Halliburton on Tuesday said it agreed to pay $7.5 million to settle and a Securities and Exchange Commission investigation involving its 1998 to 1999 disclosure of an accounting for the recognition of revenue from unapproved claims on long-term construction projects, Halliburton said in a statement.

“We are pleased to bring closure to this matter,” said Dave Lesar, chairman, president and chief executive officer, Halliburton. “The resolution of this issue and the pending resolution of the company’s asbestos liability will help us focus on strengthening our business in energy services and engineering and construction.”

Harold F. Degenhardt, Administrator of the Commission’s Fort Worth office, commented, “The SEC’s action today emphasizes the importance of complete transparency in a company’s financial disclosures. Important information bearing on a company’s results should be clearly and timely disclosed, even if those results are calculated in accordance with Generally Accepted Accounting Principles (GAAP).”

“The penalty against Halliburton serves as yet another reminder that the Commission will not tolerate lapses by companies that serve to delay or hinder the Commission’s investigative processes,” said Spencer C. Barasch, enforcement head in the Commission’s Fort Worth office.

The Commission approved these enforcement actions following a thorough investigation that included the review of approximately 340,000 documents and sworn testimony from 23 individuals. The company’s former Chief Executive Officer, Vice President Dick Cheney, provided sworn testimony and cooperated willingly and fully in the investigation conducted by the Commission’s career staff, SEC officials said.

Today’s enforcement actions include all of the charges that the Commission deemed appropriate in light of the investigative record developed by its staff. These actions conclude the Commission’s investigation of Halliburton’s 1998 change to its accounting practice.

Over six reporting periods, spanning approximately 18 months covering 1998 and 1999, Halliburton failed to disclose its change of accounting practice. In the absence of any disclosure, the investing public was deprived of a full opportunity to assess Halliburton’s reported income - more particularly, the precise nature of that income, and its comparability to Halliburton’s income in prior periods. It was not until March 2000 that Halliburton, in its 1999 Form 10-K, disclosed its change in accounting practice.

Halliburton neither admitted nor denied the SEC’s findings, but agreed to pay a $7.5 million civil penalty, and will take a charge of that amount in the second quarter of 2004.

(via U.S. Securities and Exchange Commission)