stateman of the business world in Norway, "hop out of my chair" when he heard Popp's comments. Myklebust claims he gave testimony that cleared Reiten, and so did at least three others.
"Either she said things even though she knew better -- and that's not very comforting when she's sitting on on all the testimony -- or she hasn't read the testimony," another former director of Hydro, Thor Håkstad, told newspaper Dagens Næringsliv. "And that's not any better."
At issue is who knew what about questionable payments made to a Libyan consultant who was initially hired by a firm, Saga Petroleum, that Hydro took over in the 1990s.
That takeover meant that Hydro inherited agreements to pay the consultant, Abdurrazag Gammudi, who initially was supposed to help Saga Petroleum obtain oil field licenses in Libya. Hydro ultimately cancelled the deal with Gammudi, by paying him off a few years later.
Myklebust was Hydro's CEO in 2000, when one of the alleged bribery deals was agreed, and he claims Reiten wasn't involved then or when the deals were cancelled. "Libya came up at the top management level, but only in a limited manner," he told Dagens Næringsliv. "I didn't see any reason to get involved in something that could be handled at another level. Management new that we had an offer on licenses, and that I said no to them... but I didn't go into detail."
Several former Hydro employees suspect that StatoilHydro is keen to wash its hands of the bribery case by blaming it all on Hydro. Some suggest StatoilHydro is "out to get" Reiten. He already was forced to quit as chairman of the newly merged StatoilHydro when the bribery allegations first emerged publicly last year.
Union leaders at StatoilHydro have said the conflict is souring the work atmosphere within the company. Relations between former Statoil and Hydro workers reportedly have grown so tense that the chairman of both StatoilHydro and Hydro have asked the workers to tone things down.
Nina Berglund
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