Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007
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 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

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UNITED STATES DEPARTMENT OF LABOR
OFFICE OF ADMINISTRATIVE LAW JUDGES

(1)

INDEX

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( 2)

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( 2)

( 3)

( 4)

( 4)

In the Matter of:

( 5)

ANTHONY MENENDEZ.

( 6)

( 5)

WITNESSES

DIRECT

JAMES PAQUETIE

68
By Mr.
Dulmage

ANTHONY MENENDEZ

194
By Mr.
Ahmad

( 6)

Complainant,

CROSS
156
Mr.

REDIRECT

RECROSS

VOIR
DIRE

180
187
By Mr. By Mr.
Dulmage Jordan

(7)

Case No. 2007-S0X-00005

(7)

( 8)

v.
( 8)

( 9)

HALL IBURTON. INC. ,

(10)
(11)

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Respondent.

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EXHIBITS

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Monday,
September 24, 2007

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(19)

(18)

BOB CASEY UNITED STATES
COURTHOUSE
515 Rusk Avenue
Courtroom #7006
(U.S. Tax Court)
Houston. Texas

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(23)

The above-entitled matter came on for hearing,
pursuant to notice, at 9:00 a.m.

IDENTIFIED

RECEIVED

COMPLAINANT'S EXHIBITS
1. 2
19, 22, 23, 25
27, 29, 31
39 through 50
80
167
221

56
56
56
57
57
57
67

59
59
59
59
59
59
68

RESPONDENT'S EXHIBITS
1 through 35
36, 37
38 through 57
59, 63

63
63
63
63

65

REJECTED

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65
65

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BEFORE:

HONORABLE PATRICK M. ROSENOW,

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( 1)

APPEARANCES:
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( 5)
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( 8)
( 9)

On behalf of the Complainant:
Howard T. Dulmage, Esqui
McCORMICK HANCOCK NEWTON
1900 West Loop South, Suite 700
Houston, TX 77027
(713) 297-0700
Ahmad, Esquire
ZAVITSANOS &ANAIPAKOS, P.C.
3460 One Houston Center
1221 McKinney Street
Houston, TX 77010
(713) 655-1101

(16)
(17)

(5)

matter of Mr. Anthony Menendez, the petitioner, versus

(6)

Halliburton, Incorporated as respondent. It's being - this

(7)

formal hearing is being conducted pursuant to the employee

(8)

protection provisions of the Sarbanes-Oxley Act as codified

(9)
(10)

at 18 United States Code Section 1514(a). It's OALJ Number
2007-S0X-5.
I am Patrick Rosenow. I'm the Administrative Law
Judge who has been assigned to conduct the hearing in this

On behalf of the Respondent:

(13)

W. Carl Jordan, Esquire
Corey E. Devi ne, Esqui re
Mauro Ramirez, Esquire
VINSON &ELKINS LLP
First
Tower
1001
n Street, Suite 2500
Houston, TX 77002
(713) 758-2787

(14)

case and make findings and recommendations. The matter has
been properly approved by the Chief Administrative Law
Judge, Office of Administrative Law Judges of the Department

(12)

(15)

JUDGE ROSENOW:
We're on the record, and the
hearing will convene. This is a formal hearing in the

(12)

(11)

(14)

(3)

(4)

PRO C E E DIN G S
10:57 a.m.

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(10)

(13)

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(15)

(17)

of Labor.
At this time, I'd ask counsel for both sides to

(16)

(18)

enter their notices of appearance on the record, and we'll

(19)

start with counsel for Mr. Menendez, please.

(20)

MR. AHMAD:
Your Honor, Joe Ahmad and Howard
Dulmage on behalf of complainant, Mr. Tony Menendez.

(18)
(19)

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(20)

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JUDGE ROSENOW:

(23)

MR. JORDAN:

(21)
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(25)

Thank you.

Your Honor, I'm Carl Jordan, Corey

(24)

Devine, my associate, on behalf of the respondent,

(25)

Halliburton. Also with us are Mr. Mark McCollum, chief

Page 1 to Page 4

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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accounting officer of Halliburton, Mr. Jim Boa, the head of

(2)

litigation for Halliburton, and our youngest associate, Mr.

(2)

nature of the job. In fact, at a later point - and one of

(3)

Ramirez.

(3)

the Halliburton witnesses testified about this, when Mr.

JUDGE ROSENOW:

Thanks very much for your presence

(1)

Page 7
on all technical accounting issues. That was the very

(4)

Menendez suggested perhaps that he should report to another

(5)

today. We started - I had an informal conference with

(5)

(6)

counsel before we started going over some scheduling

(6)

vice president, Mr. Muchmore, Mr. Muchmore testified it
didn't make any sense because his whole job was to advise

(7)

matters. Counsel - Mr. Menendez's counsel indicated to me
that they anticipated that, although they had provided a

(8)

(4)

(8)

(9)

(7)

the chief accounting officer so that's who he should report
to.

(10)

large number of documents as potential exhibits, that they
in fact were not going to offer all of those at this time

(9)
(10)

And he was told specifically by the chief
accounting officer, Mr. Mark McCollum, tllat he was to be a

(II)

for inclusion in the record, and they would - but, as far

(12)

as the - I think there were, like, in excess of 200

(11)
(12)

Smokey the Bear is the term that was used, in other words to
make sure that there weren't any fires, prevent any fires to

(13)

documents that were previously offered, but they - counsel

(13)

the company, and specifically to keep his name, as he said,

(14)

for petitioner clarified that they didn't intend at this

(14)

out of The Wall Street Journal.

(15)

time to offer all of those and make them part of the record.

(15)

But there was a problem with that. The problem

(16)

So we still

(16)

was that, in tlle course of preventing any fires, what Mr.

(17)

objections to deal with, don't you think?

(17)

Menendez found was that the accounting in general was in

(18)
(I 9)

counsel, we're still going to have some

MR. JORDAN:

I think we're just going to have one

(18) pretty poor shape, and putting out fires or preventing fires
(19) essentially meant implicating past accounting treatment at
(20) Halliburton.

(20)

set of objections?
JUDGE ROSENOW:

(21)

Well, I also told counsel that I was just a little bit out

(21)

And that's what really got Mr. Menendez in

(22)

of order for I how I normally run hearings, but I think it

(22)

trouble, because that is what the company did not want

(23)

would be helpful to have the opening statements come first.

(23)

exposed. The did not want, for example, a restatement of

(24)

I'd get a chance to ask some questions, and tllat would allow

(24)

past accounting treatments. But, implicitly, if Mr.

(25)

me to put both sides' theory of the case in context and

(25)

Menendez was going to say there's got to be a change in the

One set of objections? Okay.

(1)

probably more effectively rule on any objections that deal

(1)

future for our accounting treatment because the way we're

(2)

with relevance, in particular. So, with that in mind, go

(3)

ahead, and I' II let you go ahead and give me a brief and
pithy opening statement.

(2)
(3)

doing it systematically is wrong - well, that's the way
they had been doing it in the past. And it became a
problem.

(4)
(5)

(6)

(7)
(8)
(9)

MR. AHMAD:

Well, thank you, Your Honor.

OPENING STATEMENT OF COMPLAINANT
MR. AHMAD:

And I'll say at the outset that we

welcome questions. Obviously, some of this is eitller
complicated or we may not be doing a very good job of

(4)
(5)

There are a number of items that Mr. Menendez

(6)

brought up, but there were two general items, one concerning

(7)

revenue recognition, another concerning joint ventures. And

(8)
(9)

these issues were somewhat complicated but also relatively
recent, because both of them had - some accounting

(10)

understanding it - or, making it clear, and certainly

(10)

guidances had come out in the case of the joint ventures, I

(11)

that's our goal, so feel free at any time to interrupt and

(11)

(12)
(13)

ask questions.
We're here today, Your Honor, because of what Tony

(12)

tllink, there was a guidance FIN-46, which had come out, I
believe, in 2004.

(14)

(14)

(15)

Menendez did in the course of his accounting duties while he
worked as the director of technical accounting and research

(16)

while at Halliburton. Mr. Menendez started at Halliburton

(16)

(17)

in March of 2005.

(17)

(18)

He had worked as an accountant at various odler

(18)

(19)

firms, accounting firms, as well as Marathon Oil. He was

(19)

(20)

told when he was hired tlut he was going to be reporting to

(20)

(21)

the chief accounting officer. In fact, there had been a

(21)

(13)
(15)

JUDGE ROSENOW:
I'll expose my lack of accounting
knowledge right off the bat. I understand the SAB' s are SEC
mles, either directly or indirectly, right?
MR. AHMAD:

That's how I llnderstand it, Your

Honor.
JUDGE ROSENOW:

Okay. The FIN's, do they also

have the weight of SEC mles?
MR. AHMAD:

I don't know about that, and I

my

understanding is, not necessarily.

(22)

switch immediately before him being hired, and that switch

(22)

(23)

resulted in him reporting directly to the chief accounting

(23)

will - I mean, if it's something that's clear and you knew

JUDGE ROSENOW:

Okay. And 1'111 sure the record

(24)

officer.

(24)

(25)

And he was to advise tlle chief accounting officer

(25)

that and both sides are going to go, yeah, I mean, we know
that-

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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Page 9
I don't necessarily -

(1)

MR. AHMAD:

(2)

JUDGE ROSENOW:

(3)

MR. AHMAD:

(4)

JUDGE ROSENOW:

(5)
(6)
(7)

(8)
(9)

(10)

MR. AHMAD:

All right.

- think that's the case.
All tight.

(3)
(4)

important about delivery is that, if you do not meet
delivery, the way you recognize revenue - the only way you

But, in any event, there was a certain

(5)

can recognize revenue is to meet some factors called the

guidance, but I don't know that Halliburton contests that it
has to follow, let me put it that way, that's called FIN -46

(6)

(7)

bil1-and-hold factors. And I'll go into that in a little
bit.

(8)

But essentially bil1-and-hold means you are

that applies to certain joint ventures. The other issue
with respect to revenue recognition concerned two primary
issues, and if I could have the PowerPoint, I'd like to

(11)

there's a very brief PowerPoint that I think will help

(12)

explain this point. The basis element of revenue

(13)

recognition, which is in SAB 104 -

(14)

(1)

(2)

Page 11
would expect, physical delivery to the customer. In this
particular case and we can go to the next slide - what's

JUDGE ROSENOW:

Are we going to get hard copies?

(9)
(10)

billing for and you are holding it. In other words, you
haven't delivered it to the customer, the customer hasn't

(11)
(12)

taken physical possession. In either event, however, there
is another guidance called EITF - I think it's Emerging

(13)

Issues Task Force - 00-21. And, whichever way you go,

(14)

delivery or bill-and-hold, you have to meet those factors,

(15)

And I know they're demonstrative evidence, but they need to

(15)

as well. That also became an issue with respect to Mr.

(16)
(17)
(18)

be part of the record.
MR. AHMAD:
I can have a hard copy.
JUDGE ROSENOW:
Yeah, if you could do that? Now,

(16)
(17)

Menendez, but I want to stick on this issue, which is
delivery and bill-and-hold.

(19)

I mean, not a big deal, but it just makes it absolutely

(18)
(19)

JUDGE ROSENOW:
Okay, let me ask you about the
EITF. Same question I had about the FIN, is the EITF a

(20)

clear to somebody reading the transcript what you're

(20)

specific SEC guidance, or is it more along the lines of

(21)

referring to and what you're looking at.

(21)

generally accepted accounting principles?

(22)

Yes, and this comes right out of, by

(22)

(23)

the way, one of the exhibits, which is SAB 104. I will say

(23)

(24)

at this point, just for form of clarification, SAB 104 when

(24)

1046 and BITF. It is not, as I understand, an actual SEC

(25)

it first came out, which I believe may hav,e been 1999 or

(25)

rule by itself, it's just simply the SEC rules require -

(I)

(2)
(3)
(4)

(5)

MR. AHMAD:

2000, was actually called SAB 101.
JUDGE ROSENOW:
Okay. But this isn't the exhibit
itself?
MR. AHMAD:

This is not the exhibit.

JUDGE ROSENOW:

Okay, that's fine. I'mjust

(1)

MR. AHMAD:

Well, it's - the SEC rules, as I

understand them, require compliance with these rules, like

JUDGE ROSENOW:

Right at this point of opening

(2)

statements, it's not absolutely crystal clear where it's

(3)
(4)

something everybody agrees on, so it's something I'll have
to glean from the record, and you'll show me why it does

(5)

have the force and - but it's not a clear-cutMR. AHMAD:

Well, we believe, Your Honor - and we

(6)

trying to make the record as clean as possible. If it's an

(6)

(7)

actual exhibit, obviously I wouldn't have to have it, but if

(7)

will make this clear later on - that ultimately what the

(8)

it's just a summary then I do need it in the record.

(8)

company did not do, by not complying with all of these

(9)
(10)
(11)
(12)

MR. AHMAD:

And we will provide this exact

PowerPoint presentation.
JUDGE ROSENOW:
Okay.
MR. AHMAD:
Now, what is up here, it leads to the

(9)

rules, it ultimately led to materially misleading public

(10)

filings, which, of course, is a violation of 10-B-5 of the

(11)

Securities Act, the 34 Act as well as Section 12A of the
Securities Act. And I will talk about that, the violations
of that injust a second.

(12)
(14)

(15)

bullet points up here, are actual quotes from SAB 104, and
that is, in order to recognize revenue, you have to have
these four bullet points met. And there really isn't a

(15)

In any event, Mr. Menendez, in pointing out that
you either had to meet the delivery factor and, if you
did not meet physical delivery to the customer, then you had

(13)

(14)

(13)

(16)

dispute, at least as far as we can tell, but you have to

(16)

(17)
(18)

meet these four elements.
One of the major issues that Mr. Menendez brought

(17)

to go to bill-and-hold. But bill-al1d-hold is something that

(18)

has been the subject of a lot of accounting research, as

(19)

up is the issue ofrecognizing revenue improperly because

(19)

well.

(20)

delivery had not occurred and the services had not been

(20)

If we can go to the next slide, these are the

(21)

rendered. And the main issue in this particular instance

(21)

bill-and-hold criteria, and these criteria I don't believe

(22)

was, had there been delivery.

(22)

are disputed. I'll go to number four right now, because

(23)

(23)

that's probably the easiest one to talk about, fixed

(24)

As Mr. Menendez can explain, as is in the
accounting literature - and, in fact, some of Halliburton's

(24)

schedule for delivery of the goods.

(25)

own research - delivery means, of course, just what you

(25)

It is undisputed that number four is not met with

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 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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(I)

Page 13
respect to product that Halliburton sells, and I want to

(1)

Page 15
is possible to separate out the actual amount for the

(2)

talk about why. The customary way - and this is absolutely

(2)

product as opposed to the amount for the services. In fact,

(3)

clear and been tnte for years and years, the customary way

(3)

there are a lot of discounts that are given for the product.

(4)

that Halliburton does business, first of all, it is

(4)

But, in any event, delivery - physical delivery, has not

(S)

primarily a services company, oilfield services company.

(S)

been met.

(6)

It sells product in conjunction with those

(6)

We can go to the next one. And these are the

(7)

services. For example, one product might be completion

(7)

bill-and-hold criteria. And, again, it appears that the

(8)

tools. They will manufacture a product, and then they will

(8)

company is essentially taking a few - three of the bill-

(9)

install the tool. Now, traditionally and customarily in

(9)

and-hold criteria and indicating that is sufficient to meet

(10)

Halliburton's business, what it does is, it delivers the

(10)

revenue recognition, although it is undisputed that the

OJ)

(11)

company must meet all seven. Okay, that's fine.

(12)

product to a Halliburton warehouse which will be located
near the rig site, the rig site being the customer's.

(12)

Mr. Menendez brought this issue up with the

(13)

And what they will do is, they will hold that

(13)

company, and he also brought up - I think I mentioned it

(14)

product until it is needed by the customer, and there is no

(14)

earlier - an issue about joint ventures. The issue with

(1S)

way of telling when it will be needed. It is just held out

(1S)

joint ventures concerned consolidation. In other words,

(16)

there, and, depending upon the schedule of the rig and

(16)

whether or not the company had to account for the joint

(17)

depending on how things progress, which is wildly

(17)

venture as if it were its own, or whether essentially it

(18)

unpredictable, it will go out whenever it is needed.

(18)

could treat it as an investment and therefore it didn't have

(19)

And, because of that, it is undisputed, for

(19)

to record the gains and losses of the joint venture in its

(20)

example, that number four is not met. Number four is not

(20)

own books.

(21)

met because of the way Halliburton does business. They do

(21)

What this would do, for example, is, in a

(22)

not have a fixed schedule of delivery from the warehouse to

(22)

deconsolidation situation, it would allow the company to

(23)

the rig.

(23)

essentially improve its margins, because it would look like

(24)

Okay, if we can go to the next, so they cannot be

(24)

the company is on a percentage basis more profitable than it

(2S)

bilI-and-hold, and they are not delivering to the customer.

(2S)

really is.

(I)

The typical way they do business is, they keep possession

(1)

Page 16
And tllere has been some testimony by Mr. Muchmore,

(2)

and keep it in their own warehouse, and then we say they

(2)

and typically, especially in a situation where the joint

(3)

don't meet bill-and-hold.

(3)

venture has losses, if you can avoid putting those losses on

(4)

And Halliburton's approach - and this is what -

(4)

your books and view this as an off-balance-sheet, then you

(S)

this is coming out of their 2005 lO-K, is they say they will

(S)

(6)

recognize revenue when title taxes

(6)

will improve - the more favorable accounting treatment is
certainly deconsolidation.
And that is essentially what was being done with

when the customer

(7)

assumes risks and ownership - assumes the risks and rewards

(7)

(8)

of ownership, rather, and collectability is reasonably

(8)

untold number - about 150 joint ventures. Mr. Menendez

(9)

assured.

(9)

when he was hired started looking at this and realized that

(10)

Essentially what this is, is just a shortened

(10)

FIN-46 was not being adhered to. Number one, there was an

(II)

version of bill-and-hold, and what the company - even

(11)

anti-abuse clause in FIN-46 which says, look, you can't try

(12)

though it doesn't reveal this in the lO-K, it's position has

(12)

to strategically structure a company for the purpose of

(13)

been in this litigation is that, well, this is effective

(13)

getting favorable accounting treatment.
And in reality it looked like the company did not

(14)

delivery, even if it is not physical delivery.

(14)

(1S)

The problem with that is, of course, that, if the

(1S)

meet what it needed to meet in order to deconsolidate. For

(16)

rules were meant such that you could meet delivery by only

(16)

example, in order to deconsolidate, the company essentially

(17)

meeting three or four of the bill-and-hold criteria, there

(17)

had to be in a situation where it really didn't call the

(18)

wouldn't be any point to bill-and-hold in general. We can

(18)

shots.

(19)

go to the next slide.

(19)

In other words, if you had a joint venture that
Halliburton was a part of, but Halliburton essentially ran

(20)

In terms of delivery, we've talked about that not

(20)

(21)

being met, but there's also persuasive evidence of an

(2l)

everytllillg, then it was treated as Halliburton and should be

(22)

arrangement, we find out at least prior to 2005 that wasn't

(22)

on Halliburton's books completely. And Mr. Menendez found

(23)

being looked at. We also find out that tlle seller's fee for

(23)

that, with respect to a number of these entities, tlle rules

(24)

fixture and terminal hasn't been looked at.

(24)

were not being followed.

(2S)

In fact, even as of today, it is not clear that it

(2S)

And, sure, with respect to some of the entities by

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 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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(I)

Page 17
themselves was a fairly small amount, when looked at in

(1)

(2)

aggregate and it's a systematic failure to follow FIN-46, it

(2)

claim that sometimes they don't know whether they are going

(3)

was very significant. And that's where Mr. Menendez found

(3)

to install, for example, a tool and maybe somebody else will

Page 19
gone to the rig, even if Halliburton didn't know - and they

(4)

that there was a very serious problem, was that this was a

(4)

come in and install it - even if they didn't know while it

(S)

systematic failure.

(5)

was sitting in their warehouse, for example, then they

(6)

And this is why it's material. I know materiality

(6)

clearly would know when they deliver it to the rig.

(7)

is one of the major issues in this case. Mr. Menendez found

(7)

Nobody could suggest, for example, that the tool

(8)

that, if you look at all the joint ventures, it is a large

(8)

arrived at the rig and nobody knows who's going to install

(9)

amount of money. With respect to the bill-and-hold, the

(9)

it. But the problem is that, in the majority of the

(10)

revenue recognition, for example, on Halliburton products,

(10)

(11)

well, Halliburton sells about $2 billion a year in products.

(11)

servicing and installation work on that tool.

(12)

Its customary way of doing business is just the

(12)

And therefore when it arrives at the customer's

(13)

way I have outlined, sitting actually in a Halliburton

(13)

site, the rig, if there's going to be service done to that

(14)

warehouse and then later shipping it out to the rig. One

(14)

product, it still could not recognize revenue until the

situations, of course, Halliburton does end up doing the

(1S)

has to believe that a very large portion of this amount is

(1S)

service was actually completed. And so what Halliburton has

(16)

at issue in terms of bill-and-hold, because that is the

(16)

done is, instead of delivering it to the rig, by delivering

(17)

typical way to do business.

(17)

it to the warehouse it says, when we deliver it to the

(18)

Now, there had been some numbers bandied about in

(18)

warehouse, we don't know whether we're going to be the one

(J 9)

terms of materiality. One number has been that they checked

(19)

installing it or somebody else is, therefore we should be

(20)

in the third quarter of 2005 on what was at issue with

(20)

able to recognize the revenue now.

(21)

respect to bill-and-hold, but there has been a realize that

(21)

If they had delivered it to the rig, they wouldn't

(22)

- and Mr. Menendez is talking with a number of other

(22)
(23)

be able to do that because everybody would know who has to
perform the services on that tool and, if they were the one,

(23)

accountants about this problem, he wanted to see, well, just

(24)

how bad was it, i.e., were they going to have to restate.

(24)

Halliburton was going to be the one doing the service, they

(2S)

They started to look at it and realized how big it was going

(2S)

wouldn't be able to recognize the revenue then.

So the amount at issue certainly looks extremely

(I)

0

be, and they stopped looking any further.

(1)

(2)

At some point, Halliburton has bandied about

(2)

material, and this is reflected by the fact, for example,

(3)

numbers of, for example, a hundred and twenty-five as a

(3)

that, one, the company went to great pains to avoid changing

(4)

snapshot picture of customer-owned inventory, as they call

(4)

their accounting treatment. It would seem remarkably easy

(S)

it, a phrase that didn't exist anywhere prior to, I suppose,

(S)

for the company to simply say, we can recognize revenue when

(6)

2005 when they stalted looking at this.

(6)

the services are completed.

(7)

But, in any event, the inventory in their

(7)

That would be very easy. Instead what happened

(8)

warehouses, they claim, was about that much of the snapshot.

(8)

was, you had a consensus of a few people at Halliburton that

(9)

There's a number of problems with this. One, it does not

(9)

(10)

things were wrong in terms of revenue recognition, and Mr.

include a number of the joint ventures. Number two, for

(10)

Menendez - and some others - expressed that, look,

(11)

some reason it doesn't include sales to Saudi Aramco, which

(11)

delivery does not mean

(12)

is one of the biggest customers that Halliburton has.

(12)

of ownership, delivery does not mean that.

when you say title passing, risks

Mr. Menendez - and, in fact, another gentleman in

(13)

Thirdly, of course, it doesn't really reflect

(13)

(14)

what's at issue in bill-and-hold because a lot of the

(14)

accounting, Mr. SuIt - said, it's physical delivery, it's

(15)

product, for example, can be delivered and therefore leave

(1S)

not risk of loss. So tllere was this consensus, and then all

(16)

the warehouse, be delivered to the customer, but still

(16)

of a sudden, without Mr. Menendez being - knowing about it,

(17)

shouldn't be recognized, the revenue still shouldn't be

(17)

somehow people at Halliburton huddled up - perhaps with

(18)

recognized.

(18)

internal lawyers, it looks like - and came to the

(19)

And the reason for that is

(19)

conclusion that, no, they met delivered.

and was one of the

(20)

revenue recognition factors

(20)

When they did that - like I said, without Mr.

(21)

obligations with respect to that product, regardless of

(21)

Menendez knowing about it, but they did that also having

is, if you have continuing

(22)

whether there has been delivery, if you have continuing

(22)

legal research, et cetera, which looks completely irrelevant

(23)

obligations, the revenue recognition rules say you cannot

(23)

in terms of the actual accounting rules, it looks like they

(24)

recognize that revenue.

(24)

went out of tlleir way to try and avoid changing their

(2S)

Well, typically, by the time that that product has

(2S)

accounting treatment.

XMAX(5/5)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

(1)

Page 21
It also appears material - in fact, much smaller

(1)

whatsoever.

(2)

amounts of material, because they had some investor calls on

(2)

For example, the auditors who apparently had

Page 23

(3)

related issues, analyst calls, in which one of the analysts

(3)

approved this process, KPMG - and one of those auditors was

(4)

noted, for example, that, while the company was saying they

(4)

John Christopher - had specifically written an article

(5)

had a lot of operational activities, for example in the

(5)

indicating how an oilfield services bill-and-hold is very,

(6)

third quarter of 2005, revenue was down.

(6)

very common, number one, and that the bill-and-hold criteria

(7)

And, to somebody that doesn't know that the

(7)

are very, very difficult to meet.

(8)

company had recognized revenue early, that wouldn't make any

(8)

Now, Mr. Christopher and KPMG apparently, though,

(9)

sense. If there's a lot of activity, then you should have a

(9)

looked at this situation, where Halliburton, of course, is

(0)

lot of revenue. If you have the revenue early, of course,

(10)

the prototypical oilfield services company, and said, well,

(11)

then the activity can occur later.

(1)

apparently it's not that common, because in this situation

(12)

They were told that the reason for that was direct

(12)

Halliburton says it's not in a bill-and-hold situation at

(13)

sales, which didn't make any sense, because a direct sale is

(13)

all because they have had delivery.

(14)

a sale in which the product is delivered to the customer and

(14)

And Mr. Christopher wasn't the only person to

(15)

this customer has no services done by Halliburton, so you

(15)

opine that this was a bill-and-hold situation requiring

(16)

wouldn't see activity occurring later on.

(16)

deferred revenue. There have been many other experts in

(17)

So what, in fact, happened after that call was,

(17)

this field - there is a Mr. Bay less, and this is part of
exhibit 1 which was Mr. Menendez's filing with tlle SEC,

(18)

one of the analysts that asked that question - I believe an

(18)

(19)

analyst at JP Morgan who actually downgraded Halliburton

(19)

there's a Mr. Bayless, there's a Mr. Lynn Turner, there's a

(20)

because of questions about management credibility, and these

(20)

Professor Carmichael who we have contacted as an expert
witness in this case.

(21)

amounts, by the way, I think were in the amount of $10

(21)

(22)

million to $25 million, much lower than what looks to be at

(22)

All have opined the same thing, you can't get out

(23)

issue with respect to all bill-and-hoid.

(23)

of bill-and-hold simply by saying you're delivering a

(24)

Also, and perhaps most importantly, is what Mr.

(24)

product to yourself. You,have to have either physical

(25)

Menendez saw was an intentional violation of GAAP in order

(25)

delivery or bill-and-hold. And, by the way, all the experts

(1)

to manipulate the public filings to mislead shareholders,

(1)

agree bill-and-hold is almost impossible to meet. In fact,

(2)

and that is ultimately what got him in trouble, because, as

(2)

nobody has ever even heard of a situation where somebody has

(3)

these issues are being vetted, Mr. Menendez is told - in

(3)

met bill-and-hoid.

(4)

fact, people at Halliburton have testified to it in this

(4)

It is not a situation that hasn't come up before.

(5)

case - that essentially Mr. Menendez should have let this

(5)

There have been other companies who have gotten in trouble

(6)

go.

(6)

with the SEC, similar companies who have gotten in trouble

(7)

And that is abundantly clear. We have taped

(7)

with the SEC because they bill-and-hold and recognize

(8)

conversations with Mr. Menendez about it where it's revealed

(8)

revenue too early.

(9)

that basically ifhe doesn't play ball or be a team player

(9)

Grant Prideco is one company that comes to mind.

(10)

he's going to get run over. It's also been testified to by

(10)

Matter of fact, that situation came up when Mr. Menendez was

(11 )

Halliburton folks that they thought that, well, yes, while

(11)

at Halliburton, and, in an e-mail they were discussing this

(12)

Mr. Menendez was right and had some valid concerns

(12)

issue about Grant Prideco where others in Halliburton staff,

(13)

initially, they didn't believe it was appropriate to keep

(13)

accounting staff, said, boy, this situation looks just like

(14)

raising it and to keep pushing it.

(14)

ours. Well, sure enough, it was, although Halliburton

(15)

Well, he did keep pushing it, and the reason he

(15)

wasn't going to change its accounting system.

(16)

kept pushing it was because he believed it was fraudulent,

(16)

In any event, as I said, in the course of pushing

(17)

and he believed that they were intentionally violating GAAP.

(17)

these issues, both at Halliburton, and then later in

(18)

An intentional violation of GAAP, the generally accepted

(18)

November of2005, Mr. Menendez went to the SEC. And when

(19)

accounting principles, should be undisputed, and I believe

(19)

they found out, they opened up an inquiry. In February of

(20)

it is, that that is in and of itself material, because it

(20)

2006, he went to tlle audit cOUlmittee.

(21)

affects management credibility.

(21)

At that point, there was an e-mail sent out by Mr.

(22)

And that is also sometlling that Mr. Menendez had

(22)

McCollum informing everybody that Mr. Menendez had gone to

(23)

complained about. Now, he was particularly concerned about

(23)

tlle SEC. And he had, but that apparently was just an

(24)

that, by the way, because when he got the answer back, which

(24)

assumption because he had gone to the audit committee. When

(25)

he hadn't been a part of, he didn't find any support for it

(25)

he made his audit committee filing, the first tlling that

XMAX(6/6)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(J)

Page 25
went out is, they notified the CFO of the company. In fact,

(1)

Page 27
Menendez. And, regardless of whether he had been promoted

(2)

the notified the CFO even before they notified the audit

(2)

or not, Mr. Menendez didn't know it, and the company sure

(3)

committee, even though it's a complaint to the audit

(4)

committee.

(3)
(4)

made it seem like he was going to have to report to somebody
that was on his same level.
So that was - together with the fact that the

(5)

In any event, one can imagine the reaction when

(5)

(6)

virtually everybody in the department now knows that you are

(6)

company ultimately was not going to comply witll the law, was

(7)

the one that has gone to the SEC and blown the whistle.

(7)

not going to comply Witll GAAP and was not going to correct

(8)

Well, after that, the phone calls came to an abmpt halt,

(8)

the faults and misleading statements it was making to the

(9)

pretty much.

(9)

public, ultimately led Mr. Menendez to say, as any hopefully

(10)

The e-mails came to an abmpt halt, pretty much.

(10)

reasonable accountant would in his shoes, that he could no

(11)

Nobody was talking to him. Matter of fact, the auditors,

(11)

longer work with this company.

(12)

KPMG, said point-blank, we are not going to deal with Tony

(12)

And after he got that letter saying that he would

(13)

Menendez. Ultimately he tried to keep doing his job, but he

(13)

be no longer reporting to the chief accounting officer,

(14)

learned that it was virtually impossible.

(14)

which Mr. Muchmore at Halliburton, the former chief

(J 5)

And, in March, late March of 2006, he went on

(15)

accounting officer, said was the essence of job, seeing that

(J 6)

administrative leave. Even before that time, however, it

(16)

his job had essentially been taken away already, saw no

(17)

was like the company had determined that it was going to

(17)

point in going back and informed them that essentially he

(18)

remove the only thing that he was responsible for prior to

(18)

could not go back, given what the company had done.

(19)

going on leave.

(19)

Therefore, we believe Mr. Menendez has shown an

(20)

The two things he was responsible for were being

(20)

adverse employment action, and we have some briefing about

(21)

on a team called RTA, which is another joint venture in

(21)

the adverse employment action standards under Sarbanes-

(22)

terms of how to do tlle accounting treatment for that, and,

(22)

Oxley. As the Court will see, they are very broad, the

(23)

two, doing training on revenue recognition. And, even

(23)

broadest that I have ever seen in terms of mentioning tllings

(24)

though it hasn't been admitted, it appeared pretty clear

(24)

like demote, harass, threaten.

(25)

that the reason they didn't want to have him do revenue

(25)

It's also clear - by the way, the United States

(1)

recognition training is they believed that he might teach

(1)

Supreme Court bulletin applies under Sarbanes-Oxley. In

(2)

revenue recognition principles that were inconsistent with

(2)

fact, the ARB specifically held that just a few weeks ago.

(3)

Halliburton's accounting treatment. So they took both of

(3)

In any event, the following facts - and I've already

(4)

those away from him, and that was the only thing he was

(4)

mentioned some of this already - was the causation.

(S)

doing.

(S)

Well, first of all, there wasn't any reason for

(6)

But later, when he was going to come back from

(6)

doing the actions that they took against him, taking away

(7)

leave in October of 2006, he had filed a charge with the

(7)

his duties, for example, taking away the fact that he was

(8)

Department of Labor. In May of 2006, he filed a Sarbanes-

(8)

going to report to the chief accounting officer, other than

(9)

Oxley complaint, so now he's gone to the SEC, he's gone to

(9)

he had gone to the SEC, gone to the audit committee and

(10)

the audit committee and he's filed a Sarbanes-Oxley

(10)

complained about illegal accounting practices.

(11)

complaint.
And after that, approximately in September of

(11)

And the justification, for example, for taking

(12)

(12)

away the ability to report to the chief accounting officer

(13)

2006, just before he's scheduled to come back from leave, he

(13)

was that the chief accounting officer had too many reports.

(14)

was told that he would no longer be reporting to the chief

(14)

But apparently, other than Mr. Menendez and some people who

(IS)

accounting officer if he came back, instead he would report

(15)

were only temporarily reporting to Mr. McCollum, nobody else

(16)

to a gentleman named Charlie Geer.

(16)

was affected by that.

(17)

And tlley described Mr. Geer's position as a

(17)

And it's fairly clear

(18)

position that Mr. Menendez understood as a director, which

(18)

conversations, and these are in the taped conversations but,

(19)

was the same position that Mr. Menendez had. In fact, they

(19)

frankly, it's also in current deposition testimony that the

(20)

were - as far as Mr. Menendez knows, they were essentially

(20)

company's issue with Mr. Menendez was that he wouldn't let

(21)

at the same level.

(21)

go of tlle past accounting treatment, he wasn't going to let

(22)

Now, Halliburton has indicated that three montlls

(22)

go of the fact that tlle company had issued some misleading

(23)

before Mr. Geer went - as soon as Mr. Menendez went on

(23)

information in tl1e fact and tlley needed to stop it in the

(24)

leave, Mr. Geer was then promoted, but for some reason this

(24)

future, and he needed to let go ofthat and attend to otller

(2S)

promotion is not ref1ected in the letter that they sent Mr.

(25)

things.

again, if you hear ilie

XMAX(7/7)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(I)

Page 29
Mr. McCollum states in a conversation, for

(1)

particular industry.

(2)

example, that - this is his statement

(2)

This is a hard cash revenue industry, and we're

(3)

to make money, okay? It's not to write off investments, all

(3)

talking about revenue that was received by the company, and

(4)

right? That's not a value-added exercise, all right? SO,

(4)

the argument between Mr. Menendez and his colleagues - and

(S)

when you come in and you say we've got a $10 million hit,

(S)

it was more than with just Mr. McCollum. It was with

(6)

well, you know, that gets people excited around here,

(6)

virtually everybody in the finance and accounting group,

(7)

because we just destroyed $10 million of shareholder value,

(7)

there was colleagues, it was not whether tile income was real

(8)

right'? Okay? Since people are going to start taking a hit,

(8)

or what earnings period to appropriately book it in.

(9)

that's expected. If they didn't do it, I would fire them.

(9)

In fact, in some instances, Mr. Menendez took the

our company job is

Page 31

(10)

You know, people shouldn't just roll over and take it and

(10)

position that parts and products that had been delivered by

(II)

just ignore it.

(11)

Halliburton to customers years before and paid for by the

(12)

He tells Mr. Menendez, in order for you to be

(12)

customers, that just happened to still be sitting in a

(13)

successful in the organization

(13)

Halliburton warehouse somewhere because the customer hadn't

(14)

of his complaints about the accounting treatment - he says,

(14)

needed it on the particular well that it was ordered for,

(15)

in order for you to be successful you have to recognize that

(1S)

but it was still tile customer's property, that Halliburton

and this is in the context

(16)

it's a political reality and deal with it.

(16)

should not be allowed to recognize revenue on that. In some

(17)

And then later on says that the problem with -

(17)

cases, we're talking about parts that were 10 years old or

(18)

that the problem is that if you think that the answer is,

(19)

I'm going to just SOli of run over it, okay, what will

(18)
(19)

older, where the monies had been received more than a decade
before.

(20)

happen to you here is that the process will um over you,.

(20)

Neither had there been any changes in recent years

(21)

Because the relationships will be damaged, people will not

(21)

in Halliburton's accounting practices in tile areas that

(22)

trust, you know, and quickly you will find yourself

(22)

we're concerned with. This is tile way the company has

(23)

irrelevant because they will work around you, okay? That's

(23)

always done it. There haven't been any recent changes to

(24)

not what you want, and that's not what I want.

(24)

try to again inflate the earnings statement or the financial

(2S)

The fact of the matter is that Mr. Menendez is

(2S)

statements.

(I)

simply being told, look, be a team player, let this go. The

(1)

In fact, if anything, Halliburton has growl1more

(2)

fact of the matter is, when he went and he wouldn't let it

(2)

conservative in its accounting practices in recent years,

(3)

go and he went forward, went to the audit committee, went to

(3)

including its revenue recognition practices, in view of the

(4)

the SEC, went to the Department of Labor, that was what

(4)

changes in GAAP and other accounting bills that have

(5)

Halliburton had an issue with and took issue with, and

(S)

occurred.

(6)

that's why they took these actions against him and had him

(6)

Now, Mr. Menendez raised issues in his - at least

(7)

moved to his job, and that is why we're here today, Your

(7)

his initial complaints to the SEC and the alldit committee of

(8)

Honor. Thank you.

(8)

the board of directors in three areas. They call them

(9)
(10)
(11)

(12)

(9)

customer-owned inventory - that's what Mr. Ahmad was

Thank you, Your Honor.

(10)

referring to as bill-and-hold, we don't believe it was bill-

OPENING STATEMENT OF RESPONDENT

(11)

and-hold, it was customer-owned inventory, multiple-element

(12)

arrangements - that's the Emerging Issues Task Force 00-21

JUDGE ROSENOW:
MR. JORDAN:
MR. JORDAN:

Okay, thank you. Mr. Jordan?

First, I'd like to spend a minute or

(13)

two to put some of these accounting allegations or claims in

(13)

area, and then variable interest entities, the joint venture

(14)

perspective. Halliburton is one of the oldest and most

(14)

issue which was the FIN-46 issue.

(15)

highly regarded oilfield services companies in the world, in

(15)

All three of these areas are developing, they are

(16)

operation since about 1911.

(16)

very complex, they involve gray areas, and they require

(17)

Their operations span the globe, and they have for

(17)

interpretive judgments with respect to which reasonable

(18)

many years. Their business is not one where an accountant

(18)

accounting professionals may differ in their judgments. Mr.

(19)

or anybody else can book revenue or earnings in order to

(19)

Menendez didn't believe that.

(20)

pump up the financial statements without hard, cold cash

(20)

He saw everything in black and white, and he

(21)

coming in.

(21)

tilOught he was always right and everybody else was always

(22)

That's been the situation in most of these

(22)

wrong. But the audit committee of the board of directors,

(23)

headline accounting fraud cases we've seen over the last

(23)

the Securities and Exchange Conmlissiol1, the government

(24)

year, where companies are reporting revenue income and not

(24)

entity tilat has oversight responsibility for public

(2S)

really generating it. That would be impossible in this

(2S)

accounting firms, and the Department of Justice, all of whom

XMAX(8/8)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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Page 33

Page 35

(1)

Mr. Menendez and his lawyers lobbied mightily to take action

(1)

United States. It's on the Gulf Coast. It's offshore.

(2)

against Halliburton, and all of whom he submitted quantities

(2)

It's big stuff. They are custom-manufactured for 1110st of
dlese customers at a manufacturing facility. The purchase

(3)

and quantities and quantities of Halliburton's documents

(3)

(4)

which he took without authorization, as well as his own

(4)

order of a contract, at the customer's direction, instmcts

(S)

testimony, after reviewing his allegations for months, none

(S)

Halliburton to shift this product to a location dlat is
usually a Halliburton warehouse that's proximate to the well

(6)

of those entities, none of those bodies, saw any reason to

(6)

(7)

require Halliburton to change anything about its accounting

(7)

site so dlat, when the driller needs it, they can get it

(8)

practices.

(8)

very promptly.

(9)
(10)

And KPMG, the company's independent auditors whom
Mr. Menendez is also attempting to vilify, opined that there

(9)
(10)

These things are shipped via common carrier, FOB
terms, eidler from Halliburton's manufacturing location or

(11)

was a reasonable basis for every accounting practice that he

(11)

FOB through the warehouse facility the customer has said

(12)

challenged.

(12)

send it to. Their inventory is held temporarily in that

(13)

Now, I don't want to leave the Court with the mis-

(13)

warehouse until the customer needs it.

(4)

impression that Mr. Menendez did not find problems. He

(14)

As I said before, in some cases the customer may

(IS)

found some problems. And, when he brought them to Mr.

(1S)

not need it. It may be a backup in case there's a failure

(16)

McCollum and others' attention, and people have believed

(16)

or something like that, in which case it can sit in a

(17)

that there were problems, adjustments were booked. There's

(17)

warehouse, if the customer doesn't need it on the well, for

(18)

no dispute about that. Mr. Menendez has admitted that.

(18)

a decade. But the customer will have paid for it a decade

(19)

We do not think, of course, that the purpose of

(19)

ago, and the customer understands it has no right of return

(20)

this proceeding is to adjudicate the correctness of

(20)

on that product, and Halliburton has booked that income.

(2 [)

Halliburton's accounting practices. We think that should be

(21)

We believe that we can book the income once the

(22)

left to the independent auditors, to the audit committee of

(22)

product is shipped from the manufacturing facility and

(23)

the board, to the appropriate governmental entities, the

(23)

because we believe the customer has taken delivery, which is

(24)

Securities and Exchange Commission.

(24)

the only issue under SAB 104. And SAB 104 says that the

(2S)

The issue in this case we think is, was he

(2S)

customer can direct delivery to an intermediate site rather

Page 36
retaliated again for having raised alleged accounting

(1)

(2)

improprieties that rose to the level of legal violations

(2)

title has passed, listed on our shipping manifest, its

(3)

inside the company and outside the company. We believe the

(3)

collectability is reasonably assured - in many cases, it's

(1)

than to its own location, and, as long as it does that and

(4)

evidence in this case will show that the company exercised a

(4)

already been paid, but at least it's been billed, and

(S)

high degree of caution to avoid just such claims as what Mr.

(S)

collectability is reasonably assured, then it's properly

(6)

Menendez is raising in this proceeding.

(6)

recognized to revenue.

(7)

And we believe the evidence will show that there

(7)

That's the practice that Mr. Menendez argued so

(8)

was no retaliatory motive on the part of Mr. McCollum or

(8)

forcefully and vehemently against while he was at the

(9)

anyone else, and in addition that there was no materially

(9)

company. It is false tlmt the suggestion he makes that
there was a consensus that agreed with his view is blatantly

(l0)

adverse employment action that was taken against Mr.

(10)

(11)

Menendez because of his complaints.

(11)

false. That is not tme.

(l2)

Now, before I move to retaliation issues, I would

(12)

He raised these issues, people talked about it,
Mr. SuIt was relatively new in his job, he was a director

(13)

like to say a couple things in response to some of the

(13)

(14)

things Mr. Ahmad said about the accounting issues. First,

(14)

working for Mr. McCollum, he had some concerns about it, and

(IS)

as I indicated, Hallibmion' s position is that most of its

(1S)

he - and Mr. SuIt and Mr. McCollum decided to have

([6)

customer-owned inventory that it holds in various warehouses

(16)

restudied again.

(17)

scattered around the world do not fall under the bill-and-

(17)

It had been studied in 200212003 with the

(18)

hold criteria.

(18)

conclusion that they could recognize revenue because it had

(J 9)

They are dealt with under SAB 104. The only issue

(19)

been delivered, they decided to restudy it. And a White

(20)

in this case about SAB 104 and the only issue that Mr.

(20)

Paper was produced, and the White Paper came to the same

(21)

Menendez raised at the time was whether or not delivery had

(21)

conclusion, tllat the business practice was appropriate. And

(22)

been made. These are parts, for the most part, in the

(22)

the only person tllat took issue with conclusions in that

(23)

completion tools division of Halliburton dlat are custom-

(23)

White Paper - dmt argued that they were incorrect, that he

(24)

manufactured for wells.

(24)

was right and everybody else was wrong - was Mr. Menendez.

(2S)

In the United States, it's - most of it is in dIe

(2S)

Now, Mr. Ahmad also mentioned EITF 00-21 that

XMAX(9/9)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 37
deals with the multi-element arrangements. Often

(1)

Page 39
But they did not change the accounting treatment

(2)

Halliburton will be hired to produce a part and then to

(2)

with regard to other joint ventures, and Mr. Menendez had a

(3)

install that part at the wen site when that time comes.

(3)

real problem with that. Most of - except for Welldynamics,

(4)

Under 00-21, if those two elements - the product and the

(4)

most of these Halliburton joint ventures are pretty small

(5)

service

(5)

entities, and in the aggregate I think it's only about $200

(6)

proper for the company to recognize revenue on the product

(6)

million of assets. But for a $20 billion company on the ESG

(7)

at such time as it meets the requirements of SAB 104.

(7)

side, that's what, about $10 billion, that's not a lot of

(8)

And it has done so when it meets that - and has

(8)

revenue.

(9)

done so when those two elements, product and service, can be

(9)

Now, with regard to retaliation, I think the

can be divided for accounting purposes, then it's

(10)

separated. Where it cannot separate them, it defers revenue

(10)

(1)

until the service is complete. In cases where it's a

(11)

evidence will show that Mr. Menendez is a highly
intelligent, knowledgeable technical accountant but one who

(12)

product that only Halliburton can install, it does not

(12)

at Halliburton and in his prior employment before
Halliburton experienced difficulties, great difficulties,

(13)

recognize revenue until it makes the installation.

(13)

(14)

In cases where another company can install it, a

(14)

formulating practical applications of accounting theory and

(15)

competitor, for example, and where Halliburton installs its

(15)

niles.

(16)

competitor's products in a similar nature and has a market

(16)

And one of his most important job responsibilities

(17)

cost charged to the client for doing that, it recognizes

(17)

as director of technical research and training was to assist

(18)

revenue on the part at such time as it meets the

(18)

the field finance and accounting staff. He was told by Mr.

(19)

requirements of SAB 104.

(19)

McCollum when he was hired that his first priority - or,

(20)

That's what EITF 00-21 is all about. When Mr.

(20)

one of his first priorities needed to be to build

(21)

Menendez raised these issues there, Mr. McCollum

(21)

relationships with the field finance and accounting staffs

(22)

commissioned yet another study of that. And there was a

(22)

so that they would come to him with accounting issues,

(23)

White Paper produced on that, and Mr. Menendez again was the

(23)

technical accounting issues, when they came up and use him

(24)

only person that argued against the conclusions in that

(24)

as a resource and to help them solve the problems - in

(25)

White Paper. The consensus was clearly against him.

(25)

other words, to get him to help them solve their accounting

problems in the field so that they came with the right

(I)

And then FIN -46 involves joint ventures and

(1)

(2)

whether you consolidate them or don't consolidate them on

(2)

answers.

(3)

your financial statements. I think the important thing to

(3)

That didn't happen. Mr. Menendez does not build

(4)

remember here is that this issue doesn't impact the net

(4)

relationships. And, over time, instead of seeking Mr.

(5)

equity or net revenue or net income figure on a financial

(5)

Menendez out, the field staff actually avoided him. They

(6)

statement. It has to do with whether all the other stuff

(6)

started going to other people because they felt they could

(7)

gets put on there.

(7)

not work with him.

(8)

Now, if you have

(9)

venture with a huge amount of debt, then there's no

if the company has a joint

(8)

They had a nickname for him, Capital One No Man.

(9)

Mr. Menendez would spout theory, and he would tell the field

(10)

consolidation. You know, there may be an argument there

(10)

people what was wrong with what they were doing? but he

(11)

that could be misleading to investors or shareholders

(11)

could not seem to ever offer constructive suggestions as to

(12)

because, if the company has any arguable responsibility for

(12)

how to solve their accounting problems.

(13)

that huge amount of debt, even though the income might look

(13)

Just telling them no didn't accomplish very much.

(14)

all right, that could be a problem.

(14)

And so the staff started going to others that could help

(15)

These are not the kind of joint ventures

(15)

them formulate solutions. And this inability to reduce

(16)

Halliburton has. Halliburton's joint ventures are generally

(16)

accounting mles theory to practical applications also came

(17)

operating joint ventures. What partnerships it makes for

(17)

through in his training, the training function of his job.

(18)

its foreign governments or governments that require it to go

(18)

There will be witnesses that will testify that

(J 9)

into business with them in order to do business in the

(19)

they attended his training courses, especially - or,

(20)

company, and it's a cash flow kind of operation.

(20)

sessions, especially in revenue recognition, and felt that

(21)

But it did, however, do a FIN-46 review while Mr.

(21)

they were wholly unhelpful, that they involved most reading

(22)

Menendez was there, and they did change their accounting

(22)

SAB 104 and interpretive guidance and other rules with

(23)

treatment with respect to some of those joint ventures

(23)

virtually no application to Halliburton's business world

(24)

because of FIN-46, including their largest joint venture, a

(24)

practices.

(25)

company called Welldynamics.

(25)

Mr. Menendez also shunned the collaborative

XMAX(lO/lO)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 41
culture of the finance and accounting group. Finance and

(1)

(2)

accounting people in major corporations that have complex

(2)

to when we talk about that.

(3)

business operations, especially if they're global, face-

(3)

Now, Mr. Menendez went to the audit committee in

XMAX(11/l1)

Page 43
with clean hands, but that's one of the things that we refer

(4)

or, are confronted with difficult accounting issues

(4)

early Febmary of 2006. He sent them a letter bye-mail

(S)

continually, on a daily basis.

(S)

that identified these three areas that he thought there were
deviations from GAAP. By the way, he received his bonus on

(6)

Mr. McCollum's management style is to get a lot of

(6)

(7)

smart people in the room that might have different

(7)

(8)

perspectives on complicated issues and has things out and

(8)

(9)
(10)

try to get some resolution, try to get to the right answer.
That was not the way Mr. Menendez liked to operate. He was

(9)
(10)

(J I)

a Lone Ranger, and eventually he began to alienate some of

(11)

(12)

his colleagues by giving them the impression that he though

(12)

(13)

they - he was smarter than they and that his opinions were

(13)

(14)

infallible.

(14)

(1S)

This especially came to a head when he began to

(1S)
(I 6)

(16)

criticize conclusions that some of his colleagues had

(17)

reached in prior studies, began to publicly within the

(17)

(18)

finance and accounting organization criticize them and their

(18)

(19)

conclusions as wrong, without even going to talk to them

(19)

(20)

beforehand about how they came to those conclusions and

(20)

(21)

attempting to reconcile his views with theirs.

(21)

(22)

That was the impetus for the conversation that Mr.

(22)
(23)

(23)

Ahmad referred to between Mr. McCollum and Mr. Menendez,

(24)

four months after he began work where Mr. McCollum told him,

(24)

(2S)

if you try to run over people

(2S)

see, the process is

Friday, February 5th for the year, about $20,000.00. At
7:54 a.m., I believe, the next day, Saturday, is when he
sent his e-mail to the audit committee.
By that time, it was well known within the finance
and accounting organization that he was continuing to object
to these accounting practices of the company in these three
areas. He complains that well, he complains that his
name was associated with the SEC inquiry, which was opened
at the same time, by being placed in a document hold notice
that went to some members of the finance and accounting
group, there is - there will be a wealth of evidence that
those involved, those that received the document hold notice
and others, would have known in an instant, once they were
told that the SEC was going to conduct an investigation and
what the issues were surrounding which they had to hold and
preserve docmhents, that they would have known in an instant
who this was.
He had gone to person after person in the finance
and accounting group and voiced his complaints. More

(I)

collaborative, we talk things out, and we try to reconcile

(1)

significantly, there is no evidence that Mr. McCollum had

(2)

our different views, the process is collaborative, and if

(2)

any retaliatory motive in circulating the document hold

(3)

you try to run over the process the process will nm over

(3)

notice.

(4)

you, people will stop dealing with you and you'll become

(4)

He merely forwarded a document hold notice that

(S)

irrelevant. And even Mr. Ahmad admitted that Mr. McCollum

(S)

had been sent to him by the general counsel of the company.

(6)

admitted, I don't want that to happen.

(6)

The notice said Mr. Menendez - or, the notice said the SEC

(7)

Also, Mr. Menendez was hired to assist in

(7)

has opened an inquiry on Mr. Menendez's complaints in the

(8)

resolving current technical accounting issues. Before

(8)

following three areas, hold all related documents, and then

(9)

coming to Halliburton, he had only worked in an auditing

(9)

it described the three areas.
I think Mr. McCollum will tell you in his

capacity, looking backward where decisions had already been

(10)

(II)

made.

(11)

testimony that he didn't even think about taking Mr.

(12)

And he could never turn loose of that role at

(12)

Menendez's name out of that because everybody knew, and if
he had it to do all over again today he would take the name

(10)

(13)

Halliburton. He neglected the current work in order to look

(13)

(14)

for past problems, and he spent an inordinate amount of time

(14)

out.

(IS)

searching for past errors, found some, but most of what he

(1S)

But everybody knew anyhow, and almost immediately

(16)

found was insignificant, and that was not what he was hired

(16)

Mr. McCollum - witnesses will testify that almost

(17)

to do.

(17)

immediately Mr. McCollum went to his direct reports in his

(18)

In the July conversation, when Mr. McCollum

(18)

department and told them about this and said, there can be

(19)

counseled Mr. Menendez, four months after he started work,

(19)

no retaliation against Mr. Menendez for what he has done.

(20)

Mr. Menendez had a tape recorder in his pocket. That's

(20)

He said, you can't treat Tony any differently than you have

(21)

where these recordings and transcripts come from of several

(21)

because this has happened. At that point in time, he said

(22)

meetings he was in.

(22)

this is really a professional disagreement about these

(23)

He didn't bother to tell any of his colleagues or

(23)

things, but Tony had the right to elevate these issues in

(24)

his manager that he was secretly tape recording. In a

(24)

the way that he has.

(2S)

minute I'm going to talk about Mr. Menendez not being here

(2S)

Mr. Menendez was not shunned after this came to

 Menendez V. H::lLllIburt(]1ll Inc. 2007-STA-00005 09-24-2007

BSA

Page 45
(I) light any more so than he had been previously. He
(2) disappeared. He's admitted in his own deposition testimony

(2)

Page 47
out of the F&A department, and they did not replace her.
And that's why Mr. Menendez reported to Mr. McCollum. There

that he was hardly in the office after he made these
complaints. He was off at his lawyer's office working on

(3)
(4)

is no history of that function reporting to the chief
accounting officer.

(5)

his SEC presentation.

(5)

While Mr. Menendez was on leave, Mr. McCollum

(6)

Halliburton and Mr. McCollum took these complaints

(6)

assigned responsibility for the technical research function

(7)

very seriously, and they took their legal obligation not to

(7)

to Mr. Geer, and Mr. Geer had also been promoted. It's

(8)

retaliate very seriously. Virtually nothing was done with

(8)

irrelevant whetl1er Mr. Menendez knew that or not. Mr. Geer

(3)

(4)

(9)

respect to Mr. Menendez without consultations with both the

(1)

(9)

was a higher level position than Mr. Menendez was in, and

(l0)

legal department at Halliburton and the human resources

(11)

department.

(11)

accountant and was a good person to, oversee Mr. Menendez's

(12)

They wanted to avoid even the appearance of an

(12)

function for that reason, as well.

(13)

inadvertent violation of his rights. For example, with
regard to the alleged removal from the revenue recognition
course, that course was to be taught in June of 2006 at a

Mr. Menendez chose to quit rather than to come
back to work. It turns out - Halliburton didn't know it at
the time - it turns out he was making a lot more money at
the time acting as a litigation consultant for a California
law firm that specialized in plaintiff's securities fraud
cases.

(10)

(16)

finance and accounting summit.

(13)
(14)
(15)
(16)

(17)

It was a big deal. The coordinators that were

(17)

(18)

responsible for lining up the presenters and vetting their

(18)

(14)

(15)

he's also, witnesses will testify, an excellent technical

(19)

materials started communicating with the presenters in early

(19)

He was making about, on an annual basis,

(20)

February of that year. Mr. Menendez was 110t responsive to

(20)

$180,000.00 a year, which is a lot more than he was paid by

(21)

their communications.

(21)

(22)

They began to talk to Mr. McCollum about the need

(22)

Halliburton. The legal test for cOl1stmctive discharge, as
this Court knows, is stringent. Mr. Menendez must

(23)

to remove him, to replace him, because he wasn't

(23)

demonstrate that a reasonable person - or, a complainant

(24)

communicating with them. Mr. McCollum said, I can't tell

(24)

must demonstrate that the employer made the working

(25)

you that yet, I can't give you an answer to that yet. And

(25)

conditions so intolerable that a reasonable person would

(I)

then an intervening incident arose.

(1)

(2)

Mr. Menendez's lawyers asked for him to be put on

(2)

(3)

a paid leave of absence, and, when that happened and Mr.

(3)

reasonable conclusion on his part.

(4)

McCollum felt confident that that request was going to be

(4)

We would submit, Your Honor, that Mr. Menendez

(5)

accommodated, he allowed

(6)

to replace Mr. Menendez with another instmctor for revenue

or, he approved a recommendation

have thought he had no alternative but to resign. He must
feel that he was compelled to resign, and that must be a

(5)

cannot come close, based on the evidence in this case, of

(6)

demonstrating that. And we would also submit that neither
is there evidence of another - of any other materially

(7)

recognition. That's how that happened.

(7)

(8)

Mr. Menendez was granted a paid leave of absence

(8)

adverse employment decision taken with respect to him.

(9)

at his request during the investigations conducted by the
audit committee and the SEE. It was for up to six months.

(9)

Now, we had asserted certain affirmative defenses

(l0)
(11)

(12)
(13)

That was an extraordinary act on the part of Halliburton, I
believe. Halliburton even paid his lawyer's fees regarding

(10)

in this case involving misconduct by Mr. Menendez. I have

(11)

already mentioned taking the job with the accounting firm.
He collected his pay from the accounting firm while he was

(12)

(13)

still collecting his pay from Halliburton. We consider that
to have been an implicit breach of the terms of his leave of

(14)

to its cooperation in those investigations.
When the leave of absence expired six months later

(15)

and the investigations were completed, Halliburton notified

(15)

absence.
He also took witl1 him when he left Halliburton

(14)

him that he was to be reinstated to his former position

(16)

(17)

without any change in responsibilities and without any

(17)

(18)

change in title.
His reporting assignment was changed. He had not

(18)

over 1,000 confidential finance and accounting documents
without alerting his supervisors or the HR department or the

(19)

legal department that he had done that. He was told in

(20)

writing when he went on leave of absence, when the company

(21)

been hired to report to Mark McCollum. He had been hired to
report to Evelyn Angelle, who was in a similar job to what

(21)

acc01lli11odated his request to go on leave of absence, that if

(22)

Mr. Geer had

or, she was in a similar job at the time Mr.

(22)

he needed any documents to fully cooperate with the SEC or

(23)

Menendez was hired to what Mr. Geer had at the time Mr.

(23)

the audit committee and their respective investigations that

(24)

Menendez was supposed to come back from his leave. Ms.

(25)

Angelle had been promoted at the time Mr. Menendez was hired

(24)
(25)

there was a certain person in the law department he could
contact and make the request of those documents.

(16)

(19)
(20)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 49
Instead, he engaged in self-help. He took the

(1)

federal fraud statutes

(2)

documents. In doing so, he violated the terms of his leave

(2)

not a theory here, right, so we can discount? There is no

(3)

of absence agreement, and he also violated the terms of the

(3)

mail fraud, wire fraud, 13, 14, et cetera?

(4)

confidentiality agreement he signed at the time he was

(4)

(S)

hired.

(S)

(6)

Finally, a word about Mark McCollum. Mr. McCollum

(6)

MR. AHMAD:

Well, there are some -

JUDGE ROSENOW:
play?

(7)

has been viciously accused of fraudulent accounting

(7)

MR. AHMAD:

(8)

practices by Mr. Menendez. We believe witnesses will

(8)

JUDGE ROSENOW:

(9)

testify that Mr. McCollum is a very capable professional

(9)

That you think are brought into

Well, when he says No, I'm taking it one step, very

simple step at a time. Section 13, 14,43,44 or 48 of 18

(l0)

accountant and manager who will challenge people to defend

(10)

U.S. Code - those are all, like, wire fraud, mail fraud.

(11)

their positions, as is his job as a manager, and, most

(1])

(12)

importantly, they will testify that he is a man of high

(12)

MR. AHMAD:
whatever-

(13)

integrity and character. We look forward to the evidence in

(13)

JUDGE ROSENOW:

(14)

this case. Thank you, Your Honor.

(14)

MR. AHMAD:

JUDGE ROSENOW:

Okay. Let me go to some questions

I think the wire fraud/mail fraud,
Right.

- we haven't alleged that because we

(15)

feel that, yes, security fraud, we have that, but we don't

(16)

I have. Some of them are pretty basic, things I just need

(16)

need anything else for security fraud.

(17)

to cover in terms of completing the record. I'm taking it,

(17)

JUDGE ROSENOW:

(18)

although we don't necessarily have to enter into any formal

(18)

MR. AHMAD:

(1S)

Okay.

I think that's the same thing.

(19)

stipulations, neither side disagrees that Halliburton is a

(19)

(20)

covered employer under the statute?

(20)

What I am looking, on the other hand, is his reasonable

(21)

belief that what he reported dealt with any violation of any

(21)

MR. JORDAN:

(22)

JUDGE ROSENOW:

(23)

MR. AHMAD:

(24)

(2S)

No dispute.

JUDGE ROSENOW:

Okay. So I'm not looking at that.

Okay.

(22)

mle or regulation of the SEC or any provision of federal

No dispute.

(23)

law relating to fraud against shareholders, okay.

JUDGE ROSENOW:

And neither side disagrees that,

at least for the purposes that he remained employed and

(24)

(2S)

MR. JORDAN:

Well, that's right. Also, Your

Honor, there is another aspect to the protected activity,

(1)

then, I guess, on administrative leave, Mr. Menendez was a

(1)

and that's the actual participation clause of 1514(a),

(2)

covered employee?

(2)

because he did make filings with the SEC.

(3)

JUDGE ROSENOW:
them?

(3)

MR. JORDAN:

(4)

MR. AHMAD:
Yes.
JUDGE ROSENOW:
And it doesn't look - and

Yes.

(4)
(S)

MR. AHMAD:

(6)

particularly as to the amended complaint and the amended

(6)

JUDGE ROSENOW:

(7)

answer, it looks like there is really no issue as to whether

(7)

(8)

or not he communicated something to the SEC, to the PCOAB,

(8)

MR. AHMAD:

(9)

to the audit committee and internally to various supervisors

(9)

JUDGE ROSENOW:

(S)

And once he starts he's talking to

I'm sorry?
And once he starts he's talking to

them, he's working with them?
That's correct.
And, again, that's an

and other peers and other higher reporting officials within

(10)

investigation relating to violations of the SEC regulations

(11)

Halliburton, that he communicated something, there's no

(11)

or federal laws relating to fraud?

(12)

dispute as to any of that, so there was a communication?

(12)

MR. AHMAD:

(13)

JUDGE ROSENOW:

(10)

(13)

MR. JORDAN:

(14)

JUDGE ROSENOW:

(1S)

Yes, Your Honor. Thank you.
And that Halliburton knew of those

communications? They were aware of the communications?

(16)

MR. JORDAN:

We knew of some of them.

(]7)

JUDGE ROSENOW:

Yeah. Eventually you found about

Yes.

So, as we go through this, and I

(14)

have listened to your opening statement, I understand the

(15)

whole bill-and-hold and the mUltiple element arrangements

(16)

kind of go together, as you explained in your opening, as I

(17)

understand it, the bill-and-hold, because a lot of times
it's - the multiple element arrangements are, we're going

(18)

all of them, but, okay. Oh, we didn't know, is not going to

(18)

(19)

be a big issue in this case?

(19)

to provide some services, we're also going to provide - or,

(20)

sell you some actual physical products, and those things may

(21)

be intertwined, we mayor may not be able to separate those.

(20)

(21)

MR. JORDAN:

Correct.

JUDGE ROSENOW:

The record is going to show that

MR. AHMAD:

That's right, they are related in the

(22)

you knew at some point, okay. So I understand, obviously

(22)

(23)

the issue is whether or not Mr. Menendez really, really

(23)

sense that all of this is applying to the recognition,
revenue recognition issue. That's right.

(24)

believed that the things he was communicating to those folks

(24)

(2S)

were either - constituted violations of the enumerated

(2S)

XMAX(13/13)

Page 51
and I'm not sensing that that's

JUDGE ROSENOW:

And I understand the parameters of

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 53
that. Is the variable interest entities the same as the

(2) joint venture?
(3)

MR. AHMAD:

Well, yes, because that relates to the

(1)

Page 55
had physically provided - the list you had earlier provided

(2)

as potential exhibits?

(3)

MR. AHMAD:

Yes, that's right, Your Honor. And,

(4)

joint venture and whether or not they should be

(4)

Your Honor, I am going to delete some of the exhibits that I

(5)

consolidated.

(5)

gave to Mr. Jordan, because he had indicated to me that

(6)

JUDGE ROSENOW:

(7)

MR. AHMAD:

(8)
(9)

Right.

And, if not, whether to use the cost

or equity method of accounting.
JUDGE ROSENOW:

Okay. And you didn't talk a whole

(6)

these were ones that they objected to, so I'm going to -

(7)

I'11 just notify Mr. Jordan we're going to delete some of

(8)

those.

(9)

JUDGE ROSENOW:

Okay. And I think the cleanest

thing for the record - thinking that people are going to

lot about that in opening from either side as far as the

(10)

(11)

tactical1evel as far as this one

(11)

come looking at this, that although they may be readiI'lg the

(12)

it, the case we're going to litigate basically is whether or

(12)

transcript, they'll tend to look from there to the exhibits,

(13)

not Mr. Menendez reasonably believed, when he talked to the

(13)

is - well, first off we need to explain to somebody that

(14)

various folks that we've talked about, he was disclosing

(14)

looks at this thing down the road that the reason that the

(15)

problems with bill-and-hold, multiple-element arrangements

(IS)

numbers are not going to necessarily be in order is because

(16)

and, you know, joint venture variable interest entities,

(16)

you had previously marked and identified for possible

(17)

that he believed that the way they were being done

(17)

offering into the record in excess of 200 exhibits, you

(18)

constituted a violation of federal law or SEC mles and

(18)

don't think that's necessary. And we're going to start with

(l0)

but, as I understand

(19)

regulations related to - well, SEC mles and regulations or

(19)

a small subset of that. So I'd just ask you at this time to

(20)

federal law regarding shareholders, filings to shareholders?

(20)

go ahead and tell me which ones you're going to offer,

(21)

numerically, and we'll look in that direction.

(21)
(22)
(23)

MR. AHMAD:

That's right. And there's also what

you mentioned just now, the participation clause.
JUDGE ROSENOW:

All right. So when we get to the

(22)

exhibits 1 and 2.

(24)

(25)

right?

(25)

(1)

MR. AHMAD:

JUDGE ROSENOW:

I'm sorry?
I don't think there is any

Okay, Your Honor. Complainant submits

the admission of - what we have on our exhibit list is

- and I understand the SAB has the force of an SEC reg,

(2)

MR. AHMAD:

(23)

(24)

(1)

[WHEREUPON, the documents

(2)

identified as COMPLAINANT'S

(3)

disagreement that the SAB has the force of an SEC

(3)

EXHIBITS 1 and 2 were marked for

(4)

regulation.

(4)

identification.]

(5)

MR. JORDAN:

(6)

JUDGE ROSENOW:

(7)

We agree, Your Honor.

(13)

27,29and31.
[WHEREUPON, the documents

(9)

identified as COMPLAINANT'S

(10)

EXHIBITS 19,22,23,25,27,29 and

We haven't yet made that assertion,

(II)

31 were marked for identification.]

JUDGE ROSENOW:

(12)

Okay.

As well as 19,22 and 23, exhibits 25,

No, I understand. You know,

(9)

We do not agree-

that'sMR. AHMAD:

JUDGE ROSENOW:
MR. AHMAD:

(8)

MR. JORDAN:

(10)

(5)

(6)
(7)

EITF?

(8)

(11)

Not putting it on the FIN or the

(12)

Your Honor.
JUDGE ROSENOW:

All right. But we're leaving that

(13)

XMAX(141l4)

MR. JORDAN:

Sorry, Mr. Ahmad, could you just slow

down a little? You've changed some numbers on me.

(14)

for - you may decide that you want to prove that on the

(14)

(15)

record and make that argument, and I understand Halliburton

(15)

25, I originally had said 25 through 31. I had tried to

MR. AHMAD:

Well, yes, I will say, going back to

(16)

is going, no, we don't, we're not agreeing to that? I think

(16)

take out the transcript portions.

(17)

the adverse employment actions are a little bit more

(17)

MR. JORDAN:

Okay, we've got 1 and 2 and then?

(18)

straightforward. They don't require quite so much detailed

(18)

MR. AHMAD:

CX-19.

(19)

knowledge of accounting principles or anything like that.

(19)

MR. JORDAN:

CX-19?

(20)

Let me see if I've got any other questions. Okay,

(20)

MR. AHMAD:

That may be in the record. That's the

(21)

I think I have a good grasp of the parameters of what you're

(21) job offer letter.

(22)

really presenting to me for litigation and adjudication.

(22)

MR. JORDAN:

Okay.

(23)

With all that in mind, why don't we go ahead and try to take

(23)

MR. AHMAD:

And 22 and 23.

(24)

on the exhibits at this time? And complainant has indicated

(24)

MR. JORDAN:

Okay. Those, I have.

(25)

that you are going to offer a very small subset of what you

(25)

MR. AHMAD:

And then 25,27,29 and 31.

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 57

Page 59
That's fine. And, as we noted in

(1)

MR. JORDAN:

Okay.

(1)

(2)

MR. AHMAD:

And then 39 through - exhibit 39

(2)

our conference, you can do that with the appropriate motion,
file any evidence, they'll have a chance to answer, and

JUDGE ROSENOW:

(3)

through 50.

(3)

(4)

[WHEREUPON, the documents

(4)

we'll sort it out then. In the absence of any objection,

(5)

identified as COMPLAINANT'S

(5)

what's been offered for admission into the record as

(6)

EXHIBITS 39 through 50 were marked

(6)

Complainant's Exhibits 1,2,19,22,23,25,27,29 and 31,

(7)

for identification.]

(7)

39 through 50,80 and 167 are admitted and are part of the
record upon which I will base my decision.

(8)

And then exhibit 80.

(8)

(9)

[WHEREUPON, the document identified

(9)

(10)

as COMPLAINANT'S EXHIBIT 80 was

(10)

(11)

marked for identification.]

(12)

MR. AHMAD:

[WHEREUPON, the documents
previously identified and marked as

(11)

COMPLAINANT'S EXHIBITS 1,2,19,

MR. JORDAN:

All right.

(12)

22,23,25,27,29,31,39 through

MR. AHMAD:

And then exhibit 167.

(13)

50, 80 and 167 were received into

(J 4)

[WHEREUPON, the document identified

(14)

evidence.]

(15)

as COMPLAINANT'S EXHIBIT 167 was

(15)

(16)

marked for identification.]

(16)

that book of documents, are there any more that are very,
very long?

(13)

JUDGE ROSENOW:

(17)

MR. JORDAN:

CX-167?

(17)

(18)

MR. AHMAD:

That's co rrect.

(18)

MR. AHMAD:

(19)

JUDGE ROSENOW:

(19)

JUDGE ROSENOW:

That has to be, what, I'll say,

(20)

like, 24, 26, something like that, rather than - mid-

(21)

twenties?

(22)

MR. AHMAD:

That's probably right, Your Honor.

(23)

JUDGE ROSENOW:

Let me just - are there - in

I believe just one is very, very long.
My normal practice - and this

(20)

isn't a normal case, so we may not want to state normal

(21)

practice, but normally if there's an exhibit in excess of 25

(22)

pages I require the parties to cite me to the pages within

Okay. Have you had a chance to

(23)

those exhibits that are really relevant and not assume that

(24)

take them out of your books and separate those into a format

(24)

I'm going to, you know

(25)

ready to offer right now, physically ready to offer? Some

(25)

record, I am assumed to have read it and evaluated it,

(1)

of them are really long. Well, some of them- excuse me,

(1)

Page 60
whether or not either side specifically cites me to it or

(2)

CX-1 is pretty long.

(2)

not in any part of the litigation.

(3)

MR. AHMAD:

(3)

And if what you're telling me is, look, every

CX-1 is very long, Your Honor. In

under the - if it's in the

(4)

fact, it's two binders. We should have those ready perhaps

(4)

single page in there is critical and needs to be part of the

(5)

after lunch. Do you want to hold them out? We've got about

(5)

record, is one thing. I guess I'll do that. But, if that's

(6)

10 books.

(6)

not the case and you just needed to do it in globo just

(7)

because it made sense but there are little things in there

(7)

(8)
(9)
(10)

JUDGE ROSENOW:

that. So right now you're offering for admission into the

(8)

that you want to highlight that you really need to be part

record 1, 2,19,22,23,25,27,29,31,39 through 50,80

(9)

of the record, you know, that would be the better practice

(10)

and 167'1

(11)

MR. AHMAD:

(12)

JUDGE ROSENOW:

(13)

Okay, and I'll give you time to do

That is correct, Your Honor.
Okay. Any objections to those,

counsel?

(14)

MR. JORDAN:

No objections to those particular

(15)

exhibits, Your Honor.

(16)

JUDGE ROSENOW:

(17)

MR. JORDAN:

Okay.

I would like to note for the record,

(11)
(12)

as far as I'm concerned.
MR. AHMAD:

Is to give a specific page references,

Your Honor?

(13)

JUDGE ROSENOW:

(14)

MR. AHMAD:

Yes.

Well, there are some exhibits that

(15)

probably would meet this definition, other than exhibit 1,

(16)

that in excess of 20, the ones that I would point out

(17)

specifically would be Halliburton 10-K's, and we could cull

(18)

as I brought up with the Court in pre-trial conference, that

(18)

it down, but it seems to me to make sense just to have the

(19)

some of these exhibits, particularly CX-1, are documents

(19)

complete document in there.

(20)

which belong to Halliburton, which our position is Mr.

(20)

(21)

Menendez essentially stole, and, at the appropriate time, we

(21)

do that is, instead of putting the burden on counsel to have

(22)

will ask this Court to order the return of all copies of

(22)

to pull out single pages, and then to avoid reading a 500-

(23)

those-

(23)

page exhibit that counsel really didn't think I needed to

(24)

JUDGE ROSENOW:

(25)

MR. JORDAN:

Okay.

- documents to us.

JUDGE ROSENOW:

Right. And one of the reasons I

(24)

read all 500 pages of, what I normally do is, I ask counsel

(25)

to just send me to the pages in your briefs of those big

XMAX(15!15)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 61
documents everything I need to look at.

(2)

MR. JORDAN:

Okay.

(3)

JUDGE ROSENOW:

And that includes, you know, if

(1)

Page 63
[WHEREUPON, the documents

(2)

identified as RESPONDENT'S EXHIBITS

(3)

1 through 57, 59 and 63 were marked

(4)

for identification.]

(4)

there's a 30-page block, hey, look, no kidding, we really

(5)

need you to read these 30 pages to fully understand our

(5)

MR. JORDAN:

(6)

argument, you can go ahead and do that.

(6)

through 57, 59 and -

(7)
(8)
(9)
(10)

MR. AHMAD:

And, certainly with respect to the

documents that I mentioned, Your Honor, we can do that.
JUDGE ROSENOW:

Okay. So what we'll do is, I'm

going to make that the rule in the case, then, for documents

We'd move for the introduction of 1

(7)

JUDGE ROSENOW:

(8)

MR. JORDAN:

(9)
(10)

RX-63?

- RX-63.

JUDGE ROSENOW:

Any objection to what's been

offered as Respondent's 1 through 47, 49 and 63?

(II)

in excess of 25 pages, I will ask counsel to go ahead and

(11)

(12)

cite me to the pages that they need me to consider as part

(12)

MR. AHMAD:

Yes, Your Honor. Just to exhibits 36

(13)

of the record.

(13)

involve performance reviews at previous places of

(14)

And that's important, because you need to - do

(14)

employment. We don't - not only are they hearsay coming

and 37. We believe these are hearsay and irrelevant. They

(15)

not assume that if you offer me 300 pages - if I get an

(15)

from other people that will not be testifying and, in fact,

(16)

exhibit that is 300 pages long and neither side cites me to

(16)

never have testified, but I don't see how they're relevant
to the issues of whether he complained about something

(17)

some of those pages, I'm not going to read them, and they

(17)

(18)

are not going to be part of the record upon which I base my

(18)

that's protected activity and whether he was retaliated

(19)

decision.

(19)

against.

(20)

So you just need to know, if you give me an

(20)

JUDGE ROSENOW:

(21)

exhibit more than 25 pages, cite me to the pages I need to

(21)

MR. AHMAD:

(22)

look at. If you need to cite me to multiple pages, that's

(22)

evidence, which -

(23)

fine. I just want to have the confidence that you really

(23)

JUDGE ROSENOW:

(24)

want me to read them, and that tells me that you've looked

(24)

MR. AHMAD:

(25)

at them and you think they are worth the Court's time.

(25)

JUDGE ROSENOW:

(1)

MR. AHMAD:

And I take it, Your Honor - we

(2)

wouldn't do that right now.

(3)

JUDGE ROSENOW:

(4)

Okay.

Unless it's just blatant character
Response?

- wouldn't normally come in.
I understand. Are you offering

(1)

Page 64
these as - well, yeah, it's not even a specific instance of

(2)

conduct, although there may be specific instances of conduct

No, no, no, no. If one of your

(3)

which are included in these documents, but basically you're

witnesses cites me to those pages that are going to be part

(4)

offering them to show that he is acting consistent, that

(5)

of the record, if you're going to cite me in your brief to

(5)

his, you know, actions were consistent with what he had done

(6)

part of the record - and he's going to know what parts of

(6)

before?

(7)

the record, because I do rolling briefs, so he's going to

(7)

(8)

see your opening brief. He's going to know.

(8)

(9)
(10)
(II)

(12)

MR. AHMAD:

(9)

Oh, he's going to -

JUDGE ROSENOW:

He's going to know that it's this

page and this page.
MR. AHMAD:

So we can do that at the brief stage?

(10)

MR. JORDAN:

Well, actually, Your Honor, those are

not hearsay. They are authenticated as business records.
JUDGE ROSENOW:
MR. JORDAN:

All right.

And I'm not sure that the other side

(11)

asked for a copy of the court reporting record. I think Mr.

(12)

Menendez was pro se at the time and didn't - refused to

(13)

take the certified letter that was sent to him, the notice.

(14)

to do it. Just so we all know, exhibits more than 25 pages,

(14)

But we have given him the authenticated copies this morning,

(15)

you need to cite me to those portions of those exhibits you

(15)

so they are not hearsay. They are business records, and we

(16)

want me to look at. Okay, so that's done, and Complainant's

(16)

offer them for relevance.

(17)

Exhibits that have been offered were admitted. And

(17)

Mr. Menendez was confronted with a couple of - at

(I 8)

respondent, do you have exhibits likewise to offer?

(18)

least two exhibits in his deposition and admitted that some

(19)

of the criticisms that were voiced of him at Ernst & Young

(13)

(19)

JUDGE ROSENOW:

MR. JORDAN:

Absolutely. That's the best way

Yes, Your Honor. We have

we would

(20)

otfer at this time our exhibits 1 through 59 and 63, with

(20)

and at the other accounting firm where he worked were

(21)

the exception of 58, which was our version of a transcript

(21)

similar to the matters on which Mr. McCollum counseled him

(22)

that Mr. Ahmad has withdrawn

(22)

while he was at Halliburton, specifically uot being able to

(23)

so we're withdrawing our version. So 58 is withdrawn.

(23)

make practical applications to theoretical mles.

(24)

(25)

or, Mr. Menendez's version,

(24)

JUDGE ROSENOW:

Okay. You need to start off with

the deposition, then, right? In what you've given me so

XMAX(16/l6)

 Anthony Menendez v. Halliburton, Inc. 2007 -ST A-00005 09-24-2007

BSA

Page 65
far, the deposition is not in there yet?

(l)

(2)

MR. AHMAD:

That's correct, Your Honor, the

deposition is not in there.

(3)

JUDGE ROSENOW:

(4)

(1)

Page 67
AFT ERN 0 0 N S E S S ION

(2)

1 :21 p.m.

(3)

Okay. Well, what I'm going to do

order, and Mr. Ahmad, I guess you have the PowerPoint slides

(S)

that you used in your opening?

(5)

is, 1'111 going to sustain it for now, but, depending

you're going in your direct and cross with the complainant,

(6)

MR. AHMAD:

(7)

and depending if you get into a matter where you may end up

(7)

JUDGE ROSENOW:

(8)

going back to that. So for right now 36 and 37, objection

(8)

sustained. But you can revisit that when it becomes clear.

(9)

Any other objections?

(10)

(II)

MR. AHMAD:

(12)

JUDGE ROSENOW:

(9)
(10)

No, Your Honor.
All right, then what's been marked

The hearing will come back to

(4)

(6)

011

where

JUDGE ROSENOW:

I do, Your Honor.

Could you just mark those - and I

know they're demonstrative, they're not necessarily offered
for, you know, for substantive weight, but that's the best
way to include them in the record is to mark them as an

(11)

exhibit. So what would be the next in order that you want

(12)

to-

(13)

for identification and offered into the record as

(13)

MR. AHMAD:

(14)

Respondent's 1 through 35,38 through 57,59 and 63 are

(14)

JUDGE ROSENOW:

(1S)

admitted as 1 through 35 and 38 through 57 and 59 and 63.

(1S)

(16)

So that's the written record right now.

(16)

[WHEREUPON, the document identified

(17)

[WHEREUPON, the documents

(17)

as COMPLAINANT'S EXHIBIT 221 was

We end at 220. It would be 221.

marked for identification.]

Okay. I'lljust mark it, and

that's fine.

(18)

previously identifIed and marked as

(18)

(19)

RESPONDENT'S EXHIBITS 1 through 35,

(19)

(20)

38 through 57, 59 and 63 were

(20)

offered and made part of the record, not for any substantive

(21)

received into evidence.]

(21)

purpose but to clarify the record as to the PowerPoint

(22)

JUDGE ROSENOW:

(22)

slides you were using during your presentation.

(23)

Anything else evidentiary-wise

that you want to offer from either side?

(24)

MR. AHMAD:

Not from the complainant, Your Honor.

(2S)

JUDGE ROSENOW:

(23)

JUDGE ROSENOW:

MR. AHMAD:

So Complainant's Exhibit 221 is

Thank you, Your Honor.

(24)

Okay.

(2S)

No, Your Honor.

(1)

[WHEREUPON, the document previously

(2)

identified and marked as

(3)

COMPLAINANT'S EXHIBIT 221 was

(4)

received into evidence.]

(I)

MR. JORDAN:

(2)

JUDGE ROSENOW:

All right, I think the next step,

(3)

then, is to start with your case and your witnesses. What

(4)

do you want to do as far as

(S)

probably - you all have been working harder than the Court,

(S)

(6)

than I have today, because you got an earlier start than we

(6)

before the complainant starts his case? Apparently not.

(7)

did. What do you want for a lunch break? I mean, I'm

(7)

All right, call your first witness, please.

(8)

assuming you probably need a little bit of a break now?

(8)

MR. AHMAD:

Maybe a little bit. We're fine, but

(9)

Paquette to the stand.

MR. AHMAD:

(9)

it's 12:30. Everybody is

(10)

if Your Honor is comfortable in terms of getting enough time

(10)

Ol)

to eat, maybe 45 minutes'?

(11)

JUDGE ROSENOW:

(12)
(13)

That's what I was thinking. Is

that good for respondent, lunch 45 minutes?

(14)

MR. JORDAN:

(15)

JUDGE ROSENOW:

Yes.
All right, it's 22 after. We'll

JUDGE ROSENOW:

Anything else fr0111 either side

Complainant would like to call James

JUDGE ROSENOW:

Mr. Paquette, if you'd raise your

right hand?

(12)

WHEREUPON,

(13)

JAMES PAQUETTE

(14)

having been first duly sworn, was called as a witness

(IS)

herein, and was examined and testified as follows:
JUDGE ROSENOW:

Thanks very much. Please be

(16)

try to come back on the record at about 10 after, between 10

(16)

(17)

after and a quarter after.

(17)

(18)

[WHEREUPON, the hearing was recessed for

(18)

DIRECT EXAMINATION OF

(19)

lunch at 12:22 p.m., to be resumed this

(19)

JAMES PAQUETTE

(20)

same day at 1: 15 p.m.]

(20)

(21)

\

(21)

Q

Sir, would you state your name for the record?

(22)

A

James Paquette.

(22)

XMAX(17/17)

seated.

BY MR. DULMAGE:

(23)

(23)

Q

And where do you live, sir?

(24)

(24)

A

Austin, Texas.

(2S)

(25)

Q

And what do you do?

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

A

(2)

Q

(3)

A

(4)

Q

(5)

A

Page 69
I'm an FX accountant for Dell.
You mean Den Computers?

(1)

A

(2)

Q

Dell.

(3)

A

And prior to doing that what did you do?
I was a senior accountant for Halliburton.

(4)

(S)

Q
And then what was your next job at Halliburton?
A I was an accountant in the technical accounting
research department.

(6)

Q

And how long did you work for Halliburton?

(6)

(7)

A

Four years.

(7)

Q

(8)

Q

And I want you to give us a little bit of an idea,

(8)

A

(9)
(10)

(11)
(12)

(13)
(14)
(1S)

what was your educational background?
A

I graduated from A&M in May of 2002 with a double

major in finance and accounting. Subsequent to that, I
obtained a CPA license in December of 2004 and then my
master's in December of 2005.
Q
Where did you get your master's from?
A

(9)

Q

And when did you start working for Mr. Hill?

A

It was the spring of 2004.

(11)

(13)
(14)

Q

(1S)

A

(16)

Q

And what is your master's in?

(16)

(17)

A

(17)

(19)

(18)

Q

(19)

A

No.

Q

And am I correct in assuming from what you just

(20)
(21)

(22)
(23)
(24)
(2S)

Q And how long did you work for Mr. .Hill?
A Until he went over to KBR, which was January or
February of 2005.

University of Houston, Victoria.
Just an MBA.
Do you hold any other professional certifications?

said that you have two jobs since you got out of college,
and that was Halliburton and Dell?
A

Correct.

Q

Have you worked for anybody else other than maybe

a summer job or anything like that?

And who did you report to?
Chris Hill.

(10)

(12)

(18)

Did you have a good relationship with Mr. Hill?
Yes.

Q
Who else was in the department with you while you
were working for Mr. Hill?

A Susan Willrodt was in the department prior to his
departure.

(20)

Q

Anybody else?

(21)

A

No.

Q

All right. And, after Mr. Hill left, who did you

(22)
(23)

XMAX(18/18)

Page 71
About a year and a half.
And who did you work for?
Brian Frazier.

work for?

(24)

A

Tony.

(2S)

Q

Mr. Menendez?

A

No.

(1)

A

Yes.

(2)

Q

Again, what year did you start at Halliburton?

(2)

Q

And how long did you work for Mr. Menendez?

(3)

A

(3)

A

Until April of 2006.

(4)

Q

June of 2002.
What was your first job at Halliburton?

(S)

A

I was an associate accountant for the internal

(S)

And at any point did you - when did you start
working for Mr. McCollum, do you know? When was he in your

(6)

chain of command?

(1)

(6)

reporting group.

(4)

Q

(7)

Q

And where did you work, what job site?

(7)

A

I don't recall when he came.

(8)

A

OakParlL
And those of us who live in Houston may be

(8)

Q

(9)

A

Were you already working for Mr. Menendez?
Yes.

(10)

familiar, Halliburton has a lot of locations, but could you

(10)

Q

Or was it before -

(1t)

explain briefly to the Court where Oak Park is and who's out

(11)

A

(12)

there?

(12)

(13)
(14)

A Location is at the intersection of Bellaire
Boulevard and Beltway 8, and that's where primarily the

(14)

(1S)

corporate accounting folks worl{, along with some other

(1S)

A

(16)

divisions.
Q Is the Oak Park complex, are there a lot of people

(16)

Q

that work out there?
A Yes.
Q And a lot of management people?

(18)

(9)

(17)
(18)
(19)
(20)

Q

(21)

A

(22)

Q

(23)

Yes.
With respect to your first job, you said you were

doing what, again? I'm sorry.

(24)

A

(2S)

Q

(13)

(17)

(19)
(20)
(21)
(22)
(23)

No, it was before - I'm sorry, it was before Mr.
Menendez came to Halliburton.

Q And then, when Mr. Menendez came onboard, who was
in the department?
Susan and I.
And did you as a department - what was the title

of your department or the name of your department?
A Technical accounting research and training.

Q And did you, as a department, ever meet with Mr.
McCollum?
A

We had quarterly updates set up for GAAP and SEC

updates, which he was sometimes there and sometimes not.

Q

And did Mr. McCollum ever give you any

Internal reporting.

(24)

instmctions, or your department any instmctions on how he

And how long did you do that?

(2S)

wanted you to do your job?

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA
(1)

A

Page 73
Yeah, the first quarterly update meeting that we

(1)

(2)

had, the instructions were based off of Mr. Menendez's

(2)

office, which - I mean, it's quite a few people in finance

(3)

opening remarks were for us to scrub the balance sheet, the
financial statements and not only to fix any issues but also
to prevent any other accotmting issues from occurring.
Q
And did you - did he have any other instmctions

(3)

and accounting from around the world, so Q
As far as the Oak Park site, are youall - are
offices in close to each other?
A Yes.

(4)
(5)

(6)
(8)

for you?
A Just basically focus on the issues that we - in

(9)

terms of training, technical accoIDlting updates and training

(7)

(10)

and focus on cleaning up the balance sheet and make sure

(4)

(5)

(6)
(7)

(8)
(9)
(10)

Q
And so where was Mr. McCollum's office, say,
reference yours?

A Just below mine, on the second level. We were in
the other end, the third level.

(11)

that any questions that come up we perform due diligence on,

(11)

Q

(12)

and we don't want to have any fire drills.

(12)

yours?

And where was Mr. Menendez's office reference

(13)

Q

I'm sorry, no fire drills?

(13)

A

Probably about 20 yards away.

(14)

A

Fire drills.
Did you ever hear him use the term, Smokey the

(14)

Q

And, when you were working in the summer of 2005,

(15)

(16)

Q

Bear?

(7)

A

(8)

Q

(19)

A

(15)

(16)
Yeah.
And how did he use it?
That was how he described scrubbing the balance

(17)

do you remember any accounting issues that come to mind?
A Well, one of the first issues that we dealt with
was the TCP gun, TCP memo. We had an accounting issue

come
(18) in through Susan Willrodt on the revenue recognition.

(20)

sheet based off of Mr. Menendez's introduction and remarks

(9)

(21)
(22)

where he said we would smoke out any issues and then be
preventative in terms of any further accounting issues.

(20)

brought this up, the TCP, it is one of our exhibits. Your

(21)
(22)

Honor, let me step down and show the witness JUDGE ROSENOW:
Which one?

(23)

Q

And let's give the Court a little bit of a sense

(24)

of some of the things that might go on. In terms of

(23)

(25)

technical research at Halliburton while you worked there, if

(24)
(25)

(I)

somebody had done some previous research and now we're going

(1)

(2)

to do some research on that issue again for some reason,

(2)

(3)

where would those documents typically be archived?
There is a memo folder on Halliburton's network,
A

(3)

(4)

(4)

MR. DULMAGE:

MR. DULMAGE:

I'm going to do something, since you

And I will tell you, for your

records, it is in the - the SEC report is exhibit 160.
JUDGE ROSENOW:

MR. DULMAGE:

Is that part of exhibit 1?

Yes, sir. It's part of exhibit 1,

and it's tabbed 60.
Tab 60 of exhibit 1?
JUDGE ROSENOW:
MR. DULMAGE:
Subpart 60.
BY MR. DULMAGE:
I'm going to just show you this. You can look at

(5)

so that's where any high level memos that we would use would

(5)

(6)

be on, and then, if we didn't have any information on a
particular topic that we needed, we would contact Chris Hill

(6)

or whoever originally worked on the issue.
Q So, if you were going to go back and look into an

(8)

A

(9)

Q

Is there any particular item I'm looking for?
Was that the memo you were just referring to?

(7)

(8)
(9)

(7)

Q

that for a second. When you're ready, let me know.

issue that somebody, a predecessor or another person at
Halliburton had worked on, you would be able to figure out

(10)

A

Yes.

(11)

(11)

Q

Okay. And I just thought it would be nice if we

(2)

who that person was and, if they still worked at

(12)

could have the memo, since you mentioned TCP gun. What is

(13)

Halliburton, contact them?
We would make an effort to do so.
A

(13)

the TCP gun? Can you explain that to the Court?

(14)

(0)

(14)
(15)

(16)
(17)

Q

And was it conm10n at Halliburton to do some of

these things bye-mail?
A

(18)

Q

(19)

A

(20)

Q

Yes.
Was it also common to talk with them, as well?
Yes.
Describe briet1y for us, since you're our first

XMAX(l9/19)

Page 75
hundreds of accounting foll,:s that work at the Oak Parl<

(15)

(16)
(17)

(18)
(19)

A

Well, based on many documents, I mean, Halliburton

has an arrangement with other manufacturers to customize
manufacturing guns, which they refer to as TCP equipment,
and they provide these charges upon request to store the TCP
equipment and charges at Halliburton's UK warehouse.
Q

I think everybody has a general sense of how the

(20)

oil business works and how oil wells work, but are these
guns used in production, in oil well production?

(21)

witness, the term F&A department. What does that mean to

(21)

(22)

you?

(22)

A

To my lmowledge, yes.

(23)

A

Finance and accotmting.

(23)

Q

And it's something that might go into the well and

(24)

Q

And how big was that group, in round numbers?

(24)

have some expense associated with it, is that a fair

(25)

A

Well, I don't lmow the size. I mean, there's

(25)

statement?

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007
Page 77

A That's correct.
(2)
Q
So you mentioned that that was one of the issues
(3) that came up. Tell us a little bit about the issue.
(4)
A The issue came into our group, and the request
(5) from the field that finance and accounting foll\:s, I believe
(6) in the UK, were aslting us to confirm the company's position
(7) on the way they ran an account for the TCP gun, and they
(8) were saying that tlns was very similar to a position that
(9) the - or, the same type of contract that the company
(I)

(10)
(11)
(12)
(13)

(14)
(15)
(16)
(17)

(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)

(1)

already had approved in prior years.
Q
All right.
A So they were asking us to approve the accounting.
Q
And how did they want to account for it?
A Well, they wanted to be able to bill the customer
once the guns were shipped to Halliburton's warehouse and
then recognize the revenue at that point.
Q
And is this one of the things that got you looking
at this issue?
A Well, the question came in and it got raised to
Tony, and Tony asl{ed, you know, where was the accounting
policy for Halliburton's revenue recognition because Ills
understanding was, you llliow, revenue shouldn't be recognized
until the part is delivered to the customer.
Q
Only because the court reporter may need this
later to make the exhibit, but could you take that out?

Thank you. And so did you do the researching on this issue?
A Yes. I went and got the policy and talked to Tony
and showed him the company's position that supported

(8) And, when deliverance or - when delivery has not
(9) occurred, when the inventory of the product or the equipment
(10) has not been delivered physically to the customer or to a
(11) site recommended by the customer, in those situations you
(12) have to assess the bill-and-hold criteria.
(13)
Q
And, before we go into that a little bit, you just
(14) in your answer mentioned the word delivery, i.e. applied in
(15) perfom1ance, which sounds like a service. What about
(16) situations where you have a product that is coupled with
(17) some service?
(18)
A Well, when you have situations where the company
(19) to deliver a product and to perform a service in relation to
that product for the same customer, generally that falls
under what's called EITF 00-21, accounting for multiple
(22) deliverals. And you have to assess that criteria to be able
(23) to determine if you can separate the service and the
(24) delivery of the product in terms of recognizing revenue.
(25)
Q
And multiple deJiverals, when you used that term
(20)

(21)

(1)

Page 80
in your testimony today, why don't you explain to us what

recognizing the revenue prior to delivery.
Q
And then what did you do?
A Him and Tony asked me to do some additional
research into specific SEC guidance and SEC speeches to
confirm that the policy that Halliburton had in place was,
in fact, aligned with SEC's.
And did you do that?
Q
A Yes.
Q
And what did you determine?
A Based upon what I found in situations where the

that means?
A Multiple deliverals means that there is unique
(4) elements in the contract, so multiple deliveral can even be
(5) more than one element in the contract, and that might be
(6) product or service or somethlng to be delivering or
(7) performing to the customer.
(8)
Q
And would it be possible to have a contact that
(9) might have two or three elements of product and two or three
(10) elements of service that would be part of the analysis that
(11) you might have to look at?
(12)
A Yes.
(13)
Q
All right. And let's go back to this bill-and-

(24)

equipment or product is not delivered to the customer
following to what the SEC refers to as bill-and-hold, and
therefore those criteria would need to be excised.
And - I'm sorry, I didn't mean to cut you off.
Q
You had more to say?
A And, based on the accounting policy, that's not
what was taking place.
Okay, before we get into that, the Court has heard
Q
a little bit in opening statements, but, again, you're the
first witness about bill-and-hold, and I don't want you to
go into great detail other tl1an what you need to to maybe

hold situation. All right, so, as I understand your
testimony so far, the UK is asking you to assess whether
(16) they can book revenue or recognize revenue on these TCP
(17) guns, is that correct?
(18)
A Yes.
(19)
Q
You started to talk a little bit about bill-and(20) hold, and 1'd like to go back to that. Now, with respect to
(21) the issue that was going on at this time, what all were you
(22) looking at with regard to bill-and-hold?
A We were specifically focu:sing on SAB 104 and all
(23)
(24) speeches that related - speeches by the SEC that related to

(25)

explain yourself today. Can you just give tl1e Court a sense

(25)

(2)
(3)

(4)
(5)
(6)
(7)
(8)
(9)

(10)
(11)

(12)
(13)

(14)
(15)
(16)
(17)
(18)
(19)

(20)
(21)
(22)
(23)

XMAX(20/20)

Page 79
(1) of what SEC guidance you were looking at and its
(2) significance here?
(3)
A The research to issue SAB 104, wIllch specifically
(4) deals with revenue recognition issues, and it speaks to four
(5) criteria that must be met to be able to recognize revenue.
(6) And one of the l<ey criteria is, deliverance or performance
(7) has occurred.

(2)

(3)

(14)
(15)

revenue recognition in SAB 104, and we consulted the

 Anthony Menendez v. Halliburton, Inc. 2007 -STA-OOOOS 09-24-2007

BSA
(1)

Page 81
guidance that we could get our hands on relating to

(1)

(2)

implementation or the adoption or the use of SAB 104 in

(2)

(3)

recognizing revenue.

(3)

Q

So it wasn't something Mr. Menendez says, hey,

Now, as you understand it, who distributes the

(4)

let's go look into this and see what can be done?

(5)

A

The SEC.

(6)

A
Not unless he was directed to lool{ specifically at
any particular issues for management.

(7)

Q

And do you know what SAB stands for?

(7)

(8)

A

Staff accOlmting bulletin.

(8)

(4)

Q

(5)

SAB's?

(6)

(9)

Q

And then you also mentioned some speeches?

(10)

A

Right.

Q

How would you go back as a researcher, technical

(11)
(12)

accounting researcher finding these documents?
A

Going onto the SEC website and searching on or

Q

And were you ever present when management directed

him to look at any issues?

(9)

A

No.

(10)

Q

Did you typically see the e-mails that would come

(11)
(12)

in when you got inquiries from out in the field or from
accounting, say, outside of Oak Park?

(13)

A

Yes.

(14)

filtering on specific language that would be in SAB 104, or

(14)

Q

And who would typically get copied on those e-

(15)

searching on SAB 104 and the speeches, search engine.

(15)

mails?

(16)

A On initial inquiries, it was typically Tony, Susan
or I, or a combination of the three.

(13)

(16)

Q

Is this stuff that is publicly available to

(17)

anybody, or is it stuff that you have to subscribe as a

(17)

(18)

corporation doing accounting services?

(18)

(19)
(20)
(21)
(22)
(23)

A

It's publicly available.

(19)

Q

And we've heard some discussion in this case in

(20)

the opening remarks about SAB 101. Did you look at SAB 101?

(21)

SAB 101 was the original revenue recognition

(22)

guidance put out by the SEC in 1999. SAB 104 clarified that

A

(23)

(24)

guidance with a question-and-answer part, so it was

(24)

(25)

basically SAB 101 plus questions and answers by companies

(25)

Q

And were those e-mails circulated amongst the F&A

department once you all started working on them?
A

If you needed to get particular questions answered

by foU{s in departments in the F&A group.
Q

So, for example, if you had - found out that a

given person had worked on the issue before, what would you
typically do?
A

If you couldn't find the supporting documentation

(1)

that were having issues with trying to assess the impact of

(1)

relating to that prior issue, you would contact that

(2)

101.

(2)

individual to asi{ them to send us the support or any other

(3)

Q

When did 104 come out?

(3)

e-mails revolving around that particular e-mail - or,

(4)

A

I believe it was 2001, but I'd have to look at -

(4)

issue.

(5)
(6)

I'd have to look. I don't lmow.

Q

We may get this for you here in a minute. But let

(5)
(6)

Q

At any time that you worked for Mr. Menendez, did

he ever tell you not to contact somebody?

(7)

me ask you, was there any other accounting issue that you

(7)

A

No.

(8)

were doing any research on in this time frame?

(8)

Q

And, when you were going back and contacting some

(l0)

A
Q

What were they?

(10)

(11 )

A

I mean, they revolved around other revenue

(11)

(9)

Yes.

(9)

of these people, was one of them Chris Hill?
A

I don't recall if I contacted Chris HilI or not.

I lmow the group contacted Chris Hill for information.

Q

(12)

recognition issues, FIN-46 issues, which is accounting

(12)

(13)

variable interest entities, and there was a lot of issues

(13)

(14)

that our group - or, issues that had come into our group to

(14)

A

It's Susan, Tony or I.

(15)

research.

(15)

Q

Then did you see e-mails in which Chris Hill was

(16)
(17)

Q

All right. And who raised these issues?

A

It varied. It could be F&A from arolmd the world,

All right. And, just so we're clear today, when

you testify and say the group, you mean?

(16)

contacted on some of the issues that you have just testified

(17)

were going on in the summer of 2005?

(18)

or it could be in-house or Houston both aslung questions,

(18)

A

Yes.

(19)

preparing for upcoming adoptions of particular accounting

(19)

Q

I want to just

(20)

standards.

(20)

Q

again, because you're the first

witness - just very briefly clarify FIN-46. Just tell us

Now, with respect to the issues you've talked

(21)

very briefly what

about so far, did Mr. Menendez come to you and ask you to

(22)

about and why it's important to a big company like

(23)

start researching these on his own, or was it a result of

(23)

Halliburton.

(24)

maybe some inquiries, either in F&A - either in Oak Park

(24)

(25)

or, you know, outside of Oak Park?

(25)

(21)
(22)

XMAX(21121)

Page 83
A All the issues were originated from people aslung
us questions.

A

your understanding of what FIN-46 is

FIN-46 came out after the lund-of Enron era

happened, and it talks to what they considered VIE's, which

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

-----------------------(1)
(2)

(3)
(4)

(5)

(6)
(7)
(8)
(9)

(10)
(11)

(12)
(13)
(14)

(15)
(16)
(17)
(18)

(19)
(20)
(21)

(22)
(23)
(24)
(25)

(1)
(2)
(3)

Page 85
is a variable interest entity, and how companies account for
these types of entities. Companies were trying to structure
relationships or ownership with entities and whether or not
to have to consolidate those entities and put them on their
balance sheet.
And so FIN-46 came out and said - and provided
more of a substance-over-form look at who's controlling this
entity, who is being affected by this entity, and, instead
of being just total common stock whether or not you
consolidated them, now you have to look to who's on the hook
for risk of loss of this entity, who is going to benefit
from the maj ority of the reward of this entity, and several
other criteria.
Q
And, again, you described how you did your
research for the 1011104 and the EITF 00-21 issue. Was your
methodology of research similar for FIN-46?
A Yes.
Q
If you'll turn to what is exhibit 60 there, the
tab 60 in our exhibit 1, Complainant's Exhibit 1, the memo
itself is from director of technical account, research and
training. Does that mean Tony wrote it?
A A lot of the way the process worked for memos was
depending on how - you lmow, how complex the issue was or
how many issues we had, Tony or Susan or I could have
written the memo. In this case, I wrote a majority of this

memo with Tony providing edits and approval and
recommendations.
Now, do you see how it says draft at the top?
Q

(4)

A

(5)

Q

Yes.
Why would it have draft stamped on it?
Because we hadn't gotten final approval for tllls

A
accounting position.
(8)
So a position that your group might take would
Q
(9) need to be approved by somebody else, is that what I'm
(10) understanding you to say?
(6)
(7)

(11)

A

(12)

Q

(13)

A

(14)

Q

(15)

A

(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)

Yes.
And who would those people be?
Well, ultimately it would be the CAF.
Which would be, in this case, Mr. McCollum?

Yes.
And, again, you're the first witness and this is
Q
one of our first documents, who is - on the memo, it's
cc'ed to J.R. Suit. Who is Mr. SuIt?
A I believe at the time he was the controller of
ESG.
Q
And who is Charlie Geer?
A He was the director of external reporting Q
And when you 1'm sorry?

(24)

A

(25)

Q

- for ESG.
And, when you say ESG, just for the record, so

(1)
(2)
(3)
(4)
(5)

(6)
(7)
(8)
(9)

(10)
(11)

(12)
(13)
(14)
(15)
(16)
(17)
(18)

(19)
(20)
(21)
(22)
(23)
(24)
(25)

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)

(12)
(13)
(14)
(15)
(16)
(17)

reported to?
A Yes.
Q
Now, if somebody were to tell the Court at any
point during this proceeding that this memo was just about
the TCP guns, what would your response on that be?
A
The memo itself focused on the TCP issue, but it
derived a bigger question for our group in terms of
Halliburton's accounting policy on revenue recognition,
specifically with respect to bill-and-hold.
Q
And, to the extent that you helped author this
memo, did you put anything in it that, in fact, suggested
that in the memo?
A In all of our memos, we speak to the specific
guidance on a particular issue that we research, so if we
pull guidance from the SEC or documents, website, you put
that literature in there, and then you talk about how that
relates to a specific issue.

Q
Well, let me direct you to page four of the memo.
It's the second full paragraph down. It starts at, at the
(20) point in time. Do you see that?
(21)
A Yes.
(22)
Q
All right, would you just read that - and you
(23) don't need to read it into the record, but just read that
(18)
(19)

(24)
(25)

XMAX(22/22)

Page 87
it's clear, what does that stand for?
A
Well,at that time Halliburton was comprised of
what you considered energy - or, Halliburton Energy Service
Group and KBR, construction and infrastructure group.
Q
So we can have an agreement that if you say ESG on
the record you're referring to the Energy Service Group?
A Correct.
Q
Who was Mr. David Johnson?
A I don't lmow.
Q
Well, let me ask you just to look at the names on
here and just tell me who you do know?
A I believe Gary Paver was one of our contacts in
the UK. Bryce Tawney I believe was a manager or director of
a division. I'm not really sure. I don't Imow what his
title was at the time. Millicent Chancellor actually the
director of the specific division that we were IooIting at.
Kevin Church was the high-level accountant in that
division. Kelly Youngblood, I don't know exactly if he was
the global operations director at the time. And then Chris
Hill was - at this time he would have been at KBR, but,
because he worked on the issue previously, he was included
on the e-mail.
Q And Chris Hill is the same Chris Hill that you
testified a few minutes ago that you - when you first
started in research and technical accounting that you

and let me ask you a question or two about that.
That appears to be talking about what was going on
Q

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

Page 89
in the UK?
A Correct.
(3)
Q
And then a little farther down you start talking
(4) about, it looks like, SAB 104, into the next paragraph, and
(5) that continues down to the bottom, do you see that?
(6)
A Yes.
(7)
Q All right. Now, is the guidance from there 011
(S) applicable only to the UK issue, or is it applicable to
(9) other issues?
(10)
A The way SAB 104 reads, it is bill-and-hold should
(1)

(1)

(2)

(2)

(11)

(12)
(13)
(14)
(15)
(16)
(17)
(1S)

(19)
(20)
(21)
(22)
(23)
(24)
(25)

be assessed on all purported transactions that could be
construed as bill-and-hold. So that guidance would be
applicable to any situations where you do not deliver tomy understanding of that guidance, you would assess the
bill-and-hold criteria when you do not deliver it physically
to the customer.
Q
All right. And I notice that there is the word,
retains physical possession, is underlined and bolded. Do
you see that?
A Yes.
Q And, since, again, you created this memo, do you
remember why you did that?
A Well, in this particular paragraph I was stressing
we have so we've tall{ed about the SAB 104 guidance, and
then we talk about speeches that go and speak to how to

(3)
(4)
(5)
(6)
(7)
(S)
(9)

(10)
(11)
(12)
(13)
(14)
(15)
(16)

Q

I don'tIf you know.
(19)
A My understand is that this issue arose when they
(20) originally had an issue similar to this contract that Chris
(21) Hill addressed.
(22)

(23)
(24)
(25)

(4)

(15)

criteria.
All right, so - and what you're in effect saying,
Q
if I understand what you just said correctly - and, please,
do not be shy about correcting me, because I'm not an
accounting, what I understand you just said was that if
physical possession is retained by, in this case
Halliburton, then you need to analyze the bill-and-hold

(16)

criteria, is that correct?

(9)
(10)
(II)

(12)
(13)
(14)

A

(2)
(3)

(5)

Q
All right. And do you know when that issue
originally arose?
A I don't recall.
Q
Was it prior to 2005?

Yes.
Do you know if it's prior to 2004'1'
A I don't remember.
Q
All right. But it was not the first time this
issue had come up?
A
Q

No.
How long did it take you to do the research and
(S) prepare this memo?
(9)
A To prepare the memo? To do the research, it tool{
(10) me probably a few days to gather all the evidence, and then
(11) to prepare the memo probably took me a few days, so a week,
(12) weel{ and a half, to get all the information.
(6)

A

(7)

Q

(13)

(14)
(15)

Q
And did you follow that process that you talked
about earlier where you would check with other documents
within Halliburton's database or with other people in

Halliburton?
A Yes.
(1S)
Q
Now, at the point that this issue has now
(19) surfaced, what happened as a result of this memo?
(20)
A Well, it was our conclusion that the revenue
(21) should be deferred until delivery to the customer takes
(22) place, and that raised the question of, well, what is our
(16)

Yes.
(IS)
Q
And it's because that's one of the reasons - one
(19) of the things in SAB 104 that triggers the bill-and-hold
(20) analysis?
(21)
A But, I mean, to get at the root of the issue,
(22) they're trying to determine if risi{ of loss is transferred.

(17)

(23)

And so in most, if not aU, situations risk of loss isn't
transferred until the customer takes physical possession.
(25)
MR. JORDAN: I'm sorry, Your Honor, I didn't hear

(23)

(24)

(24)

(17)

SAB 104 issue come up prior to this July 2005 time frame
that this memo was in its draft form?
A I don't understand what you mean by come up.
Q
I'm trying to give the Court a sense of the
timeline here. This issue just didn't arise in July, did
it?
A

customer requests the shipment to be designated to
(5) locations, i. e., the customer is taking physical possession.
(6) So I was trying to stress that we were retaining physical
(7) possession, which was what the speech was referring to, in
(8) order to state that we needed to assess the bill-and-hold

(3)
(4)

Could you repeat the answer so he

THE WITNESS:
I said that it was trying to assess
whether or not risk of loss has passed to the customer, and
the SEC speaks to back-end situations where the customer
takes physical possession.
BY MR. DULMAGE:
Q
Now, with respect to this issue and the things
that are going on in this time frame, had the SAB 101 and

(1S)

(1)

(2)

that answer.
JUDGE ROSENOW:
can hear it?

(17)

understand SAB 104, and a particular speech, this speech
refers to situations where the customer, who is to purchase
goods, but the seller retains physical possession until the

(I)

XMAX(23123)

Page 91

accounting policy saying, .which was then given to our group

to assess the accounting policy and confirm or change it to
(25) make sure that it's in alliance with what specifically SAB

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 93
(1)

XMAX(24124)

Page 95

104 refers to.

(1)

they're looking under ESG regarding this policy.

(2)

Q

And did you participate in -

(2)

(3)

A

Yes.

(3)

does Halliburton have an intranet or its own website where
people can go to look at, you know, policies?

Q

All right. Now, like a lot of big corporations,

(4)

Q

- that project or anything?

(4)

(5)

A

Yes.

(5)

A

Yes.

(6)

Q

And who asked you to do that project?

(6)

Q

And is that the case with these accounting

(7)

A

Tony.

(7)

Q

All right. And did any of the other managers that

(8)
(9)

you've mentioned so far in F&A want this looked into?

(8)

A

Yes.

(9)

Q

So you've - what happened at this point that you

(10)

A

It was a directive from J.R. Sult.

(10)

(11)

Q

Mr. SuIt? So Tony wasn't the Long Ranger on this,

(11)

(12)

he was following somebody else's directive?

policies?

were starting to question the policy. What did you do?

A

We just used the research that we had done for TCP

(12)

to support malting a change to the accolmting policy to

(13)

A

Correct.

(13)

state, in situations where the inventory is not delivered

(14)

Q
A

What did you find out when you did this research?

(14)

Found out that the accounting policy was missing a

(15)

physically to the customer, it is to be assessed, the billand-hold criteria needs to be assessed.

(lS)
(16)

critical step in assessing revenue recognition in respect to

(16)

(7)

(17)

(18)

delivery.
Q And is it fair for us to understanding that

(19)

accounting policy was currently in

(20)

that you're talking about - in other words, you're saying

~ffect

at Halliburton

Q

And, again, who all was involved in that process

that you knew of?

(18)

A

Our group and J.R.'s group.

(19)

Q

And did you attend any meetings where Mr. Suit was

(20)

present?

(21)

that that policy as it existed in this time frame, 2005, in

(2l)

A

On tins particular issue, I don't thinI{ so.

(22)

your opinion didn't follow the critical step you just

(22)

Q

All right. Did Mr. Menendez discuss with you any

(23)

addressed?

(23)

directions that he got from Mr. SuIt?

(24)

A

Yes.

(24)

(25)

Q

And had you looked at the policy ever prior to

(25)

A He just said that Mr. Sult said that we need to
address-

(1)
(2)

being asked to do this research?

No, I never had actually read the - prior to

A

(3)

doing the research, I had never actually read the accounting

(4)

policy.

(5)

Q

All right. Now, as an accountant at Halliburton

(l)

MR. JORDAN:

(2)

JUDGE ROSENOW:

Objection, Your Honor. It's hearsay.

(3)

MR. DULMAGE:

Response?
Well, Your Honor, I don't know that

(4)

it is, because it may go to what Mr. Menendez was thinking,

(5)

which may go to the retaliation issue later, and, until I

(6)

without doing the research, if you had just read the policy,

(6)

find out what the witness is going to say - I'll see if I

(7)

would you have had any reason to question it?

(7)

can ask the question differently.

(8)

A

Depending on your Imowledge of SAB 104.

(8)

(9)

Q

And, in doing this research -

(9)

(10)

JUDGE ROSENOW:

(10)

MR. DULMAGE:

And one other thing too, Your Honor,

I guess since it's Mr. Suit and his corporation could argue

question it without having done the research, and what -

(12)

that it's a party opponent, which should be an exception to

you say, depending on -

(13)

hearsay based on that.

that

(12)
(13)
(14)

You kind of shook your head. Was

Okay, rephrase the question, and

(11)

(II)

the question was, would you have had any reason to

JUDGE ROSENOW:

then you can - start with a new question.

THE WITNESS:

Whether or not you understood SAB

(14)

MR. JORDAN:

JUDGE ROSENOW:

(15)

104. So, if you had a true understanding of SAB 104, then

(IS)

(J 6)

you would raise questions. If you were reading the policy

(16)

(17)

just to find out what the policy said and to follow the

(17)

(18)

policy and you had never seen or read SAB 104, then you

(18)

(19)

wouldn't raise any questions.

(19)

(20)

BY MR. DULMAGE:

(20)

(21)

Q

(21)

Again, since you're our lucky first witness, when

It's double hearsay, Your Honor.
Well, you know, what did Mr. So-

and-So said that Mr. So-and-So said.
BY MR. DULMAGE:

Q

Let me try it this way, what did Mr. Menendez

direct you to do?

A

Just to - I didn't make any changes to the

accounting policy, just to provide him the information that
we had put together with respect to bill-and-hoid so that he

(22)

you say the policy, is this the policy that's, you know,

(22)

(23)

promulgated to everybody in Halliburton that would be

(23)

could confirm any changes to the draft and move that along

(24)

looking at Halliburton's accounting policies for guidance?

(24)

the chain.

(25)

A

I believe it's an ESG policy, so everybody if

(25)

Q

All right. And did Mr. Menendez tell you at any

Page

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(I)

Page 97
point during this process that he was conummicating with Mr.

(2)

SuIt about this?

(3)
(4)
(5)

(1)
(2)

JUDGE ROSENOW:
question one more time?

A

Yes.

(3)

MR. DULMAGE:

Q

Then what happened?

(4)

BY MR. DULMAGE:

A

So the draft, the accounting policy was updated.

(5)

Q

XMAX(25/25)

Page 99
Okay. Well, can you restate the
All right.

Well, let me try it this way, what directions were

(6)

I believe the accounting policy was updated within that

(7)

(25)

span, July, to not to do a running investigation into
whether or not we had additional bill-and-hold issues
elsewhere.
JUDGE ROSENOW:
Beyond the TCP?
THE WITNESS:
Beyond the TCP memo.
BY MR. DULMAGE:
Q And did you all do that'?
A Well, I don't know who sent an e-mail, but someone
sent an e-mail out to the global F&A group to gather the
information. I don't recall who that was.
Q And did you participate in any meetings or
discussions or see any e-mailsthatthatinformationwas, in
fact, being gathered?
A Yeah, I talked to Mr. Menendez about that.
Q And what did you all talk about?
A We just talked about the original assessment of
potential bill-and-hoid sales for a specific division or
area, I don't recall.
Q And did you have - did you learn at any time any

(24)
(25)

(I)

estimates of what kind of numbers we might be talking about?

(1)

But, you know, the CFI provides the formal rules

(2)

Based on my conversations with Mr. Menendez, that
particular area was around the number $125 million in
revenue, and then that could be - I thinl{ it's $54 million
in
MR. JORDAN:
Your Honor, I would object to that
testimony on hearsay grounds, as well.
JUDGE ROSENOW:
Mr. Menendez told you that?
THE WITNESS:
Yes.
JUDGE ROSENOW:
I'll sustain it. You can get it
out with your client.
BY MR. DULMAGE:
Q Was there any discussions during this time frame
that the issue could touch on a larger percentage of
Halliburton's business?
A Yes. We - our concern wasMR. JORDAN:
Your Honor, we're still talking about
this, so I would object again. If this isn't being offered
for the truth of the matter stated, then it ought to come
from the evidence.
MR. DULMAGE:
Well, first off, he's already
testified, Your Honor, that he's doing the analysis, and,
second off, he's being directed to do it, so I think the
discussion that are directing him are, I think, something he
can testify about because he has personal knowledge.

(2)

of evidence, quote, don't necessarily apply. We use those

(8)

(9)

(10)
(11)

(12)

(13)
(14)

(15)

(16)
(17)
(18)
(19)

(20)
(21)

(22)
(23)
(24)

(3)
(4)
(5)

(6)
(7)
(8)
(9)
(10)
(11)
(12)

(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)

(23)
(24)
(25)

A

(6)

you given in terms of how to analyze how much of

(7)

Halliburton's business this might impact?

(8)
(9)
(10)

(11)
(12)

(13)
(14)
(15)
(16)

(17)
(18)
(19)
(20)
(21)

(22)
(23)

A I wasn't given specific directions to analyze it
farther on.
Q All right. And at any time did you learn from
anybody that it could be a substantial number?
MR. JORDAN:
Objection, Your Honor, hearsay.
JUDGE ROSENOW:
You're offering it for the truth
of the matter of I ri1ean, you're trying to get to how much
of an impact did this have on the company?
MR. DULMAGE:
Well, I'm also trying to find out
how much they studied it, is one of the things.
JUDGE ROSENOW:
Well, then, you can ask how much
they studied, and we can go direct that way.
MR. DULMAGE:
All right.
JUDGE ROSENOW:
I don't think - and you need to
know, we may need - I don't know if we're going to have to
have a full discussion just legally on this down the road,
but, generally speaking, I mean, the hearsay rules are good
guidance.

(3)

as guidance to tell us what's reliable and what's not. So,

(4)

if I can get to a first level and find the person that

(5)

actually said it, I'd rather do that. Then I'll start a

(6)

balancing test, how badly does one side or another need to

(7)

offer it. I'm sure Mr. Menendez is going to testify a lot

(8)

to how much this meant to everybody in it. All he can tell

(9)

us is what he derived from Mr. Menendez. It doesn't get me

(10)

anywhere further down the road, evidentiary-wise, so we find

(11)

it as a general background for these types of issues. We

(12)

can press on.

(13)

MR. DULMAGE:

(14)

MR. JORDAN:

(15)

BY MR. DULMAGE:

(16)
(17)

Q

Okay.
Thank you, Your Honor.

Mr. Paquette, during this time frame, was your

whole group studying it?

(18)

A

It was primarily Tony and I focused on this issue.

(19)

Q

And, during this time frame, based on e-maiis you

(20)
(21)

saw, were you aware that other people were questioning the
issue?

Questioning what issue?
Questioning this - the impact of the bill-and(24) hold issue, or the possession issue and whether it triggered
(25) bill-and-hold.
(22)

A

(23)

Q

Page 97 to Page 100

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 101
(I)

A

I mean, I was aware of them doing the

XMAX(26/26)

Page 103
(1)

Q

How about bill-and-hold in general? Did you go

investigation in terms of how much tIns could impact the
(3) company, so, I mean, everybody had that question.

(2)

into your larger bill-and-hold analysis as the result of all

(3)

of this?

(4)

(4)

A

Yes.

(5)

Q

As your group got into larger analysis, did you

(2)

(5)

Q

And did you become aware of any - to what level

the issue was anaJyzed?

A From my understanding, it was a high level process
sent out to F&A managers, based on the e-mails that I saw,
(8) to assess their warehouses and what in there could be
(9) considered to be customer-owned inventory.
(6)

(6)

start looking at any of the contracts?

(7)

(7)

A Well, our group didn't perform the analysis, but,
yeah, our group didn't perform the analysis.

(10)

Q

(11)

that?

And, by the term high level, what do you mean by

(8)

(9)

Q

Who did?

(10)

A

Kelly Youngblood.

Q

And what time frames, if you know, did Mr.

(11)

A It was just - there was no actual people - I
(13) mean, there was no people from Houston going out there to
(14) count any inventory. It was just all done via e-mail to
(12)

(12)

Youngblood perform the analysis?

(13)

A I believe it was in September or October. It was
October of 2005.

(14)

come up with a particular set of information.
Q So what did you find out the possible impact might

(15)

Q

(16)

(16)

group?

(17)

be?

A Based off of what I saw, it could range - it
(19) could - you saw the nlUnbers for products sitting there in
(20) our warehouses. I donlt recall what that number was. I
(21) just remember it being a very significant number.

A At the beginning. We were given a couple of - I
was given a couple of contracts to review from a bill-and(19) hold, just to get our understanding of what the - how the
(20) contracts read and how they related to the particular
(21) criteria that had to be met in SAB 104 to recognize revenue.

(22)

(22)

(15)

(17)

(18)

(23)

Q

And did Mr. Youngblood's group consult with your

It would have been a substantial percentage of the

Energy Services Group business?

(l8)

(23)

Q

All right. And, again, since you just brought it

up, I'm going to show you what is in Complainant's Exhibit

(24)

A

Yes.

(24)

1, subpart 28. Take a moment to look at that document, and

(25)

Q

And what kind of products are we talking about

(25)

I'll ask you some questions about it.

(I)

sitting in warehouses?

(1)

(2)

A Again, on what division that we were loolting out,
so it could be completion tools, could be TCP guns, pacl{ers,
which is another completion tool. It could be mud for
putting down the well, basically equipment that customers
purchase and turn over to Halliburton to perform specific
services.

(2)

missing from our copy of complainant's exhibits. May we ask

(3)

for a copy, please?

(3)

(4)
(5)
(6)
(7)
(8)

(9)

Q

All right. And at any point did anybody in the

group express to you that there was any concerns about

(4)

MR. JORDAN:

Your Honor, that document seems to be

MR. DULMAGE:

Sure. Carl, I'll show you

(5)

I'll just give you our copy for right now. I've got a

(6)

working copy here I can use.

(7)

MR. JORDAN:

(8)

JUDGE ROSENOW:

(9)

I've got this.

(10)

whether the product was delivered to a Halliburton warehouse

(10)

MR. DULMAGE:

versus a customer's warehouse?

(11)

JUDGE ROSENOW:

(12)

A No, I mean, it originated on the TCP memo when we
were doing the research on that. I mean, the question was,
why is it sitting in a Halliburton warehouse and why - you
know, why is revenue - why would revenue be recognized?

(12)

MR. DULMAGE:

(13)

(15)

October 26,2005, 10:45 p.m. e-

mail is the first page?

(II)

(14)

well,

Yes, Your Honor.
Okay.
Okay, he's got it, Your Honor.

(13)

BY MR. DULMAGE:

(14)

Q

(15)

this?

Mr. Paquette, have you had a chance to look at

(16)

A

(17)

what was your personal conclusions on whether revenue should

(17)

Q

And have you seen it before?

(18)

be recognized or not?

(18)

A

Yes.

Q

And is this the memo or paper you were talking

(16)

Q

And, based on everything you learned at that time,

A Based off our conversations with the folks out in
the UK and our understanding of SEC guidance, delivery had
(21) not occurred.

(19)

(19)

(20)

(20)

(22)

Q

All right. And were you at any point asked to

Yes.

about that Mr. Youngblood worked on?

(21)

A

Yes.

(22)

Q

And were you - other than involvement you just

(23)

look into the contracts doing this analysis?

(23)

described, was your group involved in this at all?

(24)

A On TCP, I don't recalliooiting at contracts
specifically.

(24)

A No. I looked at those three contracts and was
never consulted again on tIns particular issue.

(25)

(25)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 105
Q
Now, do you have any understanding as to why your
group wasn't involved in creating this memo?

XMAX(27127)

(1)

Page 107
And the contact in the case said, well, we would

(2)

end up malting Shell whole, they are one of our biggest

(3)
(4)

customers, we want to make sure they're happy. So then it
became a substance-oyer-form issue where contractually they

October 26, 2005, and it's titled revenue recognition,

(5)

are saying risl( of loss had passed. But in substance, from

customer-owned stocks stored at Halliburton locations. Did
(7) I read that correctly?

(6)

our assessment of conversations with these guys, the risl{ of
loss hadn't passed.

(1)
(2)
(3)

A

(4)

Q

(5)

No, I don't understand that.
All right. And tell us - the memo is dated

(6)

(8)

A

(9)

Q

Yes.
There have already been in opening remarks in this

(7)
(8)

Q

(9)

A

Was that another one of your concerns?
Yes.

Q

Now, during this time frame, is it fair to assume

(10)

case some comments about customer-owned inventory. Have you

(10)

(11)

heard that term before?

(11)

from a chronological standpoint that some of the FIN -46
issues were also going on?

(12)

A

Not prior to this memo.

(12)

(13)

Q

So the first time you heard of the concept of

(13)

A

Yes.

Q

And you briefly already have explained to the

(14)

customer-owned inventory was as a result of reading this

(14)

(15)

(18)

memo?
A Correct.
Q
And you have studied all the literature. Have you
ever seen any allowance by any of the authoritative

(15)

(19)

literature for customer-owned inventory?

(16)
(17)

Well, a question had come in about a particular

(22)

process of researcWng tWs particular issue, we were trying

(23)
(24)

to determine what particular literature is applicable, and
FIN-46 was one of the items that we were assessing, whether

(25)

or not it was applicable.

Q

(25)

A

ever seen any authority for customer-owned inventory?

(21)

(24)

(19)

respect to some of tl1e things that you remember as you sit
here today, what was going on ahd what kind of research were
you tasked with doing in your group regarding FIN-46?

(20)

A

(23)

(18)

No.
And, as you sit here today, since then have you

(20)

(22)

(16)
(17)

Court what FIN-46 is, and I'm sure they're going to the
Court will hear some more testimony of others, so, with

A

Huh-uh.

Q

You have to say yes or no. I'm sorry, but she's

going to have to write your answer down.

(I)

A

(2)

Q

No.
All right, did you have any problems with any of

(21)

entity that Halliburton had some ownersWp in, and, in the

(2)

And then in tWs research of tws issue, the
question came up, well, how did the company adopt FIN-46,
and it was through tWs process that our group became

(1)

(3)

the conclusions in this memo?

(3)

(4)

(4)

concerned with the adoption of FIN-46 and how it was

(5)

assessed on the remaining entities that Halliburton is

(6)

A Well, my problem was is that the inventory was
being delivered to a Halliburton warehouse and held on
behalf of the customer, and bill-and-hold criteria were not

(6)

involved with.

(7)

being assessed.

(7)

(8)

Q And, in terms of risk of loss that's something
that you've mentioned, and I'm sure it's going to come up in

(8)

(5)

(9)

(9)

Q

And, when you said have adopted FIN-46, did that

adoption of FIN-46 occur while you and Mr. Menendez were
working, or was that something that had happened prior to
Mr. Menendez coming onboard at Halliburton?

(10)

the case a little bit - at any point while you were doing

(10)

(11)

any of the work prior to Mr. Youngblood's team taking over

(11)

A

Happened prior to Mr. Menendez coming onboard.

(12)

and working on the memo, did you talk to anybody out in the

(12)

Q

And do you know who was involved in that FIN-46

(13)

(13)

(14)

field or get any sense from any of your sources who would
actually pay for some of the loss if, say, a hurricane came

(14)

adoption prior to Mr. Menendez coming onboard?
A The technical research group employees at the

(15)

along?

(15)

time, wWch was Chris Hill.

(16)

(16)

(18)

A Well, that was one of the questions that we asked
in the TCP discussion with the folks out in the UK, was
about risk of loss, and the question came up who had risk of

(18)

(19)

loss, and someone said that contractually Halliburton has

(19)

the adoption process, as well as the binder that was put

(20)

risk of loss.
And then my follow-up question was, if an act of

(20)

together for FIN-46 adoption.

(21)
(22)

God were to occur, whether that be a hurricane or whatnot,

(22)

since you were getting some e-mails from Mr. Hill or he was

(23)

how would that - and, you know, destroyed the equipment

(23)

forwarding these tl1ings, that based on those e-mails he knew

(24)

that was sitting in Halliburton's warehouse, who's

(24)

you were looking at it?

(25)

responsible for that equipment.

(25)

(17)

(17)

(21)

Q

And did you see any e-mails or communications with

Mr. Hill with regard to FIN-46?
A

Q

A

He forwarded us on some, some e-muils regarding

And I assume, not unlike the bill-and-hold issue,

That was my understanding.

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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Page 111
(1) recognizing revenue at different points along the timeline
(2) of the contract.

A I don't know if I called him or e-mailed him to
ask him where he was keeping particular information on FIN46 and the adoption of it.
Q Well, if somebody were to assert in this case that
Mr. Hill didn't know what Mr. Menendez was looking into
these issues, would you dispute that?
A Yes.

(3)

And would you dispute that based on things you
witnessed personally?
A Yes.
Q

And I know that the EITF 00-21 issue is locked up
a little bit more with the bill-and-hold, but just very
quickly tell us a little bit about that.
A Well, another issue that came out of the TCP memo
was whether or not our accounting policies were correct in
respect to. the EITF 00-21 in terms of assessing situations
where we have to delivery or fulfill multiple services and
products to a customer.
Q So that sort of became part of your 104 analysis,
or was it separate?
A It was in tandem, but SAB 104 and EITF 00-21
govern two of the pieces of revenue recognition.
Q And this - was this an issue that Mr. Menendez
Q

brought up, or was this an issue that, again, came in as a
question from somebody?
A It's my understanding the J .R. Sult was concerned
with the company's position on 00-21.
And does Mr. SuIt still work at HalIibmion?
Q
A Not to my knowledge.
Q

A

(9)

Q

(10)

A

(11 )

(12)
(13)
(14)
(lS)

(16)
(17)
(18)

Do you know where he works?
No.
Did he leave Halliburton when you were there?

Yes.
All right. And I think we've talked quite a bit
about accounting, but let's see if we can just wrap up the
EITF 00-21 - that's a mouthful. What were your conclusions
or your group's conclusions that you were aware of about
Halliburton's practices relative to 00-21?
Q

A Based on the research that we were performing on a
lot of revenue recognition issues, there was a lot of
situations where we were both delivering a product ap.d then

(19)

subsequently were either expected to or were contracted to
(20) be installing those products.
(21) And so, in those situations, we needed to do an
(22) assessment of 00-21, and, when we discussed this with people
(23) that were doing the accounting on these types of contracts,
(24)
(2S)

XMAX(28128)

Page 109
Q
Did you ever actually have a conversation with Mr.
Hill about it?

we were concerned that they weren't assessing whether or not
there would be a separation and if they were, in terms of

(4)

(S)

(6)
(7)
(8)
(9)
(10)
(11)
(12)
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(19)
(20)
(21)
(22)
(23)
(24)

(25)

(1)

(2)
(3)
(4)
(S)

Q
And did you have an 0PPOliunity to gain an
understanding of what kind of impact this might have on
Halliburton?
A The concern was that we would be recognizing
revenue prior to when EITF 00-21 said we could recognize
revenue.
Q
And give us some geographical locations where this
might have come into play, based on your research.
A The TCP memo in the UK, there was delivery of a
product and installation. It was any where we were
delivering packers and then were contracted to install those
papers. And there were also situations where there was a
contract that we were delivering product through an agent in
a particular cOllltry and then we would enter into a
subsequent contract with the customer to install that
equipment.

Which country was that?
I believe it's Saudi Arabia.
Huh?
I'm not sure. It was the Saudi Aramco contract.
Q
All right. And do you have any knowledge of how
much - how big a business Aramco is to Halliburton?
A I don't recall.
Q

A
Q
A

Q If somebody else in the case were to say that
Saudi Arabia Aramco was a substantial customer for
Halliburton, would based on any research or information
you saw when you worked at Halliburton, would you disagree
with that?

(6)

A

(7)

Q

I don't understand the question.
Well, I'm just trying to find out if somebody else
(8) has already testified in the case or will testify that
(9) Aramco is a pretty big customer of Halliburton, did you see
(10) anything that would dispute that?
(11 )
Q I mean, it would be a large percentage of
(12) Halliburton's revenues?
(13)
A I have no - I don't recall what the percentage of
(14) Halliburton's revenues it is.
(1S)
Q
All right. Well, let me ask you this, have you
(16) heard the term, direct sales?
(17)
A Yes.
Q
And did you ever hear the term direct sales
applied to the situation you just described, whether it
(20) would be Aramco or some other customer, where they are
(21) delivering, say, a packer, in your example, to a agent and
(22) then have a subsequent contract for service?
A It was my understanding that Halliburton was
(23)
(24) classifying the sale under Saudi Aramco as direct sales.
(18)
(19)

(2S)

Q

But, in point of fact, there was going to be

Page 109 to Page 112

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

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XMAX(29129)

(1)

Page 115
just described to the VP position while you were at

(2)

A

That was my guess.

(2)

Halliburton?

(3)

Q

And, in your opinion, based on the research you

(3)

A

Yes.

(4)

Q

Now, what did Mr. Menendez do that you're aware of

(I)

service after the item got in-country?

(4)

did while you were Halliburton, was that in compliance with

(5)

00-21?

A Our concern in 00-21 is not necessarily was it in
(7) compliance, it was it wasn't being assessed. So, just to be
(8) able to recognize the revenue, you have to assess 00-21, and
(9) we didn't see anybody applying the criteria of 00-21 just to
(l0) get to the point of being within the scope of - I mean,
(11) being within the parameters that you want to recognize the
(12) revenue.
(6)

(J 3)

Q

I think you've done a pretty good job of

(J 4)

explaining to the Court some of the issues that were going

(15)
(16)

(5)

as a result of learning that revenue recognition may not be

(6)

in compliance with the literature?

(7)
A We started developing some in-depth training on
(8) revenue recognition that we were going to throw out to the
(9) regions, started assessing the accounting policy regarding
(10) revenue recognition and to confirm that those were or, if
(11) not, were updated to be in compliance with the guidance out
(12) there.
(13)

Q

And what did you do with this training that you

(14)

started working on? Did you circulate that in the F&A

on in the department at that time. I'd like to sort of move

(15)

department?

on now and talk about what happened as a result of some of

(16)

A

We did training, I believe, in September of 2005.

(17)

the things you've already talked about. First off, do you

(17)

Q

All right. And did you receive then criticism as

(18)

know if Halliburton had to make any write-offs or

(18)

a result of the training?

(19)

adjustments to any reports or reporting it did as a result

(19)

A

I didnlt receive any criticism.

(20)

of some of the research that you and Mr. Menendez and Ms.

(20)

Q

Did Mr. Menendez tell you that he, on behalf of

(21)

Willrodt did?

(21)

the group, had received some criticism about the training?

(22)

A There were some write-offs or accounting issues
specifically with respect to FIN-46 and the EITF-0214, and
then there was - I believe, the bill-and-hold assessment
that the company performed, you know, being about $5 million

(22)

A Yes.
Q What did he tell you?
A That it wasnlt in compliance with the companyls
position on revenue recognition.

(23)
(24)
(25)

(23)
(24)
(25)

in write-offs.
Q All right. And was one of the things that was

(1)

Q

(2)

(2)

A

I donlt recall.

(3)

written off as a result of FIN-46, did that have anything to

(3)

Q

Were you instructed by Mr. Menendez or anybody

(I)

And did he tell you who told him that?

(4)

do with an entity called Fiberspar? Do you remember

(4)

else to do anything different as a result of the view that

(5)

anything about that?

(5)

your training wasn't in compliance?

(6)

A I mean, I remember Fiberspar, but I donlt recall
which entity fell under which of our issues, whether it was
FIN-46 or 0214.

(6)

(7)

(8)

(7)

(8)

A
Q

I donlt understand the question.
You just said, I believe, a moment ago that you

worked on rolling out some new training that your group

(9)

thought was in compliance and that you heard that there was

when you were in the group, were your conclusions different

(10)

some criticisms to what the company was doing at that time,

(II)

than your predecessors' in the group? On some of the

(11)

and so 1'm just trying to find out, did you all do anything

(12)

issues?

(12)

as a result of that? Did you take any other action, did you

(13)

A

Yeah, on some of the issues.

(13)

do anything once you learned that?

Q

And do you know who headed up the group, besides

A My conversions were solely with Mr. Menendez in
terms of how to handle the accotmting, the companis
(16) position. And my lmderstanding he was working with
(17) management and the auditors at the time to make sure that
(18) the company's position was in compliance with that.

(9)
(10)

(14)

Q

Well, based on what you saw and your conclusions

(15)

Mr. Hill, before Mr. Menendez?

(16)

A Before Mr. Menendez was on it was - Chris Hill
was the manager of the group.

(17)
(18)
(19)
(20)

(21)

Q

And who did he report to?

A When I started, I believe he reported to Evelyn,
Ms. Angelle.
Q

And do you know today what Ms. Angelle does for

(22)

Halliburton?

(23)

A I donlt lrnow what shels doing currently. When I
left, she was the VP of investor relations.
Q All right. And did she go from the first job you

(24)
(25)

(14)

(15)

(19)
(20)

Q

All right. And did this issue continue forward

into the fall and winter of 2005?

(21)
A There was subsequent revenue recognition training
(22) that was provided in the summer of 2006.
(23)

Q

All right. And I'm trying to get a sense here

(24)

and, again, we're trying to find out what you know about.

(25)

Other people in the case, of course, will testify what they

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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(I)

Page 117
know about. But, with respect to what you knew about as we

(1)

A

Yes.

(2)

go into the fall of 2005 and into early winter of late 2005,

(2)

Q

And why did - what did he say he was frustrated

(3)

say in October when this memo from Mr. Youngblood came out

(3)

about?

(4)

to the end of 2005, what did you know with respect to any

(4)

(5)

issues that might have been going on with any fmstration

(5)

(6)

toward Mr. Menendez by anybody?

(7)
(8)
(9)

(10)
(11)

MR. JORDAN:

Objection, Your Honor. I think that

calls for hearsay.
Well, I think I asked him what he

MR. DULMAGE:
knows.

Yeah, you did, but rephrase it,

(12)

because it got - there were so many loops, the question had

(13)

multiple lines.

(14)

(6)

MR. DULMAGE:

I'lljust go straight to it.

(IS)

BY MR. DULMAGE:

(16)

Q

What did you learn during this time frame that I

allow him to say, because So-and -So is telling me all those
things.

(11)

(12)

heard.

(22)

BY MR. DULMAGE:

(23)

Q

(24)

JUDGE ROSENOW:

person might have - what might have told Tony, but we're

(15)

have been or his mental state at this time frame when it was

(16)

going on in the F&A department.

A
He expressed his frustration in the way that he
was being treated by management.

(2S)

(19)

Q

And, without talking about what anybody else said

(20)

to him, did he say why?

(21)

A
Because he felt like he was totally vetting issues
and those of his conclusions not being considered, and he
wasn't being given a valid reason why those conclusions
weren't being considered.

(22)

Well, let's start with your observations.

We're trying to focus on what Tony told you and

trying to get a sense of what Tony's emotional state might

(18)

(21)

Q

we're trying to avoid you testifying about what some other

(13)

(17)

asking for his direct observations, he's asking him what he

BY MR. DULMAGE:

(14)

Menendez?

(20)

Well, I'll allow him to talk about

(9)

just spoke of about any fmstration that was directed at Mr.
Objection, Your Honor. He's not

JUDGE ROSENOW:

(8)

(17)

MR. JORDAN:

Objection. Regarding he's

general, I'm fmstrated that I can't do X, Y and Z. I won't

(18)
(19)

MR. JORDAN:

fmstrated, you said he was frustrated -

(7)

(10)

JUDGE ROSENOW:

(23)

I'll allow that part of it. Did

(24)

you actually - did you witness, I guess, Mr. Menendez

(2S)

Q

All right. Now I'll ask you the question about

(I)

being, I guess, frustrated or having - did you see the

(l)

how you felt. How did you feel when you saw how the White

(2)

interactions yourself with other people that would have

(2)

Paper, the October White Paper, come out? I guess it's our

(3)

frustrated him in that regard?

(4)

THE WITNESS:

No.

XMAX(30/30)

Page 119

(3)

exhibit 28 that you have in the two exhibits up there. How

(4)

did you feel about that when you saw that paper come out

(S)

with conclusions different than you had come up with?

(6)

what Mr. Menendez told him, and I think it goes to Mr.

(6)

(7)

Menendez's state of mind, which I think goes to the

(7)

(8)

constructive discharge, because I think, you know, it's a

(8)

A
I was frustrated. You know, we had done a lot of
work on our position, and then our group wasn't consulted on
the ultimate position generated by the company.

(9)

continuum in terms of what's going on in Mr. Menendez's

(5)

MR. DULMAGE:

Now, Your Honor, I want to ask him

(9)

Q

All right. And did you have any feelings that you

(10)

mind, so I'd like to ask him what Mr. Menendez was telling

(10)

(II)

him.

(11)

A

Yes.

(12)

Q

Did anybody ever tell you why you were shut out?

(12)

JUDGE ROSENOW:

Well, I'll allow you to ask if it

were shut out?

(13)

goes to, I'm really upset, I can't take it anymore, stuff

(13)

A

No.

(14)

like that. But as far as, because Mr. So-and-So from the

(14)

Q

All right. Now, the evidence in the case already

(15)

company threatened to do X, Y and Z, I may as well just get

(1S)

shows - and I suspect you already know - that Mr. Menendez

(16)

that from your client since all he's telling me is, well,

(16)

at some point in, you know, in November sent something to

(17)

this is what Mr. Menendez says.

(17)

the SEC. When did you learn about that?

(18)

A When we were given an e-mail, were sent an e-mail
informing us that he had filed a complaint.

(18)

MR. DULMAGE:

(19)

JUDGE ROSENOW:

(20)

MR. DULMAGE:

(21)

BY MR. DULMAGE:

(22)

Q

With respect

Okay.
Do you see what I'm getting at?
Yeah, I do, Your Honor.
and you just heard the Judge's

(19)
(20)
(21)

(22)

Q

And when was that?

A I believe February. I'd have to see the date on
the e-mail.

(23)

instructions, if you'd be kind enough to just very briefly

(23)

(24)

tell us - well, let me just ask you this, did Tony indicate

(24)

I want to ask you one other question, did Mr. Menendez at

Q

Okay. And I'll show that to you in a second, but

(2S)

to you that he was frustrated during this time frame?

(2S)

any point during the fall, early winter through February,

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

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(1)

when you found out in the e-mail, did Mr. Menendez at any

(1)

Q

How did you learn that there was an SEC inquiry?

(2)

time share with you that he was going to complaint outside

(2)

A

Well, I mean, the subject says, SEC investigation,

(3)

the company?

(3)

but the actual SEC investigation was discussed in the e-mail

(4)

that was included on Mark McCollum's e-mail.

(4)

A

No.

(5)

Q

All right. Let me

all right, I'm going to show

(5)

(6)

you what's in our exhibit book as exhibit 1, subpart 18.

(6)

(7)

Would you take a look at it?

Q

All right. So, based on that, did you assume that

Mr. McCollum had simply forwarded Mr. Cornelison's e-mail?

(7)

A

Yes.

(8)

A

Okay.

(8)

Q

And do you have an opinion whether Mr. McCollum

(9)

Q

Is that the e-mail you were just referring to?

(9)

A

Well, I mean, the e-mail I'm referring to is the

(10)
(11)
(12)

(13)

one that was sent by Mark McCollum on February Sth.

Q

All right.

A

I haven't seen subsequent - those subsequent e-

(14)

mails.

(15)

Q

All right. Well, you know howe-mails sometimes

(10)

(11)

needed to tell everybody that Mr. Menendez had filed an SEC
complaint?
MR. JORDAN:

Objection, Your Honor. I think it

(12)

calls for speCUlation, and it's irrelevant to the issues in

(13)

the case.

(14)

JUDGE ROSENOW:

(15)

MR. DULMAGE:

(16)

when they're ultimately pulled off the computer end up being

(16)

(17)

a chain of e-mails?

(17)

Yeah, I'm not sure Well, let me just ask it this way,

Your Honor.
BY MR. DULMAGE:
Q

I mean, did - to have asked you to preserve

(18)

A

Correct.

(18)

(19)

Q

Will you look at that exhibit and tell us if you

(19)

documents, did you need to know who the person that filed a
complaint with the SEC was?

(20)

see the e-mail contained in there that you just referred to

(20)

(21)

in your previous testimony?

(21)

A

No.

(22)

Q

Did you have any discussions with Mr. McCollum as

(22)

A

(23)

MR. DULMAGE:

I do.

And, Your Honor, just for the

(23)

a result of this e-mail?

(24)

record, this has to have been, since Mr. Jordan asked, it is

(24)

A

Yes.

(25)

Respondent's Exhibit 5. I wasn't sure which exhibit it was,

(25)

Q

Right after the e-mail?

(1)

A

I believe a few days after the e-mail.

(2)

Q

And this is a discussion where you're present and

(1)

but it turns out it's Respondent's Exhibit 5 also.

(2)

JUDGE ROSENOW:

(3)

MR. JORDAN:

(4)

(5)

And, Your Honor, I think you have a

notebook with our exhibits in it.
JUDGE ROSENOW:

(6)

BY MR. DULMAGE:

(7)

Q

(8)
(9)

Oh, okay.

Yes, I do.

With respect to the part of the e-mail that you

(3)

Mr. McCollum is present?

(4)

A

(5)

Q

Can you tell us what Mr. McCollum told you?

(6)

A

Just to kind of see how I was doing after the e-

(7)

Correct.

mail came out, to see what all the issues that - kind of to

were talking about that you received from Mark McCollum on

(8)

get a touch on what all the issues our group was going

Febmary 28th, 2006, is that the e-mail you were just

(9)

through at that point in time, and to lrnow, you lrnow, all

(10)

the issues that had come through our group, to make sure

(11)

A

February Sth, 2006, yes.

(11 )

that those - that he has an understanding of those issues.

(12)

Q

And, just for the record, 3:02 p.m.?

(12)

JUDGE ROSENOW:

(13)

A

I see that it says 3:03 p.m.

(13)

THE WITNESS:

(14)

Q

Okay. And who are the people that that e-mail

(14)

BY MR. DULMAGE:

(15)

went to?

(16)

A

(10)

referring to?

It was, I believe, Mr. McCollum's counterpart at

(15)

Q

He, being Mr. McCollum?

Mr. McCollum, correct.

All right. And did you get an impression as to

(16)

why he was doing that? Did he say anything to you as to why
he was checking with you on those things?

(17)

KBR, which is Jay Gmm, the director of external reporting,

(17)

(18)

the director of global operations, Nick Stugart - I'm not

(18)

A

I mean, just - no.

(19)

sure what his role was at the time, but it was mostly the

(19)

Q

Did you at any point get the impression that Mr.

(20)

managers of the Oak Park or Houston - or, directors of the

(20)

McCollum was trying to figure out if you knew that Mr.

(21)

Houston F&A department.

(21)

Menendez had filed the SEC complaint?

(22)

Q

And the part of the e-mail that it appears Mr.

(22)

MR. JORDAN:

Objection, Your Honor, asking for

(23)

McCollum authored doesn't say anything about an SEC inquiry,

(23)

speculation. I think the question is irrelevant to the

(24)

does it?

(24)

issues in the case.

(25)

A

No.

(25)

JUDGE ROSENOW:

Well, yeah, I mean, at this point

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 125

(1)

aren't we talking about a meeting after which he had already

(1)

(2)

forwarded an e-mail that said that?

(2)

(3)

MR. DULMAGE:

Well, Your Honor, I think first off

XMAX(32/32)

Page 127

A The major issue that we - or, Tony was worlting on
was the RTA issue.
Q

(3)

Did Mr. McCollum at any point during the meeting

(4)

he can testify as to his impression, and it may go to some

(4)

ask you to report back to Mr. McCollum

(5)

issues-

(5)

to?

011

what Tony was up

(6)

A

(7)

have a reason to know what he was thinking and why, and see

(7)

Q

And did you do that?

(8)

if we start wandering into hearsay if that's what he based

(8)

A

I was never consulted on what he was doing after

(9)

it on.

(9)

that.

(6)

(0)
(11)

(12)

JUDGE ROSENOW:

MR. JORDAN:

First you have to ask him, do you

And he's already asked him what he

said.
JUDGE ROSENOW:

Yeah. J'mjust trying to figure

(10)

Q

Yes.

Let me ask you this, did you have an opportunity

(11)

in the F&A department at Oak Park to observe people

(12)

interacting with Tony after this e-mail came out?

Yes.

(13)

out what you're trying to get into the record on this that

(13)

A

(14)

you need.

(14)

MR. DULMAGE:

(15)

MR. DULMAGE:

Well, I'm trying to determine if the

(16) witness had a sense that Mr. McCollum was, in effect, trying
(17) to figure out what Tony's up to.
(I8)

MR. JORDAN:

(19)

JUDGE ROSENOW:

(20)
(21)
(22)

Well, he can ask him what he said.
J mean, I'll allow you to ask

that.

we're talking the e-mail that's marked as Complainant's 1

(16)

subpart 18, or as Respondent's 5.

(17)

Okay.

JUDGE ROSENOW:

Did he do anything that gave you

BY MR. DULMAGE:

(18)

Q

What did you observe?

(19)

A

There was no more communication with Tony.

Q

And what do you mean?

(20)

MR. DULMAGE:

(21)

(22)

By, well, management, the people that were worlting
on the issues that he was currently involved in.
A

(23)

the idea that he was trying to root out what Mr. Menendez's

(23)

(24)

intentions were? I think that's out of bounds.

(24) yourself?

(25)

(I)

MR. JORDAN:

Thank you, Your Honor.

JUDGE ROSENOW:

So it's really not hearsay. And

(25)

(1)

it's not really - you're not asking for an impression.

(2)

(3)

You're asking did he do anything that a layperson, you know,

(3)

(4)

did he ask, what's he up to, do you know what he's planning,

(4)

(2)

And, just so the record is clear,

(15)

Q

A

And you saw that in your own - you observed that

Well, I didn't see anybody in his office tallting

to him about the issues or getting his - or including him
on e-mails or Q

Were you a party to any discussions with any of

the other people in the F&A department where you heard with

(5)

what's his next step. Anything like that, J don't think

(5)

your own ears anybody say anything about, you know, Tony

(6)

that's out of bounds. You can ask this witness ifhe's

(6)

filing this complaint with the SEC?

(7)

aware of anything like that.

(7)

A

Yes.

(8)

Q

What did you hear?

(8)
(9)

MR. DULMAGE:

All right.

BY MR. DULMAGE:

(9)
A Talldng with Susan just about what had happened.
(l0) She expressed - Susan Willrodt had expressed frustration

(10)

Q

(II)

A

Yes.

(11)

about why he would go and file a complaint with the SEC.

(12)

Q

Tell us what you're aware of.

(13)

A

Well, when I brought up that we were working on a

(12)
(13)
(14)

was in your small group that worked with Mr. Menendez, so it
was basically you and Susan working for - you reported to

(15)

Mr. Menendez?

(14)

Are you aware of anything like that?

(15)

specific issue - or, I said Tony was worlting on a specific
issue, he asked if there were any other issues, what else

(16)

was Tony involved in, and that he wanted to know what Tony

(16)

(17)

and our group was involved in for any other issues that came

(17)

(18) through the group.
(19)

Q

And with respect to

anything else said in the

meeting?

JUDGE ROSENOW:

THE WITNESS:

And, just so I understand, Susan

Well, at the very end, I reported to

Susan who reported to Mr. Menendez.

(18)

JUDGE ROSENOW:

(19)

within the organization?

But you were one little entity

(20)

THE WITNESS:

(21)

A

Not that I recall.

(21)

JUDGE ROSENOW:

(22)

Q

Did you report to Mr. McCollum during the meeting

(22)

to her and she expressed frustration that he went to the

(23)

SEC?

(20)

(23)

what you were doing?

Correct.

(24)

A

What issues I was working on?

(24)

THE WITNESS:

(25)

Q

Yes, sir.

(25)

JUDGE ROSENOW:

So when you say you were talking

Yes.
Okay.

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 129
(J)

BY MR. DULMAGE:

(2)

Q

(3)
(4)

(1)

Q

Anybody else?

(2)

A

No.

(3)

why Mr. Menendez was still going to be teaching the

Q

Did anybody express to you directly - or, did you

(4)

derivative class but not going to be teaching the revenue
recognition class?

(5)

heat anybody ever say anything about, you know, now we're

(5)

(6)

going to have to be under the scrutiny of the SEC, or

(6)

(7)

anything like that?

(7)

A Well, I guess in the conversations with I had with
Marl{ originally it was about, you Imow, we do have our day
(10) jobs, but now we're going to be having to do additional work
(11) to make sure that we provide the SEC with any documents that
(12) they need and provide them with any of the answers or
(13) questions that they have.
(14)
Q And Mr. McCollum told you that?
(15)
A Yes.

did you come out of the meeting with an understanding as to

MR. JORDAN:

Objection, vagueness and hearsay,

understanding. Just ask, had he heard the -

(8)

(8)

JUDGE ROSENOW:

(9)

(9)

THE WITNESS:

Q

All right. During this time frame - and I think

(10)

Well, what did you hear?

Well, the person conducting the

meeting had said that, you know, Tony would remain under the

(11)

accounting, but he would have been pulled off the rev rec

(12)
(13)

because they wanted to make sure that whoever was teaching
the revenue recognition training was in line with the

(14)

company's position on revenue recognition.

(15)

BY MR. DULMAGE:

(17)
(18)

you touched on this earlier, you were testifying - I'm
sorry, you were working on preparing some revenue

(16)
(17)
(18)

(19)

recognition training, do you remember that testimony

(19)

(20)
(21)

earlier?

(20)

A

Yes.

(21)

about right now, this meeting occurred, you said, in March

(22)

Q

Did you attend any meetings where - we're

(22)

of 2006?

(16)

Q

And did the revenue training that actually -

first off, did you attend the F&A summit in 2006?

A
Q

Yes.
And, just so we're clear because we've jumped

around a little bit on dates, the time frame we're talking

(23)

probably into the February and March time frame now, did you

(23)

A

Yes.

(24)

attend any meetings in which you heard any discussions about

(24)

Q

Did the training change on revenue recognition at

(25)

whether Mr. Menendez was going to be teaching revenue

(25)

(1)

recognition?

A Well, I have to lund of clarify what was going on.
(3) We were - Halliburton was planning a F&A summit, which was
(4) a gathering of all lead accountant and above personnel to
(5) the Woodlands area for a three-day conference and to focus
(6) on a lot of topics, some of them being technical accounting
(7) topics.
(8) And on that list of topics to be taught was
(9) revenue recognition. And, when we originally put together
(10) that list, Tony was the trainer of the revenue recognition.
([ 1) Our group was pushing revenue recognition, so it was our
(12) understanding that we would just use the training that we
(2)

(13)
(14)

had done in October.
Q

All right. And did you have any meetings on that

(15)

Tony was not going to be doing the revenue recognition

(16)
(17)

course?

(18)
(19)
(20)
(21)

where Kelly Youngblood would now be doing the revenue
recognition training and Tony would be doing derivative
accounting.

A

Q

And this is the same Mr. Youngblood that authored

It wasn't our group's training.

A

(2)

Q

It wasn't-

(3)

A

It was different.

(4)

Q

It wasn't what you had put together?

(5)

A

No.

(6)

Q

Okay. What changed, if you remember?

(7)

(11)

(12)
(13)
(14)
(15)

(16)
I'd say there was a meeting in early to mid-March

the F&A summit that was actually conducted in 2006?

(1)

(8)
(9)
(10)

(17)
(18)
(19)
(20)
(21)

A Well, our training really was pulled straight out
of, you lrnow, SAB 104 and the SEC speeches, so it spoke
straight to that, whereas this training spoke to customerowned inventory and how to assess whether or not you can
recognize revenue on customer-owned inventory.
And customer-owned inventory wasn't a term that I
was familiar with from the literature, and the criterias
that they were utilizing to define whether or not you could
recognize revenue weren't criteria that I had seen in any
literature elsewhere.
Q

I want to make sure I understand. So was there

some tllings in the new training or the different training
that was not contained in SAB 104?

A

Yes.

Q

And had you seen it in any autlloritative

(22)

the October 26th White Paper that took a little bit

(22)

(23)

different position on bill-and-hold and delivery than what

(23)

A

No.

(24)

you and Mr. Menendez came up with?

(24)

Q

Did you learn at this time frame we're talking

(25)

A

Correct.

(25)

XMAX(33/33)

Page 131
All right. And during that meeting did anybody -

literature that you had ever reviewed at any time?

about, which is March 2006, did you learn that Mr. Menendez

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

(2)

Page 133
was going to be on a leave of absence?

A

(1)

In March?

(2)

A Well, they would want to talk to the whistleblower
and all parties involved with the issue that the

(3)

Q

Yes.

(3)

(4)

A

No.

(4)

whistleblower is discussing or whistleblowing on.
Q Now, as a result of these issues, we're now

(5)

traveling into April, May, June of 2006. Did Mr. Menendez,

(6)

in fact, go on leave?

(5)
(6)
(7)

(8)
(9)

Q
When did you learn?
A It would have been either the very end of March or
beginning of April.
Q

And, as you sit here today, do you believe you

learned that he was being pulled off the revenue recognition

(7)

A

Yes, I believe he went on leave in April.

(8)

Q

All right. And, regardless of the exact date that

(9)

(10)

course before you learned that he was taking the leave of

(10)

(11)

absence?

(11)

(12)

A

No.

he went on leave, did you continue to communicate with Mr.
Menendez?

(12)

A
Q

After he went on leave?
Yes.

(13)

Q

You don't think that's how it happened?

(13)

A

Yes.

(14)

A

No.

(14)

Q

And at any point did Mr. Menendez refuse to give

Q

You think you already knew he was going to be

(15)

a

(15)

you any assistance as, you know, your boss on any projects

(16)

leave of absence?

(16)

you were working on?

(17)

A No, I didn't lmow he was going to be on a leave of
absence.

(17)

A

No.

(18)

Q

At any point, were you unable to use the company

(18)

(19)

Q

011

(19)

e-mail to contact Mr. Menendez?

(20)

trying to figure out the timing and help the Court figure

(20)

(21)

out the timing on the - why Mr. Menendez would be pulled

(21)

A Yeah. At some point, they took him off the
company e-mail.

(22)

off one training but left on the other.

(23)
(24)
(25)

A Well, my understanding was he was pulled off the
rev rec because the training that we had originally provided
and his position on rev rec wasn't in line with the

(22)
(23)
(24)

(1)
(2)

Are you - okay, I'm a little confused. I'm

company's policy.
Q

Did that have anything to do with him going on

(25)

Q

And, after that happened, what did you do to get

e-mail to Mr. Menendez?

A We didn't e-mail. We did have periodic
conversations via telephone.

(1)

Q

(2)

A

On occasion, yes.

(3)

Q

And did you discuss some of the issues that you

And did you ever meet with him?

(3)

leave?

(4)

A

Not to my lmowledge.

(4)

might need his guidance on?

(5)

Q

All right. During this time, did you learn from

A I discussed hypotheticals, just to kind of get
pointed in a direction to go and do some research.

(6)

anybody that the auditors at KPMG would not talk to Mr.

(5)
(6)

(7)

Menendez?

(7)

(8)

XMAX(34!34)

Page 135

Based off my conversations with Tony, yes.

(9)

A
Q

(10)

A

The company's external auditors.

(9)
(10)

Q

And just, again, who is KPMG?

(8)

Q

And were you concerned at that point about talking

to Tony a little bit?

A

Little bit.

Q

Had anybody told you anything, that you shouldn't

All right. And that's the big company that we

(11)

talk to Tony?

(12)

probably all know about as KPMG, same company, right, the

(12)

(13)

accounting firm?

(13)

A Not to my Imowledge.
Q Why were you concerned about talking to him?
A I just didn't - I had never been in that
situation before with someone on adminleave and what does
that mean, I didn't lmow, so that's why I was speaking
hypotheticals, because I didn't want to speak to things that
the company was specifically involved in.

(1)

(14)

A

Yes.

(14)

(15)

Q

All right. And, based on your knowledge of what

(15)

(16)

your group was supposed to do, Tony's position, did you find

(16)

(17)

it unusual that the auditors wouldn't want to talk to Mr.

(17)

(18)

Menendez?

(18)

(19)
(20)
(21)

A
Q
A

Yes.

(19)

And as a CPA do you find that unusual?

(20)

business?

Yes.

(21)

(22)

Q

And, if you know, as a CPA, in a whistleblowing

(22)
(23)
(24)
(25)

A Right. It was, like, saying company A to company
B and changing numbers and trying to get an idea of what the
literature would be to understand how to account for certain
transactions.

(23)
(24)
(25)

situation, what would be your understanding of what the
outside auditors would want to do in terms of who they'd
want to go talk to?

Q

Q

But the hypotheticals were, in effect, Halliburton

And anytime you asked Mr. Menendez for any

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 137
(1)

guidance he gave it to you?

(1)

Q

(2)

A

Yes.

(2)

A

Halliburton's corporate boardroom.

(3)

Q

And did you find that guidance to be useful in

(3)

Q

And you -

(4)
(5)

terms of you doing your duties at Halliburton?

(4)

A

Yes.

(5)

Q

And did you find that guidance to be consistent

A
I believe it was the boardroom. It was
Halliburton corporate offices.

(6)

Q

And is that at the Oak Park facility?

(7)

with the literature and other research that you were doing

(7)

A

No, it was downtown.

(8)

on those subsequent issues?

(8)

Q

Downtown Houston?

(9)

A

Yes.

Q

And, to your knowledge, was anybody else in the

(6)

(9)

(10)

A

Yes.

Q

Did Mr. Menendez at any time give you some

(10)

(1)

guidance that you thought was just not consistent with the

(11)

(12)

literature or any research you did?

(12)

(13)

(14)

A
Q

No.

(13)

All right. At some point, you, as I understand

(14)

F&A department interviewed downtown?

A

No.

Q

To your knowledge, was anybody else interviewed by

the audit committee?

(15)

it, were interviewed by the audit committee, do you remember

(15)

A

Yes.

(16)

that?

(16)

Q

Was anybody else interviewed by lawyers for the

(17)

A

Yes.

(17)

(18)

Q

Do you remember when that occurred?

(18)

A

I believe so.

(19)

Q

And those interviews, to your knowledge, were

(19)
(20)

A I'd have to see. I don't remember the date, top
of my head. I think it was June of 2006.

XMAX(35/3S)

Page 139
And where were you interviewed, sir?

audit committee?

(20)

conducted out at Oak Park?

(21)

Q

Okay.

(21)

(22)

A

I know I was interviewed twice, so I don't

(22)

A
I believe they were conducted at Oak Park or North
Belt, which was another location if they were worlting at
North Belt.

(23)

remember which - the dates for both of them. And one of

(23)

(24)

them was with the audit committee and the other was with the

(24)

Q

Did you have any concerns about going downtown?

(2S)

company's lawyer.

(25)

A

I was intimidated, yes.

(1 )

Q

All right. I'm going to give you a document that

(2)

the complainants tendered as our exhibit 2, and I believe it

(3)

has been admitted.

(4)

MR. DULMAGE:

Your Honor, just for clarification,

(1)

MR. JORDAN:

Your Honor, objection to this line of

(2)

questioning. There is absolutely no relevance. We have

(3)

already-

(4)

JUDGE ROSENOW:

Well, yeah. You know, a couple

(S)

this is now out of the large exhibit 1 and its sub-exhibits,

(5)

(6)

and it's on the stand-alone.

(6)

two memoranda, and they have - kind of have - one is a

(7)

JUDGE ROSENOW:

(7)

color copy, and one's in black and white, and one has more

(8)

edits. So can you just explain to me what the two things

(9)

are?

(8)

MR. DULMAGE:

(9)

JUDGE ROSENOW:

Okay.
So it's Complainant's 2.
Correct.

questions. One is as to Complainant's Exhibit 2, there's

(10)

BY MR. DULMAGE:

(10)

(11)

Q

Mr. Paquette, do you recognize that document?

(11)

(12)
(13)

A
Q
A

Yes.

(12)

JUDGE ROSENOW:

Would you tell the Court what it is?

(13)

MR. DULMAGE:

After my meeting with the lawyers for the audit

(14)

Word allows you to change things in color, and so we just

(15)

felt like it would be easier for you

(14)
(1S)

committee, they sent me a communication documenting what

(16)

we

MR. DULMAGE:

The color one is the actual - if

you were to print the Word file Okay.
--- that he went back. You know,

JUDGE ROSENOW:

No, that's fine. Ijust want to

discussed, and so this is my modification to that

(17)

make sure that the record represents what's going on and I

(17)

conversation because, I mean, some of the things that they

(18)

understand what's going on. You were interviewed by the

(18)

said I said I either said a specific way or I didn't say a

(19)

audit committee, and they sent you a copy of their - then,

(19)

particular thing. So this was my e-mail back to - this

(20)

out of that, they sent -

(20)

would have been my e-mail bad: to them in terms of my

(21)

(21)

(22)

(22)

position on issues that we discussed.
Q And, when they met with you, who did you

(23)

understand you were being interviewed by?

(24)

(16)

(24)
(2S)

A

Well, I was told I was going to be interviewed by

the audit committee.

THE WITNESS:

Well, they had somebody writing,

kind of, while we were talking, so I understood this to be

(23) kind of I was (25)

JUDGE ROSENOW:

So they didn't transcribe it live?

They basically took notes, then they sent you a copy of what

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 141

XMAX(36/36)

Page 143
to that second fairly large paragraph about six, seven lines

(1)

they thought an accurate statement of your testimony or your

(2)

answers to their questions was, and then the first part of

(2)

down where you made a change, it says, Paquette said that he

(3)

Complainant's Exhibit 2 reflects your changes to make what

(3)

did not recall saying that. "

(4)

they said more accurate?

(4)

A

Yes.

(5)

Q

And then you changed it to, using that term?

(6)

A

Correct.

(7)

Q

And why did you change it to, use that term?

(S)

THE WITNESS:

Yes.

(6)

JUDGE ROSENOW:

(7)

BY MR. DULMAGE:

Okay.

(8)

Q

And the red is your changes?

(9)

A

Red and blue, yes.

(10)

Q

And the blue strike-outs are your changes?

A

Yes.

JUDGE ROSENOW:

Okay, great. So at least I

(13)

understand what the documents are and let's press from

(14)

there.

(IS)

MR. JORDAN:

Your Honor, my objection-

(16)
(17)

let me - restate the question now that I understand exactly

(18)

what document we're talking about.

(J 9)

I understand it still stands, but

JUDGE ROSENOW:

MR. DULMAGE:

A Because the way that the sentence was reading
originally was stating that I didn't think that the flow
(10) chart was incorrect, but, in fact, I did think the flow
(11) chart was incorrect, so I corrected the sentence so that you
(12) would be able to lmow that I - while I didn't say that the
(13) flow chart was crap, I disagreed with the flow chart.
(8)
(9)

(1)

(12)

(1)

Well, I don't necessarily have a

(14)
Q Were you concerned while you were making these
(15) corrections that they were trying to put words in your
(16) mouth?
(17)
A Yes.
(18)

Q

And I noticed there's some other corrections in

(19)

here. It seems to be a lot of the corrections relate to
possession and delivery, is that correct?

(20)

question. I don't know whether counsel is going to object

(20)

(21)

further, but I was going to ask him a question about -

(21)

A

Yes.

(22)

Q

And you put some comments otT to the side. Would

(22)
(23)

MR. JORDAN:

Not if you're going to ask him any

more questions.

(24)

BY MR. DULMAGE:

(2S)

Q

One of the things I wanted to ask you about was,

(23)

you explain to the Court why you did that?

(24)

A Well, on page three, my comment was, I did not
hear this term, and I was referring to customer-owned

(2S)

Page 144
(1)

there's a chart referred to in the exhibit. Do you see it

(2)

there? It may be further in.

Yeah. Yes.

(3)

A

(4)

MR. DULMAGE:

And, just so we can verify for the

(S)

record - and, Your Honor, this is in Complainant's Exhibit

(6)

1, sub-tab 56.

(7)

JUDGE ROSENOW:

(8)

BY MR. DULMAGE:

(9)
(10)
(11)

(12)
(3)

Q

Okay.

Is that the chart that they showed you at the time

(9)

comment. Do you see that?

A

Yes.

That was the chart we discussed.

(ll)

Q

And what was the purpose of that comment?

And you didn't bring that chart to the meeting,

(12)
A Well, the original sentence said that Tony I s views
(13) on FIN-46 were not my views. And, again, what I said was
(14) that Tony'S views on FIN-46 were not always my views, which
(15) was saying that we always had a discussion on a top, and
(16) just because one of us disagreed or agreed didn't mean that

did you?

(14)
(15)

A I don't think so.
Q Somebody showed it to you?
(6)
A I don't recall if they showed it to me or if we
(17) just talked about the particular bill-and-hold decision that
(8)

inventory. And the way that it was originally written it
(2) was insinuating that the company had originally come - the
(3) company already had a position on customer-owned inventory,
(4) which is a term that I wasn't familiar with that SuIt was
(5) pushing us to research the issue. So I didn't say customer(6) owned inventory because I wasn't - that wasn't a term that
(7) I was familiar with.
(8)
Q You have, I believe, on page seven, another
(0)

that they interviewed you?

A
Q

(1)

was in.

(17)
(18)

we didn't gut out the issue to both come to a conclusion
that the group could support. And I was uncomfortable with

All right. Well, there is some comments in this

(19)

them saying that I didn't have the same views as Tony,

(20)

memo about that Mr. Menendez said that you were critical of

because that was incorrect.

(21)

the chart.

(20)
(21)

Correct.

(22)

Paquette. If anybody was to say in this case that Mr.

(19)

(22)

Q

A

Q

Well, that brings up a very good point, Mr.

(23)

Q

And were you critical of the chart?

(23)

Menendez was kind of a my-way-or-the-highway kind of guy,

(24)

A

Yes.

(24)

would you agree with that?

(25)

Q

And then, if you go to page two, if you'd go down

(25)

A

No.

Page 141 to Page 144

 BSA
(I)
(2)

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007
Q

Page 145
Did you find him to be open to working with other

people's input?

(1)

Q

(2)

MR. JORDAN:

Objection, Your Honor.

(3)

A

Yes.

(3)

JUDGE ROSENOW:

(4)

Q

Did he ever tell you, we're going to do it my way

(4)

BY MR. DULMAGE:

(5)

and the heck with you guys?

(5)

Q

Sustained.

Did you have any concerns at the end of this

(6)

A

No.

(6)

investigation that

(7)

Q

Did you ever see him do that with anybody else?

(7)

finding out the facts or not?

(8)

A

No.

(8)

MR. JORDAN:

(9)

Q

All right. Over on page eight, you put a note in.

(9)

JUDGE ROSENOW:

(10)

Do you see that?

(10)

whether they were interested in
Objection, Your Honor.

MR. DULMAGE:

Sustained.
All right, let's move on to one

(11)

A

Yes.

(11)

other thing. This is Exhibit 80, and I think there is,

(12)

Q

Can you explain why you put the - why don't you

(12)

again, one subpart, Your Honor.

(13)
(14)
(15)

read the comment and explain it?
A

The comment says, actually, I was not aware of any

such complaint when tlns matter was first brought up in our

(13)
(14)
(15)

BY MR. DULMAGE:
Q

Mr. Paquette, this is a several-page document.

Why don't you just take a couple moments to pemse it, and

(16)

meeting. It was referring to them insinuating that I knew

(16)

I'll ask you a few questions. You've had a chance to look

(17)

that Mr. Menendez had gone to the Department of Labor prior

(17)

at that?

(18)

to them telling me that he had. And I didn't lmow that he

(18)

A

Vh-huh.

(19)

went to the Department of Labor.

(19)

Q

Tell us whatthis document is, sir.

A

Thls is a section from, I believe, the Halliburton

(20)

Q

Were you concerned they didn't believe you?

(20)

(21)

A

Well, yeah, because they didn't - I mean, they

(21)

XMAX(37/37)

Page 147
And was this investigation, you know, open-minded?

10-K draft process for 2005.

(22)

put tlns in the letter trying to implicit sometlnng off of

(22)

Q

And did you author this section?

(23)

my body language, whlch was concerning to me, because I

(23)

A

I was given the responsibility to review last

(24)

didn't say anythlng like that and I didn't lmow anything

(24)

year's section on critical accOlmting policies and estimates

(25)

like that.

(25)

and determine if any updates needed to be made.

(1)

Q

Now, was a Halliburton lawyer there during this?

(I)

Q

(2)

A

Yes.

(2)

made?

And did you determine some updates needed to be

(3)

Q

Or on the phone, at least?

(3)

(4)

A

Yes.

(4)

lmow, what they - and also I went out and looked at KPMG's

Q

On page nine, you have one more comment. Would

(5)

guidance on what should be included on critical accounting

(5)
(6)
(7)

you read that into the record?
A

The comment is, I do not thlnl\: he was treated

A

I went out to the SEC website and looked at, you

(6)

policy and estimates, and came to the conclusion that we

(7)

should be disclosing more information about our revenue
recognition process.

(8)

fairly in some respects. The point that I was trying to

(8)

(9)

maI{e concennng what they're referring to was, it was a

(9)

(10)

matter of questions being answered and Menendez being

(10)

(11)

someone who had a great amount of lmowledge with regards to

(11)

(12)

specific issues.

(12)

should be discussing for management to review and determine

(13)

if it should be included.

(13)
(14)

Q

So when you're referring to who wasn't being

fairly, was that Mr. Menendez?

(15)

A

Correct.

(16)

Q

So it was your opinion in June of 2006 that they

(17)
(18)
(19)
(20)

Q

And did you do anything to try to attempt to get

that done?
A

I just put my brackets my thoughts on what we

(14)

Q

And were your suggestions adopted?

(15)

A

Not to my lmowledge.

Q

And, at any time during this process, did you have

(16)

(17)

any discussions with Mr. McCollum about any of his concerns

Correct.

(18)

about having to make a restatement to the public?

Q

And what did you base that opinion on, sir?

(19)

MR. JORDAN:

A

Just my understanding of the amount of time and

(20)

This is after the fact.

were not treating Mr. Menendez fairly?
A

Objection, Your Honor, relevance.

(21)

knowledge and effort that Mr. Menendez had put into all the

(21)

MR. DULMAGE:

(22)

issues that he had researched and the conclusions that he

(22)

JUDGE ROSENOW:

Well, I don't-

(23)

came to and in the way that hls conclusions were handled,

(23)

MR. DULMAGE:

(24)

and for IUm to no longer be consulted on issues the way he

(24)

based on my question. Mr. Menendez is still working at

(25)

was.

(25)

Halliburton.

Yeah, restate your question.
I don't know that we know that,

 Anthony Menendez v.Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 149
(1)

BY MR. DULMAGE:

(2)

Q

(1)

Did Mr. McCollum, during the time that Mr.

XMAX(38/38)

Page 151
(2)

becallse of why.
BY MR. DULMAGE:

(3)

Menendez was still working at Halliburton, have any more

(3)

(4)

discussions with you regarding any of the issues we've been

(4)

but would you tell us, was Mr. Menendez frustrated about the

(5)

talking about today?

(5)

restatement issue?

Q

We'll let Mr. Menendez testify as to substance,

(6)

A

Yes.

(6)

A

Yes.

(7)

Q

Okay. Tell us about those discussions.

(7)

Q

And, again, without telling us what Mr. McCollum

A Well, I didn't have the discussions with Mr.
McCollum.

(8)

mayor may not have said to Mr. Menendez, what did Mr.

(9)

Menendez tell you why he was fmstrated? What did he say?

(8)
(9)

Q

(10)

I thought you just said you did.

No, I had discussions about Mr. McCollum's
(12) thOllghts on whether or not we had a prior period adjustment
(13) to some of these statements, but that was with Mr. Menendez.
A

(11)

JUDGE ROSENOW:

(14)

And just so I -let me intermpt

(10)
(11)

MR. JORDAN:

Your Honor, same objection. I mean,

Mr. Menendez is going to testify to it. Why do we have to

(12)

hear it twice? It has no additional value allowing him to

(13)

do it this way.

(14)

JUDGE ROSENOW:

Well, I mean, as you said, it's

(15)

real briefly. I'm looking at your Complainant's Exhibit 1,

(15)

more of a - your objection is that it's cumulative, as much
as anydling else?

(16)

tab 80. When you say that you added - this is basically

(16)

(17)

10-K stuff, when you added your suggestions for the draft in

(17)

MR. JORDAN:

(18)

brackets, so that's - under revenue recognition, that's the

(18)

MR. DULMAGE:

(19)

first full paragraph?

(19)

(20)
(21)

THE WITNESS:

(22)
(23)

That would be everything under

revenue recognition.
JUDGE ROSENOW:

(24)

THE WITNESS:

(25)

JUDGE ROSENOW:

(1)

Correct.

THE WITNESS:

Well, those were things that we

needed to start adding and discllss.

(8)
(9)

evidence down the road, so at this point it's not cumulative

(23)

yet but -

(24)

MR. JORDAN:

(25)

JUDGE ROSENOW:

(1)

BY MR. DULMAGE:
And did you receive any direction from Mr.

that there is going to be a huge, you know, disagreement

(3)

about the fact that he subjectively was frustrated.

(6)

JUDGE ROSENOW:
MR. JORDAN:

(9)

(10)

(11)

any kind of restatement?

(11)

(12)

A

Yes.

(12)

(13)

Q

What did Mr. Menendez tell you as to regards to

(13)

(16)

restatement?
MR. JORDAN:

Objection. He's still trying to -

JUDGE ROSENOW:

Well, if it's going to be based on

timing.

(8)

Menendez on whether or not there was concerns about making

(14)

I'll tell you what, Your HonorYour Honor, my big concern was to

(7)

(10)

(15)

- when you put that in your

quiver, that may come up down the road. But I don't know

MR. DULMAGE:

Okay. Now I understand what it

Exactly.

(2)

MR. JORDAN:

JUDGE ROSENOW:

Q

(22)

(4)

is.

And it will be cumulative to the

point that he tries to elicit the same thing from further

(5)

THE WITNESS:

(6)

JUDGE ROSENOW:

(21)

Address?

JUDGE ROSENOW:

(5)

Your Honor, I think it's only going

to take a few seconds, and I don't-

Address, correct.

(4)

(7)

Okay. So those are all things

that you thought needed to be added?

(2)
(3)

All the way down to percentage of

completion?

(20)

Yes.

And I understand that.

We've got three days, and I knew they

were going to try to call JUDGE ROSENOW:

I totally understand. That's

fine.
MR. DULMAGE:

All right, Your Honor, I'll tell you

what-

(14)

JUDGE ROSENOW:

(15)

MR. DULMAGE:

(16)

BY MR. DULMAGE:

(17)

what Mr. Menendez heard from Mr. McCollum, we'll just wait

(17)

(18)

and hear it from Mr. Menendez.

(18)

Halliburton was storing this customer-owned inventory at the

(19)

(19)

customer's direction, what did your research show about that

Menendez's, again, his state of mind as to what's going on

(20)

issue?

(21)

in the company and why he can't do his job anymore.

A My research showed that, according to SAB 104 in
situations where delivery has not occurred and then
(23) furthermore situations where a contract could be purported
(24) to be where delivery has not occurred, they should be
(25) assessed under the bill-and-hold criteria.

JUDGE ROSENOW:

Well, I think it goes to Mr.

If anybody were to say in this case that

(20)
(22)

MR. DULMAGE:

Q

Okay.
- let me try to wrap this up.

And that's fine, and I'll allow

(23)

you to ask him. Again, it's one of those things where you

(24)

can ask was he upset, was he concerned, was he frustrated

(25)

about a general topic, but I don't want you to get into

(21)

(22)

 BSA
(1)

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007
Q

Page 153
And, if anybody would say that Mr. Menendez wasn't

XMAX(39/39)

Page 155
(1)

that's irrelevant.

(2)

the type of person to build relationships, based on your

(2)

(3)

experience working for Mr. Menendez, what would you say
about that?

(3)

JUDGE ROSENOW:
Yeah. First off, it's pretty
vague. Can you focus it down?

(4)

(4)

MR. DULMAGE:

(5)

A

That would be incorrect.

(5)

JUDGE ROSENOW:

(6)

Q

And, based on your observations and working for

(6)

happened, what would you have done if you had been in his
position. Are you trying to get to the, hey, look, any
reasonable person -

(7)

Mr. Menendez, do you think he took to heart and followed

(7)

(8)

this collaborative culture that Halliburton had with respect

(8)

(9)

to revenue accounting issues?

(9)

I'm going to I

MR. DULMAGE:

mean, based

011

everything that

That's exactly-

(10)

A

Yes.

(10)

JUDGE ROSENOW:

(11)

Q

If anybody were to say that Mr. Menendez's

(11)

MR. DULMAGE:

would have quit?
That's exactly what I'm doing.

(12)

opinion, his own opinion was infallible, that that was sort

(12)

MR. JORDAN:

(13)

of his view, that he could never make a mistake, based on

(13)

JUDGE ROSENOW:

(14)

your observations of Mr. Menendez, would you agree or

(14)

(15)

disagree with that?

(15)

what your job is to get from this witness all the facts and

(16)

A I would disagree with that.
Q With respect to past errors versus future
accounting issues, some of the things that you've talked
about today, can you just briefly explain to the Court why
the issue could be bigger than just past errors?
A Because the issue was, what does the literature or, what does the accounting policy that the company is
following, and so whether it was a past issue or a future.
issue it's a matter that, when an accountant at Halliburton
goes and reads the accounting policy, is he reading - or,

(16)

then argue to me that any reasonable person in that position

(17)
(18)

(19)

(20)
(21)

(22)

(23)
(24)
(25)

would have felt compelled to do what your client did, and I

(18)

don't know that he can add anything as an expert as to the
reasonable person in the same situation.

(19)

(20)

MR. DULMAGE:

(21)

BY MR. DULMAGE:

(22)

(23)

MR. JORDAN:

JUDGE ROSENOW:

(5)

by his coworkers in the F&A department?

(6)

(7)
A
(8) issues
(9)
Q
(10)
A

(11)
(12)
(13)
(14)
(15)
(16)

(17)
(18)

(19)

Q

I didn't see them incorporating or discussing
with him.
Prior, or after?
After.
All right, okay. How about prior?

A No, I think people who worked with Tony to drill
out issues.
Q So, based on your observation, there was a change
in how Tony was treated after people learned that he had
went to the SEC?
MR. JORDAN:
Objection, leading.
JUDGE ROSENOW:
Overruled. You were going to say
yes?

mean, I think you got the facts out of the witness that you
need to make your argument.

(3)

MR. DULMAGE:
witness.

(4)

Okay, we'll take a - we're at the

we're basically at two hours, so I'll take about

a five- or ten-minute recess. Then we'll go to cross
examination.

(9)

[WHEREUPON, tllere was a brief recess.]

(0)
(11)
(12)

JUDGE ROSENOW:

The hearing will come back to

order, and, Mr. Jordan, cross examination, please.
MR. JORDAN:

Thank you, Your Honor.

(13)

CROSS EXAMINATION OF

(14)

JAMES PAQUETTE

(15)

(16)

BY MR. JORDAN:
Q

Good afternoon, Mr. Paquette. When you worked for

(17)

Mr. Hill and he was the head of technical research, do you

(18)

remember you testified about that?

(19)

A

Yes.

(20)

Q

Who did he report to?

A
Q
A

And who did Ms. Angelle report to at that time?

BY MR. DULMAGE:

(21)

Q

(22)

you observed happening to Tony Menendez, if that had been

(23)

you, how would you have felt?

(24)

Objection, Your Honor. I think

JUDGE ROSENOW:
two-hour

(7)

(21)

MR. JORDAN:

All right. With that, I'll pass the

(8)

(22)

(25)

I'll sustain it to that too. I

(1)

THE WITNESS:

And then let me ask you a question, based on what

Objection, relevance.

(2)

(20)

(23)
(24)

Uh-huh.

Q Would you - when you left Halliburton, how did
you feel?

(24)

(5)

(4)

All right.

(25)

(6)

(3)

And I think that's better left for

argument, you know, so I'll sustain it as to that. I think

(17)

she reading in a policy that's founded on SEC and 5-B
guidance.
Q Prior to your learning that Mr. Menendez had, in
effect, gone to the SEC or gone to the audit committee, did
you notice Mr. Menendez being in any way shunned or shut out

(1)
(2)

Your Honor-

(25)

I believe it was to Evelyn Angelle.
I don't recall. It seems like at some point while

we had the relationship she reported to Mark McCollum.
Q After Mr. McCollum joined the company, she

 Anthony Menendez v. Halliburton, Inc. 2007-STA-OOOOS

BSA

09-24~2007

Page 157
(1)

reported to him?

(1)

statement?

(2)

A

Yes.

(2)

A

Yes.

(3)

Q

And then Ms. Angelle, I believe, was promoted, is

(3)

Q

Did Ms. Lewis make a general statement to the

(4)

that correct, or at least went over to investor relations?

(4)

group that day that the presenters' materials would be

(5)

A

Yes.

(5)

reviewed by a reviewing committee to ensure that they were

(6)

Q

And she was not replaced, is that right?

(6)

consistent with legal requirements as well as policy? Do

(7)

A

Correct.

(7)

you recall that?

(8)

Q

And then while - or, once Mr. Menendez went on

(8)

(9)

(10)

leave of absence, was the technical research or
responsibility for that reassigned to Mr. Geer?

(9)
(10)

A

I remember her malting that statement, but I don't

feel it was that day that she made that statement. That
wasn't the first time I heard that.

(11)

A

Yes.

(11)

(12)

Q

So, while Mr. Menendez was on leave, you reported

(12)

knew there was going to be a review process where your

(J 3)

(14)
(15)

to Mr. Geer, is that right?

Q

There was a review process, though, as you - you

(13)

presenter

A

Correct.

(14)

conU11ittee to make sure they were consistent with legal

your materials were going to be reviewed by a

Q

Now, you talked - you testified about a

(15)

requirements and policy?

(16)

conversation you had with Mr. McCollum after Mr. Menendez

(16)

A

Correct.

(17)

filed his complaint with the SEC and the audit committee.

(17)

Q

And the day you say you heard Ms. Lewis make the

(18)

How many conversations did you have with Mr. McCollum?

(19)

A
Q

I recall two.

XMAX(40/40)

Page 159

(18)

statement about Mr. Menendez, Mr. McCollum was not at that

(19)

meeting, was he?

(20)

A

No.

complaint was filed and told you - well, I think you

(21)

Q

And you don't know what communications might have

(22)

actually told counsel that he said something like to keep

(22)

occurred between Ms. Lewis and anybody else and Mr. McCollum

(23)

him advised about stuff?

(23)

about whether Mr. Menendez should teach the revenue
recognition course, do you?

(20)
(21)

Two? When he met with you shortly after the

(24)

A

Correct.

(24)

(25)

Q

He confined that to work-related matters, correct?

(25)

(1)

A

Correct.

(2)

Q

In mean, in other words, he wanted to know what

A

I just know what she said.

(1)

Q

You don't know what she said to Mr. McCollum, do

(2)

you?

(3)

technical accounting issues were being worked in your group,

(3)

A

No.

(4)

is that right?

(4)

Q

Now, you testified that you and Mr. Menendez

(5)
(6)

A

Yes.

Q

And that was the extent of what Mr. McCollum said

(7)

to you about keeping him advised about what you or Mr.

(8)

Menendez was doing, is that right?

(9)

A

Correct.

(10)

Q

You also testified about some frustration that you

(5)

disagreed with the company's ultimate conclusion after Mr.

(6)

Youngblood led the study that he led about what the revenue

(7)

recognition policy ought to be, you remember that?

(8)

A

Vh-huh.

(9)

Q

Were you aware that KPMG, the outside auditors,

(10)

had found that there was a reasonable basis for the
conclusions that Mr. Youngblood and his group had come to?

(11)

felt, and you say Mr. Menendez felt, about the fact that

(11)

(12)

your judgment on revenue recognition was not being followed

(12)

A

I made that assumption.

(13)

by the company. It wasn't Mr. Menendez's job to set

(13)

Q

You were aware that KPMG was involved in the

(14)

accounting policy or practices for the corporation, was it?

(14)

discussions about what the requirements of SAB 104 were,
were you not?

(15)

A

No.

(15)

(16)

Q

That would be Mr. McCollum's responsibility,

(16)

(17)

correct?

(18)

A

Correct.

(18)

(19)

Q

You also testified about a finance and accounting

(19)

represented the audit committee when that investigation was

(20)

done. Do I understand correctly that, after they

(20)

(17)

summit, and you say there was a meeting at which someone

A
Q

Yes.
By the way, counsel asked you a series of

questions about your interview notes with the law firm that

(21)

said that Mr. Menendez would not be teaching revenue

(21)

interviewed you, somebody with that law firm actually sent

(22)

recognition because they needed somebody to teach it that

(22)

you their write-up of their interview for your review?

(23)

would be teach it consistent with company policy?

(23)

A

Yes.

(24)

A

Correct.

(24)

Q

And your correction, if they had gotten anything

(25)

Q

And was it Ms. Lewis that you think made that

(25)

wrong, right'?

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 161
(1)

A

Correct.

(1)

(2)

Q

And you made those corrections and sent them back?

(2)

that month, he was not at the office very much either, was

(3)

A

Yes.

(3)

he?

Q

And did you ever hear from the lawyers or the law

(4)

(4)

(S)

firm that had interviewed you that they had some problem or

(S)

(6)

difficulty with any of d1e corrections you made?

(7)
(8)
(9)

He was at the office probably 40 percent of the

A

time. He was probably gone for a weei{ or two at the very

(6)

beginning and then came back up until, I guess, the end of

A

No.

(7)

March.

Q

By tbe way, do you remember telling Mr. McCollum

(8)

Q

So he was iliere less than half the time?

(9)

A

Yeah.

Q

And you really, other than what you saw or didn't

when he met with you after the e-mail - I want to call it

XMAX(41/41)

Page 163
lawyer's request that he be given a paid personal leave, in

(10)

document hold notice for shorthand, that's dle e-mail that

(10)

(11)

went around saying to save any documents relating to these

(11)

(12)

accounting issues, do you remember telling Mr. McCollum when

(12)

managers might have had with Mr. Menendez during that time,

(13)

you spoke with him after the document hold notice was

(13)

do you?

see, don't have any idea what communications other F&A

(14)

distributed that the traffic into the technical mailbox in

(14)

A

(1S)

your department had dried up before that time?

(1S)

MR. JORDAN:

(16)

A

No.

(16)

Correct.
Your Honor, may I approach the

witness?

(17)

Q

That there was not much going on?

(17)

JUDGE ROSENOW:

(18)

A

Yeah, I remember saying that there was not much

(18)

BY MR. JORDAN:

(19)
(20)

going on.

Q

You were not getting a lot of traffic into the

(19)

Q

Yes.

There's one exhibit I want you to look at, and

(20)

dlat is Respondent's Exhibit 45, Mr. Paquette. And,

(21)

technical mailbox in dle research department at that time,

(21)

actually, rather than starting at 45, would you flip to the

(22)

were you?

(22)

one before, exhibit 44?

(23)

A

No.

(23)

A

Yes.

(24)

Q

In fact, there had been a decline in the volume of

(24)

Q

Do you see that?

traffic into that mailbox from the time Mr. Hill was your

(2S)

A

Yes.

Q

And that's an e-mail from John Taylor - do you

(2S)

(1)

boss until the time that Mr. Menendez went on leave of

(1)

(2)

absence, correct?

(2)

know who John Taylor was?

A

No.

(3)

A

Yes.

(4)

Q

You don't think there had been?

(4)

Q

He's an accountant at the company?

(S)

A

No.

(S)

A

Yes.

(6)

Q

Are you saying there was never much traffic in

(6)

Q

And it's addressed to some people at KPMG, Brian

(3)

(7)

that mailbox?

(7)

Maloney - was he another accountant at the company?

(8)

A

I'm saying it was cyclical.

(8)

A

Yes.

(9)

Q

Now, you testified that you didl1 ,t see F&A

(9)

Q

Scott Willis, was he at Halliburton? .

(10)

managers in Mr. Menendez's office much after he submitted

(10)

A

Yes.

(11)

his complaint to the audit committee and his complaint to

(11)

Q

And Tony Menendez, with a copy to Mark Traylor.

(12)

the SEC. The fact is, Mr. Menendez was not at work very

(12)

(13)

much after that time, was he?

(13)

(14)

A

No.

(14)

Mark Traylor was an accounting manager, was he not?

A

I don't remember his title, but he was in

accotmting.

(1S)

Q

Are you agreeing with me, or disagreeing?

(1S)

Q

And the date of this e-mail is what?

(16)

A

For a short period of time, he wasn't at the

(16)

A

March 17th, 2006.

(17)

office.

Q

So that was more ilian a week - well, actually,

(18)

Q

(17)

He went on leave in early April of2006, and he

(18)

that was more than a month after it became known that Mr.
Menendez had filed his complaint with the SEC, right?

(19)

requested that leave in March of 2006, and were you aware

(19)

(20)

that he was working primarily out of his lawyer's offices

(20)

A

Correct.

(21)

after the request - after they made the request for the

(21)

Q

And Mr. Taylor's e-mail attaches a draft

(22)

leave on his behalf?

(22)

memorandum regarding the RTA or red technology alliance
project, is that right?

(23)

A

Yes.

(23)

(24)

Q

And, in the month between the time that it became

(24)

A

Correct.

(2S)

Q

And he says in here to all the addressees,

(2S)

known that he had made a complaint to the SEC and his

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 165
including Mr. Menendez, please review my revisions and

(1)

(2)

provide any comments you may have. Do you see that?

(2)

Q

FIN-46, did she?

(3)

A

Correct.

(3)

A

Not in all cases.

(4)

Q

And then, if you'll turn to exhibit 45, the next

(4)

Q

Now, the fact of the matter is that the technical

(5)

exhibit, there is an e-mail from Mr. Menendez back to Mr.

(6)

Taylor and some of the other addressees, is that right?

(5)

research group, and Mr. Menendez specifically, did have

(6)

input into the study that Mr. Youngblood did on revenue

(7)

A

Yes.

(7)

recognition for customer-owned inventory, isn't that

(8)

Q

How long did it take Mr. Menendez to respond to

(8)

correct?

this - to Mr. Taylor's e-mail? Six days?

(9)

A

Upon commencement, yes.

(10)

A

That's what it 1001(s lil{e.

(10)

Q

I

(11)

Q

But he is providing some conm1ents in response to

(11)

(9)

(12)
(13)

Mr. Taylor's revised draft of the memo, do you see that?
A

Yes.

Q

So at least with respect to some projects, such as

mean, Mr. Menendez's views were known to Mr.

Youngblood and others participating in that study?

(12)

A

Yes.

(13)

Q

Including his views about SAB and what the

(14)

requirements were

(15)

the RT A matter, Mr. Menendez was not cut off from

(15)

of SAB 104 and what its requirements were?

(16)

communications with the rest of the finance and accounting

(16)

A

Yes.

(17)

departmeJ,1t, would you agree with that now, having reviewed

(17)

Q

And so, when you testified tl1at you all felt shut

(18)

these exhibits?

(14)

(19)
(20)
(21)

(22)
(23)

A

For tIlls particular issue, yes.

MR. DULMAGE:

Your Honor, I would object, because

I'm sorry, including his interpretation

(18)

out of Mr. Youngblood's study, what you're really saying is

(19)

you all felt fmstrated that your views were not being

(20)

accepted by others involved in the study?

(21)

A

That's part of it.

Well, I'll sustain it to the

(22)

Q

By the way, there was some previous testimony, a

extent that the record shows - I mean, it shows that.

(23)

the witness doesn't have personal knowledge of that.
JUDGE ROSENOW:

(24)

BY MR. JORDAN:

(25)

Q

You said Ms. Willrodt expressed some fmstration

XMAX(42142)

Page 167
And she didn't agree with Mr. Menendez's view on

mention of something called direct sales, Mr. Paquette. Do

(24)

you know exactly what kind of transaction Halliburton

(25)

describes or defines as a direct sale?

Page 168
(I)

that Mr. Menendez had elevated these issues to the audit

(1)

(2)

committee and the SEC?

(2)

(3)

A

Yes.

(3)

(4)

Q

And Ms. Willrodt - Mr. Menendez didn't work for

(4)

A I don't recall the verbiage that Halliburton would
define it on tIlls day. I lmew it back then.
Q

With regard to the EITF 00-21, you testified that

you looked at some situations where the contract called for

(5)

the delivery of a product, a part, and then a subsequent -

(6)

A

No.

(6)

I think you said a subsequent contract called for install

(7)

Q
A

She had worked for him until -

(7)

that part, correct?

(8)

Yes.

(8)

(9)

Q

- right about the time he made his complaint,

(9)

A Looked at both, delivery of the contract and then
a subsequent contract, or delivery and service in the same
contract.

(5)

(10)

Ms. Willrodt, did he?

(10)

right?

(11)

A

Yes.

(12)

Q

And, in fact, you had

(13)

(11)
Ms. Willrodt had been

your immediate superior, had she not?

Q

And, if it's two separate contracts, then EITF 00-

(12)

21 would not preclude recognition of revenue upon delivery

(13)

of the part or the product, correct?

(14)

A

Correct.

(14)

A

That's incorrect.

(15)

Q

So this was an example of one of the people that

(15)

Q

So you - it's your opinion that, even if the

(16)

worked with Mr. Menendez directly under him, such as

(16)

installation is only to be accomplished in a subsequent

(17)

you rself, that Ms. Willrod t had a different view of these

(17)

contract, that the company still can't recognize revenue

(18)

matters than you did, correct?

(18)

when it's paid for, when it bills, it's paid for and

(19)

delivers the product in the first contract?

(19)
(20)

A

No.

Q

Well, she didn't agree that Mr. Menendez should

(20)

(21 )

have elevated these issues to the audit committee or the

(21)

(22)

SEC.

(22)

(23)

A

Correct.

(24)

Q

That was your testimony, right?

(25)

A

Yes.

A

If you read 00-21, it speaks to having to lool{ at

your relationsIllp with your customer and the contracts as a
whole, so regardless of it's split into two contracts or if

it's one contract you have to determine whether or not you
have to look at both contracts in tandem with each other,
(25) and then you assess the criteria of whether or not you can
(23)
(24)

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007
Page 169

(1)

(2)

(3)
(4)

(S)

(6)

separate those contracts and recognize revenue at different
points. My testimony did not say that you could not be
recog~zing revenue. My testimony said that there was no
assessment of whether or not you could separate those
criteria to be able to recognize revenue.

Q

I see. So you're not saying that the revenue was

(1)

XMAX(43/43)

Page 171
accounting division within finance and accounting that

(2)

oversaw or regulated the operations or activities of the

(3)

field accounting personnel, is that right?

(4)

A

I think so.

CS)

Q

And, in connection with the revenue recognition

(6)

study that Mr. Youngblood led in late 2005, a great deal of
information had to be gathered from the field, right?

(7)

improperly recognized with respect to 00-21, you're saying

(7)

(8)

that in your judgment you didn't think the company was being

(8)

A

Yes.

(9)

sufficiently proactive in evaluating its practices?

(9)

Q

And the purpose of that study was to gather the

(l0)

(10)

facts and so that a reasoned judgment could be made about

(11)

A That you have to assess EITF 00-21 to recognize
revenue. So, if there was no assessment, then they would
(12) incorrectly recognize revenue, because they weren't
(13) correctly assessing the guidance out there. That's a
(14) separate issue.

(11)

whether or when, rather, Halliburton could recognize revenue

(12)

in the various types of transactions, correct?

(IS)

Q

Well, what about - I think you mentioned Aramco,

(13)

A

Yes.

(14)

Q

And Mr. SuIt, when he along with Mr. McCollum

(1S)

directed that that review or study take place, made that

(16)

in particular, in connection with tllis. Do I recall that

(16)

clear, right, that nobody was making a judgment at that

(17)

correctly?

(17)

point in time about what was the correct metllod or not, that
they were going to look at it very carefully?

(18)

A

Yes.

(18)

(19)

Q

And do you know how the transactions of sale, the

(19)

A

Correct.

sale transactions of parts to Aramco worked at that time?

(20)

Q

And so - in fact, Mr. SuIt didn t change any

A My understanding at that time was, Halliburton
(22) would sell- because Halliburton couldn't interact - I
(23) believe Halliburton couldn't interact directly with the
(24) customer, so Halliburton had to sell it to an agent and then
(2S) subsequently that agent would pass that along to the

(21)

business practice regarding revenue recognition at that

(22)

point in time, did he?

(23)
(24)

A I believe prior to that he was already making
changes to the accounting policy.

(20)
(21)

(4)

customer. And then Halliburton would have to end up
entering into a contract with the customer to perform the
service.
Q And so Halliburton is selling to the agent, and

(S)

then the agent is turning around and selling to Aramco?

(1)

(2)

(3)

(6)
(7)
(8)

A
Q

(2S)

(1)

practice on when revenue could be recognized for customer
product delivered to Halliburton warehouses, did he?

(3)

A That's what he was changing, was the business
practice on SAB 104.

(4)
(S)

(6)

And then Halliburton at that point could enter

(7)

(9)

A

Correct.

(10)

Q

Now, isn't it true that, with regard to most of

But he didn't make a change to the business

(2)

Correct.

into a contract with Aramco to install the product?

Q

t

(8)
(9)
(10)

Q

You think he was changing that, or was he -

A The business practice is a docmnent, and he was
malting changes to incorporate SAB 104.
Q Do you know whether changes - do you know whether
he ever implemented changes to the business practice,
formally implemented?

(11)

those products, that Aramco could and sometimes did use

(II)

A

No, I don't know.

(12)

other companies to install the Halliburton product?

(12)

Q

And if he comes here tomorrow and testifies he

(13)

A I think that would depend on the complexity of the
product, but I don't recall hearing that that's what

(13)
(14)

A

To implement?

(IS)

Q

To implement, yes, sir.

(16)

Halliburton did.
Q Did you say it would depend on the complexity? So

(16)

I don't know.

(17)

it would be possible, at least with regard to some of the

(17)

A
Q

(18)

products?

(18)

indicated number - or, dollar values for total product in

(14)
(IS)

never did that you'd have no reason to disagree?

You testified that you saw some documentation that

(19)

A

In some cases.

(19)

Halliburton warehouses I think around the world, is that

(20)

Q

By the way, with regard to the study that Mr.

(20)

right?

(21)

Youngblood, you said, led, do you remember what his job was

(21)

(22)

at the time?

(22)

A I don't recall what it was referring to in terms
of the nmnber, actual number , but when they were doing their

(23)
(24)

analysis there was I believe an Excel file that had those
numbers on it.

(23)
(24)
(2S)

A

I think his job was either manager or director of

global operations accounting.
Q

And global operations accounting would be the

(2S)

Q

Do you recall whether those numbers were total

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 173
(1)

product in Halliburton warehouses?

(1)

it's possible or not, just assume, if the four SAB 104

(2)

A

I don't recall.

(2)

criteria are met

(3)

Q

So you don't know if that was - if those numbers

(3)

arrangement to manufacture the piece of equipment, the cost

that is, there's a contractual

(4)

were limited to what Halliburton would call customer-owned

(4)

is fixed and collectability is reasonably assured - and

(5)

inventory or whether it was total inventory?

(5)

that is, it's been billed for, maybe it's even been paid

(6)

A

Not - well, I believe it was for customer-owned

(7)

inventory, but I don't lmow if it was for all of what they

(8)

would consider customer-owned inventory.

(9)

Q

And that would include, then, customer inventory

(6)

for, and the customer has said to the common carrier, pick

(7)

it up at the Halliburton manufacturing facility and take it

(8)

to Halliburton warehouse close to where our well site is, if

(9)

those four criteria are met, then the inventory belongs to

(10)

on which Halliburton had actually deferred recognizing

(10)

(1)

revenue?

(11)

A

It depends.

Q

Are you saying that the customer can pay for the

(12)

A

I don't lmow if they did or not.

(12)

(13)

Q

You don't know - I'm sorry, let me ask you that

(13)

the customer, right?

inventory and have control over where to ship it to and you

(14)

question, do you know whether or not Halliburton deferred

(14)

still don't believe it belongs - you still don't believe

(15)

recognizing revenue on certain inventory because of SAB 104?

(15)

it's owned by the customer in some instances?

(16)
(17)

(18)

A

All the actions that I worked on, they recognized

tIle revenue prior to delivery.
Q

Now, you had an exchange with counsel about the

(16)

A

The customer owns the inventory, correct.

(17)

Q

So customer-owned inventory is not an irrational

(18)

term, is it?

(19)

various customer-owned inventory. Let me ask you something

(19)

A

No.

(20)

about SAB 104, if delivery occurs - I'm sorry, let me back

(20)

Q

Now, you said you had some discussion with a field

(21)

up. SAB 104 set forth four criteria for recognizing

(21)

(22)

revenue, correct?

(22)

A

Yes.

(23)

Q

Did you go to the warehouse and conduct a review

(23)
(24)
(25)

A

Yeah, it's four criteria to support the revenue

has been realized and earned.
Q

That's right. And, if the revenue has been

XMAX(44/44)

Page 175

(24)

location about risk of loss. Was that a telephone call?

of the documentation, do anything like that?

(25)

A

Subsequent to that discussion, when we went and

(1)

realized and earned, under those four criteria, then one

(1)

did revenue recognition training in September, we went to a

(2)

never gets to a bill-and-hoid analysis, does he?

(2)

warehouse But did you -

(3)

A

Correct.

(3)

Q

(4)

Q

And the four criteria are, evidence of an

(4)

A

- and aslwd questions.

arrangement that the cost is fixed or determinable and that

(5)

Q

How about the one - I guess the one you were

(6)

collectability is reasonably assured, those are three of

(6)

(7)

them, right?

(7)

A

Yes.

(8)

Q

Perforating gun?

(5)

(8)

A

Uh-huh.

talking about specifically was TCP, was that -

(9)

Q

Is that a yes?

(9)

A

Yes.

(10)

A

Yes.

(10)

Q

And that warehouse, when you talked to - those

Q

And then the fourth one is that delivery has

(11)

were the people that told you that risk of loss was still

(12)

Halliburton's as to the perforating guns, is that right?

Ol)
(12)

occurred or services have been rendered?

(13)

A

Correct.

(13)

A

Yes.

(l4)

Q

So if those four elements are met, including

(14)

Q

And that warehouse was in the United Kingdom?

(l5)

delivery, and the inventory is sitting in a Halliburton

(15)

A

Correct.

(16)

warehouse because that's where the customer has told the

(16)

Q

So you didn't go to that warehouse, did you?

A

I believe that wasn't the warehouse we went to,

(17)

common carrier to deliver it, then that would be the

(17)

(18)

customer-owned inventory, right?

(18)

(19)
(20)

A

That would be inventory that the customer owns

sitting in Halliburton's warehouse.

no.

(19)

Q

(20)

A

And the customer in that case was Shell Oil?
I believe so.

Q

I think you said that in your testimony.

(2l)

Q

Okay.

(21)

(22)

A

That's defined by Halliburton as customer-owned

(22)

A

Yes.

(23)

Q

And are you aware whether Halliburton - are you

(23)
(24)
(25)

inventory.

Q

Well, now, I'm not really asking you as defined by

Halliburton. 1'm asking you to assume - whether you agree

(24)

aware of what instmction Mr. Suit or Mr. McCollum issued

(25)

about whether revenue should be recognized in that

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

(1)

Page 177
particular instance that you and Mr. McCollum wrote this

(1)

(2)

memo about?

(2)

(3)

A I think the final conclusion, with respect to this
memo, was to defer the revenue.

(3)

(4)

(4)

(S)

Q

To defer the revenue?

(6)

A

Vh-huh.

(6)

(7)

Q

And is it also tme that the equipment involved in

(7)

(S)

(8)

that particular analysis, the perforating guns, is equipment

(8)

(9)

that Halliburton, because of the nature of the product, has

(9)

(10)

to install itself?

A Well, the memo was still in draft form at this
point.
Q

Before the draft was written and circulated, you

don't know - you can't say that you talked to Mr.·Hill, can
you?

A Well, I had to tall.: to him to get the documents
for the prior issues, the prior TCP issues.
Q

You didn't talk to him abont the fact that you and

Mr. Menendez were reaching the opposite conclusion from what

(10)

he had reached before the draft memo was written and

(l1)

A

Yes.

(lJ)

circulated, did you?

(12)

Q

And the equipment, standing alone without

(12)

A

That was the purpose of the draft memo.

(13)

Halliburton installing it, because of its nature, would not

(13)

Q

To let him know that?

(14)

have much value to the customer, would it?

(14)

A

That's why it was in draft form.
And you don't know that Mr. Menendez did either,

(IS)

A

Correct.

(IS)

Q

(16)

Q

And are you aware of anything about the contracts

(16)

do you?

(17)
(18)

(19)

(17)

A

Not to my lrnowledge.

A

Am I aware of-

(18)

Q

I'm sorry, did you say in your testimony that part

Q

- that provides - well, are you aware - do yo

that Halliburton has with Shell, at least in the UK -

(19)

of the SAB 104 analysis is that the risk - is to determine

(20)

know whether Shell - or, whether Halliburton's contracts

(20)

or assess when the risk of loss transfers to the customer?

(21)

with Shell in the UK are unclear about who has title and

(21)

A

That is involved in assessing SAB 104.

(22)

risk of ownership as long as those perforating guns are in

(22)

Q

Are you familiar - you know, we talked about

(23)

the warehouse?

(23)

these four criteria on this SAB 104 for revenue being

(24)

A

I don't recall the language of the contracts.

(24)

earned, do you recall in connection with the delivery

(2S)

Q

With regard to the perforating guns that you and

(2S)

criteria that there's some SEC guidance about an

(1)

Mr. Menendez wrote that memo about - and I think it's-

(2)

make sure we've got the right

(3)

1, because Halliburton had to install that product, and

(4)

because it did not have stand-alone value without it being

(4)

designated by the customer is generally thought to mean a

(5)

installed, recognition of revenue for that product would be

(S)

location other than one of the customer's locations?

(6)

improper under 00-21, would it not?

(6)

A

Yes.

(7)

Q

Otherwise, it wouldn't need to be in there, would

(7)

(8)

it's sub-tab 60 of exhibit

A

It would be improper, yes.

Q

Now, you testified about the prior - or, the

XMAX(4S/4S)

Page 179

(I)

intermediate site designated by the customer?

(2)

A

Yes.

(3)

Q

And isn't it tme tllat the intermediate site

(8)

it?

(9)

A

Correct.

owned inventory back in - I think it was actually done in

(10)

Q

Mr. Paquette, I'm skipping around a little bit,

(l1)

late 2002 and - the memo, I think, was published in early

(11)

sorry about that. But let's go back to that TCP memo, the

(12)

2003. Did you personally talk to Ms. Angelle about the

(12)

perforating guns memo. Do you recall how much revenue was

(13)

different conclusions that you and Mr. Menendez were coming

(13)

involved in that exercise?

(14)

to? You did not, did you?

(14)

(9)

(10)

study that Mr. Hill and Ms. Angelle did regarding customer-

A

I don't.

(15)

A

Not about - no.

(15)

Q

Does about $3 million sound right to you?

(16)

Q

And you did not personally talk to Mr. Hill

(16)
(17)

I don't recall the nmnber.
MR. JORDAN:
May I have a moment, Your Honor?

(18)

A

No.

(18)

JUDGE ROSENOW:

(19)

Q

Before the memo was written?

(19)

MR. JORDAN:

(20)

A

Before the TCP memo was written?

(20)

(21)

Q

Yes, sir.

(21)

(17)

(22)
(23)
(24)
(25)

either, did you, about that?

A I don't recall when it was I talked to them about
it specifically, but I taU.:ed to them about it.
Q

But you can't testify

you don't know whether it

was before the memo was written, do you?

A

Sure.

Thank you, Mr. Paquette. I'll pass

the witness, Your Honor.
JUDGE ROSENOW:

Redirect, please?

(22)

REDIRECT EXAMINATION OF

(23)

JAMES PAQUETTE

(24)

BY MR. DULMAGE:

(25)

Q

Mr. Jordan asked you a couple questions about Mr.

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
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Page 181
Geer. When you were working for Mr. Menendez, what was Mr.
Geer's position?
A

Director of external reporting.

Q

And what was Mr. Menendez's position?

(4)

(5)

Q And was Mr. Menendez and Mr. Geer equals, as far
as you knew?

(7)

(9)

A

Yes.

Q

(11)

A

In terms of the hierarchy?
Yes.

(12)

Q

Mr. Jordan asked you a couple questions about some

(14)

(15)
(16)

(2)
(3)

A Director of technical accounting research and
training.

(10)

(13)

(1)

of the SAB guidance related to an intermediate destination,
do you remember that'?
A Yes.

(6)

(8)
(9)
(10)
(11)

(12)
(13)
(14)

(15)
(16)

concerns that you and Mr. Menendez had about bill-and-hold
and the accounting issues that we've discussed today was
only a small amount of Halliburton's revenue? Have you seen
something that proves it was only a small part of
Halliburton's revenue?
A

No.

Have you ever seen anything that justifies
Halliburton taking the position that they currently take on
this issue?
A
No.
Q

Q
I just want to show this to you. This is the
other thing tl1at you were talking about.

JUDGE ROSENOW:
What is that?
MR. DULMAGE:
Your Honor, just for the record,
that's in exhibit 1, sub-tab 62.

(J7)

Q
Was there any distinction in your mind, based on
the literature you looked at, as to whether that

(17)

JUDGE ROSENOW:

(18)

intermediate destination being other than Halliburton?

(18)

BY MR. DULMAGE:

(19)
(20)

A

Most of the speeches and SAB 104, when they talk

about tIlis intermediate site, it would need to be a site

(19)
(20)

(21)

that is critically - very independent between the company

(21)

(22)

and the customer, and that are not to be - in order for it

(22)

(23)

to be considered witilln the code.
Q Do you remember any third party in the literature'?

(24)

(24)
(25)

A

I haven't read the literature in a year and a

(23)

(25)

(1)

half, so it's in there. I don't know. It may have been in

(1)

(2)

the last - I don't recall if it's - I just know that it

(2)

(3)

was important to designate the difference between an

(3)

(4)

independent tillrd-party warehouse versus Halliburton's

(4)

(5)
(6)

warehouse.
Q
So in your mind, based on what you remember about

(6)

(7)

your research, if it was Halliburton's warehouse, that could

(7)

(8)

be problematic?
A That could be bill-and-hold.

(8)

(9)

(5)

(9)

XMAX(46/46)

Page 183
documentation that supports the idea that all of these

Okay.

Q
And you didn't see anything in there that
supported-

A

The company's position.

The company's position, right. Do you know when
Mr. Christopher wrote this?
A
No.
Q

Q

Did you have the chance to talk to Mr. Christopher

about this article versus what the company was doing?
A

I lmow Tony had talked to John about that article

bacl( when we were doing our iIlitial assessment of bill-andhold.
MR. DULMAGE:
Your Honor, may I take a moment?
JUDGE ROSENOW:
Sure.
BY MR. DULMAGE:
Q Mr. Jordan showed you a couple of exhibits in that
notebook regarding some communications and e-mails that

MI'. Jordan asked you some questions about the

(10)

related to the audit committee meeting, do you remember when

(lJ)

Kelly Youngblood study, which we talked about also, and then

(11)

he asked you that?

(12)

you said that your frustration was part of your answer. I

(12)

A

Yes.

(13)

don't know if you remember that testimony just a few minutes

(13)

Q

Were you aware that Tony talked to those people?

(14)

ago. Do you remember that?
A Part of my frustration had to do with the fact

(14)

(IS)

(16)

that the memo was generated outside of our group.

(10)

(17)

Q

Q

What was your - other part of your frustration?

(15)

A Well, the initial communication came up - well,
whether he had worked with them prior to, you lmow, in

(16)

January, in December and January when the issue came up. So

(17)

on March 17th I wasn't aware of tills. I was copied on an email March 23rd where Tony responded.
Q Were you aware that Tony couldn't talk to them

(18)
(19)

A That I wasn't asked for - no consideration
between our position and the position that Kelly had - or,

(18)
(19)

(20)

the company took. I was told that KPMG supported the
company's position, so, upon that answer, I asl(ed, well, how

(20)

because KPMG said they wouldn't talk to Tony anymore because

(21)

of the audit committee report?

(21)

MR. JORDAN:

Objection, Your Honor, calls for

(22)

did that reconcile with KPMG's position on bill-and-hold in

(22)

(23)

the letter that KPMG wrote. And I never received an

(23)

(24)

explanation on that.
Q Did you ever - to this day, have you seen any

(24)

any evidence that Mr. Menendez was prohibited from talking

(25)

to people at Halliburton.

(25)

hearsay, and, second is, you know, I don't think there is

Page 181 to Page 184

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007
Page 185

(I)

(2)
(3)
(4)
(S)
(6)

(7)
(8)
(9)

(10)
(11)

JUDGE ROSENOW:

I'll sustain it in that this

witnessMR. DULMAGE:

Let me

can I ask him a question

ofYou can rephrase it, and we'll see

if it MR. DULMAGE:

We'll withdraw the question, Your

JUDGE ROSENOW:

Okay.

BY MR. DULMAGE:
What changes did you notice in Tony, Mr. Menendez,

(12)

after the e-mail came out outing him about the

(13)

the whistle?

(14)

MR. JORDAN:

(1S)

JUDGE ROSENOW:

(16)

RECROSS EXAMINATION OF

(3)

JAMES PAQUETTE

(S)

(6)

Honor.

MR. JORDAN:

blowing

Objection, Your Honor.
Basis for the objection?

MR. JORDAN:

(2)
(4)

JUDGE ROSENOW;

Q

(1)

BY MR. JORDAN:

Mr. Paquette, it was well known within the finance

Q

and accounting department that Mr. Menendez was taking

(7)

strong issue of objection with the company's practice on

(8)

revenue recognition, was it not?

(9)

A

Yes.

(10)

Q

And it was also known that he had taken issue with

(11)

issues under FIN-46 , correct?

(12)

A

Yes.

(13)

Q

Now, would you look at the Christopher article

(14)

that counsel showed you? It's under tab - do you have it

(1S)

there?

Well, I think it's irrelevant. It's

(16)

JUDGE ROSENOW:

(17)

a reasonable-person test. But also - and I haven't said

(17)

MR. DULMAGE:

(18)

anything about this so far, but we have, what, a statute of

(18)

JUDGE ROSENOW:

limitations defense? This all happened outside the 90-day

(19)

BY MR. JORDAN:

(20)

period. And I haven't objected to it for background

(20)

(21)

purposes, but -

(21)

(22)
(24)
(2S)

(1)

JUDGE ROSENOW:

I'm trying to figure out, you say

the statute of limitations defense as to what?
MR. JORDAN:

Well, I'll take it back. This

particular problem did not - it was something else that may

have happened before.

(2)

JUDGE ROSENOW:

(3)

MR. JORDAN:

Would you look at the introductory paragraph in

that article, please, and about halfway down, referring to
bill-and-hold transactions, do you see that sentence that

(23)

says, also known as ship-in-place transactions?

(24)

A

Vh-huh.

(2S)

Q

Would you read that out loud, please, that

(2)

But I still don't think his

Thank you.

(22)

(1)

Okay.

Q

Which tab is it?
Sixty-two.

(19)

(23)

(3)

XMAX(47/47)

Page 187
Yes, Your Honor, just a couple.

sentence?
A

Also known as ship-in-place transactions. These

transactions generally refer to scenarios where revenue is

(4)

impression of how Mr. Menendez was reacting to this

(4)

recognized after a seller has substantially completed its

(S)

situation, when it became known that he had filed these

(S)

obligations under an arrangement but prior to the buyer or

(6)

charges, is irrelevant.

(6)

common carrier taking physical possession of the goods.

(7)

(8)
(9)

(10)

JUDGE ROSENOW:

problem I have is, 1'111 not sure if it's in the scope of the
cross, but 1'm still going to want - just make it - how
was he acting?

(11)

MR. DULMAGE:

(12)

JUDGE ROSENOW:

(13)

Well, I'm not sure - the only

(8)
(9)
(10)

Yeah.
Was he

did he seem - you know,

was he upset?
MR. DULMAGE:

Yeah.

(15)

JUDGE ROSENOW:

(16)

MR. DULMAGE:

(17)

BY MR. DULMAGE:

I don't think that's out of line.
Thank you, Your Honor.

So Mr. Christopher is saying here that bill-and-

has not yet taken physical possession of the goods?
Correct?
A

Correct.

(12)

Q

And isn't it a fact that all or most of the

deliveries from the Halliburton manufacturing facilities to

(14)

the Halliburton warehouses where the customer wants the

(1S)

product taken are handled by common carrier?

(16)
(17)

I believe the exact question was, what changes did

Q

hold applies conmlonly whether a buyer or a common carrier

(11)

(13)

(14)

Q

(7)

A

By the people taking the equipment, is that what

you're saying?

(18)

Q

Yes, sir. Or do you know?

(19)

you notice in Tony after he was outed for blowing the

(19)

A

I don't know that.

(20)

whistle to the SEC and the audit conmlittee?

(20)

MR. JORDAN:

(21)

JUDGE ROSENOW:

(18)

(21)
(22)

(23)
(24)
(25)

A

He was shocked, disappointed, somewhat emotional

in terms of feeling that he was betrayed.
MR. DULMAGE:

Thank you, Your Honor. Nothing

further.
JUDGE ROSENOW:

Any recross based on

(22)

No further questions, Your Honor.

(23)

MR. DULMAGE:

(24)

JUDGE ROSENOW:

(2S)

Any further redirect based on

that?
We're done, Your Honor. Thank you.
I have some questions. The EITF

and the FIN, are they - what's the source of those

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

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(2)
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Page 189
guidances or regulations or rules?
THE WITNESS:

FASB. See, the Financial Accounting

Standards Board develops literature on generally accepted

(1)

THE WITNESS:

(2)

JUDGE ROSENOW:

(3)

XMAX(4S/4S)

Page 191
Correct.
And I think you talked a little

bit about folks around the office talking about, well, it's

(4)

accounting principles that have to be followed by a company

(4)

not like - I think it was, well, we have Oilr day jobs, now

(5)

like Halliburton in issuing financial statements.

(5)

we're going to have a night job with the SEC. You may not

(6)
(7)
(S)
(9)
(10)

(II)
(2)

(13)

JUDGE ROSENOW:

Do they have to be followed by a

company like Halliburton because THE WITNESS:

Because they are a publicly traded

company.

(6)

be able to answer this, but was that a sense of we're in

(7)

trouble now because we've been doing stuff wrong, or it's

(S) just I hope nobody from the SEC comes to look at it because
(9)

JUDGE ROSENOW:

And that's all pursuant to the

SEC?
THE WITNESS:

Yes.

JUDGE ROSENOW:

So the SEC says, if you don't

we've got to gather up a bunch of documents?

(10)

THE WITNESS:

(11)

JUDGE ROSENOW:

The latter.

(12)

THE WITNESS:

The latter of the two?

Uh-huh.

(13)

JUDGE ROSENOW:

(14)

follow EITF and you don't follow FIN, you're nllming afoul

(14)

that's fine, was your sense

(15)

of SEC rules and regulations?

(15)

you wrote one draft for the 10-K saying, you know, we ought

(16)

THE WITNESS:

(17)

JUDGE ROSENOW:

Yes.
So, in other words, what I'm

And if you can't answer that,
~

and I know that - I guess

(16)

to put more information out about our revenue recognition

(17)

policies - was that after all this going on with the

(IS)

saying at this point is, both the FIN and the EITF have the

(1S)

disagreement about your office - your three-man office

(19)

force, either directly or indirectly, of SEC regulations?

(19)

getting a memo that said, hey, you know what, you know,

(20)

THE WITNESS:

(21)

JUDGE ROSENOW:

Correct.
I guess when you were talking - I

(20)

we're not handling this stuff right, we think we ought to go

(21)

in a different direction, apparently Mr. Youngblood listened

(22)

think it was with Shell Oil product, dealing with the Shell

(22)

to you and how much he listened to you, is, I guess, up to

(23)

Oil - or, the Shell customer in England, and basically

(23)

litigation. So it was after all that that you came back and

(24)

you're saying that he takes the risk of that loss, and you

(24)

you said, bey, look, we got to be a little bit more

(25)

testified to that guidance, but your impression was that

(25)

fortllcoming in the lO-K disclosures?

Page 192
In the period after we got-

maybe technically the risk of loss would be on the

(1)

(2)

purchaser, but they're a very good customer and we would

(2)

JUDGE ROSENOW:

(3)

never let them eat the loss on that?

(3)

THE WITNESS:

(1)

(4)

THE WITNESS:

(5)

JUDGE ROSENOW:

Correct.
As I understand your testimony,

(4)

THE WITNESS:

JUDGE ROSENOW:
published after

the company decided they weren't going to

take your point of view as to these transactions?

your understanding was that was not a legal obligation but

(6)

(7)

would be something that Halliburton would do to maintain the

(7)

THE WITNESS:

(S)

goodwill of that customer?

(S)

JUDGE ROSENOW:

(10)

THE WITNESS:

Right.

JUDGE ROSENOW:

And, as I understand, basically

So you believed that what was

(5)

(6)

(9)

After the memo?

After the memos were -

(9)
(10)

(11)

after e-mail went out saying that there was a document hold,

(11)

(12)

looks like there's an SEC - the SEC is going to be looking

(12)

Correct.
Was your sense that they didn't

disclose, or you think that they were actually trying to
mislead or hide what was going on, or you just THE WITNESS:

I mean, Ijust

I was given a task

to - I had never looked at this type of document before, so

(13)

at us, don't get rid of any documents, make sure you hold

(13)

I was just given a task to say, what do we need to do in

(14)

onto all the documents, that was the way you found out, one,

(14)

this part of the documents. And so, regardless of having

(15)

that there was going to be an SEC investigation?

(15)

gone through this or not, after it was pointed out that we

(16)

needed to disclose it in our revenue recognition practices.

(16)

THE WITNESS:

(17)

JUDGE ROSENOW:

(1S)

Correct.
And at the same time you found

(17)

JUDGE ROSENOW:

Do you think what was being

that - so at the same time you found out the SEC

(IS)

published was misleading, that if somebody read it they

(19)

investigation you also found at the same time it was based

(19)

would get the wrong idea?

(20)

on Mr. Menendez's communications to the SEC?

(20)

(21)
(22)

THE WITNESS:

Correct.

JUDGE ROSENOW:

And not long after that Mr.

(21)
(22)
(23)

THE WITNESS:

No, there was no information, so you

wouldn't know.
JUDGE ROSENOW:

You wouldn't know one way or

another?

(23)

McCollum called you to ask you what was going on in your

(24)

three-man office, what you all were looking at, what you

(24)

THE WITNESS:

(25)

were doing?

(25)

JUDGE ROSENOW:

Right.
And the last question I have, you

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

XMAX(49/49)

----------------------~--~

(I)

Page 193
expressed your frustration that your office came up with a

(1)

(2)

position, forwarded it down the line, and they never came

(2)

Page 195

in 1995 with a BBA in accounting. I started my career at
Ernst & Young right after that.

(3)

back to ask you any more about it, then they just - they

(3)

(4)

decided to set the accounting policy for the company without

(4)

you held as an accountant or in the accounting field.

Q

You can go ahead and continue about your jobs that

(5)

coming back on something that you all had worked on.

(5)

(6)

Is it your sense this is an area as to which

(6)

A Yeah, I assumed a position with the audit practice
at Ernst & YOlllg, and I was a staff auditor. I progressed

(7)

reasonable accounting minds can differ, or is it an area

(7)

to senior auditor, and after about four years I accepted a

(8)

that - it's not just that you have a different opinion and

(8)

position with a local firm, an accounting firm called Mann

(9)

I wish you would have talked it over with us, it's I think

(9)

Frankfort Stein, and I - position with them as a manager of
audit practice.

(10)

what you're engaging in is misleading and could be

(10)

(11)

fraudulent when you're dealing with shareholders?

(11)

(12)
(13)
(14)

THE WITNESS:

That was my impression.

JUDGE ROSENOW:

The latter of the two things that

I mentioned?

(15)

THE WITNESS:

(16)

JUDGE ROSENOW:

Yes.

(12)

(13)

clients and the audit works around public finance. I spent

(14)

about two years at Mann Franldort, and then I accepted a job
with Marathon Oil Corporation as an internal auditor in the

(15)

I understand that to be your

I was at Mann Frankfort about two years. There is
a drastic difference in the type of worl{ in terms of the

(17)

testimony. That's all the questions I have. Questions from

(17)

corporate world. And, after that stint, I returned to Ernst
& Young as a manager in the audit practice, and after six

(18)

either side based on my questions?

(18)
(19)

months I got promoted to senior manager, and that's where I
was prior to coming over to Halliburton.

(19)

MR. JORDAN:

No, Your Honor.

(20)

JUDGE ROSENOW:

(21)

MR. DULMAGE:

(22)

No?
No, Your Honor.

JUDGE ROSENOW:

And I guess we can release him,

(23)

and we don't need to have him stay for possible recalling

(24)

him?

(25)

(I)

(2)

MR. DULMAGE:

Yes, Your Honor.

(16)

(20)

Q

And how did you get hired at Halliburton?

(21)

A

I was contacted by a recruiter. I received a

(22)
(23)

phone call one day, and the recruiter said he'd like to meet
with me, and, in fact, asked me if I would go to lunch with

(24)

him. He did not tell me the name of the company. It was
somewhat unusual to actually have a recruiter take you to

(25)

(1)

lunch.

your time. Why don't we take a real - just almost an in-

(2)

Throughout my career, I have been - I've
solicited calls from recruiters all the time. TIns was

JUDGE ROSENOW:

All right, thanks very much for

(3)

place recess, and then we'll take care of some housekeeping

(3)

(4)

matters instead of doing it on the record.

(4)

actually the first time somebody called and said, I'd like

(5)

[WHEREUPON, there was a brief recess.]

(5)

to meet with you and tal{e you to hmch. I agreed to go. I

(6)
(7)

JUDGE ROSENOW:

(8)

MR. AHMAD:

(9)

call Tony Menendez.

(10)

The hearing will come back to

order. Mr. Ahmad, call your next witness, please.
At this time, Your Honor, we would

JUDGE ROSENOW:

Very well. Mr. Menendez, can you

(6)

went to lunch with the gentleman.

(7)
(8)
(9)

He described the position to me and showed me the
- he described the position to me, and it was something I
was extremely interested in. I have always wanted to teach,
and I always liked doing the research, and I went for the

(10)

(11)

raise your right hand?

(11)

position. And at the end of the lunch he told me, well, the

(12)

WHEREUPON,

(12)

company is Halliburton. And at first I expressed a little

(13)

ANTHONY MENENDEZ

(13)

reservation because at the time Halliburton was - there was

(14)

having been first duly sworn, was called as a witness

(14)

a lot of press about Halliburton.

(15)

herein, and was examined and testified as follows:

(15)

Q

Well, why don't we skip what the press was?

(16)

A

Okay.

Q

What did you understand the position to be?

(16)

JUDGE ROSENOW:

Thanks very much. Please be

( 17)

seated.

(17)

(18)

DIRECT EXAMINATION OF

(19)

ANTHONY MENENDEZ

(18)
(19)

A Well, I understood the position to be similar to
working in a national office of a audit practice, which is

(20)

BY MR. AHMAD:

(20)

(21)

Q

(21)

something I had had an interest in at Ernst & Young, where
you would basically - you do a lot of - you do the

Mr. Menendez, first of all, can you tell us a

(22)

little bit about your educational background? We know,

(22)

technical research and then training the actual accountants

(23)

obviously, by background you're an accountant, but can you

(23)

to make sure they understand GAAP and accounting rules.

(24)

tell me how you got there?

(24)

Q

And did you ultimately get hired by Halliburton?

(25)

A

Yes, I did.

(25)

A

Yeah. I graduated from the University of Houston

Page 193 to Page 196

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
Q

(1)

Page 197
When did you get ajob description from

(2)

Halliburton?

(3)

A That was the primary reason I was interested in
the job.

(4)

XMAX(50!50)

(2)

Page 199
McCollum, he did make an impression upon me in terms of
being - I felt like he wanted bring it up and suggested he

(3)

wanted a Smokey the Bear and someone who could actually,

(1)

you
(4)

(7)

Q What did you understand your job duties to be?
A Again, just like a national office, this was
something new to corporate America, as far as I lrnew. With

(6)

know; prevent fires,
And that's exactly what I had wanted to be able to
do, teach and train. He said he - you lrnow, he assured me

(8)

the passage of Sarbanes-Oxley, corporations had to start

(7)

that the company was very conservative in its accounting

(9)

taking responsibility for their financial statements and

(8)

(10)

their internal controls, whereas historically companies

(9)

reporting and that, you Irnow, that basically he was looiting
for someone to come in who could l(eep his name of out The

(1 J)

simply relied upon their external auditors.
And one of the pertinent aspects of Sarbanes-Oxley

(5)
(6)

(5)

(12)

(14)

was to separate those two and focus on independence. And,
with that being said, corporations actually had to step out

Wall Street Journal.
Q
Okay.
A And so reporting directly to him, I thought that

(13)

was a very good thing.

(15)

and retain - you lrnow, bring people in that actually could

(14)

(16)

ensure a company was complying with their financial
statements, as opposed to relying on their external

(15)

Q
Was he fairly high up, as far as the chain of
command was concerned?
A My impression, he was the fifth highest officer in

(12)
(13)

(17)

(10)
(11)

(16)

the company.
Q
And obviously he's the chief accounting officer

(19)

auditors.
MR. AHMAD:

(20)

Menendez. We're going to be relying on some of these

(19)

A

Yes.

(21)

documents here. I've laid them all in front of you.

(20)

Q

- according to the title?

(18)

BY MR. AHMAD:
Q
Mr. Menendez, what was the position that you

(22)

(23)
(24)
(25)

(17)

Let me just bring these up to you, Mr.

accepted with Halliburton, the title of it?
A Director of technical accounting research and

(18)

(21)
(22)

(23)
(24)
(25)

(1)

(2)

training.
Q Okay. If you'll look at exhibit 1, tab 2, can you

(1)

(2)

A It's probably the highest - if you could report
to anyone and you're in finance and accounting, he's the one
you'd probably want to report to.
Q
And did you did anybody ever give you the idea
that this was a temporary reporting relationship?

A
Q

No. No.
What are some of the early things that you

(3)

remember working on, Mr. Menendez, when you went to work at

(4)

tell us what that is?
A That would be the position profile that they

(4)

(5)

provided to me at the time they were interested in hiring

(5)

(6)

me.

(7)

Halliburton?
A Probably the first issue that I - that ever came
across my desk was that some of the employees were trying to
determine whether or not a joint venture was being accounted

(8)

for properly. The joint venture was - it went by the name

(9)

of GMI.
Q
I need to just back up for a second. When did you

(3)

Q

(7)

(8)
(9)

(6)

Who did you understand that you were going to be

reporting to as the director of technical accounting?
A At the time, it was my understanding that Evelyn

(10)

Angelle was going to be the individual I would be reporting

(10)

(11)

to.

(11)

(12)

Q

You say at the time. How about when you actually

(12)

start at Halliburton'?
A March of 2005, the middle of March 2005.
Q
A

And who reported to you?
At the time, Susan Willrodt and James Paquette.

Q

And they were to assist you with your research and

(13)

started? Did you find out who you actually reported to when

(13)

(14)

(14)

(15)

you started?
A Well, yes. There was - when I actually started,

(16)

she came to me and didn't want me to be alarmed, she said,

(16)

(17)

look, I've just accepted a position with the investor

(17)

A

(18)

relations, VP of investor relations, but in no way should
you be alarmed, that tlus was actually a very good thing for

(18)

Q

(19)

(20)
(21)
(22)
(23)
(24)
(25)

me, reporting directly to the chief accounting officer, it
was going to be a very good tlung for my career, getting
exposure to the chief accounting officer.
Q Did you agree with that, tllat it was a good thing
to report directly to the chief accounting officer?
A Yes, I did. I did. In my interviewing with Mr.

(15)

training, is that right?
That's right.
Tell us about

you said one of your early

(19)

projects was a joint venture called GMI. What kind of joint

(20)
(21)

venture was GMI?
A GMI was a joint venture that was - maybe I should

(22)

give a little background on the accounting for joint

ventures before talldng about this one.
Q
Well, I'll ask you - I'm sorry, I'll just ask you
(24)
(23)

(25)

about that in a second. But just tell us what GMI is.

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 201

A

GMI was a joint venture set up between Halliburton

XMAX(511S1)

Page 203
(1)

investment or an equity method investment. Cost method

(2)

and some outsiders, and the purpose was to develop some

(2)

investment is a situation where you own less than 20 percent

(3)

technology that - some research and development, and, had

(3)

(4)

(4)

(S)

they actually developed or hired someone to come in, they
would have had the expense, those research and development

(6)

costs.

(6)

of the common stoclL And you just basically - whatever
amounts you invest in the entity, you put on your bool{s as
an asset, because you have an investment.
Equity method, again, is between 20 and 50

(7)

But, instead of expensing them that way, they

(7)

percent. If you apply the equity method, what you have to

(8)

created a joint venture, so it was a joint venture owning I think they structured it such that they only owned 19

(8)

do is, you put that asset on the books, but you have to
recognize your share of the entity's profits and losses over
a period of time.

(1)

(9)

(10)

percent of the common stock ownership. However, they funded

(5)

(9)

(10)

(11)

the entity through preferred stock.

(11)

(2)

The other investors had roughly $50,000.00 at

(12)

treatment for a company to consolidate or not consolidate?

(13)

stal{e, but Halliburton was claiming that they did not

(13)

Is there any advantage for

(14)

control, so, for Halliburton's reporting purposes, they were

(14)

it off your balance sheet?

(15)

able to leave that seven and a half million dollars on the

(15)

(16)

(16)

(17)

balance sheet as an investment.
Q Well, let me just ask you, had there been any

(17)

A There are huge advantages, and in particular for a
company that - the advantages are good in a number of
respects. One-

(18)

recent accounting guidances as they pertain to joint

(18)

(19)

ventures?

(19)

equity, the cost, and what you call consolidation. You said

(20)

A Yes. There was a dramatic change in response to
Enron. Maybe you've heard a little bit about FIN-46. FIN-

(20)

that's from the 1950's interpretation?

(21)

(21)

A

Fifties and seventies.

(22)

46 is called consolidation of variable-interest entities.

(22)

Q

Okay.

(23)

Actually, it started off as a project that FASB had on its

(23)

A

The rules were pretty old.

(24)

agenda for a long time.

(24)

Q

So we're still talking about pre-FIN-46?

(2S)

A

Correct.

(1)

Q

Okay.

A

So the rules were very legal-form driven then,

(2S)

Q

And FIN -46, what does it say?

(1)

A

FIN-46, it's completely revamped the accounting

Q

Q

Is there any advantage as far as accounting
to deconsolidate and getting

Let me interrupt. You have three ways, the

Page 204
(2)

rules surrounding consolidation. The original consolidation

(2)

(3)

rules were based on rules that came out in the early

(3)

and, again, it's a cost/benefit to consolidation. The

(4)

fifties, which was based upon the concept of common stock

(4)

(S)

ownership.

(S)

advantages for a company to not consolidate a joint venture
would be that they could actually manage or control or
improve their operating performance, because, if you're not

(6)

So, if you owned 20 percent of the common stocl.: -

(6)

(7)

or, less than 20 percent of the common stock, you applied
something called the cost method. If you owned more than 20

(7)

consolidating an entity but you should be, then all you're

(8)

doing is you're reflecting the net income of that entity in

(8)
(9)

percent, between 20 and 50, you had to apply something

(l0)

called the equity method. And then if you owned common

(9)
(10)

(II)

stock greater than 50 percent you consolidated.

(11)

margins, which give you a sense of how efficient the company

(12)

is, so gross margins, you take your amount of income and

(12)
(13)

(14)

Q

Let me just stop you there. When you say, you

consolidated, what does that mean, accounting-wise?

A

The difference between the three accounting

your operating account.
Companies' analysis are always interested in gross

(13)

divide it by your revenues. Now, the situation is that, if

(14)

you're not consolidating something you should, you're not

treatments are, one, if you consolidate the entity, you
actually put the assets and liabilities on the books. So,

(15)

(16)

(16)

including the revenue, so the direct hit to your gross
margins is an improvement, because you are adding something

(17)

in other words, youjust take the financial statements of

(17)

to your profit but you're not having to reduce your - or,

(18)

the entity and you add them to yours.

(18)

add to your revenues.

(1S)

(19)

Q

So it's like they are just a part of the company?

(19)

Q

Okay.

(20)

Correct.

(20)

A

And so you can change significantly your - what

(21)

A
Q

No real distinction, then?

(21)

(22)

A

That's right.

(22)

Q

Gross margins are of interest to investors?

(23)

Q

What about if they are not consolidated?

(23)

A

Extremely of interest, but if you ever talk to an

A

Well, if they are not consolidated, that means the

(24)

evaluation analyst where we're trying to value a company,

(2S)

basically discounted cash flow bacl.:, so you're trying to

(24)
(2S)

company has to account for it either as a cost method

we'll be calling your performance ratios.

Page 201 to Page 204

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 205
(1)
(2)

project a company efficiency over a long period of time, and
the most important variable in that analysis is gross

(3) margins.
(4)
(5)

(6)
(7)

(8)

Gross margins and then revenues. And gross
margins tell how efficient you are, and, in Halliburton's
case in particular, gross margins are a huge metric for the
analysis and the investing public. The gross margins
between the top three companies are always very close, run

(9) 20, 21 percent. So analysts are always discussing, well, in
(10)
(11)

terms of your peers your gross margins.
Q

Have you ever heard management talk about or

(1)

relationships with the entity. So, you know, if you have

(3)

preferred stock, common stock, loans, contracts - so you

(4)

had to really assess the entity. It became a compound,
because the issue is - well; if you're really not
controlling or you're the one that's going to receive the
majority of the benefit or the majority - or you're not on
the hook for the majority of the losses or labilities,

(5)
(6)
(7)

(8)
(9)

(10)

Q

And, in terms of GMI, for example -

(12)

Yes.
- who controls GMI?

(14)

A
Q
A

(15)

Q

Really controls?

A

Really controls. It's - well, this is an actual

(13)

gross margins? Have you ever heard them do that?

(13)

(14)
(15)

A Well, I would say that, yes, in every analyst
call, the topic of gross margins is the highlight. It's

(16)

something that, if we are superior to our period tins

(16)

(17)

quarter, there's a lot of discussion on it, and if we're
less then there's some questions on it. So gross margin is
very important metric.

(17)

(21)
(22)

Q

Let's talk about GMI. How was the accounting

treatment being handled for GMI?

A

Well, I explained the rules, the fifties and

that's who should consolidate, not the entity it just owns
greater than 50 percent of the common stock.

(11)

compare themselves favorably with their peers in terms of

(20)

So FIN-46 made you lool{ at everything, all your

(2)

(12)

(18)
(19)

(18)
(19)

(20)

GMI, again the entity really controls -

interesting situation. The other guys invested $50,000.00
and owned 81 percent of the company, so this allowed
Halliburton to not consolidate tins entity. But the entity
needed money to fund R&D.

(21)

And so Halliburton funded seven and a half million

(22)

dollars through preferred stock interest. And, when I went

(23)

seventies, which were very - based on common stock Now,

(23)

to look at it, looking at the financial statements, it was

(24)

FIN-46 came out, it changed their entire consolidation model

(24)

(25)

from one where you just look at the common stock ownership

(25)

pretty clear that, as the cash went in, it went directly
out.

(2)

to taking a look at the entire entity and the arrangement.
They introduced a concept called variable interests. As it

(2)

(3)

turns out, they're not that - well, let me back up a little

(3)

themself. So, by the time I looked at it, there was nothing

(4)

bit.

(4)

left in the entity. There was no cash, there was basically
nothing.

(I)

(1)

(5)

Now, the purpose of the rule was in response to

(5)

(6)

Enron, because Enron, for all its negative publicity, a lot

(6)

(7)

(7)

(8)

of things they were doing were actually in accordance with
some of the new rules, because it's so easy for a company to

(9)

structure an investment to be either cost, equity or

(8)

The owners of the entity that had the control of
the common stock were taking the funds and then paying

Q

Well, but who was controlling it, really?

A Well, that's a good question, because the control
- those guys had 81 percent, so they really could make the

(10)

decisions as to - and that's what they did. They made
decisions to pay themself all the money that came in. So in

(II)

consolidated simply by your ownership in common stock. SO,
if you wanted to not consolidate sometinng, arguably, and

(11)

that situation it's not so much control but who has - who's

(12)

still flmd it, you would own common stock and then fund it

(12)

(13)

with debt or preferred stock or loans, and then that entity

(13)

going to absorb the losses, who's going to fund the entity.
Q And who was funding the entity?

(14)

would just remain off your bool{s.

(10)

(9)

(14)

A

Halliburton.

(15)

Q

And what were the implications, then, of FIN-46?

(15)

Q

What is the difference between doing a situation

(16)

A

With FIN-46, you have to throw out this notion of

(16)

this way, for example, and just hiring a bunch of people on
the research staff?

(17)

common stock ownership as the - the original deal was ARB-

(17)

(18)

51 on consolidations, and it said generally you could turn

(18)

(19)

it over and consolidate it, the legal characteristic was
(20) ownerslnp of common stock of more than 50 percent.
(21) Now, FIN-46 is an interpretation, because it's an

XMAX(52/52)

Page 207

A

In fact, Halliburton lool{ed at that, and part of

(19) the pitch that I saw in the presentation to management was,
(20) look, we could hire somebody in-house. It would cost us
(21) about five million dollars or eight million dollars, can't

(22) interpretation of that original rule. It's actually not the

remember what the number was, or we could go this route and

(23) rule, because they wanted to say - because what we

create this entity and then house this - and then basically

(24)

practice, everyone was assuming that that generally meant in

(25)

all cases you owned it by common stocl{.

keep our investment on the books.
Q

Was GMI consolidated, or not?

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

(2)

(3)

Page 209
No. When I looked at it, it was just a cost

A

method. That's what the issue was. I lool{ed at the balance
sheet, and it had a seven and a half million dollar asset,

XMAX(53/53)

Page 211
(1) suspicious, you know, we need to determine - do we lmow if
(2)
(3)

these are Halliburton employees or what's the relationship.
I said, well, I don't lmow that. And he almost picked up

looked through the financial statements and there's nothing
there.

(5)

(6)

(7)

Q
So what was the difference if Halliburton had
chosen, for example, instead of creating this entity which

the phone and was going to call legal. And so Tony said, go
talk to J.R., so I came in on a Saturday to talk to J.R.
Sult.

(7)

I had Henry Jazdzewsld with me. I described what

(8)

would have these workers doing research -

(8)

was going on, and J .R. SuIt actually did picl( up the phone

(9)

and tried to call legal. He said, this is just fishy, this

(4)

(5)
(6)

(9)
(10)
(11)

A

Vh-huh.
if they had done it where they just paid the

Q

researchers as their employees? What would be the

(4)

(10)

is - and then he was upset because he just approved a one

(11)

million dollar payment into this entity a few weel{s earlier,
and he told me he would have never approved that payment

(2)

difference in the accounting treatment based upon what they

(12)

(13)

were doing with GMI?

had

(14)

A

Well, as they would pay their employees, it would

(13)

he known this was occurring.

(14)

Q
Now, you just mentioned some names. J.R. Suit,
who was he?

(17)

have been an expense. So, you know, just like any other
employee, you write him a paycheck, that's an expense. So,
in effect, by capitalizing the seven and a half million

(16)

(18)

dollars and calling it cost method, they were able to avoid

(17)

(19)

recognizing seven and a half million dollars of expense on

(18)

Q

And what is ESG, by the way?

(20)

(19)

A

Energy Services Group.

(21)

the books.
Q
But, when you looked at GMI, I mean, was it worth

(20)

(22)

anything in terms of the money that you were expecting to

(21)

(23)

get back as an investor?

(22)

A

(23)

Q

And now it's just ESG?

(24)

A

That's right.

(25)

Q

I'm sorry. You were talking about J.R. SuIt?

Yeah. On Saturday, I described the situation to

(15)
(16)

(24)
(25)

A

No. It was completely exhausted. Halliburton had

no recourse to anything that would have been developed.

Page 210
What was the difference between the money going

(15)

A J .R. SuIt is the former controller for the ESG
division.

Q
And now that's all Halliburton, but at the time
it's just ESG and KBR, right?

(1)

A

(2)

in, as you said, money is involved going into the entity,

(2)

him.

(3)

and employees' salaries, for example, research workers'

(3)

(4)

salaries?

(4)

(1)

Q

Q

That's right.

No, I'm sorry, what was J.R. Suit's current

position?

WellIs there a difference?

(5)

A

He said, we need to write this thing off.

(6)

Q

I'm sorry, the title, job title?

A

In terms of, had they been doing it right?

(7)

A

Oh, he was vice president and controller for

Q

No, I mean, in terms of how were these workers

(8)

(5)

A

(6)

Q

(7)
(8)

Energy Services Group.
Q
And you mentioned another name, Henry?

(10)

A

Jazdzewski.

(11)

paid, in other words?
A Well, they owned 81 percent of the common stod:,
and so they just gave themselves stock options and stock.

(11)

Q

Yeah.

(12)

And then they just created an arbitrary value and said

(12)

(9)
(10)

(9)

(13)

$5.00 per - and then they would exercise their own stoel{

(13)

A I'm not sure if I'm saying it right. He is a he was a - I thinl\: he was a manager-level employee that had

(14)

and take the money out of the company.
Q Was there any money left over after the workers

(14)

some responsibility over joint ventures, and so he was

(15)

actually the individual that was collecting a lot of

(16)

(17)

took their interest?
A No. In fact, I started in March, and in January

documentation Q Okay.

(18)

or early February Halliburton had just funded one million

(18)

A

(19)

dollars to the entity. And I noticed when I started looldng

(19)

Q

(20)

at it that basically within days that million dollars went

(20)

(21)

directly to those owners.
Q What was your recommendation on GMI?

(21)

(15)
(16)

(22)
(23)

A

Basically that the entity was valueless and needed

(17)

A

- for us.
And what did you all found out?
Well, on Saturday morning, J .R. said, we need to

write this thing off, the whole thing. And that was his

(22)

recommendation to Henry and me. And I said, okay, well,

(23)

that's fine, I mean, I haven't completed my analysis, but I,

(24)

to be written off. I brought those concerns to Mark

(24)

you know, basically what I'm seeing, that's probably a

(25)

McCollum, and his first question was, well, this looks very

(25)

conservative and appropriate answer. And he said, well,

Page 209 to Page 212

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

Page 213
(1)

it I S just better that way.

(2)

I come in Monday morning, and J .R. is frantically
(3) looking for me, and he gets Henry and Charlie Geer and
(4) myself and says, well, is there any way we can defer, you
(5) know, writing off some of this investment. And I said,
(6) well, I haven't finished my analysis, but, you lrnow, if we
(7) just tal{e a simple calculation of what the book equity is
(8) and compare it to our investment balance, we could probably
(9) write off only four and a half million dollars at the
(10) current time and maybe address it next quarter when we could
(II) finish the analysis. And then he seemed very relived and
(12) ran off.
(13)

Q

What ultimately happened?

(1)
(2)

(3)
(4)

(5)
(6)

(7)

(8)
(9)

stock, so the entity was effectively being funded by
Halliburton's preferred stock.
And someone in a prior area said, hey, we should
be applying the equity method, but the problem with that
was, you lrnow, the eqtrity method wasn't enough because the
Halliburton preferred stock was funding the losses that were
all being accrued by the entity.
Q

So what was going to happen with respect to

Fiberspar?

A Again, my group researched it. We issued a
memorandtun suggested that the proper accounting treatment
(12) would require this entity to be written off. And I remember
(13) my first conversation about Fiberspar was right at the end
(14) of (10)

(11)

A They took the four and a half million dollars and
(15) wrote that off, and I don't think anyone ever addressed the
(16) remaining three and a half million dollars, because someone
(17) just said it was immaterial.
(18)
Q Was this an isolated instance as far as joint

(18) described two situations, GMI and Fiberspar where you had

(19)

(19)

(14)

ventures?

(20)
A No, it wasn't. One thing that kind of bothered me
(21) at the time that he seemed overly excited about only writing
(22)
(23)

(24)
(25)

(1)

(2)
(3)

(4)
(5)
(6)
(7)

(8)
(9)
(10)
(11)
(12)
(13)

(14)
(15)
(16)

(17)
(18)
(19)
(20)
(21)
(22)
(23)

(24)

off four and a half million was because, at the time, the
company would have had to report any significant
deficiencies over $5 million to the audit committee. And I
got the impression, you lrnow, they probably wanted to avoid

disclosing that accounting error to the audit committee at
that time.
Q

Sure, okay. Did you look at other joint ventures?

A I did. After looldng at GMI, the group - the
individuals that I worked with on GMI, during the initial
meeting and when we started - I started raising some - you
lrnow, we got to take a look at this - from the joint
venture and accounting group said, well, look, this is very
similar to an entity called Fiberspar, I bet we have the
same problem there.
Q

And did you look at Fiberspar?

A Eventually I did, yes. It was a few weeks later,
and I looked at Fiberspar, and it was effectively the same
tIring. It was Q Okay.
A - another entity that Halliburton had funded
through preferred stock TIns time the amount was about $11
million, and, you lrnow, tIns is an entity that Halliburton
had $11 million in it, was reporting it as an equity method
investment, which meant that they were picldng up their
share of the losses in this case, so it wasn't just a flat
investment.
But the problem was, they structured the entity
such that Halliburton only owned seven percent of the common

(25) stock but they owned a hundred percent of the preferred

XMAX(54/54)

Page 215

(15)

Q
A

Well, let me just ask you, was it written off?

(16)
(17)

Q

Now, from what you could tell- you've already

Yes, it was.

talked about the accounting changes that were necessary -

(20)

A

Uh-huh.

(21)

Q

- were you seeing FIN -46 applied across the board

(22)

at all to the joint ventures?

(23)

A No. After dealing with the GMI and Fiberspar, as
well, Jolm Christopher, the senior manager in the audit
accounts, came to me, and he said, look, you obviously lrnow

(24)
(25)

(1)
(2)

(3)
(4)
(5)
(6)
(7)

(8)
(9)
(10)
(11)

(12)

a lot about FIN-46 - he was giving me a rundown on some of
the issues from the prior year - and said, look, we had
tIns issue last year, an entity called Bass.
And it was ldnd of complicated, and he asked me if
I'd look at it. And I said, well, sure, I'll- you lrnow,
I'lllool{ at it, what the heck, yeah. He sent the e-mail to
me, all the information, the memos on Bass, and it didn't
take me but about five minutes to realize that there was a
real problem with the conclusion that was reached in
relation to Bass.
I discussed it internally with my staff. Susan
Willrodt actually worked on the accounting memorandum that

(13) Halliburton put together. I also reviewed KPMG's memo. To
(14) put this entity into perspective, it was a joint venture
(15) that Halliburton had with one of its largest - one of its
(16) large customers, Sonatrach in Algeria.
(17) And Halliburton owned 60 percent of the entity, so
(18) right off the bat the entity is receiving 60 percent of any
(19) profits or is on the hook for 60 percent of all the losses.
(20) So right off the bat, that - even under the old rules, that
(21) says, look, you consolidate. Okay?
(22)
Q Okay, but, I mean, so who had real control of the
(23)

entity?

(24)

A

Control was with Halliburton.

(25)

Q

Now, what was the theory for saying that

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

Page 217
(1) Halliburton didn't have real control?
(2)
A You know, John - the reason he wanted me to look
(3) at it, as I said, because we just dealt with this last year,
(4) and it was kind of an issue. It was actually KPMG who told
(5) Halliburton, 1001" you guys - they were consolidating the
(6) entity.

(6)

(7)

It was on Halliburton's bool\S, but KPMG went to

(7)

(8)

Halliburton and said, look, you shouldn't be consolidating
this entity, and then gave them an accounting model to use,
something called EITF-9616. Basically Susan Willrodt
drafted a memo and adopted what John Christopher was telling
her, crafted a memo very similar to what John had written,
and Halliburton deconsolidated Bass at the end of '04.
Q Did you agree with that?

(8)

(9)
(10)

(11)
(12)

(13)
(14)

(15)
(16)
(17)

(18)
(19)

(20)
(21)

(22)
(23)
(24)
(2S)

(I)

(2)
(3)
(4)
(S)
(6)
(7)

(8)
(9)
(10)

(11)

(12)
(13)
(14)
(1S)
(16)
(17)

(18)
(19)

(20)
(21)
(22)
(23)
(24)
(2S)

A Well, I wasn't there in '04, but Q No, no, I mean, did you agree when you got there
in '05?
A No. I said, why would you ever deconsolidate this
entity when you own 60 percent of the entity, for starters,
but their accounting conclusion said, well, look, you lmow,
KPMG went out there and did an audit or reviewing the joint
venture's books, and they said, well, based on a review of
the contractual arrangements, we don't thinl, you control it,
okay. So the situation was Q
Wait a minute. How did they not control it?

A Because the board - even though Halliburton owned
60 percent of the entity, the board representation was
50/50, so KPMG was arguing, look, you don't control the
entity so you shouldn't be consolidating it.
Q But, from a realistic point of view, was that
true, that they didn't control it?
A I mean, that made no sense, to be honest. I mean,
under the old rules, when you're just focusing on control,
50 percent common stod, or board representation, maybe that
makes sense. But FIN-46, the whole purpose of FIN-46 was to
bring things on companies' balance sheets, to reflect the
true operations of the company, okay.
Well, I think I said or mentioned something
earlier about FIN-46 being designed to identify situations
where, you know, legally you might only own common stock
with this, but in a sense you're on the hook for the losses,
or you're the one that's going to benefit from the
arrangement, and therefore you put it on your books.
And so in tIns case, as I started looking at the
entity, I said, okay, well, lool!:, first of all, we've got a
problem because we own 60 percent. I realize that maybe
board representation is 50/50 and Halliburton may not be
able to actually control it.
So I says, well, what does this entity do.
Basically the entity is a joint venture that buys all of its

XMAX(55/55)

Page 219
(1) products and services from Halliburton to provide to the
(2) national oil company down there. And so in effect we - the
(3) relationship to the economic - the substance of the
(4) arrangement clearly pointed to Halliburton having, you know,
(S) a vested in this beyond 50 percent.

(9)
(10)

(11)
(12)

(13)
(14)
(1S)
(16)
(17)

(18)
(19)

(20)
(21)

(22)
(23)
(24)
(2S)

Q Now, who do you think made the decision, the
Halliburton people or the Algerian government people?
A Basically, Halliburton was running - I mean, the
entity was designed to provide Halliburton services to, you
Imow, the national oil company, okay. So, now, board
representation might have been 50/50 and there may have
been, you Imow, some local nationals doing some of the
underlying worl{, but the crux of the issue, the entity was
really a Halliburton entity. The entity was providing the
same services that Halliburton does.
Q Okay. Let me go back to something. 1'111 not sure
1'111 very clear on this, but did there come a point in time
when you started to view a systematic there being a
systematic issue with respect to the joint ventures?
A Yes.
Q And when was that time?
A Well, after GMI and Fiberspar, and I knew Bass was
there, I got really concerned that the organization didn't
understand FIN-46. And so I worked with my staff. We
developed training, FIN-46 training, on short notice, and I

went to Duncan, Oklahoma to meet with the group that was
supposed to be responsible for the accounting for these
(3) joint ventures.
(1)

(2)

(4)
(S)
(6)
(7)

(8)
(9)

(10)
(11)

(12)
(13)
(14)
(1S)
(16)
(17)

(18)
(19)

(20)
(21)
(22)
(23)
(24)
(2S)

Okay.
I was at a two-day Q Hold on for a second.
A Vh-huh.
Q
I want to talk about, what are the implications you said that they weren't applying FIN-46. What are the
implications of not applying FIN-46 to the joint ventures?
A Well, an entity like Bass, okay, if you're not
consolidating it, all you're doing is bringing in the net
income onto your profit and loss statement, so you're not
reflecting the revenues and expenses, you're just reflecting
the net income made, so you can see how, you lrnow, you're
just adding to your gross margins. And then you take your
gross margin and divide it by your revenue to get your gross
margin percent.
Q Well, okay, and that's just one entity.
A Right.
Q There would be implications for the entire company
and all the joint ventures?
A Well, that's right. My concern was way beyond
just Bass, way beyond GMI or Fiberspar. It was dear to me
that the company really had no one in-house that understood
Q

A

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA
(1)

Page 221
FIN-46, and there were no controls anywhere to determine

(1)

(2)

whether or not the company was even complying with FIN-46.

(2)

Q

(3)

I went to - so I guess I treated the training,

(3)

A

(4)

and I went to Duncan, Oidahoma. I gave a two-day training

(4)

(5)

(5)

(8)

to these individuals, and they just raised alll(jnds of
concerns about the company's accounting for its joint
ventures.
Q
Did you ever complain to anybody above you,

(9)

obviously, about the overall treatment with respect to joint

(9)

(6)

(7)

(10)

(11)

ventures in light of FIN -46'1
A

Yes, I did. I went to Mark McCollwn and went into

XMAX(56/56)

Page 223

(6)

(7)
(8)

(10)
(11)

business.
Are you talking about gross margins?
Yes.

Q Okay. Well, let me ask you this, applying FIN-46
to all of the joint ventures, does it make a difference to
the gross margins in the company?
A Yes.
Q
Does it make a difference in terms of something an
investor wants to see?

A

Yes.

Which way does it make a difference? In other
words, if you apply FIN -46 - and, by the way, does FIN-46
Q

(12)

his office and I said, I want to tall< to you about Bass.

(12)

(13)

And he was irate. He said, look, I already know about this,

(13)

generally tell you to consolidated or not to consolidate?

(14)

(14)

Which way does it kind of nudge you?

(15)

you know, and he said, why are you Iooiting at Bass. I said,
well, you Imow, John Christopher asI{ed me to.

(16)

And he said, well, I don't want you looiting at any

(16)

what's really going on here. It's a - you know, it's a

(17)

more past joint ventures, you're not an auditor anymore, you

(17)

(18)

(18)

(19)

worl{ here, and I need you going forward. And so - and then
he said that he had tall{ed to Dennis Whalen and they decided

substance over form, so you really have to understand what
your relationship is with the entity. So, if you have two
parties, and if the party that's going to consolidate is the

(20)

they weren't going to do anything with Bass.

(15)

(19)

A

Well, the - it forces you to look at, you Imow,

(20)

one that is going to absorb the majority of the losses, or

Well, but - and I want to focus on that issue. I

(21)

the entity that's going to - or, the party that's going to

(22)

mean, in terms of preventing future accounting problems, did

(22)

receive more than 50 percent of the benefit.

(23)

that implicate the past?

(23)

(21)

Q

(24)

A

Well, it certainly did.

(24)

(25)

Q

Why did it?

(25)

(2)

A Because, I mean, Halliburton has a hundred - in
between a hundred and two h1.mdred joint ventures, right, and

(3)
(4)
(5)

Q

And, in terms of the joint ventures overall, were

they consolidated or not consolidated?
A

No. In fact, there were very few joint ventures

(2)

that Halliburton consolidated.
Q
So, if you were to review the accounting treatment

if you're not consolidating those - and, again, I'm not
concerned about whether or not these entities have a lot of

(3)

in light of FIN-46, there wasn't much to - there wasn't any

(4)

room, really, to - in terms of deconsolidation, the room

(5)

was all towards consolidation, is that right? I'm sorry, I

(6)

debt.
I'm concerned about whether or not the company's

(6)

think I might have got it reversed. The room was - yeah, I

(7)

true operations are being reflected in its income statement,

(7)

guess the room was basically to go towards consolidation, is

(8)

okay. So you could have an investment -let's say you have

(8)

that right?

(9)

200 of these investments, and you look at your balance sheet

(9)

(I)

(10)

and there's no asset there.

(1)

(10)

A

That's right. And, again, Halliburton has a

nwnber of joint ventures. I mean, the majority of them are
50 percent j oint ventures or 49 percent, you lmow, designed

(11)

So there's no asset or liabilities, but what if

(11)

(12)

that entity is, you Imow, pulling in an extra $15 million

(12)

originally probably to avoid the control, so you keep it.

(13)

for a year and no one Imows. But maybe it's bringing that

(13)

And there's a dramatic difference between having a joint

(14)

$15 million - it takes it, you Imow, $2 billion in revenues
to make $15 million, okay, so you bring that on your booI{s,

(14)

venture with another party - I'll give you an example of

(15)

(15)

KBR, and they're a construction company.

(16)

you got - your performance is going to be drastically

(16)

They might get a - start a joint venture with

(17)

impacted.

(18)

Q

Do you know how much money was at stake with

(17)

another construction company, and they go into tIus venture,

(18)

they're going to share in the risks, the f1.mding. And so

(19)

respect to these hundred and fifty or so joint ventures?

(19)

you'd have more of a collaborative joint venture. Well,

(20)

(20)

(22)

A Again, I think Mr. Jordan in his opening said that
the balance sheet item was about $200 million, so I would
rely on that as a reasonable nwnber, from what I remember.

(22)

when you're in a situation where it's a seller and a
customer, okay, so you go and create a joint venture with
the very entity you're going to be doing business with to

(23)

But, again, my concern isn't that, you lmow, the balance

(23)

facilitate-

(24)

sheet number. My concern is that a lot of these entities

(24)

Q

Bass was -

(25)

are being used to, in effect, facilitate the company's

(25)

A

- that business.

(21)

(21)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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Page 225
(1)

Q

Bass was like that?

Yes.
(3)
Q
Okay. I'm sorry, go ahead.
A And so, when you get in a situation where you
(4)
(5) start creating joint ventures with your customers, it really
(2)

A

(1)

for this. So the real issue in revenue is whether or not
you actually earned the revenue associated with the
(4) transaction.
(5) And that's when you come up with the four
(2)

(3)

(6)

creates a problem for you because what happens when

(6)

(7)

something goes wrong, and especially if you're a small
oilfield service - I say small because, well, speaking

(7)

(8)
(9)

Shell or Exxon, who do you thinl{ is really going to drive

XMAX(57/57)

Page 227
collectability reasonably assured, are we going to get paid

criteria, persuasive evidence of an arrangement exists,
maybe you have a contract, delivery has occurred - delivery
(8) or performance has occurred, the price is fixed or
(9)

determinable, and collectability is reasonably assured.

(10)

what's happening at the entity? I mean, you just run extra

(10)

Q

And what SAB is that, 101?

(11)

risks. And then you have to start loolting at, well, what

(11)

A

It's SAB 101.

Q

Originally it was 101, later a more expanded

(12)

else is the entity doing, you lrnow, if the entity is

(12)

(13)

basically buying its products and services from the one

(13)

version came out in 104?

(14)

entity, you got - so it really creates a lot of different
relationships that mal{e it very difficult to determine who

(14)

A Yes. In the late nineties, there was a lot of
problems with financial reporting around revenue recognition

should be consolidating.
Q
Why would you want to? I mean, let's say, for

(16)

example, in terms of Bass, why would you want to f0D11 a
joint venture, for example, with your customer? What's - I

(18)

(19)
(20)

mean, what would be the point of that?

(15)

(16)
(17)
(18)

(15)

(17)

(19)
(20)

and the FASB wasn't moving fast enough, so the SEC stepped
in, and they went through all of the revenue recognition
literature and said, look, we've got to act because the
markets are suffering for bad revenue.
Q

Okay.

The only point that I could see would be to

(21)

(22)

facilitate your customer-seller relationship, and you get a

(22)

A And the staff issued SAB 101, which was - if
you're a public company, you have to comply with this,

(23)

financial benefit from that.

(23)

because these are our interpretations of GAAP.

(24)

Q
All right. And the other thing we discussed,
EITF, Emerging Issues Task Force, 00-2l.

(21)

A

(24)

Q

(25)

A

What financial benefit?
Because you're not consolidating the transactions,

(25)

(1)

you're just bringing in whatever money is made by the joint

(1)

A

(2)

(2)

Q

Vh-huh.
Can you explain what that is?

(3)

venture.
Q Okay. Well, other than the accounting treatment,

A

Yes, I can. EITF 00-21 involves multiple element

(4)

can you think of any reason why you would want to do a joint

(4)

(5)

venture with your customer?

(6)

A

To encourage additional business.

(3)

arrangements, and, again, just lil{e FIN-46 was moving away

(5)

from the form-over-substance, EITF 00-21 was designed to do

(6)

the exact same thing, meaning that you have to lool{ at the

(7)

Q

With the customer?

(7)

complete arrangement with the customer, okay, everything

(8)

A

Right.
So to encourage additional business and favorable

(8)

you're doing, and understand what the complete arrangement
is, and at the end of the day you recognize revenue when

(12)

Q
accounting treatment?
A Right.
Q Now I'm going to switch gears, now, and talk about

(13)

another issue. Did you ever run into issues regarding

(13)

A

That's right.

(14)

revenue recognition while you were at Halliburton?

(14)

Q

Okay. In terms of an oilfield services company

(9)
(10)
(II)

(15)

A

(16)

Q

Oh, definitely.
You have already heard Mr. 'Paquette talking about

(9)
(10)
(11)

(12)

value has been provided to the customer.
Q
Okay, value is under the EITF, is that right,
value?

(15)

like Halliburton, generally speaking is it giving the value

(16)

when it gives the customer a product by itself?

(17)

A

(I 8)

issues relating to bill-and-hold. We've talked about issues
related to delivery. First of all, what are the SAB

(18)

Q

No.
Why not?

(19)

guidelines with respect to revenue recognition?

(19)

A

I mean, Halliburton is an oilfield service

(17)

A Revenue recognition under SAB 101 and SAB 104 is
(21) basically to report things after they've met. You have to

(20)

(20)

company. They're in business to provide services. They are

(21)

not a manufacturer or a wholesaler. Customers buy product

(22)

start with two things. You have to - the revenue has to be

(22)

(23)

earned and realizable. And so that's really your first

(23)

or equipment from Halliburton for one reason, they want the
service.

(24)

hurdle.

(24)

And so, again, if Halliburton were a manufacturer,

(25)

And whether or not it's realizable deals with is

(25)

say a manufacturer of completion tools and then ship them

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

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Page 229

doing the oilfield services, and you can't have just remote
instances - we have a couple examples - or it might
(3) happen, you can't just say, well, if someone could do it. I
(4) mean, really, it's - the substance of the arrangement is,
(S) what's expected; what does the customer expect?

(6)

out, I'd be done. But the problem is, these are service
arrangements. In fact, the company's contractual
arrangements are just that, they are master service
agreements, okay.
Q How much business do you think that Halliburton
would do if it just sold the product, for example, and

(7)

didn't do the services?

(7)

four elements of SAB 104, and now we've talked about EITF

(8)

A It would go out of business. I mean, there would
be no point to them. I mean, that's - they're a service
company, so the whole reason they're selling the product is
to do the service.

(1)

(2)
(3)
(4)

(S)

(9)

(10)

(11)
(12)

(13)

(14)

Q

All right. Does EITF also talk about, for

example, fair value?

A

Yes. It's one of the criteria to - again, EITF

(IS)

00-21, the purpose of it is to determine -let's look at

(16)

your complete arrangements, what you have contracted - what
the arrangement is between you and the customer. Let's take
a typical example of, well, we agree we're going to
manufacture this equipment, we're going to ship it to our
own warehouse and we're just going to sit there and wait

(17)

(18)
(19)
(20)

and, when you're ready, we'll take it out to the rig and
then we'll do the service.
(23) That's a complete understanding of the
(21)
(22)

(24)

(2S)

arrangement. So I've got four or five elements there. I'm
going to manufacture it, I'm going to warehouse it, I'm

going to tal(e it out there, and I'm going to do the service.
So each of those are an element to the arrangement.
(3) And so what you have to look at, what is the
(4) customer buying? Olmy, are they buying that first piece, or
(S) are they really trying to buy the whole thing? Okay, so
(6) EITF 00-21 requires you to 1001, at each of the elements and
(7) say, look, can I really separate these elements, is it
(8) really appropriate to recognize revenue at this stage in

(1)

(2)

(6)

00-21.

A

Vh-huh.

(0)

Q

Do you have to meet both?

(11)

A Yes, without a doubt. You - in fact, by its very
definition, a bill-and-hold arrangement is multiple-element
(13) arrangement. In this situation, you're selling equipment
(14) and you're warehousing it and then you're doing a third
(IS) thing.
(12)

(16)
(18)

have to meet EITF 00-21?

(19)

A I mean, you have to address 00-21 before you can
look at bill-and-hold, because there's no point in looking
at bill-and-hold if you don't meet the EITF 00-21, okay.
And so let's take that example where you have a bill-andhold situation.

(20)
(21)
(22)
(23)
(24)

(2S)

(3)

(4)

Well, if you don't meet the criteria to separate
the service, the installation, then there's no point, you're

going to defer revenue. So, just like a bill-and-hold,
you're going to defer the revenue, and, under 00-21, if you
can't separate it, you've got to defer revenue.
Q

Okay. So let me make - let me go back now to the

(S)

SAB 104 factors. We had a lot of discussion, for example,

(6)

about delivery.

(7)

A

Vh-huh.

(8)

Q

Did you have discussions with people at

(9)
And, by the way, fair value, does that mean can

Okay. So let me make sure I'm understanding this.

SAB 104, you can meet those elements, but you also still

(I)

Q

Q

(17)

(2)

(10)

Okay. Now, tell us this, you've talked about the

(8)

(1)

time?

Q

(9)

(2)

(9)

(10)

Halliburton about the notion of delivery when it comes to
delivering product to a Halliburton warehouse?

(11)

you isolate the fair value of the product independent of the

(11)

A

(12)

whole transaction?

(12)

Q

Did you have many discussions?

(13)

A Yeah, I mean what it boils down to is really do
you have - and the term is actually objective, reliable
evidence of fair value of the element. So let's take a
situation where you're manufacturing, you're warehousing and
you're installing.
So, in order to justify meeting the separation
criteria, you'd have to be able to say, look, I have
objective reliable evidence of what the service is worth on
its own, meaning you'd have to have a history of just doing
the service and not doing the other components, not selling

(13)

A
Q

Many discussions.

(14)
(1S)
(16)

(17)

(18)
(19)
(20)
(21)
(22)

the equipment, not warehousing equipment.
So the likelihood that you will need - so I guess
(2S) what I'm saying is that you would have to have sales of just

(23)

(24)

XMAX(S8/S8)

Page 231

(14)

Yes.

Who was the first person, for example - and you

(15)

can tell us about the situation, but who - how did it first

(16)

come up at Halliburton?

(17)

A Well, I mean, our group received the e-mail, the
request from the VK. We tall(ed this situation, the TCP guns
matter. That was the first instance. When I looked at the
arrangement, my first question was, wait a minute, we're
saying that we can recognize revenue on a pass-through title
and it's in our possession? I didn't think it was right,
and at that time I really didn't have a strong background.
You lmow, it was on that particular transaction. So I said,
James, we need to look into this.

(18)
(19)

(20)
(21)
(22)
(23)
(24)

(2S)

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

Page 233

XMAX(59/59)

Page 235

(I)

Q

When was this, by the way?

(1)

(2)

A

This was in April 2005 .

(2)

A

Dh-huh.

(3)

Q

So it was pretty early on?

(3)

Q

Was the decision tree being used in the training?

(4)

A

Yes.

(4)

Q

Or very early on in your career at Halliburton?

(5)
(6)

(5)
(6)

(7)
(8)

(9)
(10)
(11)
(12)
(13)

(14)
(15)

(16)
(17)

(18)
(19)

(20)
(21)

A Yes, very early on. I said, James, it just
doesn't smell right, I don't see how you can recognize
revenue when you say it's what's in your own warehouse. He
said, well, that's what - you know, that's what we taught
last year, and we thinl{ it's - you Imow, I thinl{ it's olmy.
And I said, well, I don't lmow, you better - you need to
start checking on that, because it just doesn't smell right.
And so Ijust sent James off on this research, and he went
off on his own and started collecting things.
And, as soon as it was - my intuition was
confirmed, you know, then I said, we need to get on the horn
with the guys in the DK and really develop our understanding
of the relationship, because at that time James had showed
me the bill-and-hold decision tree flow chart. And I
reviewed the prior revenue recognition training, and it was
clear to me that no one understood bill-and-hold.

(17)

A Yes. In fact, well, in the old trainings, yes,
that's how they were taught. The situation with the UK because I actually - I said, James, get the business
practice and the training, because he said they were - I
said, were you relying on the business practice or the
training?
And he said, well, we've got tlns flow chart,
that's what we're using. So I got the business practice,
and the business practice - this wasn't in the business
practice, okay. The business practice read lil{e it was
right out of SAB 104, for the most part. We have said, it
described bill-and-hold transactions. There was no mention
of this decision tree.
Q But, in terms of the accounting treatment that had

(18)

been done before you got there, Mr. Menendez, what were they

(7)
(8)

(9)
(10)
(11)
(12)

(13)
(14)
(15)

(16)

(19)

using as their guideline for the actual accounting treatment

(20)

of the product that they were shipping out to Halliburton

(21)

warehouses?

(22)

Q

Can you look at tab 58 in exhibit 1'1

(22)

(23)

A

Dh-huh.

(23)

(24)

Q

Do you see - you mentioned that bill-and-hold

(24)

(25)

decision tree. Do you see that at tab 58?

(1)

A

Yes.

(2)

Q

Okay. Tell us, what is wrong with that decision

(3)

tree?

(4)

A

First of all, what is tab 58?

(5)

Q

Well, why don't you tell us what is at tab 58?

(6)

(7)
(8)
(9)
( 10)

(11)

(12)

A This is the company's previous trainings on
revenue recognition, because -

Q

My question is what Mr. Paquette told you, gee

this is what we taught before?

A
Q

Right.
This is what he was talking about having taught at

the last session-

(25)

(12)
(13)

(14)

Q

- about bill-and-hold and about delivery?

(14)

A Yeah. And I said, well, I want to see that
training. And, as soon as he brought it to me, I just
(17) started reading through it, and you could see my notes. I
(18) mean, I was just going, what is this? I mean -

(15)
(16)

(19)

Q

Are your notes reflected on -

(19)

(20)

A

Yes.

(20)

(21)

Q

- on tab 58?

(17)

(18)

(21)

A Yes. And - so these are my notes at the time. I
(23) mean, tIns doesn't - and I was very concerned. And I went
(24) to Mark McCollum, and I expressed concern.
(25)

(25)

Hold on, because I want to get to a point about

All right. Tell us what is wrong with the bill-

and-hold decision tree.

A

Well, there are a lot of tlnngs wrong with it. It

completely oversimplifies revenue recognition. Basically
the first one's pretty straightforward, I mean, have you
(3) billed the customer for completed inventory which is being
(4) stored at a Halliburton facility. And then, in order to
(5) recognize revenue, all you have to meet is, lool{, based on
(6) the terms of the purchase order and the underlying contract
(7) has title passed to the customer. If the answer is yes, you
(8) ask a question about whether or not they can return the
(9) product. And, if the answer is no, you just recognize
(10) revenue. And so they're missing many elements to the
(11) decision-making process.

Yeah.

Q

They were using the bill-and-hold decision tree.

(2)

A

(22)

A
Q

(1)

(13)

(15)
(16)

this decision tree.

Q

And one of those, for example, is delivery?

A Yes, exactly. I mean, the whole point - what's
funny is, the interpretation that they had was that, look,
bill-and-hold only refers to those situations where doesn't
pass, because - and the flow chart says, look, has title
passed. And, if the answer is no, then it says, well, can
you meet all the bill-and-hold criteria. With the suggesting that you still own it but you can recognize the
revenue. Does that make sense that Q

Well, I'm not going to - my question is, does the

(22)

bill-and-hold decision tree, does it include delivery as a

(23)

factor before you can recognize revenue?

(24)

A No. TIns assumes that - you lmow, tIns doesn't
address delivery. It just assumes that it's already in your

Page

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 237
(I)

(2)
(3)

(4)
(5)

(6)
(7)

(8)
(9)

(10)
(11)
(12)

Halliburton facility.
Q

Okay. Now, if you do not have delivery, what do

you need to do - or, what elements do you need to satisfy
in order to recognize revenue?
A

YOll have to meet the bill-and-hold criteria.

Are all the bill-and-hold criteria contained in
that bill-and-hold decision tree?
A
No.
Q

Q One of those seven criteria, by the way, is fixed
delivery date?
A Correct.
Q GeneraUyspeaking, can Halliburton - or any

oilfield services company, for that matter - ever meet that
(J 4) criteria of fixed delivery date?
(15)
A No.
(16)
Q
Why not?
(17)
A I don't want to be completely - but basically the
(18) product sales are dealing with oil wells, the drilling of
(J 9) oil wells, which those - the timing of when the work is
(20) actually done - they set these schedules for when the
(21) work's going to be done.
(22) But there is a lot of movement in terms of based
(23) on what they find and whatnot, so there's really no way to
(24) predict when the tool is going to be needed in the field,
(13)

(25)

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(0)
(11)
(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)

and that's - in fact, that's the whole business behind

having it at your warehouse ready to go at a moment's
notice, because they don't know when they're going to need
it, they just need it available.
Q And it depends on progress at the rig, for
example?
A Yeah, it'sQ Now, by the way, what do they do with it at the
Halliburton warehouse before the product, that is before it goes out to the rig?
A They have to actually assemble Q I'm talking about the typical case.
A The typical case is, the parts are in the
warehouse, and then the customer says, okay, now we're ready
for it, we need you to ship it out, here are the conditions
for the well, and then Halliburton assembles it based upon
the conditions of the well. Then they test it, and then

(1)

(2)

significant ongoing performance obligations. Even so, in
situations where, even if you weren't storing it in your own
(5) warehouse, you would haVe a revenue recognition problem in
(6) this case.
(7)
Q
In other words
(8)
A You have an obligation to assemble and test it and
(9) take it to the rig. In fact, it doesn't matter where it's
(10) sitting, you have a revenue recognition problem that you
(11) have to address.
(3)

(4)

(12)
(13)
(14)
(15)
(16)
(J 7)

(18)

(19)

Q
In the typical case with respect to Halliburton,
where does that assembly and testing take place?
A At the Halliburton facility, and that's the whole
purpose of the warehouse is - you know, these are not
simply arrangements to store the inventory. The whole
purpose they're there is because Halliburton - the service
requires their expertise to determine what the customer
needs.

(20)
Q
Now, if you're an exploration company, for
(21) example, like Shell or like Aramco, if you wanted to and you
(22) had the resources, could you go out and get your own
(23) warehouse?
(24)
A Of course.
(25)

(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
(15)
(16)

they take it out to the well and do the services.
Q By the way, can you recognize revenue if you have

(17)

post - even if you had delivery, okay, could you recognize
revenue if you had post-delivery significant post-

(19)

delivery 0 bligations?
A No.
Q And where would A I'm sorry?
Q And where would that be?

XMAX(60/60)

Page 239
A Well, that's even under SAB 104. I mean, you
can't have any ongoing performance obligation, any

(18)

(20)
(21)
(22)
(23)
(24)
(25)

Q

Is that the typical case for Halliburton, that

Page 240
they use a Shell or the exploration company or the
customer's warehouse?
A It's not a typical situation, no.
Q
All right. Now I want to focus again on delivery.
You've heard some talk already about, delivery has occurred
when there is delivery to the customer, correct?
A Dh-huh.
Q And/or delivery to an intermediate site, do you
remember that?
A Yes.
Q Okay. Under the research that you did, based on
the research that you did, what would be an intermediate
site?
A Third-party site.
Q
Meaning?
A It would have to be a party independent of the
seller and the customer.
Q Could you ever have delivery to Halliburton
itself? In other words, where Halliburton delivers to
itself, could that ever be an intermediate site?

A

No. That's ridiculous.
Could you ever have delivery to a customer if you
delivered it to yourself?
A No, because Q
Under SAB 104.
Q

Page 237 to Page 240

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 241
(1)

A

No.

(1)

(2)

Q

Have you ever seen the term - in any of the

(2)

bill-and-hold criteria, number one is, risk of ownership

(3)

must have passed to the buyer, right?

(3)

research you saw, did you ever see the term, physical

(4)

delivery?

(5)

(6)
(7)

(8)
(9)
(10)
(11)

(12)
(13)
(14)
(15)

(16)

A

Yes.

Q What did that mean under the research?
A I mean, it's right there implied in the title.
It's a bill-and-hold. You bill, and you're holding it. I
mean, it can be no misunderstanding that if you're holding
it that means physical possession. And all of the language
- and it wasn't just that conceptually I understood that.
It was everything that we ever found in the literature. We
studied SEC enforcement actions, and, in fact, I mean, an
SEC enforcement action, that's what they - I mean, they
emphasize physical delivery.
Q

Well, let me ask you this, you understand, of

(4)

A

Right.

(5)

Q

That's number one. A buyer who has made a fixed

(6)

c0l1U11itment to purchase their goods, right? Fixed meaning

(7)

you presumably should get paid, right?

(8)

A

Right.

(9)

Q

Buyer requests bill-and-hold and must have a

(10)

substantial business purpose for doing so.

(11)

A

Right.

(12)

Q

We talked about fixed delivery, and then, five,

(13)

the seller must not have retained any specific performance

(14)

obligations, correct?

(15)

A

Right.

(16)

Q

The goods have been segregated, and the equipment

(17)

course, that the position that you took - and, as I

(17)

(18)

understand it, Mr. Paquette took

(18)

research, the factual research that you did - and I take it

(19)

recognition, SAB 104 elements not being met because there

(19)

you did some factual research, did you not'?

(20)
(21)

wasn't delivery, among other things, were you ever told what

(20)

A

Oh, yes.

the rationale was for there being delivery?

(21)

Q

Did you talk to people in the field?

A No. No one ever came to me and said, look, you
know, you're wrong and tlns is why, this is what we're
doing. In fact, if I were wrong, I would have thought that
they would have wanted to come tell me this is why you're

(22)

(22)

(23)
(24)
(25)

(I)
(2)

(3)
(4)
(5)
(6)

with respect to revenue

wrong, but, in fact, they just avoided me.
Q

Well, let me ask you this, let's say, for example,

Halliburton is just a store of product

(23)
(24)
(25)

(l)
(2)
(3)

A Yes, I - in fact, my concern elevated that people
didn't lll1derstand revenue recognition rules, so, again, took
the initiative to develop training. We went around the
world teaching training. We gave - what was it - there

was an in-depth course, took two and a half days, case
studies, to really walk through what was necessary.
Q

And my question was, did you actually talk to the

Vh-huh.

(4)

Q

- and there's a bailment relationship, would that

(5)

field to determine whether or not any of these criteria,

(6)

biIl-al1d-hold criteria, had been met?

A Yeah. I mean, definitely. I mean, there were
probably 400 or 500 people probably attending these training
courses, and part of it was, was an open dialogue. It gave
my group an opporttmity to understand what is going on out
in the field. It was not like we just sat back in our ivory
tower. I mean, we were out there talking to the people who
were out there recording the transactions and certainly
lll1derstood the business.

be delivery to the customer?

A

No.

(7)

(8)

Q

Have you ever seen any piece of literature

(8)

(9)

must be complete and ready for shipment. Now, in all the

A

(7)

(10)

anywhere, any authoritative literature anywhere, that says
that you can deliver to yourself, you can deliver to your

(9)
(10)

(11)

own warehouse, you could be a store, you could be a bailee,

(11)

(12)

andthat's-

(12)

(13)

A

Yes.

(13)

(14)

Q

- outside of Halliburton, and that is delivery

(14)

people in the field, get information from people in the

Q

Okay, and I want to ask you about that. Well,

(15)

under SAB 104 such that you can recognize revenue, have you

(15)

(16)

ever seen anything like that.

(16)

first of all, bill-and-hold criteria, is it okay to meet

No.

(17)

one, two, or even six out of the seven and recognize

Have you seen some stuff to the contrary in your

(18)

revenue?

(17)
(18)

A
Q

(19)

research?

(19)

(20)

A Yes. I mean, everything that we fOlll1d was
physical delivery. I mean, that's the whole point. I
mean, if it were based on title and risk of loss, why do you
have the bill-and-hold - why would you have the bill-andhold criteria in the first place?
Q Well, let's talk about that. We had - and I

(20)

(21)

(22)
(23)
(24)
(25)

XMAX(6116l)

Page 243
talked about in the PowerPoint presentation - the seven

(21)
(22)

(23)
(24)
(25)

A
Q
A

No. You have to meet all of the criteria.
Imean-

Q

Yeah.

Okay.

A - the SEC has never waived on the fact that, if
you're in bill-and-hold, you have to meet all of the
criteria.

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA
(l)
(2)

Page 245
Q
Now, we talked about fixed-schedule delivery and,
in general, the company can never meet that, so I'm going to

(1)

(2)

(3)

look at the - 1'111 going to have to talk about the other

(3)

(4)

criteria.

(4)

(5)

A

Okay.

(5)

(6)

Q

Number one, risk of ownership. And, by the way,

(6)
(7)

(8)

did you ever do any research and learn anything with respect
to whether the risks of ownership were tmly passing to the

(9)

customer?

(9)

(7)

(8)

(10)

A
Q

Yes.
And what did you find?

(10)

(11)

(12)

A

Through conversations with the field during - we

(12)

(11)

XMAX(62/62)

Page 247
calling for the delivery to a Halliburton site.
A Vh-huh.

Q

Was that always the case prior to 2005?

A No, it wasn't. In fact, at the end of 2003, when
they initially tried to do some work aroll..lld whether or not
bill-and-hold was a problem, they realized in most cases
that title never passed.
Q
So, even if we were out of bill-and-hold, for
example, and were just looking at the four elements of SAB
104, prior to 2005 was that being met?
A
No.

were asking questions like, well, look, what would happen in
(14) this instance. And, you lrnow, what would happen if the

(14)

Q
And let me ask you this, were there any controls
in place to even determine whether or 110t the four elements
of SAB 104 were being met prior to 2005, prior to you

(15)

(15)

looking at this issue?

(13)

equipment got destroyed or otherwise damaged, and the

(13)

answer

(16)

(16)

every time was, lool{, you lmow, we'd be on the hool{ for

(17)

individuals in the F &A departments that were required to

(17)

that. It's our responsibility.

(18)

record the revenue never - 90 percent of them never even
looked at a contract to evaluate the contract. In fact, at

Can you give us any examples of that?
Well, I can give you a specific example. Shell,

(19)

(21)

(21)

who is one of - if not the largest customer of
Halliburton's, has a specific contractual arrangement where

(22)

(22)

they impart strict obligations on Halliburton to manage

(23)

(23)

their equipment.
And I encountered an e-mail trail between someone

(24)

(24)
(25)

high up at Halliburton and someone high up at Shell where

(18)
(19)

(20)

Q
A

(20)

(25)

A

No, there were no controls. In fact, the

the end of the 2003 audit in about January 2004, KPMG
themselves pointed out to the company that, look, you guys
need to start reviewing your contracts, you know, revenue
recognition is a risky area, it's - revenue recognition is
very legal-form driven, and they cared enough to put it into
a presentation to management that the recommendation was,

lmow, if you're not willing to accept responsibility for a
part that's on your - that you're in possession of, then

(3)

get F&A reviewing contracts.
Q
After - wen, let me just ask you this, did the
company when it realized it might have a problem, did it

(4)

ever try to go to its customers and get them to agree about

(5)

title being passed?

(6)

we've got an issue here.
I think we could probably point to the exhibit.

(6)

(7)

But it was clear to me. I mean, the obligations, they had a

(7)

A Yeah. Because, in order to comply with the
formalistic bill-and-hold decision tree, you had to get

(8)

master service agreement, but they also had an addendum
which basically dealt with Halliburton's contractual

(8)

title passage. And so, if you start with, lool{, I've got a

(9)

service contract, there's no mention of title in the service

(1)

(2)
(3)

(4)
(5)

(9)

(10)
(11)

there was some discrepancy over Halliburton's accepting
responsibility for the goods. And Shell said, look it, you

obligations related to the equipment.
Q

Okay.
It said things like, you lmow, basically anything

(1)
(2)

(10)

contract.

(11)

So, in order to get - introduce the concept of
title and ownership, they would have had to make some

(14)

A
that's lost or stolen, Halliburton's responsible, anything,
you know - Halliburton had this explicit obligation to find

(15)

the maxirmml use for that equipment. So, even if it went out

(15)

before KPMG signed off on the audit, there was - you lmow,

(16)

to the rig and came back, Halliburton had an obligation to

(16)

(17)

the customer to provide them the most value to them, whether

(17)

Halliburton approached the customers and said, hey, you
lmow, look, will you be willing to sign off on this - you

(18)

it be they sell it to somebody else or use it in a future

(18)

lmow, give us a risk of loss, you lmow, letter, if you will.

(19)

well.

(19)

And so, again, if it requires a customer to come to you, I

(20)

think it's a problem when the company actually goes to their

(21)

customer and asl{S for that.

(12)
(13)

Q Okay. Now, let's go to number two, buyer made a
(21) fixed commitment to purchase the goods, preferably with
(20)

(22)
(23)
(24)
(25)

written documentation.
A

Vh-huh.
Now, first of all, you've heard some discussion,

Q
for example, about the contract or the purchase order

(12)
(13)
(14)

arrangements with their customers and modify the purchase
orders or get letters from them, and so at the end of 2003

(22)

Q

Now, the-

(23)

A

It's outside theIt wasn't the customer requesting this

(24)
(25)

Q

arrangement, it was you, the seller?

Page 245 to Page 248

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

Page 249
(1)

A

I mean, because -

(l)

(2)

Q

Well, it seems like you weren't - it was you, the

(2)

(3)

seller, that was going to the customer, not the customer

(3)

(4)

going to you, c()rrect?

(4)

(S)

(6)
(7)
(8)

(9)

(l0)

(1l)
(2)

(13)
(14)
(IS)
(J 6)

(J 7)

(18)

A

Yeah. I mean, this is an important point because,
in 2004 when they were reviewing a contract in the UK, the
UK was trying'to comply with the bill-and-hold decision
tree, and they said, well, look, you know, we need to get
legal involved to review these contracts because we're not
sure when title passes or if it does.
They got legal department to review it, and the
guy came back and through e-mail communication said, look,
guys, these are service contracts, they don't lend
themselves to counter terms, which are delivery terms.
There's no mention of passage of title. And he said, look,
the performance under the contract, it requires the
successful provision of the service.
Q

Do you think anybody - any of Halliburton's

whether or not they care if title passes at the time it goes
through Halliburton and goes out to the rig, I can't see any
real business reason why they would.

Q

Well, in 2005, did you see where the buyer had

(5)

requested bill-and-hold, where they wrote in and said, we

(6)

want it this way?

(7)

A I saw some commmlications where they were actually
trying to go out and revamp certain language in the
contracts to get additional - maybe try to get some
additional coverage on this issue.

(8)
(9)
(10)

(11)

Q

Well, I understand. But in your research did you

(12)

ever see buyers writing letters saying, we want you to do it

(13)

this way?

(14)

A

No.

(1S)

Q

I'm going to skip over four. Number five, seller

(16)

must not have retained any specific performance obligations.

(17)

I think we already talked about that too. Generally

(18)

speaking, did you see that as being met?

(19)

customers, the typical customer, really cares about the

(19)

A

No.

(20)

product by itself if they don't get the service?

(20)

Q

Ordered goods must have been segregated from

(21)

(22)
(23)

A

No.

MR. JORDAN:

Objection, Your Honor, calls for

speculation.

(24)

JUDGE ROSENOW:

(2S)

BY MR. AHMAD:

(1)

Q

Sustained.

(21)

seller's inventory, did you ever do any research in regards

(22)

to that?

(23)

A Yeah. I mean, it - well, research in the
accounting literature, yes, but, I mean, I - James and I in
our training in the UK when we physically walked the

(24)
(2S)

Let's go to bill-and-hold criteria number three,

(2)

buyer requests bill-and-hold and must have a substantial

(3)

business purpose for doing so. First of all, in all of your

XMAX(63/63)

Page 251

(1) warehouse that was there, and, you lmow, just to get an idea
(2) of what some of these products were, but that's not really a
(3) difficult hurdle. I mean, I don't have any - they need
(4) that.

(4)

research, did you ever see where the buyer specifically

(S)

requested bill-and-hold, wrote a document and said, you

(S)

(6)

know, we want you to deliver it to your warehouse, where

(6)

be complete and ready for shipment. Was that generally

(7)

they said that?

(7)

true?

(8)
(9)

A No, I mean, the business - when you talk about let me step bacl< for a second. There's nothing wrong with
bill-and-hold in terms of it's a practice, okay? The
problem is whether or not you try to recognize revenue. So

(8)

(11)

that's just the way the industry works, okay. You're the
service provider, you're manufacturing the equipment, you're
warehousing it, you're going to do the service. So there's

(13)
(14)

A No. This - and to point to KPMG's own guidance,
this is meant to be interpreted strictly. The SEC, in their
own guidance and their example, they say, for example, you
have a machine that requires 10,000 man-hours to
manufacture, and if you've done everything in the
manufacturing process but you have a little bit of touch-up
paint, maybe four hours worth of work, then it's not
complete. That's the guidance that KPMG gave us.
So whether or not it's complete is - is it
complete, is it ready for its intended purpose. And at
Halliburton the argument they try to make is, like, 1001<,
yeah, we have to assemble it and then test it and tal<e it,
but it's not significant. But the fact of the matter is,
it's not complete. Until you lmow what the well dimensions
are and the requirements for the service, there's no way
that that tool is, in fact, complete.

(10)

(11)

(12)
(13)

(14)

(9)

(10)
(12)

(16)

all services. So Q Well,theproblemisin

(17)

recognize the revenue early, there's nothing wrong with it

(17)

(18)

as a -

(18)

(IS)

(1S)

if you want to

(16)

(19)

A

Right.

(19)

(20)

Q

- business practice or anything like that?

(20)

(21)

A

Right.

(21)

(22)

Q

You just want to recognize revenue?

(22)

(23)
A So the customer might say, well, yeah, you know, I
(24) do want it there because I want it to be ready when I need
(2S) it, okay, so that's the way the industry operates. But

(23)

(24)
(2S)

Q

Q

Okay. So six, they need. Seven, equipment must

Well, did you determine whether or not that

Halliburton could have delivered this tool without it being

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 253
(1)
(2)

assembled and tested?

(1)

if you just delivered it to a common carrier, for example.

A

No.

(2)

Is delivering to a connnon carrier delivery?

Q

No, you didn't determine it, or no it wouldn't be

(3)

A

No.

(4)

of any use?

(4)

Q

And do you know -by the way, when you did your

(5)
(6)

(5)

research and saw that, the John Christopher article, do you

(6)

have any idea where he got the information from that

(7)

A Right. The customer would have no use for
unassembled completion parts.
Q We had talked earlier about the literature with

(7)

article?

(8)

respect to SAB 104. Tell us about some of the liteniture

(8)

(9)

you looked at in 2005 when you were doing the research under

(9)

(3)

XMAX(64/64)

Page 255

(21)

issue?

(21)

(22)

A Pulled down all the guidance from the big firms,
including my former employer, Ernst & Young, got KPMG's own
guidance. We pulled down every enforcement action that the
SEC ever - when they addressed bill-and-hold. We got every

(22)

A Yeah. You lrnow, I had been in discussions with
John Christopher for - since probably beginning in May or, late May after going to McCollum and him telling me not
to, you lrnow, spend much time on the issue, I shouldn't be
looking at past practice, I wasn't an auditor.
I explained to him the issue, the concerns that I
had, and I told him that, you lrnow - you lrnow, at first I
didn't want - I'm sure he didn't want his bosses to lrnow
and I didn't want my bosses lrnowing, but the plan was, look,
we're going to vet this issue and I'm probably going to worl{
with you, because I have been told I could not audit any
past transactions, that I had to focus on current
transactions. And I told him that, even though Mark gave me
that instruction, I did have tms current contract, the TCP
gun situation.

(24)

other words, where did Mr. Christopher get the information?

(25)

Where did that article come from?

(10)

whether the company's accounting practices in terms of

(l0)

(J J)

product revenue recognition was proper.

(11)

(12)
(13)

A
Q

Ithinld-

(12)

Just outline them briefly, and tllen I want to

(13)

(14)

point them out.

(14)

(15)

(16)

A We exhausted everything we could find, because
tIris - we knew this was a big issue for the company, and we

(16)

(17)

didn't want to be wrong.

(15)

(17)
(18)

(18)

Q

We, you and Mr. Paquette?

(19)

A
Q

Yes, yes.

(19)

Specifically what articles did you find on this

(20)

(20)

(23)
(24)
(25)

(4)

speech the SEC ever gave. We reviewed restatements that had
to do with bill-and-hold. We spent months, because we were
concerned tlus was a huge issue. And, when it became
apparent that there was nothing to support what was going

(5)

on, we-

(I)
(2)
(3)

Q

(1)
(2)

(3)
(4)
(5)

(6)

Q

Can you give us some of those articles?

(6)

(7)

A

Yeah, I mean, I could tell you -

(7)

(8)

Q

Well'?

(8)

(11)

A Ernst & Young in 2004 had a revenue recognition
summary that they passed out to their clients. KPMG's
article on oilfield - you know, bill-and-hold oilfield

(12)

services.

(9)
(10)

(9)

(10)
(11)
(12)

I'm trying to find out, what's the research - in

A Well, he eventually explained it to me that he
originally drafted the article, but he sent it to the
national office and they just tore it up and basically sent
back that, but he got to keep Ius name on it. So apparently
that was the guidance that their national office Q Do you know where it came from?
A What do you mean? Oh, the article itself?
Q

Yes.

A It came from the oil and gas winter 2005 topics, I
think, where they had an arumal conference for oilfield
service companies, and they were addressing some of the
accounting and reporting or tax issues.

(13)

Q

The one by John Christopher?

(13)

(14)

A

The one by Jolm Christopher.

(14)

saying Mr. Christopher wrote that article but he didn't

(15)

Q

That's in tab 62 of exhibit 1 ?

(15)

write it? I mean, he had his name on there but he didn't

(16)

A

Yes.

(16)

nece'ssarily endorse the positions taken in the article?

(17)

Q

Okay.

(17)

(18)

Yes.

(18)

described the situation. He said yeah, that could be a big

(19)

A
Q

(19)

problem here at Halliburton.

(20)

JUDGE ROSENOW:

(21)

And, by the way I think that's the one Mr.

Paquette already testified to?

THE WITNESS:

JUDGE ROSENOW:

makes any difference is to ilie extent that it had an impact

(22)

on you -

THE WITNESS:
BY MR. AHMAD:

(23)

THE WITNESS:

(24)

Q

(24)

JUDGE ROSENOW:

were some questions about whether or not you could meet that

And the only reason any of that

(21)

(23)

Now, by the way, you - I think you saw that there

I'm not sure I understand. You're

It wasn't - what happened was, I

(22)

(25)

Yes

(20)

JUDGE ROSENOW:

(25)

Uh-huh.

things were a problem?

- and your conclusion that these

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

Page 257
Well, I had already - in fact, I

THE WITNESS:

XMAX(65/65)

Page 259
(1)

Lynn Turner?

(2)

had already drafted my - the memo that actually went out on

(2)

(3)

July 14th or 15th. I gave him a draft, a pre-draft, said,

(3)

A Yes. Or they're not necessarily articles, but
speeches.

(4)

hey, will you look at this.

(1)

(5)

(6)
(7)

Q

(4)

JUDGE ROSENOW:

Are you talking about Mr.

Christopher?

(5)

Okay, and I'll include that. And, first of all,

who is Lynn Turner?

A Lynn Turner is the form chief accountant at the
SEC. He was there during the adoption or the creation of
(8) SAB 101, so he was very instrumental in writing SAB 101 as
(9) the chief accountant.
(6)

THE WITNESS:

Yes.

(8)

JUDGE ROSENOW:

(9)

BY MR. AHMAD:

(7)

Okay.

Well, let me just aduress the Judge's question.

(10)

Q

Did you ever hear of anybody named Mr. Bayless?

(ll)

When you saw the article from John Christopher, it appeared

(11)

A

Yes.

(12)

that he endorsed it, correct?

(12)

Q

And who is he?

( 10)

Q

A Yes. I mean, I was trying to get - a timing
(14) point here, I gave him my draft. He came back to me and
(15) said that this is a very good memo, and then he came back to
(16) me with the article. So I - the first time I saw the
(17) article that he wrote was after I had already provided him a
(18) draft.
(13)

(19)

JUDGE ROSENOW:

So you had already done - you had

(13)

(14)

(15)
(16)
(17)

A I can't remember at this time, but he was - I
think, well, he was with the SEC. I don't - I can't
remember his title with the SEC.
Q

Well, if you wantto cheat, it's exhibit 1, tab

72.

(18)

A

Okay.

(19)

Q

And is that one of the articles that you uncovered

(20)

already gotten the TCP, you had already gotten with Mr.

(20)

(21)

Paquette, you had done the vast majority of your homework -

(21)

A

Yes, it is.

(22)

Q

Tell us who Mr. Bayless is and

(22)

THE WITNESS:

Yes.

(23)

JUDGE ROSENOW:

- running, talking to different

(23)

(24) people, doing your research?

(24)

(25)

(25)

(1)

THE WITNESS:

Yes.

JUDGE ROSENOW:

A He's the chief accountant for the division of
corporate finance with the SEC.
Q
And, in tab 73 of exhibit 1, can you tell us what

(1)

that is?

(2)

and speeches and everything, you came up with your draft

(2)

A

Tins e-mail?

(3)

opinion and you ran it by him?

(3)

Q

I'm sorry, I,... is it 73 that's Lynn Turner?

(4)

THE WITNESS:

(5)

JUDGE ROSENOW:

Looking at all the SEC opinions

in your research on this issue?

Yes.
Okay.

(4)

A

No.

(5)

Q

That's what I had written down.

And then he said, well, look, this

(6)

A

It's 71.

(7)

sounds familiar, and then he brought me the article. And

(7)

Q

Okay, 71.

(8)

then I was, like, yeah, you could have saved me a lot of

(8)

A

Yes.

(9)

work. And then I asked him, I said, why didn't you mention

(9)

Q

Is that another article, the one by Mr. Turner,

(6)

THE WITNESS:

(10)

this sooner? And he says, well, that's because, you know, I

(10)

another one that you uncovered in your research on this

(11)

didn't really - it didn't click, I had sent, you know, my

(11)

issue?

(12)

draft, got marked up by the national office and -

(12)

A

Yes.

(13)

Q

Is there - would it be fair to say that, if

(13)

BY MR. AHMAD:

(14)

somebody had come up to you and said, well, Mr. Menendez,

(15)

that the Christopher article was based on. Did you ever

(15)

this is how we reached our conclusions, you would have

(16)

100 k

(16)

showed them these articles that contradicted them?

(14)

Q

And you talked about there being another article
at other articles?

A Yeah. After further research, it became obvious
(I 8) that it was basically a cut-and-paste job from an article
(19) that had already been written entitled Hocus-Pocus
(20) Accounting by Professor Douglas Carmichael, who used to be
(21) the chief auditor for the PCARB. A lot of the same - I
(22) mean, other than anything unique to the oilfield services, a
(23) lot of the other - everything else was just basically out
(24) of it.
(17)

(25)

Q

Did you find any articles from a gentleman named

A Yes. In fact, I told John Christopher, after he
told me they were going to not make any correction, I said,
(19) well, how is it that, you Imow, all the research, all these
(20) other companies, they don't get to apply the - you Imow,
(21) this rule. I mean, they all had to deal with their bill(22) and-hold. And so many companies had restatement
enforcement
(23) actions, and his response was, well, all I can say, Tony, is
(24) they're not Halliburton.
(17)

(18)

(25)

MR. JORDAN:

Objection, Your Honor, hearsay.

Page 257 to Page 260

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

Page 261
Well, let me address that.

(1)

MR. AHMAD:

(2)

JUDGE ROSENOW:

Address the objection?

(1)
(2)

(4)

Oh, 110, I'm sorry. I'm going to
MR. AHMAD:
address the issue. I'm going to - I'll move on to another

(4)

Q

(5)

question.

(5)

A

(6)

JUDGE ROSENOW:
Okay. Then I guess the question
is withdrawn, then, and the answer?

(6)

(3)

(7)

(8)

MR. AHMAD:

That is correct.

(9)
(10)

JUDGE ROSENOW:
BY MR. AHMAD:

(11)

Q

Okay, that's fine.

Did the Grant Prideco issue ever come up -

actually, before I go there, did Grant Prideco ever have a
bill-and-hold issue?
A Yes, it did.

(3)

XMAX(66/66)

Page 263
A The issue is, how do you earn the revenue, okay.
So have you done everything that you need to do in order to
earn that revenue.
And one of those issues is physical delivery?
Yes. In order to say, look, I've earned - I've

performed the service or I've given you what you've asked,

(7)

but what happens when you ask for several different things?

(8)
(9)

I've asked for you to manufacture it, warehouse it and then
do the service.

(10) Well, what am I really asking for? When have you
delivered the value to me? That's what it's trying to

(11)

Q

Can you tell us what that was about?

(15)

answer. And so what the bill-and-hold criteria, it's so
strict because one of the fundamental tenets of revenue
recognition is that you have performed or delivered, but
they do provide an opportunity that you can recognize

A

In I thinl{ it was about March or early April of

2005, Grant Prideco released the fact that they had a

(16)
(17)

revenue if you haven't physically delivered, but you have to
meet all the bill-and-hold criteria.

(18) material wealmess and they were going to restate their
(19) financial statements for problems with bill-and-hold, and so

(18)
(19)

Q
And, by the way, bill-and-hold criteria is not
easy to meet, is it?

A No, not at all. I mean, I don't think you'll find
any reference anywhere that suggests that it's easy.

(12)
(13)
(14)

(15)
(16)

(17)

(12)
(13)
(14)

(20)

there was a disclosure.

(20)

(21)

And at the time I didn't really lmow what the

(21)

(22)

issue was about, but J.R. Sult forwarded the announcement of
their restatement, suggesting that everybody in his

(22)

(23)
(24)

organization be extra diligent or diligent in, you lmow,

(24)

(25)

revenue recognition, because you could see what could

(25)

(23)

(1)

Q

Do you know of anybody that's been able to meet

A

No, I'm not aware of any company that's ever met

it?
it. In fact, I mean, if you go to this Bayless speech, he

says, look, SAB 101 reminds public companies that just about
every bill-and-hold transaction you could think of doesn't

(3)

happen.
So that was in April. Then, as I was doing our
research, I realized that when I looked at Grant Prideco it

(3)

(4)

was basically the same situation, that, you Imow, it was a

(4)

(5)

bill-and-hold issue, and Grant Prideco came out and said,
look, you know, we believe that the risk of loss, title had

(6)

(7)

passed, but we couldn't meet all the criteria to recognize

(7)

physical delivery and you don't meet the bill-and-hold

(8)

revenue.

(8)

criteria? Can you still go to the SEC and request

(9)

Q Can you figure out any distinction between
Halliburton's justification of recognizing revenue at Grant

(9)

permission -

(1)
(2)

(6)

(10)
(11)
(12)

Prideco's?
A None whatsoever. In fact, there's probably a

(2)

(5)

(10)
(11)

(12)

meet the basic criteria for revenue recognition.
Q If you're a public company, can you go to the SEC
if you feel like you have a compelling need or justification
to recognize revenue, but you don't meet, for example,

A
Q

Yes.
- for revenue recognition?

AYes. It's called getting pre-clearance. So if
you think you've got a controversial accolmting position or
a unique transaction, you lmow, taU{ to the staff. They
encourage public companies to talk to the staff to get pre-

(14)

better argument for a company like Grant Prideco than at
Halliburton. Grant Prideco, you Imow, these are tools that

(14)

(15)

the customers actually can come pick up, they're not

(15)

(16)

actually providing services associated with the product or
equipment. But, still, they said - you lmow, I pointed out

(16)

clearance on a transaction before actually doing it. And,

(17)

in fact, KPMG's own article suggests just that.

(13)

(17)

(19)

that, look, it says rish: of loss and title transfer, and
even though they got the money basically you were stuck, you

(20)

still had to meet all the bill-and-hold criteria.

(18)

(13)

(18)

Q

You mean the John Christopher article?

(19)

A

The John Christopher article suggests just that.

(20)

It says, public companies with bill-and-hold transactions
should consider pre-clearing them with the SEC.

(21)

Q

Is the issue risk of loss?

(21)

(22)

A

No, it's not.

(22)

(23)

Q

Is the issue title transfer?

(23)

(24)

A

(24)

A

Yes.

(25)

Q

No, it's not.
What is the real issue, then?

(25)

Q

And requests a variance, would that be all right?

Q

Now, if a company goes to the SEC and says we'd

like to get pre-clearance, would that be okay?

Page 261 to Page 264

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007
Page 265

XMAX(67/67)

(1)

Page 267
hate - I'm going to ask just a few questions, just while

(2)

like they had a bill-and-hold situation and they wanted to

(2)

it's fresh in my mind, to just kind of maybe sllmmarize what

(3)

make their case?

(3)

I understand the testimony to be. I understand there has

(1)

A

Yes, of course. To go - I mean, if they felt

(4)

Q

Sure.

(4)

been no cross examination, so there's obviously

(S)

A

Yes, that's an appropriate way to do it.

(S)

basically what I get from the thrust of your testimony is,

Q

Do you know if KPMG or Halliburton ever went to

(6)

you got the TCP, Mr. Paquette brought it to you, said, gee,

(7)

this is what we've been doing. And it occurs to you, we

(8)

can't do that.

(6)
(7)
(8)

(9)
(10)
(1])

the SEC to get pre-clearance or to get a variance?
A

No. In fact, I

asl~ed

Christopher if they were

ever going to consider that, and he was, like, no way.

Q

We had some discussion about the SEC not taking

enforcement action -

(9)
(10)
(11)

THE WITNESS:

but

Right.

JUDGE ROSENOW:

First of all, you can't just

basically - just not even talking about bill-and-hold yet,

(12)

A

Vh-huh.

(12)

you can't do it under SAB 104 for basic revenue recognition

(J 3)

Q

- after you bad filed a complaint with the SEC?

(13)

because there is no - the way you're viewing it is there

(14)

A

That's right.

(14)

has not been any delivery, there is - services haven't been

(1S)

Q

And I want to talk about that tomorrow, but I'm

(IS)

rendered.
In fact, so much services haven't been rendered

(16)

going to ask you this and I'm going to break, but does the

(16)

(17)

lack of enforcement action at all endorse a company's

(17)

that it probably is a multiple-element relationship contract

(18)

accoullting practices?

(18)

that you don't think you could separate out. And, if you do

No, it doesn't. It means - in effect, it means

(19)

go to - so point one is, you go to - see, your point is

(20)

nothing. It means that at this time we're not recommending

(20)

that you'd have to go to the bill-and-hold because you

(21)

an enforcement action. And based on the information that -

(21)

certainly can't do it under that?

(19)

A

(22)

JUDGE ROSENOW:

(23)

MR. JORDAN:

I think he has an objection.

Your Honor, I would object to the

(22)

THE WITNESS:

(23)

JUDGE ROSENOW:

Correct.
If you turn to the bill-and-hold,

(24)

part of the answer that, in fact, it means nothing, as

(24)

you've already been through them, been through the factors,

(25)

speculation, and this witness has no foundation to express

(2S)

but - and you're saying because of the nature of the

(I)

(2)

such opinion.
MR. AHMAD:

Well, actually, I think it's already

(1)

business there can't be a fixed schedule, they don't need

(2)

the equipment until they need it?

(3)

contained in the exhibits, Your Honor. They were told-

(3)

THE WITNESS:

(4)

Halliburton was told that - and we'll pull it out tomorrow,

(4)

JUDGE ROSENOW:

(S)

and not only does it not mean anything, it's inappropriate

(S)

(6)

for Halliburton to claim that it does.

(6)

an intermediate point and then more work will actually be

(7)

done on the project before it can be delivered. And, even

(7)

(8)
(9)

MR. JORDAN:

Well, that's not-

JUDGE ROSENOW:

I believe it is.

(10)

MR. AHMAD:

(11 )

JUDGE ROSENOW:

(12)
(13)
(14)
OS)

Is that already in the exhibits or

in the record?
Then we'll leave it to that,

because he's just basing it on that anyway.
MR. JORDAN:

That's not what it says, Your Honor,

but it isJUDGE ROSENOW:

And I'll let you all sort that

(16)

out. But, as far as this witness's testimony to me as to

Right.
That, in fact, a lot of this

stuff, the contract really contemplates that it will go to

(8)

in those cases where there's some risk of ownership - it

(9)

looks like it may be laying on the customer, in point of

(10)

fact, either because of informal or understood arrangements

(11)

between Halliburton and its customers, it will end up

(12)

picking up that risk, it will be on the loss actually, no

(13)

matter what happens?

(14)

THE WITNESS:

(1S)

JUDGE ROSENOW:

(16)

Yes.
So that's basically

that was

your point of view?

(17)

what it ought to mean in this Court, I'll wait. There was

(17)

THE WITNESS:

(18)

no enforcement action, and I don't think anybody is going to

(18)

JUDGE ROSENOW:

(19)

argue that there was. And 1'l1let both of you argue how

(19)

research and everything, and you talked it over with Mr.

(20)

much that means. I'm sure you'l1make an argument, and I'm

(20)

Paquette, and then you started espousing that point of view

(21)

sure you'll cite what you've got in the record for the

(21)

- and I've oversimplified it, I understand - in general

(22)

contrary argument.

(22)

going back the other way and said, hey, wait a minute, I

(23)

don't think you guys can do this and this is why, it

(23)
(24)
(25)

MR. AHMAD:

And, Your Honor, this is a good

stopping place. I went beyond, I think, my time.
JUDGE ROSENOW:

{understand. You know, and I

Yes.
And that was based on all the

(24)

wouldn't count as risk.

(2S)

The one question I did have real quickly is, was

 Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

BSA

Page 269

XMAX(68/68)

Page 271

(1)

the push-back that you got an understanding that the other

(1)

(2)

folks within the accounting community and finance community

(2)

(3)

said, yeah, but we think that there really has been delivery

(3)

delivery to a Halliburton warehouse to be a delivery to an
intermediate site?

BY MR. AHMAD:
Q

Just so we're clear, Mr. Menendez, do you consider

(4)

and we think that we don't have to go to bill-and-hold, we

(4)

(5)

in fact think these are customer-owned products which by

(5)

A

(6)

definition means delivery has been accepted and we don't

(6)

JUDGE ROSENOW:

(7)

think we have to look at bill-and-hold? Or were they

(7)

No.

(8)

telling you, yeah, it's proper for bill-and-hold, or a

(8)

MR. AHMAD:

(9)

combination?

(9)

JUDGE ROSENOW:

(l0)

THE WITNESS:

Noone ever really came to me and

(10)

And I understood that to be his

testimohy.
Okay.
And I should have picked a better

word than - well, actually I didn't say a third party, I

(11)

explained what it was. I mean, my position is, there is no

(11)

said intermediate, which doesn't necessarily say one or the

(12)

such thing as customer-owned inventory. Those are, in fact,

(12)

other. But I'm clear on his testimony that he doesn't think

(13)

bill-and -hold transactions.

(13)

that that qualified as delivery.

(14)

JUDGE ROSENOW:

But I guess, to focus on my

(14)

MR. AHMAD:

JUDGE ROSENOW:

Okay.

(15)

specific question, as coming back to you and explaining,

(15)

(16)

okay, this is why we disagree with you and this is why we're

(16)

(17)

going in the direction that we're going, there was never

(17)

MR. AHMAD:

(18)

that discussion?

(18)

JUDGE ROSENOW:

(19)

(20)

THE WITNESS:

No, that never happened.

(19)

That was clear in my understanding

of his testimony.
That's all I had for today.
That's fine. Okay, then we'll go

off the record.

It was basically you told them

(20)

[WHEREUPON, the hearing was concluded

(21)

your point of view, they said thanks very much, this is the

(21)

for the day at 6:01 p.m., to reconvene

(22)

way we're going, and you never had any further interaction

(22)

the following day, Tuesday, September

(23)

with them on anything?

(23)

25,2007, at 8:00 a.m.]

THE WITNESS:

(24)

\

(24)
(25)

JUDGE ROSENOW:

No, originally they told me I was

right, my conclusion was right.

(I)

JUDGE ROSENOW:

(2)

THE WITNESS:

Okay.

And then after they went out and

(25)

(1)

REPORTER'S CERTIFICATE

(2)

(3)

surveyed the field to see how big a problem it could be,

(3)

TITLE:

(4)

then that was it.

(4)

CASE NO.:

(5)

DATE:

LOCATION:

(5)

JUDGE ROSENOW:

But you never got into a

(6)

substantive discussion about your view of the factors and

(6)

(7)

their view of the factors?

(7)

(8)

THE WITNESS:

(9)

JUDGE ROSENOW:

No.
Okay. And I realize I may be

Anthony Menendez v. Halliburton, Inc.
2007-S0X-00005

September 24, 2007
Houston, Texas

(8)

This is to certify that the attached proceedings

(9)

before the United States Department of Labor Office of

(10)

hijacking what - certainly what he may want to do on cross

(10)

Administrative Law Judges were held according to the record,

(II)

and what you want to do on the rest of your direct, but it

(11)

and that this is the original, complete, true and accurate

(12)

just tells me while everything is fresh. And when I'm

(12)

recording accomplished at this hearing.

(13)

reading the record I'll have a nice little summary to

(13)

(14)

refresh me on what I understand the testimony of this

(14)

(15)

witness to be.

(15)

(16)

MR. AHMAD:

(17)

THE WITNESS:

(18)
(19)

(20)

I do have oneMay I testify to what the SEC

JUDGE ROSENOW:
MR. AHMAD:

JUDGE ROSENOW:

(25)

I'm sure that your attorney will

ask you the questions tomorrow, and we'll go down that road.

(22)
(24)

MR. AHMAD:

Date

(17)
(18)

actually told me?

(21)
(23)

(16)

September 24, 2007

Ijust have one clarificationYeah.

- Your Honor, to that line of

(21)
(22)
(23)
(24)

inquiry.
JUDGE ROSENOW:

(19)

(20)

Yeah.

(25)

Page

272

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

Look-See Concordance
Report

217:17

-1UNIQUE WORDS: 2,824
TOTAL OCCURRENCES: 18,238
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TOTAL WORDS IN FILE: 53,568
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36:17
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8:12; 69:12,' 71:10,' 92:2;
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6:17; 14:5, 22; 17:20; 18:6;
21 :6; 24:18; 69:13; 71 :13;
75:14; 84:17; 91:11,25;
93:21; 103:14; 104:8; 105:5;
115:16; 116:20; 117:2, 4;
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24:20,' 25:15; 26:7, 8, 13,'
43:4; 45:15; 72:3; 116:22;
122:9,11; 131:17,22,25;
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271 :23; 272:5, 14
2007-sox-00005 [1]
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2007-sox-5 [1]
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66:15
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271 :23
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130:22
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103:24; 120:3
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122:9
29 (6]
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30 [1]
61:5
30-page [1]
61:4
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61:15, 16
31 [7]
56:7, 11, 15, 25; 58:9; 59:6,
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34 [1]
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65:14,15,19
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63:11; 65:8
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40 [1]
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63:10
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From

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

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58 [7]
62:21, 23,' 233:22, 25,' 234:4,
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43:7

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247:18
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227:18
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27:20, 21; 33:1; 34:10,'
116:12; 241 :14; 253:24;
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activity [5]
21:9,11,16; 51:25; 63:18
actual [14]
10:7, 13; 11 :24; 15:1; 20:23;
52:1,20,'101:12; 123:3,'
140:10; 172:22; 196:22;
207:16; 235:19
add [3J
155:18; 202:18; 204:18
added [3]
149:16, 17; 150:1
addendum [1]
246:8
adding [3]
150:3; 204:16; 220:16
addition [1]
34:9
additional [8]

Look-See(70)

78:6; 97:8; 129:10; 151:12;
226:6, 9; 251 :9, 10
address [11]
95:25; 150:4, 5; 213:10;
231 :19; 236:25,' 239:11;
257:10; 261 :1, 2, 4
addressed [5]
91 :21; 93:23; 164:6; 213:15;
253:25
addressees [2]
164:25; 165:6
addressing [1]
256:11
adhered [1]
16:10
adjudicate [1]
33:20
adjudication [1]
54:22
adjustment [1]
149:12
adjustments [2]
33:17,' 113:19
admin [1]
136:15
administrative [6]
4:11, 14, 15; 25:16; 50:1;
272:10
admission [3]
55:23; 58:8; 59:5
admitted [10]
25:24; 33:18; 42:5, 6; 45:2;
59:7,' 62:17,' 64:18; 65:15;
138:3
adopt [1J
108:2
adopted [3]
108:7; 148:14; 217:11
adoption [8]
81 :2; 108:4, 8, 13, 19, 20;
109:5; 259:7
adoptions [1]
82:19
advantage [2]
203:11,13
advantages [3]
203:15, 16; 204:4
adverse [5]
27:20, 21; 34:10; 48:8; 54:17
advise [2]
6:25; 7:6
advised [2J
157:23; 158:7
affected [2J
28:16; 85:8
affects [1]
22:21
affirmative [1]
48:9
afoul [1]
189:14
afternoon [1]
156:16
agenda [1]
201:24
agent [6]
111:15; 112:21; 169:24,25;
170:4,5
aggregate (2]
17:2; 39:5
agree [14]

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

24:1; 54:5,8,' 144:24,'153:14;
165:17; 166:20; 167:1,'
174:25,' 198:23; 217:14, 16,'
229:18; 248:4
agreed [3]
36:10; 144:16,' 196:5
agreeing [2]
54:16; 162:15
agreement [4]
49:3, 4; 87:5; 246:8
agreements [1]
229:4
agrees [1]
12:3
ahmad [96]
4:20,' 6:5, 7; 8:16, 20; 9:1, 3,
5, 17, 22,' 10:4, 9, 12; 11 :22,'
12:6; 32:9,' 34:14; 36:25,'
41 :23,' 42:5; 49:23; 50:4;
51:4, 7,11,14, 18; 52:5, 8,
12,22; 53:3, 7,21; 54:1,11;
55:3,22; 56:6,12,14,18,20,
23,25; 57:2, 8, 13,18,22,'
58:3,11,' 59:18; 60:11,14;
61:7; 62:1,9,12,22; 63:11,
21,24; 65:2,11,24; 66:9,'
67:4, 6, 13, 23,' 68:8,' 194:7,
8, 20,' 197:19, 22,' 249:25,'
254:23,' 257:9; 258:13; 261:1,
3,8,10,' 266:2,10,23;
270:16,21,23,' 271:1,8,14,
17
alarmed [2]
198:16,19
alerting [1]
48:18
algeria [1]
216:16
algerian [1]
219:7
alienate [1]
41:11
aligned (1]
78:9
allegations [2]
30:13; 33:5
alleged [3]
34:1; 45:14,' 51:14
alliance [2]
92:25,'164:22
allow [8]
5:24,'15:22; 117:24,'118:12,'
119:6, 8; 125:19; 150:22
allowance [1]
105:18
allowed [3]
31:16; 46:5; 207:18
allowing [1]
151 :12
allows [1]
140:14
alone [1]
177:12
alternative [1]
48:1
amended [2]
50:6
america [1]
197:7
amongst [1)
83:18

amount [15]
15:1,2,'17:1,9,15; 20:1;
21 :21; 38:9, 13,' 42:14;
146:11, 20; 183:4; 204:12;
214:17
amounts [3]
21 :2, 21; 203:4
analysis [20]
80:10,' 90:20; 98:22; 102:23;
103:2, 5, 7, 8, 12; 109:21;
172:23; 174:2,' 177:8,' 179:19;
204:10; 205:2, 7,' 212:23;
213:6, 11
analyst [4]
21 :3, 19,' 204:24; 205:14
analysts [3]
21 :3, 18; 205:9
analyze [3]
90:15,' 99:6, 8
analyzed [1]
101:5
angeUe [10]
46:21,25; 114:20,21;
156:21,22,'157:3,'178:9,12;
198:10
announcement [1]
261 :22
annual [2]
47:19; 256:10
answer [22]
22:24,' 29:18,' 41:9,' 45:25,'
50:7; 59:3; 79:14; 91:1, 2;
105:25; 182:12,21; 191:6,
13; 212:25; 236:7,9,17;
245:15; 261 :7,' 263:12;
265:24
answered [2]
83:20,' 146:10
answers [4]
40:2; 81 :25; 129:12; 141:2
anthony [4]
4:5; 194:13,19; 272:3
anti-abuse [1]
16:11
anticipated [1]
5:8
anybody [35]
30:19,' 69:24,' 71:20; 81:17,'
99:11,'102:8,'106:12; 113:9,'
116:3; 117:6,' 119:19,' 120:12;
127:25,'128:5; 129:2,4,5,'
131:1,'134:6; 136:10,'139:10,
13, 16; 144:22; 145:7;
152:17; 153:1, 11,' 159:22;
199:24; 221 :8,' 249:18;
259:10; 263:22; 266:18
anyhow [1]
44:15
anymore [4]
118:13; 150:21; 184:20,'
221 :17
anytime [1]
136:25
anyway [1]
266:12
anywhere [6]
18:5; 100:10; 221 :1; 242:9;
263:21
apparent [1]
254:4
apparently [8]

23:2,8,11; 24:23,' 28:14;
68:6; 191:21; 256:4
appearance [2]
4:18; 45:12
appeared [2]
25:24; 257:11
appears [4]
15:7; 21:1; 88:25; 122:22
applicable [5]
89:8, 13; 107:23, 25
application [1]
40:23
applications [3]
39:14,' 40:16; 64:23
applied [4]
79:14,' 112:19; 202:7; 215:21
applies [3]
9:8; 28:1; 188:8
apply [5]
100:2; 202:9; 203:7; 223:12;
260:20
applying [6]
52:23; 113:9; 215:4; 220:9,
10; 223:4
approach [2]
14:4,'163:15
approached [1]
248:16
appropriate [8]
22:13,' 33:23; 36:21,' 58:21,'
59:2; 212:25; 230:8; 265:5
appropriately [1]
31:8
approval [2]
86:1, 6
approve [1]
77:12
approved [7]
4:14; 23:3; 46:5; 77:10,' 86:9,'
211:10, 12
approximately [1]
26:12
april [8J
72:3; 133:7,' 135:5, 7,' 162:18;
233:2; 261 :16; 262:2
arabia [2]
111 :20; 112:2
aramco [13]
18:11; 111:22,24; 112:2,9,
20,24; 169:15,20,' 170:5,8,
11; 239:21
arb [1]
28:2
arb-51 [1]
206:17
arbitrary [1]
210:12
archived [1]
74:3
area [8]
32:13; 97:24; 98:3; 130:5;
193:6, 7,' 215:3; 247:23
areas [8]
31:21; 32:8,15,16,' 43:5,13;
44:8,9
aren't [1)
125:1
arguable [1]
38:12
arguably [1]
206:11

Look-See(71)

argue [4]
96:11,' 155:16; 266:19
argued [3]
36:7, 23,' 37:24
arguing [1]
218:3
argument [10]
31:4; 38:10; 54:15; 61:6;
155:14; 156:2; 252:18;
262:13; 266:20, 22
arise [1]
91:15
arose [3]
46:1,' 91:19,23
arrangement [20]
14:22,' 76:15,' 174:5,' 175:3,'
188:5,' 206:1; 218:18; 219:4,'
227:6; 228:7, 8; 229:17, 24;
230:2; 231 :4, 12, 13; 232:20,'
245:21; 248:25
arrangements [13]
32:12,' 37:1; 52:15,18; 53:15,'
217:23; 228:4,' 229:2,3,16,'
239:16; 248:13,' 268:10
arrived [1]
19:8
arrives [1]
19:12
article [24J
23:4; 184:1,2; 187:13,21;
254:11; 255:5, 7,25; 256:2,
7, 14, 16; 257:11, 16, 17;
258:7, 14, 15,18; 260:9;
264:17,18,19
articles [7J
253:20; 254:6,' 258:16, 25;
259:2, 19,' 260:16
asking [14]
77:6, 12; 80:15,' 82:18; 83:1;
117:20; 124:22,' 126:2, 3,'
174:24, 25,' 245:13,' 263:10
asks [1]
248:21
aspect [1]
51 :25
aspects [1]
197:12
assemble [3]
238:10; 239:8,' 252:19
assembled [1]
253:1
assembles [1]
238:15
assembly [lJ
239:13
assert [1]
109:6
asserted [1]
48:9
assertion [1]
54:11
assess [15]
79:12,22,' 80:15; 82:1,' 89:14,'
90:8,' 91:4; 92:24; 101:8,'
113:8; 132:10,'168:25,'
169:10,' 179:20; 207:4
assessed [7]
89:11; 95:14, 15; 106:7;
108:5; 113:7; 152:25
assessing [7]
93:16,' 107:24; 109:18,'

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

11 0:24; 115:9; 169:13;
179:21
assessment [7]
97:22; 107:6; 110:22; 113:24;
169:4,11; 184:3
asset [5]
203:5, 8; 209:3; 222:10, 11
assets [2]
39:6; 202:16
assigned [2]
4:12; 47:6
assignment [1]
46:19
assist [3]
39:17; 42:7,' 200:15
assistance [1]
135:15
associate [3]
4:24,' 5:2,' 70:5
associated [4]
43:14; 76:24,' 227:3; 262:16
assume [7]
59:23; 61 :15; 107:10,' 108:21;
123:5; 174:25; 175:1
assumed [2]
59:25; 195:5
assumes [4]
14:7; 236:24, 25
assuming [3]
66:8; 69:20; 206:24
assumption [2]
24:24; 160:12
assured [8]
14:9; 36:3,5,' 174:6; 175:4,'
199:6; 227:1,9
attached [1]
272:8
attaches [1]
164:21
attempt [1]
148:9
attempting [2]
33:10,' 41:21
attend [5]
28:24,' 95:19,' 129:22, 24;
131:17
attended [1]
40:19
attending [1]
244:8
attention [1]
33:16
attorney [1]
270:19
audit [44]
24:20, 24, 25; 25:2, 3,' 26:10,'
28:9,' 30:3,' 32:7, 22,' 33:22,'
43:3, 9; 46:10,' 48:23; 50:9;
137:15, 24; 138:14, 25,'
139:14,17; 140:19; 154:4,'
157:17; 160:19; 162:11;
166:1,21; 184:10,21;
186:20; 195:5, 10, 13, 17;
196:19; 213:24; 214:1;
215:24; 217:21; 247:20;
248:15; 255:18
auditing [1]
42:9
auditor [6]
195:6, 7, 15; 221 :17; 255:12;
258:21

assessment to bl3ltaIltly

auditors [13J
23:2, 3,' 25:11; 33:9,22;
116:17,' 134:6, 10, 17, 24,'
160:9; 197:11, 18
austin [1]
68:24
authenticated [2]
64:8,14
author [2]
88:10; 147:22
authored [2]
122 :23; 130:21
authoritative [3]
105:18; 132:21; 242:9
authority [1]
105:22
authorization [1]
33:4
available [3]
81:16, 19,' 238:3
avoid [10]
16:3; 20:3, 24; 34:5; 45:12;
60:22; 119:12; 209:18;
213:25; 224:12
avoided [2J
40:5; 242:1
aware [22J
50:15; 100:20,' 101:1, 4;
110:14; 115:4; 126:7, 10, 12;
145:14; 160:9, 13,' 162:19,'
176:23,24; 177:16,18,19;
184:13,17,19; 263:24

-Bback-end [1]
91:6
bacl{ground [7]
69:9,' 100:11,' 185:20; 194:22,
23; 200:22; 232:23
backup [1]
35:15
backward [1]
42:10
badly [1]
100:6
bailee [lJ
242:11
bailment [lJ
242:5
balance [12]
73:3,10,19; 85:5; 201:16;
203:14,' 209:2,' 213:8,' 218:11,'
222:9, 21, 23
balancing [1]
100:6
ball [1]
22:9
bandied [2J
17:18; 18:2
base [3]
59:8,' 61 :18,' 146:19
based [51]
48:5; 73:2, 20; 76:14; 78:13,
19; 96:13; 98:2; 100:19;
101:7,18; 102:16,19;
108:23; 109:10; 110:16;
111:10; 112:3; 113:3; 114:9;
123:5; 125:8; 134:8,15;
148:24; 150:16; 153:2, 6, 13;
154:14, 22; 155:5; 181 :16;

182:6; 186:25; 188:21;
190:19; 193:18; 202:3, 4;
205:23; 209:12; 217:22;
236:5; 237:22; 238:15,'
240:11; 242:22,' 258:15;
265:21,' 268:18
basic [3]
49:16; 264:3; 267:12
basically [40]
22:9; 53:12; 64:3; 73:8;
81:25; 102:5; 128:14; 140:25;
149:16; 156:6; 189:23,'
190:10; 196:21; 199:8,' 203:3;
204:25,' 208:4, 23,' 210:20,
23,' 212:24; 217:10,' 218:25;
219:8; 224:7,' 225:13,' 226:21,'
236:1; 237:17; 246:9, 12,'
256:3,' 258:18, 23,' 262:4, 19;
267:5, 11; 268:15,' 269:20
basing [1]'
266:12
basis [7J
9:12; 15:24; 33:11; 41 :5,'
47:19,' 160:10; 185:15
bass [13]
216:3, 7, 10; 217:13; 219:22;
220:11, 24; 221 :12, 14, 20;
224:24; 225:1, 18
bat [3]
8:14; 216:18, 20
bayless [5]
23:17, 19; 259:10, 22; 263:25
bba [1]
195:1
bear [3J
7:11; 73:16; 199:3
becomes [1]
65:9
beforehand [1]
41:20
behalf [5]
4:21, 24,' 106:6,' 115:20,'
162:22
behind [1]
237:25
belief [1]
51:21
believe [58J
8:12,' 9:25,'12:6,21; 17:15,'
21 :18,' 22:13, 19,' 27:19;
32:10, 19; 34:3, 7; 35:21, 23;
43:8; 46:12,' 49:8; 59:18,'
63:12; 77:5; 82:4,' 86:19,'
87:12, 13,' 94:25; 97:6;
103:13,' 111 :20; 113:24,'
114:19,'115:16; 116:7,'
120:21,' 122:16,' 124:1; 133:8,'
135:7,'138:2; 139:4,18,21,'
144:8; 145:20; 147:20;
156:21,' 157:3; 169:23,'
171 :23; 172:23; 173:6;
175:14; 176:17,20; 186:18;
262:6; 266:10
believed [8]
22:16, 17; 26:1; 33:16; 50:24;
53:13, 17; 192:4
bellaire [1]
70:13
belong [1]
58:20
belongs [2]

Look-See(72)

175:9, 14
belt [2]
139:22, 23
beltway [1]
70:14
benefit [7]
85:11; 204:3,' 207:7; 218:17,'
223:22; 225:23, 24
besides [1]
114:14
bet [1]
214:9
betrayed [1]
186:22
bigger [2]
88:7; 153:20
biggest [2]
18:12; 107:2
bill [2]
77:14,' 241:8
bill-and-hold [128]
11:6,8,14,17; 12:17,21;
13:25; 14:3,11,17,18; 15:7,
8,' 17:9, 16, 21; 18:14; 21 :23;
23:5,6,12,15,23,25; 24:1,
3, 7; 32:10; 34:17,' 52:15, 17,'
53:15; 78:15, 23; 79:12;
80:13, 19, 22; 88:9; 89:10,
12, 15; 90:8, 15, 19; 95:14;
96:22; 97:8, 23; 100:23, 25,'
103:1,2,18; 106:6,'108:21;
109:14; 113:24; 130:23;
142:17; 152:25; 174:2; 182:9,
22,' 183:2,' 184:3; 187:22,'
188:7; 226:17; 231:12,20,
21,22; 232:1; 233:19,21,24;
234:14; 235:15, 22, 23,'
236:15, 18, 22,' 237:5, 6, 7;
241 :8; 242:23; 243:2, 9,'
244:6, 16, 24; 247:6, 8,'
248:7,' 249:7,' 250:1, 2, 5, 10,'
251:5,' 253:25,' 254:2, 11,'
260:21,' 261 :13, 19,' 262:5,
20;263:12,17,18,'264:2,7,
20,' 265:2,' 267:11, 20, 23,'
269:4, 7, 8, 13
billed [3]
36:4,' 175:5; 236:3
billing [1]
11:9
billion [4]
17:11; 39:6, 7; 222:14
bills [2]
32:4,' 168:18
binder [1]
108:19
binders [1]
58:4
bit [26]
5:21,' 11 :7,' 54:17; 66:8, 9,'
69:8; 73:23; 77:3,' 78:22;
79:13; 80:19; 106:10; 109:14,
15; 110:11; 130:22; 131:20;
136:8,9; 180:10; 191:3,24;
194:22; 201 :21; 206:4;
252:13
black [2]
32:20; 140:7
blatant [1]
63:21
blatantly [1]

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

36:10
block [1]
61:4
blowing [2]
185:12; 186:19
blown [1]
25:7
blue [2]
141:9,10
boa [1]
5:1
board [10]
32:8, 22; 33:23; 189:3;
215:21,' 218:1,2,9,22;
219:10
boardroom [2]
139:2, 4
bodies [1]
33:6
body [1]
145:23
boils [1]
230:13
bolded [1]
89:18
bonus [lJ
43:6
book [7J
30:19; 31:8; 35:21; 59:16;
80:16; 121:6; 213:7
booked [2]
33:17; 35:20
books [15]
15:20,' 16:4, 22,' 57:24,' 58:6;
202:16,' 203:4, 8; 206:14,'
208:24,' 209:20; 217:7, 22,'
218:18; 222:15
boss [2]
135:15,'162:1
bosses [2]
255:15,16
bother [1]
42:23
bothered [1]
213:20
boulevard [1]
70:14
bounds [2]
125:24,' 126:6
boy [1]
24:13
brackets [2]
148:11; 149:18
breach [1]
48:14
break [3]
66:7, 8,' 265:16
brian [2]
71 :3; 164:6
brief [7]
6:3; 9:11; 62:5, 8, 12; 156:9;
194:5
briefing [1]
27:20
briefly [9]
70:11; 74:20; 84:20, 21;
107:14; 118:23; 149:15;
153:19; 253:13
briefs [2]
60:25; 62:7
bringing [3]

220:12; 222:13; 226:1
brings [1]
144:21
broad [1]
27:22
broadest [1]
27:23
bryce [1]
87:13
build [3]
39:20; 40:3; 153:2
bullet [2]
10:13, 15
bulletin [2]
28:1; 81:8
bunch [2]
191:9; 208:16
burden [1]
60:21
business [47]
13:4, 10, 21,' 14:1,'17:12, 17;
30:18; 36:21; 38:19,' 40:23;
41 :3; 64:8, 15; 76:20; 98:15;
99:7; IOJ :23; 111 :24; 136:20;
171:21,25; 172:3,6,9;
223:1; 224:22, 25; 226:6, 9;
228:20; 229:5, 8; 235:6, 8,
11, 12, 13; 237:25; 243:10;
244:14; 250:3, 8, 20; 251:3;
268:1
buy [2]
228:21; 230:5
buyer [9]
188:5, 8,' 243:3, 5, 9; 246:20;
250:2, 4,' 251:4
buyers [1]
251:12
buying [3]
225:13; 230:4
buys [1]
218:25

-ccaf [1]
86:13
calculation [1]
213:7
california [1]
47:16
call [17]
16:17; 18:4,' 21 :17; 32:8;
68:7, 8,' 152:9; 161 :9,' 173:4;
175:21; 194:7, 9; 195:22;
203:19; 205:15,' 211 :4, 9
calling [3]
204:21; 209:18,' 247:1
calls [8]
21:2,3; 25:8; 117:8; 123:12;
184:22; 196:3; 249:22
capable [1]
49:9
capacity [1]
42:10
capital [1]
40:8
capitalizing [1]
209:17
care [2]
194:3,' 251:1
cared [1]

247:24
career [4]
195:1; 196:2; 198:21; 233:5
carefully [1]
171:18
cares [1]
249:19
carl [2]
4:23; 104:4
carmichael [2]
23:20; 258:20
carrier [8]
35:9; 174:17,'175:6; 188:6,8,
15; 255:1, 2
case [53]
4:13; 5:25; 8:10; 9:3; 11 :2;
17:7; 22:5; 23:21; 33:25;
34:4, 20; 35:15, 16; 48:5, 10,'
49:14; 50:19; 53:12,' 59:20;
60:6; 61:10; 66:3; 68:6;
81 :20; 85:25; 86:14; 90:14;
95:6; 105:10; 106:10; 107:1;
109:6; 112:1, 8; 116:25;
120:1{'123:13; 124:24;
144:22; 152:17,' 176:19;
205:6; 214:21; 218:19;
238:11,12; 239:6,12,25;
244:1; 247:3; 265:3; 272:4
cases [12]
30:23; 31 :17,' 35:14; 36:3;
37:11, 14; 47:18; 167:3;
170:19; 206:25; 247:6; 268:8
cash [6]
30:20; 31 :2; 38:20; 204:25;
207:24; 208:4
causation [1]
28:4
caution [1]
34:5
cc'ed [1]
86:18
certificate [1]
272:1
certifications [lJ
69:18
certified [1]
64:13
certify [1]
272:8
cetera [2]
20:22,' 51:3
cfi [1]
100:1
cfo [2]
25:1, 2
chain [4]
72:6; 96:24,' 121 :17,' 199:14
challenge [1]
49:10
challenged [1]
33:12
chance [6]
5:24; 57:23; 59:3; 104:14;
147:16; 183:25
chancellor [1]
87:15
change [18]
7:25; 24:15; 33:7; 38:22;
39:1; 46:17, 18; 92:24; 95:12;
131:24; 140:14; 143:2, 7;
154:14,' 171:20,25; 201:20,'

Look-See(73)

204:20
changed [5]
46:19; 56:13; 132:6; 143:5;
205:24
changes [15]
31 :20, 23,' 32:4; 96:20, 23,'
141:3,8,10; 171:24; 172:7,
8,9; 185:11; 186:18,' 215:19
changing [5]
20:3, 24; 136:22; 172:3, 5
character [2]
49:13; 63:21
characteristic [1]
206:19
charge [1]
26:7
charged [1]
37:17
charges [3]
76:17, 18; 186:6
charlie [3]
26:16; 86:21; 213:3
chart [13]
142:1, 9, 11, 12, 21, 23;
143:10,11,13; 233:19;
235:10; 236:16
cheat [1]
259:16
check [1]
92:14
checked [1]
17:19
checking [2]
124:17,' 233:12
chief [22]
4:14, 25; 6:21, 23, 25,' 7:7, 9;
26:14,' 27:13,14,' 28:8, 12,
13,' 47:3,' 198:20, 22, 24;'
199:18,' 258:21; 259:6,9,23
chose [1]
47:13
chosen [1]
209:7
chris [12]
71:8,' 74:7; 84:9,10, II, 15,'
87:19, 23,' 91:20; 108:15,'
114:16
christopher [23]
23:4, 8, 14,' 183:23, 25,'
187:13; 188:7,' 215:24;
217:11; 221 :15,' 254:13, 14,'
255:5, 9, 24,' 256:14,' 257:6,
11; 258:15; 260:17,' 264:18,
19; 265:8
chronological [1]
107:11
church [1]
87:17
circulate [1]
115:14
circulated [3]
83:18; 179:3, 11
circulating [1]
44:2
cite [7J
59:22; 61 :12, 21, 22; 62:5,
15; 266:21
cites [3]
60:1; 61 :16; 62:4
claim.[3]
18:8,' 19:2,' 266:6

From

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

claiming [1]
201:13
claims [2]
30:13; 34:5
clarification [3]
9:24; 138:4; 270:21
clarified [2J
5:14; 81 :23
clarify [3]
67:21; 84:20,' 130:2
class [2]
131:4, 5
classifying [1]
112:24
clause [3]
16:11; 52:1,' 53:22
clean [2]
10:6; 43:1
cleanest [1]
55:9
cleaning [1]
73:10
clear [25]
6:10; 8:23; 9:20; 12:2, 7;
13:3; 14:25,' 22:7,' 25:24,'
27:25; 28:17; 65:9,' 84:12;
87:1; 127:14; 131:19; 171:16;
207:24; 219:17; 220:24;
233:21; 246:7; 271 :2, 12, 15
clear-cut [1)
12:5
click [1]
258:11
client [4]
37:17; 98:11; 118:16,'155:17
clients [2]
195:13; 254:10
coast [1]
35:1
code [3]
4:9,' 51:10; 181 :23
codified [1]
4:8
cold [1]
30:20
collaborative [5]
40:25,' 42:1,2,'153:8,' 224:19
colleagues [5]
31:4, 7; 41:12,16,' 42:23
collectability [7]
14:8; 36:3, 5,' 174:6; 175:4,'
227:1, 9
collected [1]
48:12
collecting [3]
48:13; 212:15,' 233:14
college [1]
69:21
color [3]
140:7,10,14
combination [2]
83:17,' 269:9
comfortable [1]
66:10
coming [11]
14:5; 30:21; 42:9; 63:14;
108:10,11,13; 178:13;
193:5; 195:19; 269:15
command [2]
72:6; 199:15
commencement (1]

claiming to

"'VAJlAA ....l'"'UIH"A

167:9
comment [7]
143:24; 144:9, 11; 145:13,
14; 146:5, 7
comments [5]
105:10,' 142:19,' 143:22,'
765:2, 11
commission [2]
32:23; 33:24
commissioned [1]
37:22
commitment [2]
243:6; 246:21
committee [36]
24:20, 24, 25,' 25:3, 4; 26:10;
28:9; 30:3,' 32:7, 22,' 33:22;
43:3, 9; 46:10; 48:23; 50:9;
137:15,24,' 138:15,25;
139:14,17; 140:19; 154:4,'
157:17,' 159:5, 14; 160:19;
162,;11; 166:2, 21; 184:10,
21; 186:20; 213:24; 214:1
common [33]
23:6, 11; 35:9; 74:15, 18;
85:9,' 174:17,' 175:6; 188:6, 8,
15; 201:10; 202:4, 6, 7, 10;
203:3; 205:23, 25; 206:10,
12, 17, 20, 25; 207:3, 10;
208:2; 210:10; 214:24; 218:9,
15; 255:1, 2
commonly [1]
188:8
communicate [1]
135:9
communicated [2]
50:8, 11
communicating [4]
45:19, 24,' 50:24; 97:1
communication [5]
50:12,'127:19,'138:15,'
184:14,' 249:12
communications [10]
45:21,' 50:15; 108:16,' 159:21;
163:11; 165:16,' 184:9,'
190:20; 251:7
community [2]
269:2
companies [18]
24:5,6; 30:15,24; 81:25;
85:1, 2; 170:12; 197:10,'
204:10; 205:8; 218:11;
256:11; 260:20,22; 264:1,
15, 20
company [124]
7:13, 22; 12:8; 13:5,' 14:11;
15:8, 11, 13, 16, 22, 24;
16:12, 14, 16; 20:3, 5; 21:4,
8; 23:10; 24:9,' 25:1, 17; 27:2,
6, II, 18; 28:22; 29:2; 31 :3,
22; 34:3, 4; 36:9; 37:6, 14;
38:8, 12, 20, 25; 39:6; 43:12;
44:5; 48:20; 77:9,' 79:18;
84:22; 99:15; 101:3; 108:2;
113:25; 116:10; 118:15;
120:8; 121:3; 134:11,12;
135:18,21; 136:18,21;
144:2, 3; 150:21; 153:22;
156:25; 158:13, 23; 164:4, 7,'
168:17,'169:8; 181:21;
182:20; 184:1; 189:4,7,9;
192:5; 193:4; 195:24; 196:12;

197:16; 199:7, 17,' 202:19,
25; 203:12,16; 204:4,11,24,'
205:1; 206:8; 207:18,' 210:14;
213:23; 218:12; 219:2, 10,'
220:21, 25,' 221 :2; 223:6;
224:15, 17; 227:22,' 228:14,
20; 229:10; 237:13; 239:20;
240:1,' 245:2; 247:21,' 248:3,
20,' 253:16; 262:13; 263:24;
264:4, 22
company's [24]
28:20; 33:9; 77:6; 78:3,'
110:4; 115:24,'116:15,18,'
131 :14,' 134:1, 10; 137:25;
160:5; 182:21; 183:21, 22;
187:7,' 221 :6; 222:6, 25;
229:2,' 234:6; 253:10; 265:17
compare [2]
205:12,' 213:8
compelled [2]
48:2; 155:17
compelling (1]
264:5
competitor [1]
37:15
competitor's [1]
37:16
complain [1]
221:8
complainant [9]
4:21; 6:6; 47:23; 54:24;
55:22; 65:6, 24; 68:6, 8
complainant's [20]
56:2, 9; 57:5, 10, 15; 59:6,
11; 62:16; 67:17,19; 68:3,'
85:19; 103:23; 104:2; 127:15,'
138:8; 140:5; 141:3; 142:5,'
149:15
complainants [1]
138:2
complained [3]
22:23; 28:10; 63:17
complains [2]
43:13
complaint [20]
25:3; 26:9, 11; 50:6,' 120:19;
121 :2,' 123:10, 20; 124:21;
128:6, 11; 145:15; 157:17,
21; 162:11,25; 164:19;
166:9; 265:13
complaints [7]
29:14; 32:7; 34:11,' 43:25,'
44:7,' 45:4, 6
complete [14]
37:11; 60:19,' 228:7, 8;
229:16, 23,' 243:17,' 252:6,
15, 16, 17, 21, 23,' 272:11
completed [6J
19 :15; 20:6; 46:15; 188:4;
212:23; 236:3
completely [6]
16:22; 20:22; 202:1,' 209:24;
236:1; 237:17
completing [1]
49:17
completion [7]
13:7; 34:23; 102:3, 4; 149:23;
228:25; 253:6
complex [4]
32:16;41:2; 70:17; 85:23
complexity [2]

Look-See(74)

170:13,16
compliance [9]
11:23; 113:4, 7,'115:6,11,
24,' 116:5, 9, 18
complicated [4]
6:9,' 8:8; 41 :8,' 216:4
comply [5]
27:6, 7; 227:22; 248:6,' 249:7
complying [3]
12:8; 197:16,' 221:2
components [1]
230:22
compound [1]
207:4
comprised [1]
87:2
computer [1]
121 :16
computers [lJ
69:2
concept [4]
105:13,' 202:4; 206:2,' 248:11
conceptually [1]
241:11
concern [9]
98:16; 111 :6; 113:6; 152:5;
220:23; 222:23, 24; 234:24;
243:22
concerned [19]
9:9; 15:15; 22:23; 31:22;
60:10; 108:4; 11 0:3, 24;
136:7, 13; 143:14; 145:20;
150:24,' 199:15; 219:23;
222:4, 6,' 234:23,' 254:3
concerning [4]
8:6, 7; 145:23,' 146:9
concerns [12]
22:12; 36:14,' 102:9,' 107:8,'
139:24,' 147:5; 148:17,'
150:10; 183:2,' 210:24; 221 :6;
255:13
concluded [1]
271:20
conclusion [14J
20:19; 36:18, 21,' 48:3; 92:20,'
144:17; 148:6,' 160:5; 177:3;
179:9; 216:9; 217:20; 256:24;
269:25
conclusions [19]
36:22; 37:24; 41 :16, 19, 20;
102:17; 106:3; 110:13, 14;
114:9, 10; 119:22, 23,' 120:5,'
146:22,23; 160:11,' 178:13;
260:15
conditions [3]
47:25; 238:14, 16
conduct [5]
4:12; 43:20; 64:2; 175:23
conducted [5]
4:7; 46:9,' 131 :25; 139:20, 21
conducting [1]
131:9
conference [5]
5:5; 58:18; 59:2; 130:5;
256:10
confidence [1]
61:23
confident [1]
46:4
confidential [1]
48:17

 _BS_A_ _ _ _ _ _ _ _.Anthony

confidentiality [1]
49:4
confined [1]
157:25
confirm [5]
77:6; 78:8; 92:24; 96:23;
115:10
confirmed [1]
233:16
confronted [2]
41:4; 64:17
confused [1]
133:19
conjunction [1]
13:6
connection [3]
169:16,' 171 :5; 179:24
consensus [4]
20:8, 15; 36:10; 37:25
conservative [3]
32:2; 199:7; 212:25
consider [6]
48:13; 61 :12,' 173:8; 264:21;
265:9; 271:2
consideration [1]
182:18
considered [6]
84:25; 87:3,' 101:9,' 119:22,
24,' 181:23
consistent [7J
64:4,5,' 137:6, 11; 158:23;
159:6,14
consolidate [14J
38:2,' 85:4; 202:15; 203:12,'
204:4; 206:11, 19,' 207:9, 19;
216:21,' 223:13,19
consolidated [12]
53:5; 85:10,' 202:11,13,23,
24; 206:10,' 208:25,' 223:13,
24; 224:1
consolidating [9]
204:7, 14,' 217:5, 8,' 218:4;
220:12; 222:3; 225:16, 25
consolidation [10]
15:15; 38:10; 201 :22; 202:2;
203:19,' 204:3; 205:24; 224:5,
7
consolidations [1]
206:18
constituted [2]
50:25; 53:18
construction [3]
87:4,' 224:15, 17
constructive [3]
40:11; 47:21; 118:8
construed [1]
89:12
consult [1]
103:15
consultant [1]
47:16
consultations [1]
45:9
consulted [5]
80:25,' 104:25; 120:7,' 127:8,'
146:24
contact [8]
48:25; 74:7, 13; 80:8; 84:1, 6;
107:1; 135:19
contacted [5]
23:20,' 84:10,11,16,'195:21

Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

contacting [1]
84:8
contacts [1]
87:12
contained [4]
121 :20; 132:19,' 237:6,' 266:3
contelnplates [1]
268:5
contests [1]
9:6
context [2]
5:25; 29:13
continually [1]
41:5
continue [3]
116:19; 135:9; 195:3
continues [1]
89:5
continuing [3]
18:20, 22; 43:11
continuum (1]
118:9
contract [33]
35:4; 77:9; 80:4, 5; 91 :20;
111 :2, 15, 17, 22; 112:22;
152:23,' 168:4, 6, 8, 9, 10, 17,
19, 23,' 170:2, 8; 227:7;
236:6; 246:25; 247:19; 248:9,
10; 249:6, 16; 255:21;
267:17; 268:5
contracted [3]
110:19; 111:13; 229:16
contracts [21]
102:23, 24; 103:6, 18, 20;
104:24; 110:23; 168:11, 21,
22,24; 169:1; 177:16,20,24;
207:3; 247:22,' 248:1,' 249:9,
13; 251:9
contractual [5]
175:2; 217:23; 229:2; 245:21,'
246:9
contractually (2]
106:19; 107:4
contradicted [1]
260:16
contrary [2]
242:18; 266:22
control [16]
175:13; 201 :14; 204:5; 208:1,
7, 11; 216:22, 24,' 217:1, 23,
25; 218:3, 6, 8, 23; 224:12
controller [3J
86:19; 211 :16,' 212:7
controlling (3]
85:7; 207:6; 208:6
controls [8]
197:10; 207:13, 14, 15, 16;
221 :1; 247:12, 16
controversial [1]
264:13
convene [1]
4:4
conversation [7]
29:1; 41:22; 42:18; 109:1,'
138:17; 157:16; 215:13
conversations [11]
22:8; 28:18; 98:2; 102:19;
107:6; 129:8; 134:8; 135:25;
157:18; 245:12
conversions [1]
116:14

cooperate [1]
48:22
cooperation [1]
46:13
coordinators [1]
45:17
copied [2]
83:14; 184:17
copies (3]
9:14; 58:22; 64:14
copy [10]
9:17; 64:11; 104:2, 3, 5, 6;
140:7, 19, 25; 164:11
corey (1]
4:23
cornelison's [1]
123:6
corporate [6]
70:15; 139:2, 5; 195:16;
197:7; 259:24
corporation [4]
81:18; 96:11; 158:14; 195:15
corporations [4]
41:2; 95:2; 197:8,14
corrected [1]
143:11
correcting [1]
90:12
correction [2]
160:24; 260:18
corrections [5]
143:15,18,19,' 161:2,6
correctly [5]
90:11,' 105:7; 160:20,' 169:13,
17
correctness [1]
33:20
cost [13]
37:17,' 53:7,' 174:5; 175:3;
202:8, 25,' 203:1, 19; 204:3;
206:9; 208:20,' 209:1, 18
costs [1]
201:6
counsel [19]
4:17, 19; 5:6, 7, 13, 16, 21;
44:5; 58:13; 60:21, 23, 24;
61:11; 141:20; 157:22;
160:17,' 173:18; 187:14
counseled [2]
42:19; 64:21
count [2]
101 :14,' 268:24
counter [1]
249:14
counterpart [lJ
122:16
country [2]
111:16,19
couple [11]
34:13; 64:17,'103:17,18,'
140:4; 147:15,' 180:25,'
181 :12; 184:8,' 187:1; 231:2
coupled [1]
79:16
course [21]
6:14; 7:16; 10:25,' 12:10;
14:15; 18:13; 19:10; 21:10;
23:9; 24:16; 33:19; 45:15;
116:25; 130:16; 133:10;
159:24; 239:24; 241:17;
244:1; 265:1

Look-See(75)

courses [2]
40:19; 244:9
court [24]
27:22; 28:1; 33:13; 47:22,'
58:18, 22; 64:11; 66:5; 70:11;
73:23; 76:13,' 77:24; 78:21,
25; 88:3; 91:14; 107:15, 16,'
113:14,' 133:20,' 138:13;
143:23; 153:19; 266:17
court's [1]
61:25
cover [1]
49:17
coverage [1]
251:10
covered [2]
49:20; 50:2
coworkers [1]
154:6
cpa [3]
69:12; 134:20, 22
crafted [1]
217:12
crap [1]
143:13
create [2J
208:23; 224:21
created [4]
89:21; 201 :8,' 210:12; 221:3
creates (2]
225:6, 14
creating (3]
105:2; 209:7; 225:5
creation [1]
259:7
credibility [2]
21:20; 22:21
criteria [57]
12:21,' 14:17,'15:7,9,' 23:6,'
34:18,' 78:16; 79:5, 6, 12, 22;
85:13,' 89:15,' 90:9,16,' 95:15,'
103:21,' 106:6,' 113:9; 132:15,'
152:25; 168:25; 169:5;
173:21,23; 174:1,4; 175:2,
9,' 179:23, 25,' 227:6; 229:14;
230:19; 231:24; 236:18;
237:5, 6, 9, 14; 242:24;
243 :2; 244:5, 6, 16, 19, 25;
245:4; 250:1; 262:7, 20;
263:12,17, 18; 264:3,8
criterias [1]
132:13
critical [7]
60:4; 93:16, 22; 142:20, 23,'
147:24; 148:5
critically [1]
181 :21
criticism [3]
115:17, 19, 21
criticisms [2]
64:19; 116:10
criticize (2]
41:16,18
cross [7]
65:6; 156:7,11,13; 186:9,'
267:4; 270:10
crux [1]
219:13
crystal [1]
12:2
cull [1]

From cOll1fideJlthllit,y

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA':'00005 09-24-2007
Look-See(76)
60:17
~6
3HO
department [39]
culture [2]
damaged [2]
deficiencies [1]
4:15; 25:6; 26:8; 30:4; 32:25;
41 :1; 153:8
29:21; 245:15
213:24
44:18; 45:10, 11; 47:1; 48:18,
cumulative [3]
database [1]
define [2]
19,24; 71:6,16,18; 72:14,
151:15, 20, 22
92:15
132:14; 168:2
16,17,19,24; 74:21,' 83:19;
current [7]
date [8]
defined [2]
113:15; 115:15; 119:16;
28:19,' 42:8, 13,' 212:3;
120:21; 135:8; 137:19;
174:22,24
122:21; 127:11; 128:4,'
213:10; 255:19, 21
164:15; 237:10,14; 272:5,16
defines [1]
139:11; 145:17,19,'154:6;
currently [4]
dated [1]
167:25
161 :15, 21; 165:17,' 187:6;
93:19; 114:23; 127:22; 183:9
105:4
definitely [2]
249:11,' 272:9
custom-manufactured [2]
dates [2]
226:15; 244:7
departments [2]
34:23; 35:2
131 :20; 137:23
definition [3]
83:21; 247:17
customarily [1]
david [1]
60:15; 231 :12; 269:6
departure [1]
13:9
degree [1]
87:8
71:19
customary [3]
day [13]
34:5
depend [2]
13:2,3; 17:12
43:8; 66:20; 129:9; 159:4, 9,
delete [2]
170:13, 16
customer [94]
17; 168:2,'182:25; 191:4,'
55:4, 7
depending [7]
11:1,10; 12:16; 13:14,25;
195:22; 228:9; 271 :21, 22
deliver [9]
13:16, 17; 65:5, 7; 85:23;
14:6; 18:16; 21:14, 15; 31:13;
days [7]
19:6,17; 79:19; 89:13,15;
94:8, 13
35:11,13,14,17,18,19,23,
92:10, 11; 124:1; 152:8;
174:17; 242:10; 250:6
depends [2]
25; 77:14, 23; 78:14; 79:10,
165:9; 210:20; 244:1
deliveral [1]
175:11,' 238:4
11, 20; 80:7; 89:16; 90:2, 4,
deal [9]
80:4
deposition [6]
5, 24; 91 :5, 6; 92:21; 95:14;
5:17; 6:1; 9:19; 25:12; 29:16,'
deliverals [3]
28:19; 45:2; 64:18, 25; 65:1,
106:6; 109:20; 111 :17; 112:2,
45:17; 171 :6; 206:17; 260:21
79:22, 25; 80:3
3
9, 20; 168:21; 169:24; 170:1,
dealing [5]
deliverance [2]
derivative [2]
2; 172:1; 173:9; 174:16,19;
42:4; 189:22; 193:11; 215:23;
79:6,8
130:19; 131:4
175:6,10,12,15,16; 176:19;
237:18
delivered [22]
derived [2]
177:14; 179:20; 180:1,4;
deals [3]
11:10; 18:15, 16; 19:21;
88:7; 100:9
181 :22; 188:14; 189:23;
37:1; 79:4; 226:25
20:19; 21:14; 31:10; 36:19;
describe [1]
190:2, 8; 224:21; 225:19;
dealt [5]
77:23; 78:14; 79:10,' 95:13;
74:20
226:5, 7; 228:7, 10, 16;
34:19; 51:21; 75:16; 217:3;
102:10; 106:5; 172:2; 240:23;
described [14]
229:17; 230:4; 231 :5; 236:3,
246:9
252:25; 255:1; 263:11, 14,
26:17; 44:9; 73:19; 85:14;
7; 238:13; 239:18; 240:6, 17,
debt [4]
16; 268:7
104:23; 112:19; 115:1; 196:7,
38:9, 13; 206:13; 222:5
22; 242:6; 245:9, 20; 246:17;
deliveries [1]
8; 211:7; 212:1; 215:18;
248:19, 21, 24; 249:3, 19;
decade [3]
188:13
235:15; 256:18
250:23,' 253:5; 268:9
31 :18; 35:18
delivering [11]
describes [1]
customer I s [8]
december [3]
13:25; 19:16; 23:23,' 80:6,'
167:25
13:12; 19:12,' 31:15; 35:4,'
69:12,13,'184:16
110:18,'111:13,15; 112:21;
description [1]
102:11; 152:19; 180:5,' 240:2
decide [1]
232:10,' 255:2
197:1
54:14
delivers [3]
customer-owned [28]
designate [1]
18:4,' 32:9,11; 34:16; 101:9;
decided [5]
13:10,' 168:19,' 240:19
182:3
36:15,19,' 192:5; 193:4,'
delivery [88]
105:6,10,14,19,22; 132:9,
designated [3]
11,12,' 143:25; 144:3,5;
221 :19
10:20, 22, 25; 11:1, 3, 4, 14,
90:4,' 180:1, 4
decision [17]
17; 12:15,16,24; 13:22;
designed [4]
152:18; 167:7,'173:4,6,8,
48:8; 59:8; 61 :19,' 142:17;
14:14, 16, 20; 15:4; 18:22;
218:14; 219:9; 224:11; 228:5
19; 174:18,22; 175:17,'
20:11,12,14; 23:13,25;
desk [1]
219:6; 233:19,25; 234:2,'
178:9; 269:5, 12
235:1, 3, 16, 22, 24; 236:22;
34:21; 35:23, 25; 78:4; 79:8,
customer-seller [1]
200:6
237:7; 248:7; 249:7
14, 24,' 92:21,' 93:17,' 102:20;
destination [2]
225:22
decision-maldng [1]
109:19,' n 1:11; 130:23;
181:13,18
customers [15]
236:11
143:20,' 152:22, 24; 168:5, 8,
destroyed [3]
18:12; 31:11,12; 35:3,'102:5;
decisions [3]
9, 12; 173:17, 20,' 174:11, 15;
29:7; 106:23; 245:15
107:3; 216:16; 225:5; 228:21;
detail [1]
42:10; 208:9, 10
179:24; 226:18; 227:7; 232:6,
248:4, 13, 16,' 249:19,'
decline [1]
9; 234:14; 236:12, 22, 25;
78:24
262:15; 268:11
detailed [1]
161 :24
237:2, 10, 14; 238:19; 240:4,
customize [1]
deconsolidate [4]
5, 6, 8, 18, 22; 241 :4, 15, 20,
54:18
76:15
determinable [2]
16:15,16; 203:13; 217:18
21; 242:6,14,21; 243:12;
cut [2]
174:5; 227:9
deconsolidated [1]
245:1; 247:1; 249:14; 255:2;
78:17; 165:15
determine [20]
217:13
263:4; 264:7; 267:14; 269:3,
cut-and-paste [1]
78:12; 79:23; 90:22; 107:23;
deconsolidation [3]
6; 271 :3, 13
258:18
125:15; 147:25; 148:1,12;
15:22; 16:6; 224:4
dell [4]
cx-l [3]
168:23; 179:19; 200:7; 211 :1;
defend [1]
69:1, 2, 3, 22
58:2, 3, 19
221:1; 225:15; 229:15;
49:10
demonstrate [2]
cx-167 [1]
239:18; 244:5; 247:13;
defense [2]
47:23, 24
57:17
252:24; 253:3
demonstrating [1]
185:19, 23
cx-19 [2]
defenses [1]
48:6
determined [1]
56:18, 19
demonstrative [2]
48:9
cyclical [1]
25:17
defer [6]
9:15; 67:8
develop [3]
162:8
177:4,5; 213:4; 232:1, 2, 3
demote [1]
201 :2; 233:17; 243:24
developed [3]
deferred [4]
27:24
-D23:16; 92:21; 173:10, 14
dennis [1]
201 :4; 209:25; 219:25
daily [1]
developing [2]
defers [1]
221:19
culture to de've14)pjIl2:

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

32:15; 115:7
development [2]
201:3, 5
develops [1]
189:3
deviations (1]
43:6
devine [1]
4:24
dialogue [1]
244:9
differ [2]
32:18; 193:7
difference [13]
182:3,' 195:12,' 202:14,'
208:15,' 209:6, 12,' 210:1, 6;
223:5, 8, 11,' 224:13; 256:21
differently [2]
44:20; 96:7
difficult [4]
23:7; 41:4; 225:15; 252:3
difficulties [2]
39:13
difficulty [1]
161:6
diligence [1]
73:11
diligent [2]
261:24
dimensions [1]
252:21
direct [18]
21 :12, 13,' 35:25; 44:17; 65:6;
68:18,' 88:18,' 96:19; 99:19,'
112:16, 18, 24,' 117:20;
167:23, 25; 194:18; 204:15;
270:11
directed [5]
83:5, 7; 98:23; 117:17;
171 :15
directing [1]
98:24
direction [7]
35:4,' 55:21,' 136:6,' 150:9,'
152:19; 191:21; 269:17
directions [3]
95:23,' 99:5, 8
directive [2]
93:10, 12
director [16]
6:15; 26:18; 36:13; 39:17;
85:20,' 86:22,' 87:13,16,19;
122:17, 18,' 170:23; 181 :3, 5;
197:25,' 198:8
directors [3]
32:8, 22,' 122:20
disagree [5]
112:4,' 153:15, 16,' 172:13,'
269:16
disagreed [3]
143:13; 144:16,' 160:5
disagreeing [1]
162:15
disagreement [4]
44:22; 54:3,' 152:2,' 191 :18
disagrees [2]
49:19,24
disappeared [1]
45:2
disappointed [1]
186:21

discharge [2]
47:21; 118:8
disclose [2]
192:9, 16
disclosing [3]
53:14; 148:7; 214:1
disclosure [1]
261:20
disclosures [1]
191:25
discount [1]
51:2
discounted [1]
204:25
discounts [1]
15:3
discrepancy [1]
246:1
discuss [3]
95:22; 136:3; 150:3
discussed [9]
110:22; 123:3; 136:5; 138:16,
21; 142:11; 183:3; 216:11,'
227:24
discussing [5]
24:11; 135:3; 148:12; 154:7;
205:9
discussion (14]
81 :20; 98:24; 99:23; 106:17,'
124:2; 144:15; 175:20, 25;
205:17; 232:5; 246:24,'
265:10; 269:18,' 270:6
discussions (15]
97:18,' 98:13; 123:22; 128:3,'
129:24; 148:17; 149:4,7, B,
11; 160:14; 232:8,12,13;
255:8
dispute [8]
10:16; 33:18; 49:21, 23;
50:12; 109:8, 10; 112:10
disputed [1]
12:22
distinction [3]
181:16,' 202:21; 262:9
distributed [1]
161 :14
distributes [1]
81:4
divide [2]
204:13; 220:17
divided [1]
37:5
division [9]
34:23,' 87:14, 16, 18; 97:23;
102:2; 171:1; 211:17; 259:23
divisions [1]
70:16
document [22]
43:15, 18; 44:2, 4; 57:9, 14;
60:19,' 67:16,' 68:1; 103:24;
104:1; 138:1,11; 141:18;
147:14,19; 161:10,13;
172:6; 190:11; 192:12; 250:5
documentation [6]
83:25; 172:17; 175:24,' 183:1;
212:16; 246:22
documenting [1]
138:15
documents [38]
5:9, 13,' 33:3; 43:22; 44:8,'
48:17, 22, 25; 49:2; 56:1, 8;

57:4; 58:19, 25; 59:9, 16;
61:1,8,10; 63:1; 64:3; 65:17;
74:3; 76:14; 81 :12; 86:17;
88:15; 92:14; 123:19; 129:11;
141:13; 161:11; 179:6;
190:13,14; 191:9; 192:14;
197:21
doesn't [21]
14:12; 18:11, 13,' 21 :7; 22:9;
35:17,' 38:4; 50:5; 100:9;
122:23; 165:21; 233:7, 12;
234:23; 236:15, 24; 239:9;
264:2; 265:19; 271:11,12
dollar [3]
172:18; 209:3; 211:11
dollars [11]
201 :15; 207:22; 208:21;
209:18,19; 210:19,20,'
213:9,14,16
double [2]
69:10; 96:14
doubt [1]
231:11
douglas [1]
258:20
downgraded [1]
21:19
downtown [4]
139:7,8,11,24
draft [20]
86:3, 5; 91 :12; 96:23; 97:5;
147:21; 149:17,' 164:21;
165:12; 179:1,3,10,12,14;
191 :15; 257:3, 14, 18; 258:2,
12
drafted [3]
217:11; 256:2,' 257:2
dramatic [2]
201 :20; 224:13
drastic [1]
195:12
drastically [1]
222:16
dried [1]
161:15
drill [1]
154:12
driller [1]
35:7
drilling [1]
237:18
drills [3J
73:12, 13, 14
drive [1]
225:9
driven [2]
204:2; 247:24
due [1]
73:11
dulmage [97]
4:21; 68:20; 75:19, 23; 76:1,
4, 5; 91 :8; 94:20; 96:3, 10,
17; 97:12; 98:-]2, 21; 99:3~ 4,
16, 20; 100:13, 15,' 104:4, 10,
12, 13,' 117:9, 14, 15, 22;
118:5,18,20,21; 119:10;
121:23; 122:6; 123:15,17;
124:14,'125:3,15,21; 126:8,
9; 127:14,17; 129:1;131:15;
138:4,8,10,'140:10,13,'
141 :7, 19, 24; 142:4, 8;

Look-See(77)

147:4, 10, 13; 148:21, 23;
149:1; 150:8, 19; 151:2, 18;
152:4, 12, 15, 16; 154:21;
155:4, 9, 11, 20, 21; 156:3;
165:20,' 180:24; 183:15,18;
184:5, 7; 185:3,7,10;
186:11,14,16,17,23;
187:17,'188:23; 193:21,25
duly [2]
68:14; 194:14
duncan [2J
220:1; 221:4
duties [4]
6:14; 28:7; 137:4; 197:5

-Ee-mail [53]
24:11, 21; 43:4, 9; 74:16;
84:3,' 87:22,' 97:14, 15,'
101 :14,' 104:8,' 120:18, 22;
121 :1, 9, 10, 20,' 122:7, 9, 14,
22; 123:3, 4, 6, 23, 25,' 124:1,
6; 125:2,' 127:12, 15; 135:19,
21,23,24; 138:19,20; 161:9,
10; 164:1, 15,21; 165:5,9;
184:17,'185:12; 190:11;
216:6; 232:17; 245:24;
249:12; 260:2
e-mailed [1]
109:3
e-mails [18]
25:10,' 83:10,14,18,' 84:3,
15,' 97:18,' 100:19,' 101 :7,'
108:16, 18, 22, 23; 121 :13,
15, 17; 128:2,' 184:9
early [19J
21:8,10; 24:8,' 43:4; 45:19,'
117:2; 120:25; 130:17;
162:18; 178:11; 200:2,18;
202:3; 210:18; 233:3, 5, 6;
250:17; 261 :16
earn [2]
263:1, 3
earned [6]
173 :24; 174:1,' 179:24,'
226:23; 227:3; 263:5
earnings [3]
30:19; 31 :8, 24
ears [1]
128:5
easier [1]
140:15
easiest [1]
12:23
easy [5]
20:4, 7; 206:8; 263:19, 21
eat [2]
66:11,' 190:3
economic [lJ
219:3
edits [2]
86:1; 140:8
educational (2)
69:9; 194:22
effect [9]
90:10; 93:19; 125:16; 136:19,'
154:4; 209:17; 219:2; 222:25;
265:19
effective [1]
14:13

From development to effective

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

effectively [3]
6:1; 214:13; 215:1
efficiency [1]
205:1
efficient [2]
204:11; 205:5
effort [2]
74:14; 146:21
eight [2]
145:9; 208:21
eitf [30J
11 :12, 19, 24; 36:25; 37:20;
54:7; 79:21; 85:15; 109:13,
18,23; 110:13; 111:7; 168:3,
11; 169:10; 188:24; 189:14,
18; 227:25; 228:3,5,11;
229:12, 14; 230:6; 231 :7, 18,
21
eitf-0214 [lJ
113:23
eitf-9616 [1]
217:10
element [7J
9:12; 52:15, 18,' 80:5,' 228:3,'
230:2, 15
elements [17]
10:17; 37:4, 9; 80:4, 9, 10;
174:14; 229:24; 230:6, 7;
231:7, 17; 236:10; 237:3;
241 :19; 247:9, 13
elevate [1]
44:23
elevated [3]
166:1, 21; 243:22
eiicit [1]
151:21
else's [1]
93:12
elsewhere [2]
97:9; 132:16
emerging [3]
11:12; 32:12; 227:25
emotional [2]
119:14; 186:21
emphasize [lJ
241:15
employed [1]
49:25
employee [4]
4:7; 50:2; 209:16; 212:13
employees [6]
108:14; 200:6; 209:11,14;
210:3; 211:2
employer [3]
47:24; 49:20; 253:23
employment [7]
27:20, 21; 34:10; 39:12; 48:8;
54:17; 63:14
encountered [1]
245:24
encourage [3]
226:6, 9; 264:15
end [20]
19:10; 65:7; 67:13; 75:10,'
107:2; 117:4; 121 :16; 128:16;
133:6; 147:5; 163:6; 170:1;
196:11; 215:13; 217:13;
228:9; 247:4, 20; 248:14;
268:11
endorse [2]
256:16,' 265:17

to experts

endorsed [1]
257:12
energy [6]
87:3, 6; 101:23; 211:19;
212:8
enforcement [8]
241 :13, 14; 253:24; 260:22;
265:11,17,21; 266:18
engaged [lJ
49:1
engaging [1]
193:10
engine [1]
81:15
england [lJ
189:23
enron [4]
84:24; 201 :21; 206:6
ensure [2]
159:5; 197:16
enter [4]
4:18; 49:18,' 111 :16; 170:7
entering [1]
170:2
entities [16]
16:23, 25; 32:13; 33:6, 23;
39:5; 53:1, 16; 82:13; 85:2, 3,
4; 108:5; 201 :22,' 222:4, 24
entitled [1]
258:19
entity [69J
32:24; 85:1, 8, 11, 12,'
107:21; 114:4, 7; 128:18;
201 :11; 202:15, 18; 203:4;
204:7, 8; 206:1, 13; 207:2, 4,
9,14,19; 208:1,4,12,13,
23; 209:7,' 210:2, 19, 23,'
211:11; 214:9, 16, 18, 23;
215:1, 7, 12,' 216:3, 14, 17,
18, 23; 217:6, 9, 19; 218:2, 4,
20, 24, 25; 219:9, 13, 14;
220:11, 19,' 222:12; 223:18,
21; 224:22; 225:10, 12, 14
entity's [1]
203:9
enumerated [1]
50:25
equals [1]
181:7
equipment [27]
76:16, 18; 78:14; 79:9; 102:5;
106:23, 25,: 111 :18; 175:3;
177:7, 8, 12; 188:16; 228:22;
229:19; 230:23; 231:13;
243:16; 245:15, 23; 246:10,
15; 250:13; 252:5; 262:17;
268:2
equity [12]
38:5; 53:8; 202:10; 203:1, 6,
7, 19; 206:9; 213:7; 214:19;
215:4, 5
era [1]
84:24
ernst [7J
64:19; 195:2, 6, 16; 196:20;
253:23; 254:9
error [lJ
214:1
errors [3]
42:15; 153:17, 20
esg [11J

39:6; 86:20, 24, 25; 87:5;
94:25; 95:1; 211 :16, 18, 21,
23
espousing [1J
268:20
essence [1]
27:15
essentially [14]
7:19; 11:8; 14:10; 15:8,17,
23; 16:7, 16, 20; 22:5; 26:20;
27:16, 17; 58:21
estimates [3]
98:1; 147:24; 148:6
et [2J
20:22; 51:3
evaluate [1]
247:19
evaluated (1)
59:25
evaluating [1]
169:9
evaluation [1)
204:24
evelyn [4]
46:21; 114:19; 156:21; 198:9
event [8]
9:5; 11:11; 12:14; 15:4; 18:7,'
24:16; 25:5; 28:3
eventually [4]
41:11; 50:17; 214:12,' 256:1
everybody [17]
12:3; 19:22; 24:22; 25:6;
31 :6; 32:21; 36:24; 44:12, 15;
66:4; 76:19; 94:23, 25; 100:8;
101 :3; 123:9; 261 :23
evidence [25]
9:15; 14:21; 34:4, 7; 39:10;
43:17,' 44:1; 48:5, 7,' 49:13;
59:3, 14; 63:22; 65:21; 68:4;
92:10; 98:20; 100:2; 120:14;
151:22; 174:4; 184:24; 227:6;
230:15, 20
evidentiary-wise [2]
65:22; 100:10
exact [4]
10:9; 135:8; 186:18; 228:6
exactly [8]
87:18; 141:17; 151:24; 155:9,
11; 167:24; 199:5; 236:13
examination [8]
68:18; 156:8, 11, 13; 180:22;
187:2; 194:18,' 267:4
examined [2]
68:15; 194:15
example [47]
7:23; 13:7, 20; 15:21,' 16:16,'
17:10; 18:3, 15; 19:3, 5, 7;
20:2,' 21:4, 5,' 23:2; 28:7, 11;
29:2; 37:15; 45:13; 83:22;
112:21; 166:15; 207:11;
208:16; 209:7; 210:3; 224:14;
225:18, 19; 229:6, 13, 18;
231 :22; 232:5, 14; 236:12;
238:5; 239:21; 242:2; 245:19;
246:25; 247:9,' 252:10; 255:1;
264:6
examples (2]
231 :2; 245:18
excel [1]
172:23
excellent [1]

Look-See(78)

47:10
except [1]
39:3
exception [2]
62:21; 96:12
excess [5]
5:12; 55:17; 59:21; 60:16;
61:11
exchange [3]
32:23; 33:24; 173:18
excised [1]
78:16
excited [2]
29:6; 213:21
excuse [1]
58:1
exercise [3J
29:4; 180:13; 210:13
exercised [1]
34:4
exhausted [2]
209:24,' 253:15
exhibit [56]
10:2, 4, 7; 23:18; 55:23; 57:2,
8, 10, 13, 15; 59:21; 60:15,
23; 61:16, 21; 67:11,17,19;
68:3; 75:24, 25,' 76:1, 3;
77:25; 85:18,19; 103:23;
120:3; 121 :6, 19, 25; 122:1,'
138:2, 5; 140:5; 141 :3; 142:1,
5; 147:11; 149:15; 163:19,
20, 22; 165:4, 5; 178:2;
183:16; 198:2; 233:22; 246:6;
254:15; 259:16, 25
exhibits (35]
5:9; 9:23; 54:24; 55:2, 4, 12,
17, 24; 56:3, 6, 10; 57:6;
58:15, 19; 59:6, 11, 23;
60:14; 62:14, 15, 17, 18, 20;
63:2, 11; 64:18; 65:19; 75:20;
104:2; 120:3; 122:4; 165:18;
184:8; 266:3, 8
exist [1]
18:5
existed [lJ
93:21
exists [1]
227:6
expanded [1]
227:12
expect [2]
11 :1; 231:5
expected [3]
29:9; 110:19; 231:5
expecting [1]
209:22
expense [5]
76:24; 201 :5; 209:15, 16, 19
expenses [lJ
220:14
expensing [1]
201:7
experience [1]
153:3
experienced [1]
39:13
expert [2]
23:20; 155:18
expertise [1]
239:18
experts [2]

 BSA

Anthony Menendez v.Halliburton, Inc. 2007-STA-00005 09-24-2007

23:16, 25
expired [1J
46:14
explain (13J
9:12; 10:23; 55:13,' 70:11,'
76:13,' 78:25; 80:1; 140:8,'
143:23; 145:12, 13,' 153:19;
228:2
explained [6]
52:16; 107:14; 205:22,'
255:13; 256:1; 269:11
explaining (2]
113:14,' 269:15
explanation (1]
182:24
explicit [1]
246:14
exploration [2J
239:20,' 240:1
expose [1J
8:13
exposed [1]
7:23
exposure (1]
198:22
express [3]
102:9; 129:4; 265:25
expressed [9]
20:10; 119:17; 128:10, 22;
165:25; 193:1; 196:12;
234:24
extent [4J
88:10; 158:6; 165:23; 256:21
external [6]
86:22,' 122:17; 134:10; 181 :3;
197:11,17
extra [3]
222:12; 225:10; 261 :24
extraordinary [1]
46:11
extremely [3]
20:1; 196:9,' 204:23
exxon [1]
225:9

face [1]
41:3
facilitate [3]
222:25,' 224:23,' 225:22
facilities [1]
188:13
facility [8]
35:3, 11, 22; 139:6,' 175:7;
236:4; 237:1; 239:14
fact [76]
5:10,' 6:21; 7:2; 10:24; 14:25;
15:2,' 20:2, 13; 21:1, 17; 22:4,'
24:1,10; 25:1, 11,' 26:19,'
27:5; 28:2, 7, 22, 23; 29:25,'
30:2; 31 :9,' 32:1; 58:4; 63:15;
78:9,' 88:11; 97:19; 112:25;
135:6,' 143:10; 148:20; 152:3;
158:11; 161 :24; 162:12;
166:12; 167:4; 171:20; 179:8;
182:15; 188:12; 195:23;
208:18; 210:17; 223:25;
229:2; 231 :11; 235:4; 237:25;
239:9; 241 :13, 24; 242:1;
243:22; 244:23; 247:4, 16,

19; 252:20,23; 257:1,'
260:17; 261:17; 262:12,'
263:25; 264:17; 265:8,24;
267:16,' 268:4, 10; 269:5, 12
factor (2]
12:15; 236:23
factors [8]
11 :5, 6, 14; 18:20; 232:5,'
267:24; 270:6, 7
facts [5]
28:3; 147:7; 155:15,' 156:1;
171:10
factual [2]
243:18, 19
failure [3]
17:2, 5,' 35:15
fair (8]
76:24; 93:18; 107:10; 229:13;
230:10,11,15; 260:13
fairly (7]
17:1,' 28:17,'143:1; 146:8,14,
17; 199:14
fall (4]
34:17; 116:20,' 117:2,' 120:25
falls [1]
79:20
false [2]
36:9,11
familiar (6]
70:10; 132:13; 144:4, 7;
179:22; 258:7
fasb [3]
189:2; 201 :23; 227:16
fast [1]
227:16
faults [1]
27:8
favorable [3J
16:5, 13; 226:9
favorably [lJ
205:12
february [12J
24:19,' 43:4, 7; 45:20; 71 :13,'
120:21, 25; 121:11,' 122:9,
11; 129:23; 210:18
federal [5J
51:1,22,' 52:11,' 53:18,20
fee [1]
14:23
feel [8]
6:11,' 48:2; 51:15; 120:1,4,'
155:23; 159:9; 264:5
feeling [1]
186:22
feelings [1]
120:9
fees [1]
46:12
fell [1]
114:7
felt [14]
40:6, 20,' 46:4; 119:21,' 120:1,'
140:15; 154:24; 155:17;
158:11; 167:17, 19; 199:2;
265:1
fiberspar [11]
114:4, 6; 214:9, 11, 13;
215:9, 13, 18, 23; 219:22;
220:24
field [20]
23:17,' 39:18, 21; 40:1, 5, 9,'

77:5; 83:11; 106:13; 171:3, 7;
175:20; 195:4; 237:24;
243:21; 244:4,5,11; 245:12,'
270:3
fifth [1]
199:16
fifties [3]
202:4; 203:21,' 205:22
fifty [1]
222:19
figure [9]
38:5,' 74:11; 124:20; 125:12,
17,' 133:20; 185:22; 262:9
file [4]
59:3,' 128:11; 140:11,' 172:23
filed [12]
26:7, 8, 10; 120:19; 123:9,
19,' 124:21,' 157:17, 21;
164:19,'186:5,' 265:13
filing [3]
23:18; 24:25; 128:6
filings [4]
12:10,' 22:1; 52:2; 53:20
filtering [1]
81:14
fin [5]
11 :19; 54:6; 188:25; 189:14,
18
fin's [1]
8:18
fin-46 [60]
8:11; 9:7; 16:10, 11; 17:2;
32:14; 38:1, 21, 24; 82:12;
84:20, 21, 24; 85:6, 16,'
107:11, 15, 19, 24; 108:2, 4,
7, 8, 12, 17, 20; 109:4;
113:23; 114:3, 8; 144:13, 14;
167:2,'187:11; 201:21,25;
202:1; 205:24; 206:15, 16,
21; 207:1; 215:21; 216:1;
218:10, 14; 219:24, 25;
220:9, 10; 221:1,2,10,'
223 :4, 12; 224:3; 228:4
final [2]
86:6; 177:3
finance [23]
31:6; 39:18,21,' 41:1,18,'
43:10, 16, 24,' 45:16,' 48:17,'
69:11; 74:23; 75:2,' 77:5,'
158:19; 165:16; 171:1,'187:5,'
195:13; 199:22; 259:24;
269:2
financial [16]
30:20; 31 :24,' 38:3, 5,' 73:4;
189:2,5; 197:9,16; 202:17;
207:23; 209:4; 225:23, 24;
227:15; 261 :19
find [30]
14:22, 23; 22:25; 29:22,'
33:14; 83:25; 93:14; 94:17;
96:6; 99:16; 100:4, 10;
101:16; 112:7,'116:11,24;
134:16, 20; 137:3, 6; 145:1,'
198:13; 237:23; 245:11;
246:14; 253:15, 20; 255:23;
258:25; 263:20
finding [2]
81:12; 147:7
findings (lJ
4:13
fine [13]

Look-See(79)

10:5; 15:11,' 59:1; 61:23;
66:9; 67:15; 140:16; 150:22;
152:11; 191:14,' 212:23;
261 :9; 271 :18
finish [1]
213:11
finished [1]
213:6
fire [4J
29:9; 73:12,13,14
fires [6]
7:12, 16, 18; 199:4
firm (10]
47:17; 48:11, 12,' 64:20,'
134:13; 160:18, 21,' 161 :5,'
195:8
firms (4]
6:19; 32:25; 253:22
first [64]
5:23; 9:25,' 13:4,' 24:25,' 28:5;
30:12,' 34:14,' 39:19, 20,'
55:13; 68: 7, 14; 70:4, 22;
73:1; 74:20,' 75:16; 78:23;
84:19; 86:16, 17,' 87:24; 92:4,'
94:21; 98:21; 100:4; 104:9,'
105:13; 113:17,' 114:25;
125:3, 6; 131:17,'141:2;
145:15; 149:19; 155:2;
159:10; 168:19; 194:14,21,'
196:4, 12; 200:5; 210:25;
215:13,' 218:20; 226:18, 23;
230:4; 232:14, 15, 19, 20;
234:4; 236:2,' 242:24; 244:16,'
246:24,' 250:3,' 255:14,'
257:16; 259:4,' 267:10
fishy [1]
211:9
five [6]
156:7; 208:21; 216:8; 229:24;
243:12; 251:15
fix [1]
73:4
fixed (12J
12:23; 13:22,' 174:5,' 175:4,'
227:8; 237:9, 14,' 243:5, 6,
12,' 246:21; 268:1
fixed-schedule [1]
245:1
fixture [1]
14:24
flat [1]
214:21
flip [1]
163:21
flow [9]
38:20; 143:9, 10, 13; 204:25;
233:19,' 235:10,' 236:16
fob (2]
35:9, 11
focus [lOJ
73:8,10; 119:11,'130:5;
155:3,' 197:13,' 221 :21,' 240:4,'
255:19; 269:14
focused [2]
88:6; 100:18
focusing [2]
80:23; 218:8
folder [1]
74:4
folks [11]
22:11,' 50:24; 53:14; 70:15,'

 Anthony Menendez v. Halliburton, Inc. 2007 -STA-OOOOS 09-24...2007
Look-See(80)
13; 251:15; 252:14
gain [1]
214:4,5; 215:18,23; 219:22;
fourth [1]
111:3
220:24
174:11
gains [1]
goal [1]
frame [15]
15:19
6:11
gann [1]
82:8; 91:10,11; 93:21; 98:13;
god [1]

BSA

75:1; 77:5; 83:21; 102:19;
106:17; 191:3; 269:2
follow [7]
9:7; 17:2; 92:13; 93:22;
94:17; 189:14
follow-up [1]
106:21
followed [5]
16:24; 153:7; 158:12; 189:4,
6
following [6]
28:3; 44:8; 78:15; 93:12;
153:23; 271 :22
follows [2]
68:15; 194:15
force [7]
11 :13; 12:5; 32:12; 53:24;
54:3; 189:19,' 227:25
forcefully [1]
36:8
forces [1]
223:15
foreign [1]
38:18
form [7]
9:24; 91:12; 179:1, 14;
223:17; 225:18; 259:6
form-over-substance [1]
228:5
formal [4]
4:4, 7; 49:18; 100:1
formalistic [1]
248:7
fonnally[l]
172:10
format [1]
57:24
former [4]
27:14; 46:16; 211:16; 253:23
formulate [1]
40:15
formulating [1]
39:14
forth [1]
173:21
forthcoming [1]
191:25
forward [4]
30:3; 49:13,' 116:19; 221 :18
forwarded [6]
44:4; 108:18,' 123:6; 125:2;
193:2; 261 :22
forwarding [1]
108:23
found [21]
7:17; 16:22; 17:3, 7,' 24:19,'
33:15; 42:15, 16,' 50:17,'
78:13; 83:22; 93:15; 121:1;
160:10; 190:14, 17, 18, 19;
212:19; 241:12,' 242:20
foundation [1]
265:25
founded [1]
154:1
four [31]
10:15, 17; 12:22, 25; 13:20;
14:17,' 41:24; 42:19; 69:7;
79:4,' 88:18; 173:21,23;

117794:12'34'19154;7172'51:31'99"14 22
:;
: ,.
:, , ;
227:5; 229:24,' 231:7,' 247:9,

to guess

100:16, 19; 107:10; 117:16;
118:25; 119:15; 129:16, 23;
131 :20; 132:24
frames [1]
103:11
frankfort [3]
195:9,11,14
frankly [1]
28:19
frantically [1]
213:2
fraud [13]
30:23; 47:17; 51:1,3,10,11,
15, 16, 23; 52:11
fraudulent [3]
22:16; 49:7; 193:11
frazier [1]
71:3
free [1]
6:11
fresh [2]
267:2; 270:12
friday [1]
43:7
front [1]
197:21
frustrated [13]
118:1, 3, 25; 119:2, 5, 7;
120:6; 150:24; 151:4,9;
152:3; 167:19
frustration [11]
117:5, 17; 119:17; 128:10,
22; 158:10; 165:25; 182:12,
15,17; 193:1
fulfill [1]
109:19
full [3]
88:19; 99:23,' 149:19
fully [2]
48:22; 61:5
function [4]
40:17; 47:3,6,12
fund [4]
206:12; 207:20; 208:12
fundamental [1]
263:13
funded [5]
201:10; 207:21; 210:18;
214:16; 215:1
funding [3]
208:13; 215:6; 224:18
funds [1]
208:2
funny [1]
236:14
future [6]
8:1; 28:24; 153:17,23;
221 :22; 246:18'
fx [1]
69:1
- G 9
gaap [ ]
21:25; 22:17,18; 27:7; 32:4;
43:6; 72:21; 196:23; 227:23

122:17
gary (1]
87'12
gas [1]
256:9
gather [4]
92:10; 97:15; 171:9; 191:9
gathered [2]
97:19; 171:7
gathering [1]
130:4
gave [13]
55:5; 125:22; 137:1; 210:11;
217:9; 221 :4; 243:25; 244:9;
252:15,' 254:1; 255:20; 257:3,
14
gears [1]
226:12
gee [2]
234:8; 267:6
geer [14]
26:16,23,24; 46:22,23;
47:7, 8; 86:21; 157:10, 13;
181 :1, 7; 213:3
geer's [2]
26:17; 181:2
generated [2]
120:8; 182:16
generating [1]
30:25
gentleman [4]
20:13; 26:16; 196:6; 258:25
geographical [1]
111:9
gets [4]
29:6; 38:7; 174:2; 213:3
give [23]
6:3; 45:25; 58:7; 60:11,'
61 :20; 69:8; 72:23; 73:23;
78:25; 91 :14; 104:5; 111 :9,'
135:14; 137:10; 138:1;
199:24; 200:22; 204:11;
224:14; 245:18,19; 248:18;
254:6
given [17]
15:3; 27:18; 64:14, 25; 83:23,'
92:23,' 99:6, 8,' 103:17, 18;
119:23; 120:18; 147:23;
163:1,' 192:11,13; 263:6
gives [1]
228:16
giving [3]
41:12; 216:1; 228:15
glean [1]
12:4
global [6]
41:3; 87:19; 97:15; 122:18;
170:24, 25
globe [1]
30:17
globo [1]
60:6
gmi [21]

;~50:io1i12g0~li/~}7;1;
: , ;
:, , ;
208:25; 209:13,21; 210:22;

106:22
goes [11]
118:6, 7, 13,' 150:19; 153:25;
225:7; 238:9,' 248:20; 251:1,
2; 264:22
goods [9]
12:24; 90:3; 188:6, 9; 243:6,
16; 246:2, 21; 251:20
goodwill [1]
190:8
gotten [6]
24:5, 6; 86:6; 160:24; 257:20
govern [1]
109:24
government [2]
32:23; 219:7
governmental [1]
33:23
governments [2]
38:18
graduated [2]
69:10; 194:25
grant [10]
24:9,12; 261:11,12,17;
262:3,5,10,13,14
granted [1]
46:8
grasp [1]
54:21
gray [1]
32:16
great [6]
20:3,' 39:13; 78:24,' 141 :12;
146:11; 171:6
greater [2]
202:11,' 207:10
gross [18]
204:10, 12, 15, 22,' 205:2, 4,
6, 7,10, 13, 15, 18; 220:16,
17,' 223:2, 6
grounds [1]
98:7
group [62]
31:6,' 41:1; 43:17,25; 70:6,'
74:24; 77:4,' 82:14; 83:21;
84:11, 13; 86:8; 87:4, 6; 88:7;
92:23; 95:18; 97:15; 100:17;
101 :23; 102:9; 103:5, 7, 8,
15, 16; 104:23; 105:2;
107:19,'108:3,14; 114:10,
11,14,17; 115:21; 116:8;
120:7,' 124:8, 10; 126:17, 18;
128:13; 130:11; 134:16,'
144:18; 158:3,'159:4,'160:11;
167:5; 182:16; 211:19; 212:8;
214:4, 8; 215:10,' 220:1;
232:17,' 244:10
group's [2]
110:14; 132:1
grown [1]
32:1
guess [20]
50:1; 60:5; 67:4; 96:11;
113:2; 117:25; 118:1; 120:2;
129:8; 163:6; 176:5; 189:21;
191:14,22; 193:22; 221:3;

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

224:7; 230:24; 261 :6; 269:14
guidance [38]
8:11; 9:6; 11:12,20; 40:22;
78:7; 79:1; 81:1, 23, 24;
88:14, 15; 89:7, 12, 14, 24;
94:24; 99:25,' 100:3,' 102:20;
115:11; 136:4; 137:1,3,6,
11,'148:5; 154:2,'169:13;
179:25,' 181 :13; 189:25;
252:8, 10, 15; 253:22, 24;
256:5
guidances [3]
8:10; 189:1,' 201 :18
guideline [1]
235:19
guidelines [1]
226:19
gulf [1]
35:1
gun [6]
75:17; 76:12, 13,' 77:7,' 176:8;
255:22
guns [12]
76:16, 21; 77:15; 80:17,' 88:5;
102:3,' 176:12,' 177:8, 22, 25,'
180:12; 232:18
gut [1]
144:17
guy [2]
144:23; 249:12
guys [9]
107:6; 145:5; 207:17; 208:8;
217:5,' 233:17; 247:21,'
249:13; 268:23

hadn't [4]
22:25; 31:13,' 86:6; 107:7
half [14]
71:1,' 92:12; 163:8,'182:1;
201 :15,' 207:21; 209:3, 17,
19; 213:9,14, 16, 22; 244:1
halfway [1]
187:21
halliburton [256]
4:6, 25,' 5:1, 2; 6:16; 7:3, 20;
9:6; 13:1,4, 11,21,' 16:20,
21; 17:10,11,13,'18:2,12;
19:1, 10, 15, 24,' 20:8, 17,'
21:15,19,' 22:4,11; 23:9,12;
24:11, 12, 14, 17; 26:22;
27:14;30:5,14;31:11,13,
15; 32:1; 33:2, 7; 34:23; 35:5,
6,20; 37:2, 12, 15,' 38:16;
39:4, 12, 13; 42:9, 13; 45:6,
10; 46:11,12,15; 47:14,21,'
48:13, 16; 49:19; 50:11, 14;
54:15; 58:20; 60:17; 64:22;
69:5, 6, 22; 70:2, 4, 10; 71 :4;
72:12; 73:25; 74:11, 13, 15;
76:14; 78:8; 84:23; 87:2, 3;
90:15; 92:16; 93:19; 94:5,23;
95:3; 102:6, 10, 14; 105:6;
106:5,19; 107:21; 108:5,10;
110:5,9; 111:5,24; 112:3,4,
9, 23; 113:4, 18; 114:22;
115:2; 130:3; 136:19; 137:4;
139:5; 146:1; 147:20; 148:25;
149:3; 152:18,' 153:8, 24,'
155:22; 164:9,' 167:24; 168:1;

169:21,22, 23, 24; 170:1, 4,
7,12,15; 171:11; 172:2,19;
173:1, 4, 10, 14; 174:15, 22,
25; 175:7, 8; 176:23,' 177:9,
13, 17,' 178:3; 181 :18; 183:9;
184:25; 188:13, 14,' 189:5, 7;
190;7; 195:19, 20; 196:12,
13, 14, 24; 197:2, 24; 200:4,
11; 201:1,13,' 207:19,21;
208:14, 18; 209:6, 24,'
210:18; 211 :2, 20; 214:16,
18, 24; 215:6; 216:13, 15, 17,
24; 217:1, 5, 8, 13,' 218:1, 22;
219:1, 4, 7, 8, 9, 14, 15;
222:1,' 224:1, 9; 226:14;
228:15, 19, 22, 24; 229:5;
232:9, 10, 16; 233:5; 235:20;
236:4; 237:1, 12; 238:8, 15,'
239:12,14,17,25; 240:18,
19; 242:3, 14; 245:22, 25;
246:14,16; 247:1; 248:16;
251:2; 252:18,25,' 256:19;
260:24; 262:14,' 265:6; 266:4,
6; 268:11; 271 :3; 272:3
halliburton's [43J

10:24; 13:10; 14:4; 16:22;
26:3; 31 :21; 33:3, 21; 34:15;
35:10; 38:16; 40:23; 74:4;
76:18; 77:15, 21; 88:8; 92:15;
94:24; 98:15; 99:7; 106:24;
110:15; 112:12, 14; 139:2;
174:20; 176:12; 177:20;
182:4, 7,' 183:4, 6; 201 :14;
205:5,' 215:2; 217:7; 245:21,'
246:1, 9, 13,' 249:18; 262:10
halt [2]
25:8, 10
hand [3]
51 :20; 68:11,' 194:11
handle [1]
116:15
handled [3]
146:23; 188:15; 205:21
handling [1]
191:20
hands [2]
43:1; 81:1
happening [2]
154:23; 225:10
happens [3]
225:6; 263:7,' 268:13
happy [1]
107:3
harass [1]

27:24
hard [4]
9:14, 17; 30:20,' 31:2
harder [1]
66:5
hardly [1]
45:3
hasn't [4]
11:10; 14:24; 24:4; 25:24
hate [1]
267:1
haven't [13]
11:10; 31:23; 51:14; 54:11;
121:13; 181:25,'185:17,20;
212:23; 213:6; 263:16;
267:14, 16
he'd [1]

195:22
he's (32]
22:10,' 26:9, 10, 13; 45:2,'
47:10; 52:3, 6, 7,' 62:6, 7, 8,
9,10; 98:21,22,23; 104:12,'
117:19,20; 118:16,'119:4;
125:10,' 126:4, 6; 150:15;
164:4,' 199:18, 22,' 259:23;
266:12
head [5]
5:1,' 41 :15; 94:10; 137:20;
156:17
headed [1]
114:14
headline [1]
30:23
hear [14]
28:17,' 73:15; 90:25; 91:3;
107:16; 112:18; 128:8; 129:5;
131:8; 143:25; 150:18;
151:12; 161:4; 259:10
heard [21]
24:2; 78:21; 81 :20; 105:11, ,
13; 112:16; 116:9; 117:21;
118:22; 128:4; 129:24,' 131:7,'
150:17,'159:10,17; 201:21;
205:11,13; 226:16; 240:5;
246:24
hearing [11]
4:4, 7, 12; 66:18; 67:3;
156:10; 170:14,'194:6;
271:20; 272:12
hearings [1]
5:22
hearsay [16]
63:12,14; 64:8,15,' 96:1,13,
14; 98:7,' 99:12, 24; 117:8;
125:8; 126:1,' 131 :6,' 184:23;
260:25
heart [1]
153:7
heck [2]
145:5; 216:6
held [6]
13:15; 28:2; 35:12; 106:5;
195:4; 272:10
help [5]
9:11; 39:24, 25; 40:14;
133:20
helped [1]
88:10
helpful [1]
5:23
henry [4]
211:7; 212:9, 22; 213:3
herein [2]
68:15; 194:15
hey [9]
61 :4; 83:3; 155:7,' 191 :19, 24;
215:3; 248:16; 257:4; 268:22
hide [1]
192:10
hierarchy [1]
181:10
high [8]
34:5; 49:12; 74:5; 101 :6, 10;
199:14; 245:25
high-level [1]
87:17
higher [2]
47:9; 50:10

Look-See(81)

highest [2]
199:16, 21
highlight [2]
60:8; 205:15
highly [2]
30:15; 39:10
hijacking [1]
270:10

hill [27]
71 :8, 9, 11, 14, 17, 22,' 74:7,'
84:9, 10, 11, 15; 87:20, 23;
91:21; 108:15,17,22; 109:2,
7; 114:15, 16; 156:17;
161 :25; 178:9, 16; 179:4
hire [1]
208:20
hired [15]
6:20, 22; 16:9; 37:2; 39:19,'
42:7, 16,' 46:20, 23, 25; 49:5;
195:20; 196:24; 201:4
hiring [2]
198:5,' 208:16
historically [1]
197:10
history [2]
47:3; 230:21
hit [3]
29:5, 8; 204:15
hocus-pocus [1]
258:19
hold [15]
13:13; 43:15,18,21; 44:2,4,
8; 58:5; 69:18; 161:10, 13,'
190:11, 13; 220:6,' 234:25
holding [3]
11 :9; 241 :8, 9
holds [1]
34:16
homework [1]
257:21
honest [1]
218:7
honor [100]
4:20, 23; 6:5, 13,' 8:17; 12:6,'
30:8, 10; 48:4,' 49:14,' 50:13;
51 :25; 54:5, 12; 55:3, 4, 22,'
57:22; 58:3, 11, 15; 60:12;
61 :8,' 62:1, 19; 63:11,' 64:7,'
65:2,11,24,' 66:1,10,' 67:6,
23; 75:21; 90:25,' 96:1, 3, 10,
14; 98:6, 17, 22; 99:12;
100:14; 104:1,10,12; 117:7,
19; 118:5, 20; 121 :23; 122:3;
123:11,16; 124:22; 125:3,
25; 138:4; 140:1,' 141:15;
142:5; 147:2, 8, 12; 148:19;
151:10,18; 152:4,5,12;
154:25; 155:12; 156:12;
163:15; 165:20,' 180:17, 20;
183:15; 184:5, 22; 185:8, 14;
186:16, 23; 187:1; 188:20,
23,' 193:19, 21, 25; 194:8;
249:22; 260:25; 265:23;
266:3, 13, 23; 270:23
hook [5]
85:10; 207:8; 216:19; 218:16;
245:16
hope [1]
191:8
hopefully [1]
27:9

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

horn [1]
233:16
hours [2]
156:6; 252:14
house [1]
208:23
housekeeping [1]
194:3
houston [9]
69:15; 70:9; 82:18; 101 :13;
122:20,21; 139:8; 194:25;
272:6
howard [1]
4:20
hr [1]
48:18
huddled [1]
20:17
huge [6]
38:9, 13; 152:2; 203:15;
205:6; 254:3
huh [1]
111 :21
huh-uh [1]
105:23
human [1]
45:10
hundred [6]
18:3; 214:25; 222:1,2,19
hundreds [1]
75:1
hurdle [2]
226:24; 252:3
hurricane [2]
106:14, 22
hypotheticals [3]
136:5,17,19

i'd [17]
4:17; 5:24; 9:10; 30:12;
55:19; 80:20; 82:4, 5; 100:5;
113:15; 118:10; 120:21;
130:17; 137:19; 196:4; 216:5;
229:1
i've [14]
28:3; 54:20; 104:5, 7; 196:2;
197:21; 198:17; 229:24;
248:8; 263:5, 6, 8; 268:21
i.e. [3]
17:24; 79:14; 90:5
idea [9]
69:8; 125:23; 136:22; 163:11;
183:1; 192:19; 199:24; 252:1;
255:6
identification [8]
56:4, 11; 57:7, 11, 16; 63:4;
65:13; 67:18
identified [12]
43:5; 55:16; 56:2, 9; 57:5, 9,
14; 59:10; 63:2; 65:18; 67:16;
68:2
identify [1]
218:14
ignore [1]
29:11
illegal [lJ
28:10
imagine [1]
25:5

horn to interactions

immaterial [lJ
213:17
immediate [1]
166:13
immediately [3]
6:22; 44:15, 17
impact [9]
38:4; 82:1; 99:7, 15; 100:23;
101 :2, 16; 111 :4; 256:21
ilnpacted [1]
222:17
impart [lJ
245:22
impetus [1]
41:22
implement [2J
172:14, 15
implementation [1]
81:2
implemented [2]
172:9, 10
implicate [1]
221:23
implicating [1]
7.~19

implications [4]
206:15; 220:8, 10, 21
implicit [2]
48:14; 145:22
implicitly [1]
7:24
implied [1]
241:7
important [9]
11 :3; 38:3; 39:16; 61 :14,'
84:22; 182:3; 205:2, 19;
249:5
importantly [2]
21 :24; 49:12
impossible [3]
24:1; 25:14; 30:25
impression [11]
41:12; 124:15, 19; 125:4;
126:2; 186:4; 189:25; 193:12;
199:1,16; 213:25
improper [2]
178:6, 7
improperly [2]
10:19; 169:7
improprieties [1]
34:2
improve [3]
15:23; 16:5; 204:6
improvement [1]
204:16
in-country [1]
113:1
in-depth [2]
115:7; 244:1
in-house [3]
82:18; 208:20; 220:25
in-place [1]
194:2
inability [1]
40:15
inadvertent [1]
45:13
inappropriate [1]
266:5
inc [1]
272:3

incident [1]
46:1
include [6]
18:10,11; 67:10; 173:9;
236:22; 259:4
included [5]
64:3; 87:21; 123:4; 148:5,13
includes [1]
61:3
inclusion [1]
5:11
income [11]
30:24; 31 :7; 35:20, 21; 38:5,
13; 204:8, 12; 220:13, 15;
222:7
inconsistent [1]
26:2
incorporate [1]
172:7
incorporated [1]
4:6
incorporating [1]
154:7
incorrect [6]
36:23; 143:10, 11; 144:20;
153:5; 168:14
incorrectly [1]
169:12
independence [1]
197:13
independent [6]
33:9,22; 181:21; 182:4;
230:11; 240:16
indicate [1]
118:24
indicated [6]
5:7; 26:22; 34:15; 54:24;
55:5; 172:18
indicating [2]
15:9; 23:5
indirectly [2]
8:15; 189:19
individual [3]
84:2; 198:10; 212:15
individuals [3]
214:5; 221 :5; 247:17
industry [4]
31:1, 2; 250:12, 25
infallible [2]
41:14; 153:12
inflate [1]
31:24
informal [2]
5:5; 268:10
information [19]
28:23; 74:6; 84:11; 92:12;
96:21; 97:16,18; 101:15;
109:4; 112:3; 148:7; 171 :7;
191:16; 192:20; 216:7; 244:4;
255:6, 24; 265:21
informed [1]
27:17
informing [2]
24:22; 120:19
infrastructure [1]
87:4
initial [5]
32:7; 83:16; 184:3, 14; 214:5
initially [2]
22:13; 247:5
initiative [1]

Look-See(82)

243:24
inordinate [1]
42:14
input [2]
145:2; 167:6
inquiries [3]
82:24; 83:11,16
inquiry [6]
24:19; 43:14; 44:7; 122:23;
123:1,' 270:24
inside [1]
34:3
insignificant [1]
42:16
insinuating [2]
144:2; 145:16
install [14]
13:9,' 19:3, 4, 8; 37:3, 12, 14;
111:13,17,'168:6; 170:8,12;
177:10; 178:3
installation [5]
19:11; 37:13; 111:12; 168:16;
231:25
installed [1]
178:5
installing (4]
19:19; 110:20; 177:13;
230:17
installs [1]
37:15
instance (6]
10:21; 64:1; 177:1; 213:18;
232:19; 245:14
instances [4]
31 :9; 64:2; 175:15; 231:2
instant [2]
43:19, 22
instructed [1]
116:3
instruction [2]
176:24; 255:21
instructions (5]
72:24; 73:2, 6; 118:23
instructor [1]
46:6
instructs [1]
35:4
instrumental [1]
259:8
integrity [1]
49:13
intelligent [1]
39:11
intend [1]
5:14
intended [1]
252:17
intentional [2]
21 :25; 22:18
intentionally [1]
22:17
i~tentions [1]
125:24
interact [2]
169:22, 23
interacting [1]
127:12
interaction [1]
269:22
interactions [1]
118:2

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

interest [10]
32:13; 53:1, 16; 82:13; 85:1;
196:20; 204:22, 23; 207:22;
210:16
interested [5]
147:6; 196:9; 197:3; 198:5;
204:10
interesting [1]
207:17
interests [1]
206:2
intermediate [12J
35:25; 180:1, 3; 181 :13, 18,
20; 240:8, 12, 20; 268:6;
271:4,11
internal [5]
20:18; 70:5, 24; 195:15;
197:10
internally [2]
50:9; 216:11
interpretation [5]
167:14; 203:20; 206:21, 22;
236:14
interpretations [1]
227:23
interpreted [1]
252:9
interpretive [2]
32:17; 40:22
interrupt [3]
6:11; 149:14; 203:18
intersection [1]
70:13
intertwined [1]
52:21
intervening [1]
46:1
interview [2]
160:18, 22
interviewed [12]
137:15, 22; 138:23, 24;
139:1,11,13,16; 140:18;
142:10; 160:21; 161:5
interviewing [1]
198:25
interviews [1]
139:19
intimidated [1]
139:25
intolerable [1]
47:25
intranet [1]
95:3
introduce [1]
248:11
introduced [1]
206:2
introduction [2]
63:5; 73:20
introductory [1]
187:20
intuition [1]
233:15
inventory [43]
18:4, 7; 32:9,11; 34:16;
35:12; 79:9; 95:13; 101:9,14;
105:10, 14, 19, 22; 106:4;
132:10, 11, 12; 144:1, 3, 6;
152:18; 167:7; 173:5, 7, 8, 9,
15, 19; 174:15, 18, 19, 23;
175:9, 13, 16, 17; 178:10;

236:3; 239:16; 251:21;
200:5; 207:5; 209:2; 216:3;
269:12
217:4; 219:13,19; 221:21;
invest [1]
226:13; 227:2; 246:5; 247:15;
203:4
251:10; 253:16,21; 254:3;
invested [1]
255:11, 13, 17; 259:20;
207:17
260:11; 261:4,11,13,22;
investigation [11]
262:5,21,23,25; 263:1
43:20; 52:10; 97:7; 101:2;
issued [4]
123:2, 3; 147:1, 6; 160:19;
28:22; 176:24; 215:10;
190:15, 19
227:21
investigations [4]
issues [96]
46:9,13,15; 48:23
7:1; 8:8; 9:10; 10:18; 11:13;
investing [1]
17:7; 21 :3; 22:3; 24:17; 32:6,
205:7
12; 34:12, 14; 36:12; 37:21;
investment [13]
39:22, 23; 41 :4, 8; 42:8;
15:18; 201:16; 203:1,2,5;
43:21; 44:23; 63:17; 73:4, 5,
206:9; 208:24; 213:5, 8;
8, 21, 22; 75:15, 16; 77:2;
214:20, 22; 222:8
79:4; 82:1, 12, 13, 14, 16, 21;
investments [2]
83:1, 6, 8; 84:16; 85:24; 89:9;
29:3; 222:9
97:8; 100:11; 107:12; 109:8;
investor [7]
11 0:17; 113:14, 22; 114:7,
21 :2; 114:24; 157:4; 198:17,
12, 13; 117:5; 119:21;
18; 209:23; 223:9
123:12; 124:7,8,10,11,24;
investors [3]
125:5; 126:15, 17, 24;
38:11; 201:12; 204:22
127:22; 128:1; 135:4; 136:3;
involve [2]
137:8; 138:21; 146:12, 22,
32:16; 63:13
24; 149:4; 153:9,18; 154:8,
involved [19]
13; 158:3; 161:12; 166:1,21;
40:21; 43:18; 95:16; 104:23;
179:7; 183:3; 187:11; 216:2;
105:2; 108:6,12; 126:16,17;
226:13,17; 227:25; 256:12;
127:22; 135:2; 136:18;
263:4
160:13; 167:20; 177:7;
issuing [1]
179:21; 180:13; 21 0:2; 249:9
189:5
involvement [1]
item [3]
104:22
76:8; 113:1; 222:21
involves [2]
items [3]
8:5,6; 107:24
38:1,' 228:3
involving [1]
ivory [1]
48:10
244:11
irate [1]
221:13
- Jirrational [ 1 ] .
175:17
J '~l~~; 93:10,' 95:18,' 110:3;

ir~~~;;,.1~J.~g1,. 42:5,' 47:8,'

63:12,' 123:12,'124:23,'155:1,'
185:16; 186:6
isolate [1]
230:11
isolated [1]
213:18
issue [127]
9:8; 10:19,21; 11:15,16;
15:12,14; 17:16,20; 18:14;
20:1; 21 :23; 24:12; 28:20;
30:5; 32:14; 33:25; 34:19, 20;
35:24; 36:22; 38:4; 50:7, 19,
23; 52:24; 74:2,8,10; 75:17;
77:3, 4, 18; 78:1; 79:3; 80:21;
82:7; 83:23; 84:1, 4; 85:15,
23; 87:21,' 88:6, 14, 17; 89:8;
90:21; 91:9,11,15,19,20,
22;92:5, 18; 95:21; 96:5;
98:14; 100:18, 21, 22, 24;
101 :5; 104:25; 107:4, 22;
108:1, 21; 109:13, 16, 25;
110:1; 116:19; 126:14, 15;
127:1, 2; 135:2; 144:5, 17,'
151 :5; 152:20; 153:20, 21,
23, 24; 165:19; 169:14;
183:10; 184:16; 187:7, 10;

211 :5, 8, 14, 16, 25; 212:3,
20; 213:2; 261:22
james [14]
688 13 19 22 15614
:,

,

,

;

:;

180:23; 187:3; 200:14;
232:25; 233:6, 13, 18; 235:6;
251:24
january [5]
71 :12; 184:16; 210:17;
247:20
jay [1]
122:17
jazdzewski [2]
211:7; 212:10
jim [1]
5:1
job [36]
6:9; 7:2, 6; 25:13,' 27:15, 16;
29:2; 30:7; 36:13; 39:16;
40:17; 46:21, 22; 48:11;
49:11; 56:21; 69:25; 70:4, 7,
22; 71:4; 72:25; 113:13;
114:25; 150:21; 155:15;
158:13; 170:21,23; 191:5;
195:14; 197:1, 4, 5; 212:6;
258:18
jobs [4J

Look-See(83)

69:21; 129:10; 191:4; 195:3
joe [1]
4:20
john [17]
23:4; 164:1, 2; 184:2; 215:24;
217:2, 11, 12; 221:15;
254:13,14; 255:5,9; 257:11;
260:17; 264:18,19
johnson [1]
87:8
joined [1]
156:25
joint [67]
8:7, 10; 9:8; 15:14, 15, 16,
19; 16:2, 8, 19; 17:8; 18:10;
25:21; 32:13; 38:1,8,15,16,
17, 23, 24; 39:2, 4; 53:2, 4,
16; 200:7, 8, 19, 21, 22;
201:1, 8, 18; 204:4; 212:14;
213:18; 214:3,7; 215:22;
216:14; 217:21; 218:25;
219:19; 220:3, 10, 22; 221 :6,
9,17; 222:2,19; 223:5,23,
25; 224:10, 11, 13, 16, 19,
21; 225:5, 19; 226:1,4
jordan [99]
4:23; 5:18; 30:9,10,12;
49:21; 50:3, 13, 16, 20;
51 :24,' 54:5, 8; 55:5, 7; 56:12,
17,19,22,24; 57:1,12,17,'
58:14, 17, 25; 61:2; 62:19;
63:5,8; 64:7,10; 66:1,14;
90:25; 96:1, 14; 98:6, 17;
99:12; 100:14; 104:1, 7;
117:7,19; 119:4; 121:24;
122:3; 123:11; 124:22;
125:10,18,25; 131:6; 140:1;
141:15,22; 147:2,8; 148:19;
150:15; 151:10,17,24;
152:5, 8; 154:17, 25; 155:12,
24; 156:11,12,15; 163:15,
18; 165:24,' 180:17, 19, 25;
181 :12; 182:10; 184:8, 22;

~8~t 411:'2~4,~ ~;6j'~; 187:1,

' ;
:;
:;
222'20'
. , 249'22'
. , 260'25'
.,
265:23; 266:7,13
journal [2]
7:14; 199:10
jp [1]
21:19

judge [236]
4:3, 12, 15, 22; 5:4, 20; 8:13,
18, 22; 9:2, 4, 14, 18; 10:2, 5,
11; 11 :18; 12:1; 30:9; 49:15,
22,24; 50:5,14,17,21; 51:5,
8,13,17,19; 52:3,6,9,13,
25; 53:6, 9, 23; 54:2,6, 9, 13;
55:9; 56:5; 57:19, 23; 58:7,
12,16,24; 59:1,15,19;
60:13, 20; 61 :3, 9; 62:3, 10,
13; 63:7, 9, 20, 23, 25,' 64:9,
24; 65:4, 12, 22, 25; 66:2,12,
15; 67:3, 7,14,19; 68:5,10,
16; 75:22, 25; 76:3; 91 :2;
94:10; 96:2, 8, 15; 97:10;
98:8,10; 99:1,13,18,21;
104:8, 11; 117:11, 24;
118:12, 19; 119:6; 122:2, 5;
123:14; 124:12, 25; 125:6,
12, 19, 22; 126:1; 128:12, 18,

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

21,25; 131:8; 138:7,9;
140:4,12,16,24; 141:6,12,
16; 142:7; 147:3,9; 148:22;
149:14, 22, 25; 150:4, 6, 16,
22,'151:14,20, 25,' 152:7,10,
14;154:18;155:2,5,10,13,
'/-1,l-1h'-1
7n, ..LVJ
7h?-77J.....Iv • ....-,
..LV,
• .J../,

..I.oI.v,

165:22; 180:18,21; 183:14,
17; 184:6; 185:1,5,9,15,22;
186:2, 7, 12, 15, 25; 187:16,
18; 188:21, 24; 189:6, 10, 13,
17,21; 190:5,10, 17, 22;
191:2,11,13; 192:2,4,8,17,
22, 25; 193:13, 16, 20, 22,'
194:1, 6, 10, 16; 249:24;
254:20; 256:13, 20, 24,'
257:5, 8, 19, 23; 258:1,5;
261 :2, 6, 9; 265:22; 266:8,
11, 15, 25; 267:10, 23; 268:4,
15,18; 269:14,20; 270:1,5,
9,19,22,25; 271:6,9,15,18
judge's [2]
118:22; 257:10
judges [2]
4:15; 272:10
judgment [4]
158:12,' 169:8; 171:10, 16
judgments [2]
32:17, 18
july [5]
42:18; 91:11,15,' 97:7; 257:3
jumped [lJ
131:19
june [5]
45:15; 70:3; 135:5; 137:20,'
146:16
justice [1]
32:25
justification [3]
28:11,' 262:10; 264:5
justifies [lJ
183:8
justify [1J
230:18

-Kkbr [6]
71 :12; 87:4, 20; 122:17;
211 :21,' 224:15
keep [12J
7:13; 14:1,2; 22:13,14,15;
25:13; 157:22; 199:9; 208:24,'
224:12; 256:4
keeping [2J
109:4; 158:7
kelly [5]
87:18; 103:10; 130:18;
182:11,19
kept [lJ
22:16
kevin [lJ
87:17
key [1]
79:6
kidding [lJ
61:4
ldnd-of [1J
84:24
kinds (1]
221:5

kingdom [1]
176:14
knowing [3]
20:16, 21; 255:16
knowledge [18]
8:14; 54:19; 76:22; 94:8;
98:25; 110:6; 111 :23; 134:4,
15; 136:12; 139:10,13,19;
146:11,21; 148:15; 165:21;
179:17
knowledgeable [1]
39:11
kpmg [21]
23:3, 8; 25:12; 33:9; 134:6, 9,
12,' 160:9, 13; 164:6; 182:20,
23; 184:20; 217:4, 7, 21;
218:3; 247:20; 248:15,'
252:15; 265:6
kpmg's (7]
148:4; 182:22; 216:13; 252:8;
253:23; 254:10; 264:17

labilities [1]
207:8
labor [6]
4:16; 26:8; 30:4; 145:17, 19;
272:9
lack [2]
8:13; 265:17
laid [1]
197:21
language [5]
81 :14; 145:23; 177:24;
241:10; 251:8
large [7]
5:9; 17:8, 15; 112:11,' 138:5,'
143:1,' 216:16
larger [3]
98:14,' 103:2, 5
largest [3]
38:24; 216:15; 245:20
last [8]
30:23; 147:23; 182:2; 192:25;
216:3; 217:3; 233:10; 234:12
late [6]
25:15; 117:2; 171:6; 178:11;
227:14; 255:10
latter [3]
191:10,11; 193:13
law [13]
4:11,14,15; 27:6; 47:17;
48:24,' 51 :23; 53:18, 20;
160:18,21; 161:4; 272:10
laws [1]
52:11
lawyer [2]
137:25; 146:1
lawyer's [4]
45:4; 46:12,'162:20; 163:1
lawyers [6]
20:18; 33:1; 46:2; 138:14;
139:16; 161:4
laying [1]
268:9
layperson [1]
126:3
lead [1]
130:4
leading [1]

154:17
leads [1]
10:12
learn [10]
97:25; 99:10; 117:16; 120:17,123:1; 132:24,25; 133:5;
134_'5,' 245.'7
learned [6]
25:14; 102:16; 116:13; 133:9,
10; 154:15
learning [2]
115:5; 154:3
leave [37]
18:15; 25:16, 19; 26:7, 13,
24; 33:13; 46:3, 8, 14, 24;
47:5; 48:14, 20, 21; 49:2;
50:1; 110:9; 133:1, 10, 16,
17,-134:3;135:6,7,9,11;
136:15; 157:9,12; 162:1,18,
19,22; 163:1; 201:15; 266:11
leaving [1]
54:13
legal [14)
20:22; 34:2; 45:7, 10,' 47:21;
48:19; 159:6, 14; 190:6;
206:19; 211 :4, 9; 249:9, 11
legal-form [2]
204:2; 247:24
legally [2]
99:23; 218:15
lend [1]
249:13
let's [19]
73:23; 80:13; 83:4; 110:12;
117:23; 141 :13,- 147:10;
180:11; 205:20; 222:8;
225:17; 229:15, 17,' 230:15,'
231 :22; 242:2, 25; 246:20;
250:1
letter [8]
26:25; 27:12; 43:4; 56:21,'
64:13; 145:22,' 182:23;
248:18
letters [2]
248:14; 251:12
level [12]
26:21; 27:4; 34:2; 47:9;
53:11; 74:5; 75:9, 10; 100:4;
101:4,6,10
lewis [4]
158:25; 159:3, 17, 22
liabilities [2)
202:16; 222:11
license [1)
69:12
light [3)
45:1; 221:10; 224:3
liked [2]
41:10; 196:10
likelihood [1)
230:24
likewise [1]
62:18
limitations [2]
185:19,23
limited [1]
173:4
line (6]
131:13; 133:25; 140:1;
186:15; 193:2; 270:23
lines [3]

Look-See(84 )

11:20; 117:13; 143:1
lining [1]
45:18
list [4J
55:1, 23; 130:8, 10
listed [1]
36:2
listened [3]
52:14; 191:21,22
literature [24]
10:24; 88:16; 105:17,19,'
107:23; 115:6; 132:13, 16,
22; 136:23,' 137:7,12;
153:21; 181:17,24,25,'
189:3; 227:18,' 241 :12; 242:8,
9; 251 :24; 253:7, 8
litigate [1]
53:12
litigation (6]
5:2; 14:13; 47:16; 54:22;
60:2,' 191 :23
live [3]
68:23; 70:9; 140:24
loans [2]
206:13,' 207:3
lobbied [1]
33:1
local [2]
195:8,' 219:12
located [1]
13:11
location [8]
35:5, 10; 36:1; 70:13; 139:22;
175:21; 180:5,' 272:6
locations [5]
70:10; 90:5; 105:6; 111 :9;
180:5
locked [1]
109:13
lone [1]
41:11
looks [13]
20:1, 18, 22, 23; 21 :22;
24:13; 50:7; 55:14; 89:4;
165:10; 190:12; 210:25;
268:9
loops [1]
117:12
loose [1]
42:12
loss [25]
20:15; 85:11; 90:22,23,' 91:5;
106:8, 14, 18, 19, 20; [07.'5,
7; 175:21; 176:11,' 179:20,'
189:24; 190:1, 3; 220:13;
242:22; 248:18; 262:6, 18,
21; 268:12
losses [11]
15:19; 16:3; 203:9; 207:8;
208:12; 214:21; 215:6;
216:19; 218:16; 223:20
lost [1]
246:13
lot [42]
12:18; 15:3,'18:14; 21:5,9,
10,' 39:7,- 41 :6; 47:15, 20,'
52:17; 53:10; 70:10, 17, 20;
82:13; 85:22; 95:2; 100:7,110:17; 120:6;"130:6; 143:19;
161:20; 196:14,21; 205:17;
206:6,' 212:15; 216:1; 222:4,

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

24; 225:14; 227:14; 232:5;
235:25; 237:22; 258:8, 21,
23; 268:4
loud [1]
187:25
lower (1]
21:22
lucky [1]
94:21
lunch (9]
58:5; 66:~ 13, 19,' 195:23;
196:1, 5, 6, II
lynn [5]
23:19,' 259:1, 5, 6,' 260:3

-Mmachine [1]
252:11
mail [3]
51:3, 10, 11
mailbox [4]
161:14,21,25; 162:7
main [1]
10:21
maintain [1]
190:7
major [5]
10:18; 17:7; 41:2; 69:11;
127:1
majority [9]
19:9; 85:12, 25; 207:7, 8;
223:20; 224:10; 257:21
maloney [1]
164:7
man [2]
40:8,' 49:12
man-hours [1]
252:11
manage [2]
204:5,' 245:22
management [13]
21:20,' 22:21; 41:6; 70:20;
83:6, 7,' 116:17; II9:18;
127:21; 148:12; 205:11;
208:19; 247:25
manager [11]
42:24; 49:10,11,' 87:13;
114:17,' 164:12,' 170:23;
195:9,17,18,' 215:24
manager-level [1]
212:13
managers [5]
93:8; IOJ :7; 122:20,' 162:10,'
163:12
manifest [1]
36:2
manipulate [1]
22:1
mann [3]
195:8,11,14
manufacture [6]
13:8; 175:3; 229:19, 25;
252:12; 263:8
manufacturer [3]
228:21, 24, 25
manufacturers [1]
76:15
manufacturing [9]
35:3, 10, 22; 76:16; 175:7;
188:13; 230:16; 250:13;

252:13
marathon [2]
6:19; 195:15
march [17]
6:17; 25:15; 129:23; 131:21;
132:25; 133:2,6; 162:19;
163:~'164:16; 184:17, 18;
200:12; 210:17; 261 :16
margin [3]
205:18; 220:17, 18
margins [16]
15:23; 204:II, 12, 16, 22;
205:3,4,5,6,7,10,13,15;
220:16; 223:2, 6
mark [18]
4:25,' 7:10,' 46:20,' 49:6; 67:7,
10,14; 121:11; 122:8; 123:4,'
129:9; 156:24; 164:II, 12;
210:24; 221:11; 234:24;
255:20
marked [14]
55:16; 56:3, 11; 57:6, II, 16;
59:10; 63:3; 65:12,18; 67:18;
68:2; 127:15; 258:12
marl{et [1]
37:16
markets [1]
227:19
master [2]
229:3; 246:8
master's [3]
69:13, 14, 16
material [6]
17:6; 20:2; 21:1,2; 22:20,'
261:18
materiality [2]
17:6,19
materially [3]
12:9; 34:9; 48:7
materials [3]
45:19,'159:4, 13
matter [19]
4:5,13; 24:10; 25:11; 29:25;
30:2; 65:7; 98:19; 99:14;
145:15; 146:10; 153:24;
165:15; 167:4; 232:19;
237:13; 239:9; 252:20;
268:13
matters [5]
5:7,' 64:21; 157:25; 166:18;
194:4
maximum [1]
246:15
mba [1]
69:17
mccollum [75]
4:25; 7:10; 24:22; 28:15;
29:1; 31:5; 33:16; 34:8;
36:14,15; 37:21; 39:19;
41:23,24; 42:5,18; 44:1,10,
16, 17; 45:6, 22, 24; 46:4, 20;
47:2, 5; 49:6, 9; 64:21,' 72:5,
20,23; 86:14,'121:11; 122:8,
23; 123:6,8,22; 124:3,5,12,
13,20; 125:16; 126:22;
127:3,4; 129:14; 148:17,'
149:2,9; 150:17,'151:7;
156:24,25; 157:16,18;
158:6; 159:18,22; 160:1;
161:8,12; 171:14; 176:24;
177:1; 190:23; 199:1; 210:25;

221:11; 234:24; 255:10
mccollum's [6]
41:6; 75:7; 122:16; 123:4;
149:l1,'158:16
mean [109]
8:23, 24; 9:19; 20:11, 12;
66:~' 69:2; 74:21, 25; 75:2;
76:14; 78:1~' 82:II; 84:13;
85:21; 90:21; 91:13; 99:14,
24; 101:1, 3, 10, 13; 102:12,
13; II2:II; II3:10,'II4:6,'
121:10; 123:2, 18; 124:18,
25; 125:19; 127:20,'136:16;
138:1~' 144:16; 145:21;
151:10,14; 155:5; 156:1;
158:2; 165:23; 167:10,' 180:4;
192:II; 202:13; 209:21;
210:8; 212:23; 216:22;
217:16; 218:~' 219:8; 221:22;
222:1; 224:10; 225:10,17,
20; 228:19; 229:8,9; 230:10,
13; 231:4, 19; 232~'1~'
234:18,23; 236:2,13; 239:1;
241:6, 7,9,13,14; 242:20,
21,22; 244:7,12,21,' 246:7,'
249:1,5,' 250:8,' 251:23,24;
252:3; 254:7,' 256:7, 15;
257:13; 258:22; 260:21;
263:20, 25; 264:18; 265:1;
266:5, 17; 269:11
meaning [4J
228:6; 230:21; 240:15; 243:6
means [12]
10:25; 11:8; 80:2,3; 202:24;
241:10; 265:19,20,24;
266:20; 269:6
meant [6]
7:19; 14:16; 100:8; 206:24;
214:20; 252:9
meet [42]
10:17,' 11:3,5,14; 12:15,16;
14:3,16; 15:9, II; 16:15;
23:7,' 24:1; 60:15; 72:19,'
136:1; 195:22; 196:5; 220:1;
231:10,17,18,21,24; 236:5,
18; 237:5,13; 244:16,19,24;
245:2; 254:25; 262:7, 20;
263:17, 19, 22; 264:3, 6, 7
meeting [19]
14:17; 73:1; 125:1; 126:20,
22; 127:3; 130:17; 131:1,2,
10,21,'138:14; 142:12,'
145:16; 158:20; 159:19;
184:10; 214:6,' 230:18
meetings [6]
42:22; 95:19; 97:17,' 129:22,
24; 130:14
meets [3]
37:7,8,18
members [1]
43:16
memo [53]
74:4,' 75:17,' 76:9,12; 85:19,
25,' 86:1,17; 88:4,6,11,12,
18,' 89:21; 91:12; 92:8,9, II,
19; 97:11; 102:12; 104:19;
105:2,4,12,15; 106:3,12;
109:16; 111:11; II 7:3;
142:20; 165:12; 177:2,4;
178:1,11,19,20,25; 179:1,
10,12; 180:11,12; 182:16;

Look-See(85)

191:19; 192:2; 216:13;
217:11, 12; 257:2, 15
memoranda [1]
140:6
memorandum [3]
164:22; 215:11; 216:12
memos (5]
74:5; 85:22; 88:13; 192:3;
216:7
menendez [230]
4:5,19, 21; 6:14, 16; 7:4, 17,
21, 25; 8:5; 10:18, 23; 11 :16;
12:14; 15:12,'16:8,22; 17:3,
7, 22,' 20:10, 13, 16, 21;
21:25,' 22:3,5,8,12,22;
24:10, 18, 22; 25:13,' 26:18,
19,20, 23; 27:1,2,9,19;
28:14,20; 29:12, 25; 31:4,9;
32:6,19; 33:1,10,14,18;
34:6,11,21; 36:7,24; 37:21,
23; 38:22; 39:2, 10; 40:3,5,
9,25; 41:10,23; 42:7,19,20,
25; 43:3,' 44:6,19,25; 45:9,
20,' 46:6, 8,23,24,25; 47:2,
5,8,9, 13, 22; 48:4,10; 49:8;
50:1,23; 53:13; 58:21,' 64:12,
17,' 71 :25; 72:2, 8, 12, 13;
82:22; 83:3,' 84:5; 95:22;
96:4, 18, 25; 97:20; 98:2, 8;
100:7, 9; 108:8, 10, 11, 13;
109:7, 25; 113:20,' 114:15,
16; 115:4, 20; II6:3, 14;
117:6, 18, 25; 118:6, 10, 17;
120:15,24; 121:1; 123:9;
124:21; 128:13,15,17;
129:25; 130:24; 131 :3;
132:25; 133:21; 134:7,18;
135:5, 10, 14, 19, 23; 136:25;
137:10; 142:20; 144:23;
145:17; 146:10, 14, 17, 21;
148:24,' 149:3,13,'150:10,
13,17,18; 151:3,4,8,9,11;
153:1,3, 7,14; 154:3,5,23;
157:8, 12, 16; 158:8,11,21;
159:18,23; 160:4,'162:1,12;
163:12; 164:II, 19; 165:1,5,
8, 15,' 166:1, 4, 16, 20; 167:5;
178:1, 13; 179:9, 15; 181:1,
7; 183:2; 184:24; 185:11;
186:4; 187:6; 194:9,10,13,
19,21; 197:20,23; 200:3;
235:18; 260:14,' 271:2,' 272:3
menendez's [21]
5:7; 23:18; 44:7, 12,' 46:2;
47:11; 62:22; 73:2, 20; 75:II;
118:7,9; 125:23; 150:20;
153:11; 158:13; 162:10,'
167:1, 10; 181:4; 190:20
mental [1]
119:15
mention [5]
167:23; 235:15; 248:9;
249:15; 258:9
mentioned [18]
15:13,' 28:4; 36:25; 48:11;
53:22; 61:8; 76:12; 77:2;
79:14; 81:9; 93:9; 106:9;
169:15; 193:14; 211:14;
212:9; 218:13; 233:24
mentioning [1]
27:23
to

AU'-'JUU\..uu .....

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

method [14]
53:8; 171:17; 202:8,10,25;
203:1, 6, 7; 209:2, 18; .
214:19; 215:4,5
methodology [1]
85:16
metric [2]
205:6,19
mid-march [1]
130:17
mid-twenties [1]
57:20
middle [1]
200:12
migh tHy [1]
33:1
millicent [1]
87:15
million [30]
21 :22; 29:5, 7; 39:6; 98:3, 4;
113:25; 180:15; 201 :15;
207:21; 208:21; 209:3, 17,
19; 210:18,20; 211:11;
213:9,14,16,22,24; 214:18,
19;222:12,14,15,21
mind [10]
6:2; 24:9; 54:23; 75:15;
118:7,10; 150:20; 181:16;
182:6; 267:2
minds [1]
193:7
mine [1]
75:9
minute [6]
30:12; 42:25; 82:6; 217:25;
232:20; 268:22
minutes [5]
66:11, 13; 87:24,' 182:13;
216:8
mis-impression [1]
33:13
misconduct [1]
48:10
mislead [2]
22:1; 192:10
misleading [6]
12:9; 27:8; 28:22; 38:11;
192:18; 193:10
missing [3]
93:15; 104:2; 236:10
mistake [1]
153:13
misunderstanding [1]
241:9
model [2]
205:24; 217:9
modification [1]
138:16
modify [1]
248:13
moment [4]
103:24; 116:7; 180:17; 184:5
moment's [1]
238:1
moments [1]
147:15
monday [1]
213:2
money [13]
17:9; 29:3; 47:15; 207:20;
208:10; 209:22; 210:1, 2, 14,

meth(]Id to

15; 222:18; 226:1; 262:19
monies [1]
31:18
month [3]
162:24; 163:2; 164:18
months [8]
26:22; 33:5; 41 :24,' 42:19;
46:10,14; 195:18; 254:2
morgan [1]
21:19
morning [3]
64:14; 212:20; 213:2
mostly [1]
122:19
motion [1]
59:2
motive [2]
34:8; 44:2
mouth [1]
143:16
mouthful [1]
110:13
move [6]
34:12; 63:5; 96:23; 113:15;
147:10; 261:4
moved [1]
30:7
movement [1]
237:22
moving [2]
227:16; 228:4
mr [707]
4:5, 19, 20, 21, 23, 25; 5:1, 2,
7, 18; 6:5, 7, 16; 7:3, 5, 10,
16, 21, 24; 8:5, 16, 20; 9:1, 3,
5, 17, 22; 10:4, 9, 12, 18, 23;
11:15,22; 12:6,14; 15:12;
16:1, 8, 22; 17:3, 7, 22; 20:9,
13, 14, 16, 20; 21 :24; 22:3, 5,
8,12,22; 23:8,14,17,18,
19,' 24:10, 18, 21, 22; 26:17,
18, 19, 20, 23, 24, 25; 27:2,
9, 14, 19; 28:14, 15, 20; 29:1,
12, 25; 30:9, 10, 12; 31:4,5,
9; 32:6,9,18; 33:1,10,14,
15,18; 34:5,8,10,14,20;
36:7,13,14,15,24,25;
37:20, 21, 23,' 38:21; 39:2,
10, 18; 40:3, 4, 9, 25; 41 :6,
10, 22, 23, 24; 42:5, 7, 18,
19, 20, 25,' 43:3; 44:1, 6, 7,
10,11,16,17,19,25; 45:6,
9, 20, 22, 24; 46:2; 3, 6, 8,
22, 23, 25; 47:2, 5, 7, 8, 9,
11, 13, 22; 48:4, 10; 49:6, 8,
9,21,23; 50:1,3,4,13,16,
20,23; 51:4, 7,11, 14, 18,
24; 52:5, 8, 12, 22; 53:3, 7,
13,21; 54:1,5,8,11; 55:3,5,
7,22; 56:6,12,14,17,18,
19, 20,22, 23, 24, 25; 57:1,
2,8,12,13,17,18,22; 58:3,
11,14,17,20,25; 59:18;
60:11, 14; 61 :2, 7; 62:1, 9,
12, 19, 22; 63:5, 8, 11, 21,
24; 64:7, 10, 11, 17, 21; 65:2,
11, 24; 66:1, 9, 14; 67:4, 6,
13, 23; 68:8, 10, 20; 71 :9, 11,
14, 17, 22, 25; 72:2, 5, 8, 11,
13, 19, 23; 73:2, 20; 75:7, 11,
19, 23,' 76:1, 4, 5; 82:22;

83:3; 84:5; 86:14,18; 87:8;
90:25; 91:8; 93:11; 94:20;
95:19,22, 23, 24; 96:1,3,4,
10,11,14,15,16,17,18,25;
97:1, 12, 20; 98:2, 6, 8, 12,
17,21,' 99:3,4,12, 16, 20;
100:7,9,13,14,15,16;
103:11,15; 104:1,4, 7,10,
12,13,14,20; 106:11; 108:8,
10, 11, 13, 17, 22; 109:1, 7,
25; 110:5; 113:20; 114:15,
16,'115:4,20; 116:3,14;
117:3, 6, 7, 9, 14, 15, 17, 19,
22,25; 118:5,6,9,10,14,
17,18,20,21; 119:4,10;
120:15,24; 121:1,23,24;
122:3,6,16,22; 123:6,8,9,
11,15, 17, 22; 124:3, 5, 12,
13, 14, 19, 20, 22,' 125:3, 10,
15,16,18,21,23,25,'126:8,
9,22; 127:3, 4, 14, 17;
128:13, 15, 17; 129:1, 14, 25;
130:21,24; 131:3,6,15;
132:25; 133:21; 134:6, 17;
135:5, 9, 14, 19, 23,' 136:25;
137:10; 138:4, 8, 10, 11;
140:1,10,13; 141:7,15,19,
22, 24; 142:4, 8, 20; 144:21,
22; 145:17; 146:14, 17, 21;
147:2, 4, 8, 10, 13, 14;
148:17, 19, 21, 23, 24; 149:1,
2, 8, 11, 13; 150:8, 9, 13, 15,
17,18,19; 151:2,3,4, 7,8,
10, 11, 17, 18, 24; 152:4, 5,
8, 12, 15, 16; 153:1, 3, 7, 11,
14; 154:3,5,17,21,25;
155:4, 9, 11, 12, 20, 21, 24;
156:3,11,12,15,16,17,25;
157:8,10,12,13,16,18;
158:6,7,11,13,16,21;
159:18,22,23; 160:1,4,5,
11; 161:8,12,25; 162:1,10,
12; 163:12,15,18,20,'
164:18,21; 165:1,5,8,9,12,
15, 20, 24; 166:1, 4, 16, 20;
167:1, 5, 6, 10, 18, 23;
170:20; 171 :6, 14, 20;
176:24; 177:1; 178:1,9,13,
16; 179:4, 9, 15; 180:10, 17,
19, 24, 25; 181:1, 4, 7, 12;
182:10; 183:2,15,18,23,25;
184:5, 7, 8, 22, 24; 185:3, 7,
10,11,14,16,24; 186:3,4,
11,14,16,17,23; 187:1,4,
5, 6, 17, 19; 188:7, 20, 23;
190:20,22; 191:21; 193:19,
21, 25; 194:7, 8, 10, 20, 21;
197:19, 22, 23; 198:25;
200:3; 222:20; 226:16; 234:8;
235:18; 241 :18; 249:22, 25;
253:18; 254:20, 23; 255:24;
256:14; 257:5, 9, 20; 258:13;
259:10, 22; 260:9, 14, 25;
261:1, 3, 8, 10; 265:23;
266:2, 7, 10, 13, 23; 267:6;
268:19; 270:16, 21, 23;
271:1,2,8,14,17
ms [17]
46:24; 113:20; 114:20, 21;
156:22; 157:3; 158:25; 159:3,
17, 22,' 165:25,' 166:4, 5, 12,

Look-See(86)

17; 178:9,12
muchmore [4]
7:5; 16:1; 27:14
mud [1]
102:4
multi-element [1]
37:1
multiple [10]
52:15, 18; 61 :22; 79:21, 25;
80:3, 4; 109:19; 117:13;
228:3
multiple-element [4]
32:11,' 53:15; 231 :12; 267:17
my-way-or-the-highway [1]
144:23
myself [1]
213:4

-Nname [12]
7:13,' 43:14; 44:12, 13; 68:21;
72:17; 195:24; 199:9; 200:8;
212:9; 256:4, 15
named [3]
26:16,' 258:25; 259:10
names [2]
87:10; 211:14
national [7]
196:19; 197:6; 219:2, 10;
256:3, 5; 258:12
nationals [1]
219:12
nature [5]
7:2; 37:16; 177:9, 13; 267:25
needs [5]
35:7, 13; 60:4; 95:15; 239:19
negative [1]
206:6
neglected [1]
42:13
net [6]
38:4, 5; 204:8; 220:12, 15
network [1]
74:4
nice [2]
76:11; 270:13
nick [1]
122:18
nickname [1]
40:8
night [1]
191:5
nine [1]
146:5
nineties [1]
227:14
nobody [7]
19:7, 8; 24:2; 25:11; 28:15;
171 :16; 191:8
normal [3]
59:19,20
normally [4]
5:22; 59:21; 60:24; 63:24
north [2]
139:21, 23
note [2]
58:17; 145:9
notebook [2]
122:4; 184:9
noted [2]

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

21 :4; 59:1
notes [S]
140:25; 160:18; 234:17, 19,
22
.
notice [IS]
43:15, 18; 44:3, 4, 6; 64:13;
89:17,'154:5,'161:10,13,'
185:11; 186:19; 219:25;
238:2
noticed [2]
143:18,' 210:19
notices [1]
4:18
notified [4]
25:1, 2; 46:15
notify [1]
55:7
notion [2]
206:16; 232:9
november [2]
24:18; 120:16
nudge [1]
223:14
number [3S]
4:9; 5:9; 8:5; 12:22, 25;
13:20; 16:8, 10, 23; 17:19,
22; 18:9, 10; 23:6; 98:3;
99:11; 101 :20, 21; 172:18,
22,' 180:16,' 203:16,' 208:22;
222:22, 24; 224:10; 243:2, 5;
245:6; 246:20; 250:1; 251:15
numbers [11]
17:18; 18:3; 55:15; 56:13;
74:24; 98:1; 101 :19; 136:22;
172:24, 25; 173:3
numerically [1]
55:21

-0oak [13]
70:8,11,17; 75:1, 4,' 82:24,
25,' 83:12; 122:20; 127:11;
139:6, 20, 21
oalj [1]
4:9
object [6]
43:11; 98:6,18; 141:20;
165:20; 265:23
objected [2]
55:6; 185:20
objection [30]
59:4; 63:9; 65:8; 96:1,' 99:12,'
117:7, 19,' 119:4; 123:11;
124:22,'131:6,' 140:1,'141:15;
147:2, 8; 148:19,'150:15,'
151:10,15,' 154:17, 25,'
155:24,' 184:22; 185:14, 15,'
187:7,' 249:22; 260:25; 261 :2,'
265:22
objections [7]
5:17, 19, 20; 6:1; 58:12, 14;
65:10
objective [2]
230:14,20
obligation [6]
45:7,' 190:6,' 239:2, 8,' 246:14,
16
obligations [10]
18:21, 23; 188:5; 238:21;
239:3,' 243:14; 245:22; 246:7,

10; 251:16
observation [lJ
154:14
observations [4]
117:20,23; 153:6,14
observe [2]
7')7.17
7R
• .l..L, .LV

..L~/

observed [2]
127:23; 154:23
obtained [1]
69:12
obvious [1]
258:17
obviously [S]
6:8; 10:7; 50:22; 194:23;
199:18; 215:25; 221 :9; 267:4
occasion [1]
136~'2

occur [3]
21:11; 106:22; 108:8
occurred [14]
10:20; 32:5; 79:7, 9; 102:21,'
131:21; 137:18,' 152:22,24;
159:22; 174:12; 227:7, 8;
240:5
occurring [3]
21 :16; 73:5; 211 :13
occurs [2]
173:20,' 267:7
october [9]
26:7,'103:13,14; 104:8;
105:5; 117:3; 120:2; 130:13,
22
off-balance-sheet [1]
16:4
offer [14]
5:10, 15; 40:11; 54:25; 55:20;
56:21; 57:25; 61 :15; 62:18,
20; 64:16; 65:23; 100:7
offered [S]
5:13; 59:5; 62:17; 63:10;
65:13; 67:8, 20,' 98:18
offering [S]
55:17; 58:8; 63:25; 64:4;
99:13
office [23]
4:15; 45:3, 4; 75:2, 7, 11;
127:25; 162:10,17; 163:2,4,'
190:24; 191:3, 18; 193:1;
196:19; 197:6; 221:12; 256:3,
5; 258:12; 272:9
officer [IS]
5:1; 6:21, 24, 25,' 7:7, 10,'
26:15; 27:13, 15; 28:8, 12,
13; 47:4; 198:20,22,24,'
199:16,18
offices [3]
75:5; 139:5; 162:20
officials [1]
50:10
offshore [1]
35:1
oh [S]
50:18; 62:9; 122:2; 212:7;
226:15; 243:20; 256:7,' 261:3
oil [13]
6:19; 76:20, 21; 176:19;
189:22,23; 195:15; 219:2,
10; 237:18, 19,' 256:9
oilfield [13]
13:5,' 23:5, 10,' 30:15,' 225:8;

228:14,19; 231:1; 237:13;
254:11; 256:10; 258:22
okay [14S]
5:20; 8:18,22; 10:2,5,11;
11:18; 13:24; 15:11; 29:3,8,
19, 23; 30:9; 49:15, 22;
50:18,22,' 51:17,19,23;
53:9; 54:20; 55:9, 22; 56:5,
17, 22, 24; 57:1, 23; 58:7, 12,
16, 24; 61:2, 9; 62:16; 63:20;
64:24; 65:4, 25; 67:14; 76:11;
78:21; 96:8; 99:1; 100:13;
104:11, 12,' 118:18; 120:23;
121:8; 122:2,14; 125:21;
128:25; 132:6; 133:19;
137:21; 138:7; 140:12; 141:6,
12; 142:7; 149:7, 25; 150:6;
152:14; 154:11; 156:5;
174:21; 183:17,' 185:9; 186:2;
196:16; 198:2; 199:11;
203:22; 204:1, 19; 212:17,
22; 214:3, 15; 216:21, 22;
217:24; 218:12,20; 219:10,
16; 220:4, II, 19; 222:8,15;
223:4; 224:21; 225:3,' 226:3,'
227:20; 228:7, 11, 14; 229:4;
230:4, 5; 231 :6, 16, 21;
232:4; 233:10; 234:2; 235:13;
237:2; 238:13, 19; 240:11;
244:15, 16, 20; 245:5;
246:11, 20; 250:10, 12, 25;
252:5; 254:17; 257:8; 258:5;
259:4, 18; 260:7,' 261 :6, 9;
263:1; 264:23; 269:16; 270:1,
9; 271:8,14,18
oklahoma [2]
220:1; 221:4
old [S]
31:17; 203:23; 216:20; 218:8;
235:4
older [1]
31:18
oldest [1]
30:14
onboard [4]
72:13; 108:10,11,13
one's [2]
140:7,' 236:2
ones [3]
55:6, 20; 60:16
ongoing [2]
239:2, 3
open [2]
145:1; 244:9
open-minded [1]
147:1
opened [3]
24:19,' 43:14; 44:7
opening [IS]
5:23,' 6:4, 6; 12:1; 30:11,'
52:14, 16; 53:10; 62:8; 67:5;
73:3,' 78:22,' 81 :21,' 105:9,'
222:20
operate [1]
41:10
operates [1]
250:25
operating [3]
38:17; 204:6, 9
operation [2]
30:16,' 38:20

Look-See(87)

operational [1]
21:5
operations [9]
30:17; 41:3; 87:19; 122:18;
170:24, 25; 171:2; 218:12;
222:7
opine [1]
23:15
opined [2]
23:22; 33:10
opinion [11]
93:22,' 113:3,'123:8; 146:16,
19; 153:12; 168:15; 193:8;
258:3; 266:1
opinions [2]
41 :13; 258:1
opponent [1]
96:12
opportunity [4]
111:3,' 127:10; 244:10;
263:15
opposed [2]
15:2,' 197:17
opposite [1]
179:9
options [1]
210:11
order [2SJ
5:22; 10:14; 16:15, 16; 21 :25,'
29:12, 15; 30:19; 35:4,' 38:19,'
42:13,' 55:15; 58:22,' 67:4, 11;
90:8,'156:11,'181:22; 194:7,'
230:18,' 236:4, 6,' 237:4,'
246:25,' 248:6, 11,' 263:2, 5
ordered [2]
31 :14; 251 :20
orders [1]
248:14
organization [6]
29:13; 41:18; 43:11; 128:19;
219:23; 261 :24
original [7]
81 :22; 97:22,' 144:12; 202:2;
206:17, 22,' 272:11
originally [14]
56:15,' 74:8; 91:20,23; 129:9;
130:9; 133:24; 143:9; 144:1,
2; 224:12,' 227:12,' 256:2;
269:24
originated [2]
83:1; 102:12
ought [S]
98:19; 160:7; 191 :15, 20,'
266:17
ours [1]
24:14
outed [1]
186:19
outing [1]
185:12
outline [1]
253:13
outlined [1]
17:13
outset [1]
6:7
outside [10]
34:3; 82:25; 83:12; 121 :2,'
134:24; 160:9; 182:16;
185:19; 242:14; 248:23
outsiders [1]

From notes to outsiders

 BSA

"",i-I"" ...,,,,

201:2
overall [2]
221 :9; 223:23
overly [1]
213:21
overruled [1]
154:18
oversaw [1]
171:2
oversee [1]
47:11
oversight [1]
32:24
oversimplified [1]
268:21
oversimplifies [1]
236:1
owned [12]
175:15; 201:9; 202:6, 8, 10;
206:25; 207:18,' 210:10;
214:24, 25; 216:17,' 218:1
owners [2]
208:1; 210:21
ownership [17]
14:7, 8; 20:12; 85:3; 107:21;
177:22; 201:10; 202:5;
205:25; 206:10, 17, 20;
243:2; 245:6, 8,' 248:12;
268:8
owning [1]
201:8
owns [3]
174:19; 175:16; 207:9

p.m. [7]
66:19, 20,' 67:2,' 104:8,'
122:12,13,' 271:21
packer [1]
112:21
packers [2]
102:3; 111 :13
page [11]
60:4,11,' 62:11,' 88:18,'104:9;
142:25,' 143:24,' 144:8,' 145:9;
146:5
pages [16]
59:22; 60:22, 24, 25; 61 :5,
11,12,15,16,17,21,22;
62:4, 14
paid [15]
31 :11; 35:18; 36:4; 46:3, 8,
12; 47:20,'163:1; 168:18;
175:5; 209:10,' 210:9,' 227:1;
243:7
pains [1]
20:3
paint [1]
252:14
paper [10]
36:20, 23; 37:23, 25; 104:19;
120:2, 4; 130:22
papers [1]
111:14
paquette [29]
68:9, 10, 13, 19, 22; 100:16;
104:14; 138:11; 143:2;
144:22; 147:14; 156:14, 16;
163 :20; 167:23; 180:10, 19,
23; 187:3, 5; 200:14,' 226:16;

Menendez v. HaHitmrton Inc. 2007-STA-00005 09-24-2007

234:8; 241 :18; 253:18;
254:21; 257:21; 267:6;
268:20
paragraph [6]
88:19; 89:4, 23; 143:1;
149:19; 187:20
parameters [3]
52:25; 54:21; 113:11
park [13]
70:8, 11, 17; 75:1, 4; 82:24,
25; 83:12; 122:20; 127:11,'
139:6, 20, 21
part [47]
5:15; 9.;16; 16:20,' 22:25;
23:17; 34:8, 22; 37:2, 3, 18;
46:11; 48:3; 59:7; 60:2, 4, 8,'
61:12,18,' 62:4,6,' 67:20;
75:25; 76:1; 77:23,' 80:10;
81:24; 109:21; 117:24; 122:7,
22,' 141 :2,' 167:21; 168:5, 7,
13; 179:18; 182:12,15,17;
183:5,'192:14,' 202:19;
208:18; 235:14; 244:9; 246:4;
265:24
participate [2]
93:2; 97:17
participating [1]
167:11
participation [2]
52:1; 53:22
parties [3]
59:22; 135:2; 223:19
partnerships [1]
38:17
parts [7]
31:10, 17,' 34:22; 62:6;
169:20; 238:12; 253:6
party [8]
96:12; 128:3,' 181:24,' 223:19,
21; 224:14,' 240:16; 271:10
pass [4]
156:3,' 169:25,' 180:19;
236:16
pass-through [1]
232:21
passage [3]
197:8; 248:8; 249:15
passed [11]
36:2,' 91 :5; 107:5, 7,' 236:7,
17; 243:3; 247:7,' 248:5;
254:10; 262:7
passes [2]
249:10; 251:1
passing [2]
20:11,' 245:8
patrick [1]
4:11
paver [1]
87:12
pay [6]
48:12, 13; 106:14; 175:12;
208:10; 209:14
paycheck [1]
209:16
paying [1]
208:2
payment [2]
211 :11, 12
pcarb [1]
258:21
pcoab [1]

50:8
peers [3]
50:10; 205:10, 12
people [57]
20:8, 17; 22:4; 28:14,' 29:6, 8,
10, 21; 33:16; 36:12; 40:6,
10,' 41.'2, 7, 25,' 42:4,' 49.'10,'
55:10; 63:15; 70:17, 20,' 75:2,'
83:1,' 84:9; 86:12; 92:15,'
95:4; 100:20; 101:12, 13,'
110:22,' 116:25,' 118:2;
122:14; 127:11,21; 128:4,'
154:12, 15,' 164:6; 166:15;
176:11; 184:13,25; 188:16;
197:15; 208:16,' 219:7; 232:8,'
243:21, 22,' 244:4, 8, 12,'
257:24
people's [1]
145:2
percent [29]
163:4,' 201:10; 202:6, 7, 9,
11; 203:2, 7; 205:9; 206:20;
207:10, 18; 208:8; 210:10;
214:24, 25,' 216:17, 18, 19,'
217:19,' 218:2,9,21; 219:5;
220:18; 223:22; 224:11;
247:18
percentage [6]
15:24; 98:14; 101:22; 112:11,
13; 149:22
perforating [6]
176:8, 12; 177:8, 22, 25;
180:12
perform [8]
19:23; 73:11; 79:19,' 102:6;
103:7, 8, 12,' 170:2
performance [12]
63:13; 79:6, 15; 204:6, 21;
222:16; 227:8,' 239:2, 3;
243:13; 249:16; 251 :16
performed [3]
113:25,' 263:6, 14
performing [2]
80:7; 11 0:16
period [8]
31 :8; 149:12,' 162:16; 185:20,'
192:1; 203:10,' 205:1, 16
periodic [1]
135:24
permission [1]
264:9
person [21]
23:14; 36:22,' 37:24,' 43:24;
47:11, 23, 25; 48:24; 74:10,
12; 83:23; 100:4; 119:13;
123:19; 131:9; 153:2,'155:8,
16,19; 232:14
personal [4]
98:25,' 102:17; 163:1; 165:21
personally [3]
109:11; 178:12, 16
personnel [2]
130:4; 171:3
perspective [2]
30:14; 216:14
perspectives [1]
41:8
persuasive [2]
14:21; 227:6
pertain [1]
201:18

pertinent [1]
197:12
peruse [1]
147:15
petitioner [2]
4:5; 5:14
phone [5]
25:8; 146:3,' 195:22,' 211 :4, 8
phrase [1]
18:5
physical [23]
11:1,11; 12:16,' 14:14; 15:4;
20:14,' 23:24; 52:20,' 89:18;
90:3, 5, 6, 14, 24; 91 :7,'
188:6,9,' 241:3,10,15;
242:21; 263:4; 264:7
physically [7]
55:1,' 57:25; 79:10; 89:15,'
95:14,' 251 :25; 263:16
pick [3]
175:6; 211 :8; 262:15 ..
picked [2]
211 :3; 271:9
picking [2]
214:20; 268:12
picture [1]
18:4
piece [3]
175:3; 230:4; 242:8
pieces [1]
109:24
pitch [1]
208:19
pithy [1]
6:4
place [8]
78:8,20; 92:22; 171:15,'
239:13; 242:24,' 247:13;
266:24
placed [1)
43:15
places [1]
63:13
plaintiff's [1]
47:17
plan [1]
255:16
planning [2]
126:4; 130:3
play [3]
22:9; 51 :6,' 111:10
player [2]
22:9; 30:1
please [12)
4:19,' 68:7, 16,' 90:11; 104:3,'
156:11,' 165:1,' 180:21;
187:21, 25,' 194:7, 16
plus [1]
81:25
pocket [1)
42:20
point [67]
7:2; 9:12,24; 12:1; 14:18;
18:2; 24:21; 27:17; 44:21;
50:22; 60:16; 72:4; 77:16;
88:4, 20; 92:18; 95:9; 97:1;
102:8,22; 106:10; 112:25;
113:10; 120:16,25; 124:9,
19,25; 127:3; 135:14,18,20;
136:7; 137:14; 144:21; 146:8;
151:21,22; 156:23; 170:7;

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

171 :17, 22; 179:2; 189:18;
192:6; 218:5; 219:17; 225:20,
21; 229:9; 231:20, 25;
234:25; 236:13; 242:21;
246:6; 249:5; 252:8; 253:14;
257:14; 267:19; 268:6, 9, 16,
20; 269:21
point-blank [1]
25:12
pointed [5]
136:6; 192:15; 219:4; 247:21;
262:17
pointing [1]
12:14
points [4]
10:13,15; 111:1; 169:2
policies [6]
94:24; 95:4, 7; 109:17;
147:24; 191:17
policy [38]
77:21; 78:2,8,19; 88:8;
92:23,24; 93:15,19,21,25;
94:4,6,16,17,18,22,25;
95:1,10,12; 96:21; 97:5,6;
115:9; 134:1; 148:6; 153:22,
25; 154:1; 158:14,23; 159:6,
15; 160:7; 171 :24; 193:4
political [1]
29:16
poor [1]
7:18
portion [1]
17:15
portions [2)
56:16; 62:15
position [54]
14:12; 26:17, 18, 19; 31:10;
34:15; 46:16; 47:9; 58:20;
77:6, 8; 78:3; 86:7,8; 110:4;
115:1,25; 116:16,18; 120:7,
8; 130:23; 131:14; 133:25,'
134:16; 138:21; 144:3; 155:7,
16; 181 :2, 4; 182:19, 21, 22;
183:9, 21, 22; 193:2; 195:5,
8,9; 196:7, 8, 11,17,18;
197:23; 198:4, 17; 212:4;
241:17; 264:13; 269:11
positions [2]
49:11; 256:16
possession [16]
11:11; 14:1; 89:18; 90:3,5, 7,
14,24; 91:7; 100:24; 143:20;
188:6, 9; 232:22,' 241:10;
246:4
post [1]
238:19
post-delivery [2]
238:20
potential [3]
5:9; 55:2; 97:23
powerpoint [6]
9:10,11; 10:10,' 67:4,21;
243:1
practical [3]
39:14; 40:16; 64:23
practice [26]
33:11; 36:7,21; 59:19,21;
60:9; 171:21; 172:1, 4, 6, 9;
187:7; 195:5,10,17; 196:19;
206:24; 235:7,8,11,12,13;
250:10,20; 255:12

practices [15]
28:10; 31:21; 32:2,3; 33:8,
21; 40:24; 43:12; 49:8;
11 0:15; 158:14; 169:9;
192:16; 253:10; 265:18
pre-clearance [4]
264:12, 15, 23; 265:7
pre-clearing [1]
264:21
pre-draft [1]
257:3
pre-fin-46 [1]
203:24
pre-trial [1]
58:18
preclude [1]
168:12
predecessor [1]
74:10
predecessors [1]
114:11
predict [1]
237:24
preferably [1]
246:21
preferred [8]
201 :11; 206:13; 207:3, 22;
214:17, 25; 215:2, 6
prepare [3]
92:8, 9, 11
preparing [2]
82:19; 129:18
presence [1]
5:4
present [4]
83:7; 95:20; 124:2,3
presentation [6]
10:10; 45:5; 67:22; 208:19;
243:1; 247:25
presenter [1]
159:13
presenters [3]
45:18, 19; 159:4
presenting [1]
54:22
preserve [2]
43:22; 123:18
president [2]
7:5; 212:7
press [4]
100:12; 141:13; 196:14,15
presumably [1]
243:7
pretty [14]
7:18; 25:9, 10, 24; 39:4;
49:16; 58:2; 112:9; 113:13;
155:2; 203:23; 207:24; 233:3;
236:2
prevent [3J
7:12; 73:5; 199:4
preventative [1]
73:22
preventing [3]
7:16, 18; 221 :22
previous [5]
63:13; 74:1; 121:21; 167:22;
234:6
previously [7]
5:13; 45:1; 55:16; 59:10;
65:18; 68:1; 87:21
price [1]

227:8
prideco [9]
24:9, 12; 261:11, 12, 17;
262:3, 5, 13, 14
prideco's [lJ
262:11
primariiy [4]
13:5; 70:14; 100:18; 162:20
primary [2]
9:9; 197:3
principles [5]
11:21; 22:19; 26:2; 54:19;
189:4
print [1]
140:11
prior [41]
14:22; 18:5; 25:18; 39:12;
41 :17; 69:4; 71 :18; 77:10;
78:4; 84:1; 91:11,25; 92:2;
93:25; 94:2; 105:12; 106:11;
108:9,11,13; 111:7; 145:17;
149:12; 154:3,9,11; 171:23;
173:17; 178:8; 179:7; 184:15;
188:5; 195:19; 215:3; 216:2;
233:20; 247:3,10,14
priorities [1]
39:20
priority [1]
39:19
pro [1]
64:12
proactive [1]
169:9
problem [32]
7:15; 8:4; 14:15; 17:4,23;
19:9; 29:17,18; 38:14; 39:3;
106:4; 161 :5; 185:25; 186:8;
214:10,23; 215:4; 216:9;
218:21; 225:6; 229:1; 239:5,
10; 247:6; 248:3,20; 250:11,
16; 256:19,25; 270:3
problematic [1]
.. 182:8
problems [13]
18:9; 33:14,15,17; 39:24;
40:1, 12; 42:14; 53:15; 106:2;
221:22; 227:15; 261:19
proceeding [3]
33:20; 34:6; 88:4
proceedings [1]
272:8
process [21]
23:3; 29:20; 41 :25; 42:2, 3;
85:22; 92:13; 95:16; 97:1;
101 :6; 107:22; 108:3, 19;
147:21; 148:8,16; 159:11,
12; 236:11; 252:13
produce [1]
37:2
produced [2]
36:20; 37:23
product [61]
13:1,6,7,8,11,14; 15:2,3;
18:15, 21, 25; 19:14; 21 :14;
23:24; 35:5, 20, 22; 37:4, 6,
9,12; 78:14; 79:9,16,19,20,
24; 80:6,9; 102:10; 110:18;
111:12, 15; 168:5, 13, 19;
170:8,12,14; 172:2,18;
173:1; 177:9; 178:3,5;
188:15; 189:22; 228:16,21;

Look-See(89)

229:6, 10,' 230:11; 232:10;
235:20; 236:9; 237:18; 238:8;
242:3,' 249:20; 253:11;
262:16
production [2]
76:21
products [15]
17:10,11; 31:10; 37:16;
52:20; 101:19,25; 109:20;
110:20; 170:11,18,' 219:1;
225:13; 252:2; 269:5
professional [3]
44:22; 49:9; 69:18
professionals [1]
32:18
professor [2]
23:20; 258:20
profile [1]
198:4
profit [2]
204:17; 220:13
profitable [1]
15:24
profits [2]
203:9; 216:19
progress [2]
13:17; 238:4
progressed [1]
195:6
prohibited [1]
184:24
project (6]
93:4, 6; 164:23; 201 :23;
205:1; 268:7
projects [3]
135:15; 165:14; 200:19
promoted [6]
26:24; 27:1; 46:25; 47:7;
157:3; 195:18
promotion [1]
26:25
promptly [1]
35:8
promulgated [lJ
94:23
proper [4]
37:6; 215:11; 253:11; 269:8
properly [3]
4:14; 36:5; 200:8
property [1]
31:15
protected [2]
51 :25; 63:18
protection [1)
4:8
prototypical [1]
23:10
prove [1]
54:14
proves [1]
183:5
provide [13J
10:9; 52:19; 76:17; 96:21;
129:11, 12; 165:2; 219:1,9;
228:20,' 246:17; 263 :15
provided [9]
5:8; 55:1; 85:6; 116:22;
133:24,' 198:5; 228:10;
257:17
provider [1]
250:13

From poillt-blanl{ to provider

 BSA
Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007
Look-See(90)
provides [2]
124:23; 141 :17, 20, 21;
227:2; 251 :3; 262:25; 268:25
19; 131:5, 13,14,24; 133:9;
100:1; 177:19
148:22,24; 154:22; 173:14;
realistic [1]
148:8; 149:18, 21; 158:12,
providing [4]
185:3, 7; 186:18; 192:25,'
218:5
22,' 159:24; 160:7,' 167:7;
86:1; 165:11; 219:14; 262:16
208:7; 210:25; 232:20; 234:8;
reality [2]
168:12,'171:5,21; 176:1;
provision [2]
236:8, 21,' 244:3; 257:10;
16:14; 29:16
178:5; 187:8,' 191:16; 192:16;
51 :22,'249:17
261 :5, 6,' 268:25,' 269:15
realizable [2]
226:14, 19, 20,' 227:15, 17,'
provisions (1]
question-and-answer [1]
226:23, 25
233:20; 234:7; 236:1; 239:5,
4:8
81 :24
realize [4]
10; 241 :19; 243:23; 247:23;
proximate [1]
questioning [4]
17:21; 216:8; 218:21; 270:9
253:11; 254:9; 261 :25;
35:6
100:20, 22, 23; 140:2
realized [7]
263:14; 264:3, 11; 267:12
public [12]
questions [36]
16:9,' 17:25; 173:24; 174:1;
recognize [51J
12:9; 22:1,' 27:9; 32:24;
5:24; 6:8, 12; 21 :20; 49:15;
247:6; 248:3; 262:3
10:14,' 11 :4, 5; 14:6; 18:24;
148:18; 195:13,' 205:7;
54:20; 73:11; 81 :25; 82:18;
reason [23]
19:14, 20, 25,' 20:5; 24:7;
227:22; 264:1, 4, 15, 20
83:2,20; 94:16,19; 103:25;
18:11,19; 21:12; 22:15;
29:15,' 31 :16; 36:18; 37:6, 13,'
pUblicity [1]
106:16,' 129:13; 140:5,' 141 :2,
25:25,' 26:24; 28:5; 33:6;
77:16; 79:5,' 80:16,'103:21;,
206:6
23; 146:10,'147:16,' 160:18;
47:12; 55:14,' 74:2; 94:7,11;
111:7,'113:8,11; 132:11,15,'
publicly [4]
176:4; 180:25; 181 :12,'
119:23; 125:7,' 172:13,' 197:3;
138:11; 168:17,' 169:1, 5, 10,
41:17,' 81:16,19,'189:8
182:10,' 188:20, 24,' 193:17,
217:2,' 226:4; 228:22; 229:10;
12; 171:11,' 203:9; 228:9;
published [3]
18; 205.;18,' 245:13,' 254:25;
251 :3; 256:20
230:8,' 232:21; 233:7,' 236:5,
178:11;192:5,18
267:1,' 270:20
reasonable [13]
9,19,23; 237:4; 238:18,19,'
pull [3]
quickly [3]
27:10; 32:17; 33:11; 47:23,
242:15; 244:17,' 250:11,17,
60:22; 88:15; 266:4
29:22; 109:15; 268:25
25; 48:3; 51 :20; 155:8, 16,
22;' 262:7,' 263:15; 264:6
pulled [8]
quit [2]
19; 160:10; 193:7; 222:22
recognized [12]
121:16; 131:11; 132:7,'133:9,
47:13; 155:10
reasonable-person [1]
18:17, 18,' 21 :8; 36:6; 77:22;
21, 23; 253:22, 24
quiver [1]
185:17
102:15, 18; 169:7; 172:1,'
pulling [1]
152:1
reasonably [8]
173:16; 176:25; 188:4
222:12
quote [1]
14:8; 36:3, 5; 53:13; 174:6;
recognizes [1]
pump [1]
100:2
175:4; 227:1, 9
37:17
30:20
quotes [1]
reasoned [1]
recognizing [12]
purchase [8]
10:13
171:10
10:19; 78:4; 79:24; 81:3;
35:3; 90:2; 102:6,' 236:6;
reasons [2J
111:1,6; 169:3; 173:10,15,
243:6; 246:21, 25; 248:13
60:20; 90:18
21; 209:19; 262:10
-Rpurchaser [1]
reassigned [lJ
recommendation [4]
raise [4]
190:2
157:10
46:5; 210:22; 212:22; 247:25
68:10; 94:16, 19; 194:11
purported [2]
rec [3)
recommendations [2]
raised [9]
89:11,' 152:23
131:11; 133:24, 25
4:13,' 86:2
32:6; 34:1, 21; 36:12; 37:21,'
purpose [15]
recall [29J
recommended [1]
77:19; 82:16; 92:22; 221:5
16:12,' 33:19,' 67:21; 144:11,'
72:7,' 84:10; 91:24,' 97:16,24;
79:11
raising [3]
171 :9; 179:12; 201 :2,' 206:5,'
101 :20; 102:24; 111 :25,'
recommending [lJ
22:14; 34:6; 214:6
218:10; 229:15; 239:15, 17,'
112:13; 114:6; 116:2,' 126:21;
265:20
ramirez [1]
243:10; 250:3; 252:17
142:16; 143:3; 156:23;
reconcile [3]
5:3
157:19; 159:7,' 168:1,' 169:16;
purposes [4]
41 :21; 42:1,' 182:22
ran [4]
37:5,' 49:25; 185:21,' 201 :14
170:14; 172:21, 25,' 173:2;
reconvene [1]
16:20,' 77:7; 213:12; 258:3
177:24,' 178:22; 179:24;
pursuant [2]
271:21
range [1]
4:7,' 189:10
180:12, 16; 182:2
record [55]
101 :18
push-back [1]
recalling [1]
4:3,18,' 5:11, 15,' 8:22,' 9.'i6,·
ranger [2]
269:1
193:23
10:6, 8,' 12:4; 15:19; 49:17;
41:11,' 93:11
pushing [6]
receive [5]
50:21; 54:15; 55:10, 17,'
rationale [1]
22:14, 15, 16,' 24:16,' 130:11;
115:17,19,' 150:9; 207:6;
56:20; 58:9, 17,' 59:5, 8, 25,'
241 :21
223:22
60:5, 9,' 61 :13, 18; 62:5, 6, 7;
144:5
ratios [1]
64:11; 65:13, 16; 66:16,'
putting [5]
received [12J
204:21
31 :3, 18; 43:6, 18,' 59:13,'
67:10, 20, 21; 68:21,' 86:25,'
7:18; 16:3,' 54:6,' 60:21,' 102:5
reacting [1]
65:21; 68:4; 115:21,' 122:8;
87:6,' 88:23; 121 :24; 12.2:12;
186:4
182:23,'195:21,' 232:17
125:13; 127:14,' 140:17;
reaction [1]
receiving [1]
142:5; 146:6; 165:23,' 183:15;
qualified [1]
25:5
194:4; 247:18,' 266:9, 21;
216:18
read [21]
271:13
recent [5]
270:13,' 271 :19; 272:10
59:25; 60:24,' 61 :5, 17, 24;
quantities [3]
recorder [1]
8:9; 31 :20, 23; 32:2; 201 :18
88:22, 23; 94:2, 3, 6, 18;
33:2,3
42:20
recess [4]
103:20; 105:7; 145:13,' 146:6;
quarter [5]
recording [3]
156:7,9; 194:3,5
168:20; 181 :25; 187:25;
17:20; 21 :6; 66:17; 205:17,'
recessed [1]
42:24; 244:13; 272:12
192:18; 235:13
213:10
66:18
recordings [1]
reading [11]
quarterly [2]
recognition [82]
42:21
9:20; 40:21; 55:11; 60:22;
72:21; 73:1
records [3]
8:7; 9:9, 13; 15:10; 17:10;
94:16; 105:14; 143:8; 153:25;
question [50]
18:20, 23; 20:9; 25:23; 26:1,
64:8, 15; 75:24
154:1; 234:17,' 270:13
11:19; 21:18; 77:19; 88:7,24;
2; 32:3; 40:20; 45:14; 46:7,'
recourse [1]
reads [2]
92:22; 94:7, 11, 12; 95:10;
52:23, 24; 75:18; 77:21; 79:4;
209:25
96:7, 8, 9; 99:2; 101 :3;
89:10; 153:25
recross· [2 J
80:25; 81 :22; 82:12; 88:8;
real [12]
102:13; 106:18, 21; 107:20,'
93:16; 105:5; 109:24; 110:17;
186:25; 187:2
108:2; 110:2; 112:6; 116:6;
31:7; 39:3; 149:15; 194:2;
115:5, 8, 10, 25; 116:21;
recruiter [3]
202:21,' 216:9, 22; 217:1;
117:12; 119:25; 120:24;
129:19; 130:1, 9, 10, 11, 15,
195:21, 22, 25

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

recruiters [1]
196:3
red [3]
141 :8, 9; 164:22
redirect [3]
180:21, 22; 188:21
reduce [2]
40:15; 204:17
refer (3]
43:1; 76:16; 188:3
reference [3]
75:8, 11; 263:21
references [1]
60:11
referred [3]
41 :23; 121 :20; 142:1
referring [14]
9:21; 32:10; 76:9; 87:6; 90:7;
121:9,10; 122:10; 143:25;
145:16; 146:9, 13; 172:21;
187:21
refers [4]
78:15; 90:2; 93:1; 236:15
reflect [2]
18:13; 218:11
reflected [4]
20:2; 26:25; 222:7; 234:19
reflecting [3]
204:8; 220:14
reflects [1]
141:3
refresh [1]
270:14
refuse [1]
135:14
refused [1]
64:12
reg [1]
53:24
regard [11]
39:2, 9; 45:14; 80:22; 108:17;
118:3; 168:3; 170:10, 17, 20;
177:25
regarded [1]
30:15
regarding [13]
46:12; 53:20; 95:1; 107:19;
108:18; 115:9; 119:4; 149:4;
164:22; 171 :21; 178:9; 184:9;
226:13
regardless [5]
18:21; 27:1; 135:8; 168:22;
192:14
regards [3]
146:11; 150:13; 251 :21
regions [1]
115:9
regulated [lJ
171:2
regulation [2]
51:22; 54:4
regulations [6]
52:10; 53:19; 189:1,15,19
reinstated [1]
46:16
relate [1]
143:19
related [11]
21:3; 44:8; 52:22; 53:19;
80:24; 103:20; 181 :13;
184:10; 226:18; 246:10

relates [2]
53:3; 88:17
relating [7]
51 :23; 52:10, 11; 81 :1; 84:1;
161:11; 226:17
relation [2]
79:19; 216:10
relations [4]
114:24; 157:4; 198:18
relationship [11]
71 :14; 156:24; 168:21;
199:25; 211:2; 219:3; 223:18;
225:22; 233:18; 242:5;
267:17
relationships [7]
29:21; 39:21; 40:4; 85:3;
153:2; 207:2; 225:15
relative [1]
110:15
relatively [2J
8:8; 36:13
release [1]
193:22
released [1]
261:17
relevance [5]
6:2,· 64:16; 140:2; 148:19;
155:24
relevant [2]
59:23; 63:16
reliable [3]
100:3; 230:14, 20
relied [1]
197:11
relived [1]
213:11
rely (1]
222:22
relying [3]
197:17, 20; 235:8
remain [2]
131:10; 206:14
remained [1]
49:25
remaining [2]
108:5; 213:16
remarlmbly [1]
20:4
remarks [4]
73:3, 20; 81:21; 105:9
remember [35]
38:4; 75:15; 89:22; 92:3;
101 :21; 107:17; 114:4, 6;
129:19; 132:6; 137:15,18,
19, 23; 156:18; 159:8; 160:7;
161:8,12,18; 164:13;
170:21; 181:14,24; 182:6,
13, 14; 184:10; 200:3;
208:22; 215:12; 222:22;
240:9; 259:13, 15
reminds [1]
264:1
remote [1]
231:1
removal [1]
45:14
remove [2]
25:18; 45:23
rendered [4]
10:21; 174:12; 267:15, 16
repeat [1]

91 :2
rephrase [3]
96:8; 117:11; 185:5
replace [3]
45:23; 46:6; 47:1
replaced [1]
157.'6
report [21]
7:4, 7; 26:15; 27:3; 28:8, 12;
46:20, 21; 71:7; 75:24;
114:18; 126:22; 127:4;
156:20, 22; 184:21; 198:24;
199:21, 23; 213:23; 226:21
reported [12]
47:2; 51 :21; 88:1; 114:19;
128:14,16,17; 156:24;
157:1,12; 198:13; 200:13
reporter [1]
77:24
reporter's [1]
272:1
reporting [26]
6:20, 23; 26:14; 27:13; 28:15;
30:24; 46:19; 47:3; 50:10;
64:11; 70:6, 24; 86:22;
113:19; 122:17; 181:3; 198:8,
10, 20; 199:8, 12, 25; 201:14;
214:19; 227:15; 256:12
reports [3J
28:13; 44:17; 113:19
representation [4J
218:2, 9, 22; 219:11
represented [1J
160:19
represents [lJ
140:17
request [11]
46:4, 9; 48:21 25; 76:17;
77:4; 162:21; 163:1; 232:18;
264:8
requested [3]
162:19; 250:5; 251:5
requesting [1]
248:24
requests [4J
90:4; 243:9; 250:2; 264:25
require [8J
11 :23, 25; 32:16; 33:7; 38:18;
54:18; 59:22; 215:12
required [1]
247:17
requirements [8J
37:7,19; 159:6,15; 160:14;
167:14, 15; 252:22
requires [5]
230:6; 239:18; 248:19;
249:16; 252:11
requiring [1J
23:15
research [83]
6:15; 10:25; 12:18; 20:22;
39:17; 47:6; 71:6; 72:18;
73:25; 74:1, 2; 78:7; 79:3;
82:8, 15; 85:15, 16, 20;
87:25; 88:14; 92:7, 9; 93:14;
94:1, 3, 6,9, 12; 95:11;
102:13; 107:18; 108:1, 14;
110:16; 111:10; 112:3; 113:3,
20; 136:6; 137:7, 12; 144:5;
152:19, 21; 156:17; 157:9;
161 :21; 167:5; 181 :5; 182:7;
J

Look-See(91)

196:10, 22; 197:25; 200:15;
201 :3, 5; 208:17; 209:8;
210:3; 233:13; 240:11,12;
241 :3, 6; 242:19; 243:18, 19;
245:7; 250:4; 251:11, 21, 23;
253:9; 255:5, 23; 257:24;
258:17; 259:20; 260:10, 19;
262:3; 268:19
researched [2]
146:22; 215:10
researcher [2J
81:11, 12
researchers [lJ
209:11
researching [3]
78:1; 82:23; 107:22
reservation [1]
196:13
resign [2]
48:1, 2
resolution [1]
41:9
resolving (1]
42:8
resource [1]
39:24
resources [2]
45:10; 239:22
respect [43]
9:9; 11:15; 13:1; 16:23,25;
17:9, 21; 18:21; 21 :23; 32:17;
38:23; 45:9; 48:8; 61 :7;
70:22; 80:20; 82:21; 88:9;
91:9; 93:16; 96:22; 107:17;
109:18; 113:23; 117:1 4;
118:22; 122:7; 126:19; 153:8,
17,· 165:14; 169:7; 177:3;
215:8; 219:19; 221 :9; 222:19;
226:19,· 239:12; 241 :18;
245:7; 253:8
respective [1]
48:23
respects [2]
146:8; 203:17
respond [1]
165:8
responded [1]
184:18
respondent [5]
4:6,24; 30:11; 62:18; 66:13
respondent's [8]
63:2, 10; 65:14,19; 121:25;
122:1; 127:16; 163:20
response [8]
34:13; 63:23; 88:5; 96:2;
165:11; 201 :20; 206:5;
260:23
responsibilities [2]
39:16; 46:17
responsibility [11]
32:24; 38:12; 47:6; 147:23;
157:10; 158:16; 197:9;
212:14; 245:17; 246:2, 3
responsible [6]
25:18, 20; 45:18; 106:25;
220:2; 246:13
responsive [1]
45:20
rest [2]
165:16; 270:11
restate [5]
J

... £>£' ..... 1+01.. '"

to restate

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-0000S 09-24-2007

17:24; 99:1; 141:17; 148:22;
261:18
restatement [7]

7:23; 148:18,'150:11,14;
151:5; 260:22,' 261:23
restatements [1]
restudied [1]

36:16
restudy [1]

36:19
result [13]

82:23; 92:19; 103:2; 105:14,'
113:16,19; 114:3; 115:5,18,'
116:4, 12; 123:23; 135:4
resulted [1]

6:23
resumed [1]

66:19
retain [lJ

12; 171:5,11,21; 172:1;
173:11,15,17,22,23,25;
176:1,25; 177:4,5; 178:5;
179:23; 180:12; 183:4,6;
187:8; 188:3; 191:16,'192:16;
204:15; 220:17,' 226:14,19,
20, 22; 227:2,3, 15, 17, 19;
228:9; 230:8; 232:1, 2, 3, 21;
233:8, 20; 234:7,' 236:1,5,
10, 20, 23; 237:4; 238:18, 20;
239:5,10; 241:18; 242:15;
243:23; 244:18; 247:18, 22,
23; 250:11, 17, 22,' 253:11;
254:9,' 261 :25; 262:8, 10;
263:1,3,13,16; 264:3,6,11;
267:12
revenues [7]

112:12,14; 204:13,18;
205:4,' 220:14; 222:14
reversed [lJ

197:15

224:6

retained [3]

review [14J

90:14; 243:13,' 251:16
retaining [lJ

90:6
retains [2]

89:18; 90:3
retaliate [1]

45:8
retaliated [2)

34:1; 63:18
retaliation [4]

34:12; 39:9; 44:19; 96:5

38:21,' 103:18; 147:23,'
148:12; 159:11,12; 160:22;
165:1; 171 :15; 175:23;
217:22; 224:2; 249:9, 11
reviewed [7J

132:22,' 159:5, 13; 165:17;
216:13; 233:20; 254:1
reviewing [6J

33:5; 159:5; 217:21; 247:22;
248:1; 249:6
reviews [1]

retaliatory [2]

63:13

34:8; 44:2

revised [1]

return [3]

35:19,' 58:22; 236:8

165:12
revisions [1]

returned [1]

165:1

195:16

revisit [1]

rev [3]

131:11,'133:24,25
revamp [1]

251:8
revamped [1]

65:9
revolved [1]

82:11
revolving [1]

84:3

202:1

reward [1]

reveal [1]

85:12

14:12
revealed [1]

22:8
revenue [189]

8:7,' 9:9, 12; 10:14, 19; 11 :4,
5; 14:6; 15:10; 17:10; 18:17,
20, 23, 24,' 19:14, 20, 25;
20:5, 9; 21 :6, 8, 10,' 23:16,'
24:8,' 25:23, 25,' 26:2,' 30:19,
24; 31 :2, 3, 16; 32:3; 36:6,
18,' 37:6, 10, 13, 18; 38:5;
39:8; 40:20; 45:14; 46:6;
52:24; 75:18; 77:16,21,22,'
78:4; 79:4, 5, 24; 80:16, 25;
81 :3, 22; 82:11; 88:8; 92:20;
93:16; 98:4; 102:15, 17;
103:21; 105:5; 109:24;
110:17,'111:1,7,8;113:8,
12; 115:5,8,10,25; 116:21;
129:18,25; 130:9, 10,11,15,
18; 131:4,13,14,16,24;
132:11,15; 133:9; 148:7;
149:18, 21; 153:9; 158:12,
21; 159:23; 160:6; 167:6;
168:12,17,'169:1,3,5,6,11,

restatement to

rewards [1]

14:7
rid [1]

190:13
ridiculous [1]

240:21
rig [17]

13:12,16,23; 17:14; 19:1,6,
8,13,16,21; 229:21,' 238:4,
9; 239:9; 246:16; 251:2
right [185]

8:14, 15; 9:2, 4, 22; 12:1, 22;
22:12; 29:4, 8; 32:21; 35:19;
36:24; 38:14; 40:1; 41 :9;
44:23; 51:2, 13, 24; 52:22,
24; 53:6, 21, 23, 25; 54:13;
55:3; 57:12, 22, 25; 58:8;
60:20; 62:2; 64:9, 25; 65:8,
12, 16; 66:2: 15; 68:7, 11;
71 :22; 77:11; 80:13, 14;
81:10; 82:16; 84:12; 88:22;
89:7, 17; 90:10; 91:22; 92:4;
93:8; 94:5; 95:2, 22; 96:25;
99:3,10,20; 102:8,22;
103:22; 104:5; 105:4; 106:2;

110:11; 111:23; 112:15;
114:2,25; 115:17; 116:19,
23; 119:25; 120:9,14; 121:5,
12,15; 123:5,25; 124:15;
126:8; 129:16; 130,~14; 131:1,
21,'134:5,11,12,15,' 135:8;
136:21; 137:14; 138:1;
142:19; 145:9; 147:10;
152:12; 154:11; 155:20;
156:3; 157:6, 13; 158:4, 8;
160:25; 164:19, 23; 165:6;
166:9, 10, 24; 171 :3, 7, 16;
172:20; 173:25; 174:7, 18;
175:10; 176:12; 178:2;
180:15; 183:22; 190:9;
191:20; 192:24; 194:1, 11;
195:2; 200:16, 17,' 202:22;
210:7,' 211 :21, 22, 24;
212:12; 215:13; 216:18, 20;
220:20, 23; 222:2; 224:5, 8,
9; 226:8, 11; 227:24; 228:11,
13; 229:12; 232:22; 233:7,
12; 234:10; 235:14, 23;
240:4; 241:7; 243:3, 4, 6, 7,
8, 11, 15; 250:19, 21; 253:5;
264:25; 265:14; 267:9; 268:3;
269:25
rights [1]

45:13
risk [28]

20:15; 85:11; 90:22, 23; 91 :5;
106:8, 18, 20; 107:5, 6;
175:21; 176:11; 177:22;
179:19,20; 189:24; 190:1;
242:22; 243:2; 245:6; 248:18;
262:6,18,21; 268:8,12,24
risks [6]

14:7,' 20:11; 224:18,' 225:11;
245:8
risky [1]

247:23
road [6]

55:14; 99:23; 100:10; 151 :22;
152:1; 270:20
role [2]

42:12; 122:19
roll [1]

29:10
rolling [2]

62:7; 116:8
room [5]

41 :7; 224:4, 6, 7
root [2J

90:21; 125:23

Look-See(92)

98:8,10; 99:1,13,18,21;
104:8,11; 117:11, 24;
118:12,19; 119:6,'122:2, 5;
123:14; 124:12,25,' 125:6,
12,19,22,'126:1; 128:12,18,
21,25,' 131:8; 138:7, 9;
140:4, 12, 16, 24; 141:6; 12,
16; 142:7; 147:3, 9; 148:22;
149:14, 22, 25; 150:4, 6, 16,
22; 151 :14, 20, 25; 152:7, 10,
14; 154:18; 155:2,5,10,13,
25,' 156:5, 10; 163:17,'
165:22,' 180:18, 21; 183:14,
17,' 184:6; 185:1, 5, 9, 15, 22;
186:2, 7, 12, 15, 25; 187:16,
18; 188:21, 24; 189:6, 10, 13,
17,21; 190:5, 10,17,22;
191:2, 11, 13; 192:2, 4, 8, 17,
22,25; 193:13,16,20,22;
194:1,6,10,16; 249:24;
254:20,' 256:13, 20, 24,'
257:5, 8, 19, 23; 258:1, 5,'
261 :2, 6, 9; 265:22,' 266:8,
11, 15, 25; 267:10, 23,' 268:4,
15,18; 269:14,20; 270:i, 5,
9,19,22, 25; 271:6,9, 15, 18
roughly [1]

201:12
round [1]

74:24
route [1]

208:22
rta [4]

25:21,' 127:2; 164:22,' 165:15
rule [8]

6:1; 11 :25; 51 :22; 61:10;
206:5, 22, 23,' 260:21
rules [31]

8:15, 19; 11 :22, 23, 25,' 12:9;
14:16; 16:23; 18:23; 20:23;
39:15; 40:16,22,' 53:18,19;
64:23; 99:24,' 100:1; 189:1,
15,' 196:23; 202:2, 3,' 203:23;
204:2; 205:22; 206:8; 216:20;
218:8,' 243:23
run [10]

5:22; 22:10; 29:19, 20; 41 :25;
42:3; 205:8; 225:10; 226:13
rundown [1]

216:1
running [4]

97:7,' 189:14,' 219:8; 257:23
rx-63 [2]

63:7, 8

rose [1]

34:2
rosenow [235]

4:3, 11, 22; 5:4, 20; 8:13, 18,
22; 9:2,4,14, 18; 10:2,5,11;
11:18; 12:1; 30:9; 49:15,22,
24; 50:5,14,17,21; 51:5,8,
13,17, 19; 52:3, 6, 9, 13, 25;
53:6, 9, 23; 54:2, 6, 9, 13;
55:9; 56:5; 57:19, 23; 58:7,
12, 16, 24; 59:1, 15, 19;
60:13, 20; 61 :3, 9; 62:3, 10,
13; 63:7, 9, 20, 23, 25; 64:9,
24; 65:4, 12, 22, 25; 66:2, 12,
15; 67:3, 7, 14, 19; 68:5, 10,
16; 75:22, 25; 76:3; 91 :2;
94:10,' 96:2, 8, 15; 97:10;

sab [78]

9:13,23,24; 10:1,13; 34:19,
20; 35:24; 37:7, 19; 40:22,'
53:24; 54:3; 79:3; 80:23, 25;
81:2, 7,14,15,21,22,23,
25; 89:4, 10, 24; 90:1, 19;
,91 :10, 11; 92:25; 94:8, 14,
15,18; 103:21; 109:23;
132:8,19; 152:21; 160:14;
167:13, 15; 172:4, 7; 173:15,
20, 21; 175:1; 179:19, 21, 23;
181:13,19,' 226:18,20;
227:10,11,21;231:7,17,'
232:5; 235:14; 239:1; 240:25;

 BSA

Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

241:19; 242:15; 247:9, 14,'
253:8; 259:8; 264:1,' 267:12
sab's [2]
8:14; 81:5
salaries [2]
210:3,4
sale [6]
21:13, 14; 112:24; 167:25;
169:19,20
sales [9]
18:11; 21 :13,' 97:23,' 112:16,
18, 24; 167:23; 230:25;
237:18
sarbanes-oxley [7]
4:8; 26:8, 10; 27:21; 28:1;
197:8,12
sat [1]
244:11
satisfy [1]
237:3
saturday [4]
43:8; 211 :5; 212:1, 20
saudi [5]
18:11; 111:20,22; 112:2,24
save [1]
161 :11
saved [1]
258:8
saying [33]
21 :4; 23:23; 27:12; 77:8;
90:10; 92:23; 93:20; 107:5;
136:21; 143:3; 144:15, 19;
161:11,18; 162:6,8; 167:18;
169:6,7; 175:12; 188:7,17;
189:18,24; 190:11; 191:15;
212:12; 216:25; 230:25;
232:21; 251:12; 256:14;
267:25
scattered [1]
34:17
scenarios [1]
188:3
schedule [4]
12:24; 13:16, 22; 268:1
scheduled [1]
26:13
schedules [1]
237:20
scheduling [1]
5:6
scope [2]
113:10; 186:8
scott [1]
164:9
scrub [1]
73:3
scrubbing [1]
73:19
scrutiny [1]
129:6
se [1]
64:12
search [1]
81:15
searching [3]
42:15; 81:13,15
seated [2]
68:17; 194:17
sec [99]
8:14, 19; 11 :20, 22, 24, 25;
23:18; 24:6, 7, 18, 23; 25:7;

26:9; 28:9; 30:4; 32:7; 43:14,
20; 44:6; 45:5; 48:22; 50:8;
51:22; 52:2,10; 53:18,19,
24; 54:3; 72:21; 75:24; 78:7,
15; 79:1; 80:24,' 81 :6, 13, 23;
88:15; 91:6; 102:20; 120:17;
122:23; 123:1, 2, 3, 9, 20;
124:21; 128:6, 11, 23; 129:6,
11; 132:8; 148:3; 154:1, 4,
16; 157:17; 162:12,25;
164:19; 166:2, 22; 179:25;
186:20; 189:11, 13, 15, 19;
190:12,15,18,20; 191:5,8;
227:16; 241 :13, 14; 244:23;
252:9; 253:25; 254:1,' 258:1;
259:7, 14, 15, 24; 264:4, 8,
21, 22; 265:7, 10, 13; 270:17
sec's [1]
78:9
second [12]
12:13; 75:9; 76:7,' 88:19;
98:23; 120:23; 143:1; 184:23;
200:10, 25; 220:6; 250:9
seconds [1]
151:19
secretly [1]
42:24
section [6]
4:9; 12:11; 51:9; 147:20,22,
24
securities [5]
12:11, 12; 32:23; 33:24;
47:17
security [2]
51:15, 16
seeking [1]
40:4
segregated [2]
243:16; 251 :20
self-help [1]
49:1
sell [4]
52:20; 169:22, 24; 246:18
seller [8]
90:3; 188:4; 224:20; 240:17;
243:13; 248:25; 249:3;
251:15
seller's [2]
14:23; 251 :21
selling [5]
170:4, 5; 229:10; 230:22;
231 :13
sells [3]
13:1,6; 17:11
send [3]
35:12; 60:25; 84:2
senior [4]
69:5; 195:7, 18; 215:24
sense [23]
7:6; 21 :9, 13; 52:23; 60:7, 18;
73:23; 76:19; 78:25; 91 :14;
106:13; 116:23; 119:14,'
125:16; 191:6,14; 192:8;
193:6; 204:11; 218:7,10,16;
236:20
sensing [1]
51:1
sentence [S]
143:8, 11; 144:12; 187:22;
188:1
separate [lS]

15:1; 37:10; 52:21; 57:24,'
79:23; 109:22; 168:11; 169:1,
4,14; 197:13,' 230:7; 231:24;
232:3; 267:18
separated [1]
37:10
separation [2]
110:25; 230:18
september [7]
26:12; 103:13; 115:16; 176:1;
271 :22; 272:5, 14
series [1]
160:17
serious [1]
17:4
seriously [2]
45:7,8
service [43]
19:13,15,24; 37:5,9,11;
79:15, 17, 19, 23; 80:6, 10;
87:3, 6; 112:22; 113:1; 168:9,'
170:3; 225:8; 228:19, 23;
229:1, 3, 9, 11, 22; 230:1, 20,
22; 231 :25; 239:17; 246:8;
248:9,' 249:13, 17, 20;
250:13, 14; 252:22; 256:11;
263:6,9
services [3S]
10:20; 13:5, 7; 15:2; 19:23;
20:6; 21 :15; 23:5, 10; 30:15;
52:19; 81 :18; 101 :23; 102:7;
109:19; 174:12; 211:19;
212:8; 219:1,9,15; 225:13;
228:14,20; 229:7; 231:1;
237:13; 238:17; 250:15;
254:12; 258:22; 262:16;
267:14,16
servicing [1]
19:11
session [1]
234:12
sessions [1]
40:20
seven [13]
15:11; 143:1,'144:8; 201:15;
207:21; 209:3, 17, 19;
214:24,' 237:9; 243:1; 244:17;
252:5
seventies [2]
203:21; 205:23r":
several-page [1]
147:14
shape [1]
7:18
share [4]
121 :2; 203:9; 214:21; 224:18
shareholder [1]
29:7
shareholders [6]
22:1; 38:11; 51 :23; 53:20;
193:11
she's [2]
105:24; 114:23
sheet [10]
73:3,10,20; 85:5; 201:16;
203:14; 209:3; 222:9, 21, 24
sheets [1]
218:11
shell [14]
107:2; 176:19; 177:17, 20,
21; 189:22, 23; 225:9;

Look-See(93)

239:21; 240:1; 245:19, 25,'
246:2
shift [1]
35:5
ship [4]
175:13; 228:25; 229:19;
23&14
ship-in-place [2]
187:23; 188:2
shipment [3]
90:4,' 243:17; 252:6
shipped [3]
35:9, 22; 77:15
shipping [3]
17:14; 36:2,' 235:20
sho'cked [1]
186:21
shoes [1]
27:10
shook [1]
94:10
shortened [1]
14:10
shorthand [1]
161:10
shots [1]
16:18
show [14]
12:4; 34:4, 7; 39:10; 50:21;
64:4; 75:21; 76:6; 103:23;
104:4; 120:23; 121:5; 152:19;
183:12
shows [3]
120:15; 165:23
shunned [3]
40:25; 44:25; 154:5
shut [4]
120:10, 12; 154:5; 167:17
shy [1]
90:12
sides [3]
4:17,' 5:25; 8:24
sign [1]
248:17
signed [2]
49:4; 248:15
significance [1]
79:2
significant [6]
17:3; 101:21; 213:23; 238:20;
239:3; 252:20
significantly [2]
44:1; 204:20
simple [2]
51 :9,' 213:7
single [2]
60:4,22
sir [10]
68:21, 23; 76:1; 126:25;
139:1; 146:19,'147:19,'
172:15; 178:21; 188:18
sit [S]
35:16; 105:21; 107:17; 133:8;
229:20
site [20]
13:12,' 19:13; 35:7, 25; 37:3;
70:7; 75:4; 79:11; 175:8;
180:1, 3; 181 :20; 240:8, 13,
14, 20; 247:1; 271:4
sitting [10]
17:13; 19:5; 31:12; 101:19;

 BSA

Anthony Menendez v. Halliburton, Inc. 2007 -STA-00005 09-24-2007

102:1, 14; 106:24; 174:15,
20; 239:10
situation [38]
15:22; 16:2, 17; 23:9,11,12,
15; 24:2, 4, 10, 13; 30:22;
80:14; 112:19; 134:23;
136:15; 155:19; 186:5; 203:2;
204:13; 207:17,' 208:11,15;
212:1; 217:24,' 224:20; 225:4;
230:16,' 231 :13, 23; 232:15,
18,' 235:5,' 240:3; 255:22;
256:18; 262:4,' 265:2
situations [21]
19:10; 78:13; 79:11, 16, 18,'
89:13; 90:2,23,' 91:6,' 95:13,'
109:18,'110:18,21,'111:14,'
152:22, 23; 168:4,' 215:18;
218:14; 236:15,' 239:4
six [7]
46:10, 14; 143:1,' 165:9,'
195:17; 244:17,' 252:5
sixty-two [1J
187:17
size [1]
74:25
skip [2)
196:15; 251:15
sldpping [1]
180:10
slide [3]
11 :2; 12:20; 14:19
slides [2)
67:4, 22
slow [1]
56:12
smaller [1]
21:1
smart [1]
41:7
smarter [lJ
41:13
smell [2J
233:7,12
smoke [1]
73:21
smol{ey [3]
7:11,' 73:15,' 199:3
snapshot [2]
18:4,8
so-and-so [4]
96:15, 16,' 118:14; 119:8
sold [1]
229:6
solely [1]
116:14
solicited [1]
196:3
solutions [lJ
40:15
solve [3]
39:24, 25; 40:12
somebody [26]
9:20; 19:3,19; 21:7; 24:2;
27:3; 55:13; 74:1,10; 84:6;
86:9; 88:3; 93:12; 109:6;
110:2; 112:1, 7; 140:21;
142:15; 158:22; 160:21;
192:18; 196:4; 208:20;
246:18; 260:14
somehow [1]
20:17

someone [13]
97:14; 106:19; 136:15;
146:11; 158:20; 199:3,9;
201:4; 213:16; 215:3; 231:3;
245:24, 25
somewhat [3]
8:8; 186:21; 195:25
somewhere [1]
31 :13
sonatrach [1]
216:16
sooner [1]
258:10
sorry [25]
52:5,' 54:1; 56:12; 70:23,'
72:11,' 73:13,' 78:17; 86:23;
90:25; 105:24,' 129:18;
167:14; 173:13, 20; 179:18;
180:11,' 200:24; 211 :25;
212:3, 6,' 224:5; 225:3;
238:24; 260:3; 261:3
sort [6)
29:19; 59:4; 109:21; 113:15;
153:12; 266:15
sound [1]
180:15
sounds [2]
79:15; 258:7
source [1]
188:25
sources [1)
106:13
span [2)
30:17,' 97:7
speak [3]
88:13; 89:25,' 136:17
spealdng[6]
99:24,' 136:16,' 225:8,' 228:15;
237:12; 251:18
speaks [3J
79:4,' 91:6; 168:20
specialized [lJ
47:17
specific [21]
11 :20,' 60:11,' 64:1, 2,' 78:7,'
81 :14,' 87:16,' 88:13, 17,'
97:23,' 99:8; 102:6; 126:14;
138:18; 146:12; 243:13;
245:19,21,' 251:16; 269:15
specifically [20)
7:9, 13; 23:4; 28:2; 60:1, 17,'
64:22; 79:3; 80:23,' 83:5;
88:9,' 92:25,' 102:25,' 113:23;
136:18; 167:5; 176:6; 178:23;
250:4; 253:20
speculation [4]
123:12; 124:23; 249:23;
265:25
speech [5)
90:1, 7; 254:1; 263:25
speeches [10]
78:7,' 80:24; 81 :9, 15; 89:25;
132:8; 181:19; 258:2; 259:3
spend [2]
30:12; 255:11
spent [3]
42:14; 195:13; 254:2
split [1]
168:22
spoke [4]
117:17,' 132:8, 9,' 161:13

spout [1]
40:9
spring [1]
71:10
staff [13]
24:12, 13; 39:18; 40:5, 14;
81:8; 195:6; 208:17; 216:11;
219:24; 227:21,' 264:14,15
staffs [1]
39:21
stage [2]
62:12; 230:8
stake [2]
201 :13; 222:18
stamped [1]
86:5
stand [2]
68:9; 87:1
stand-alone [2J
138:6; 178:4
standards [3]
27:21,' 82:20; 189:3
standing [1]
177:12
standpoint [1]
107:11
stands [2]
81:7; 141:16
start [26]
4:19; 29:8; 55:18; 64:24;
66:3, 6; 70:2; 71 :9; 72:4;
82:23; 89:3; 96:9; 100:5;
103:6; 117:23; 125:8; 150:3;
197:8,' 200:11; 224:16,' 225:5,
11; 226:22; 233:12,' 247:22,'
248:8
started [31)
5:5,6; 6:16,'16:9; 17:25;
18:6,' 40:6,14,' 42:19; 45:19,'
80:19; 83:19,' 87:25; 114:19,'
115:7,9,14,'195:1,'198:13,
14, 15; 201 :23; 210:17, 19,'
214:6; 218:19,' 219:18,'
233:14; 234:17,' 268:20
starters [1)
217:19
starting [2]
95:10,'163:21
starts [4]
52:3, 6; 68:6; 88:19
state [8]
59:20; 68:21; 90:8,' 95:13;
118:7,' 119:14, 15,' 150:20
stated [1]
98:19
statement [16]
6:4,6; 29:2; 30:11; 31:24;
38:6; 52:14; 76:25; 141 :1;
159:1, 3, 8, 9, 18; 220:13,'
222:7
statements [16]
5:23; 12:2; 27:8,' 30:20;
31:25; 38:3; 73:4; 78:22;
149:13; 189:5; 197:9,17;
202:17; 207:23; 209:4;
261:19
states [6]
4:9; 27:25; 29:1; 34:25; 35:1;
272:9
stating [1)
143:9

Look-See(94)

statute (3]
49:20; 185:18, 23
statutes [1]
51:1
stay [1]
193:23
c>+o~n r11

~""~,lJ.J.

l.lJ

195:9
step [9]
51 :8, 9,' 66:2; 75:21; 93:16,
22,' 126:5,' 197:14; 250:9
stepped [1]
227:16
stick [1]
11:16
stint [1]
195:16
stipulations [1]
49:19
stock [32]
85:9,' 201:10, 11; 202:4,6, 7,
II,' 203:3; 205:23, 25;
206:10,12,13,17,20,25;
207:3, 10, 22; 208:2,' 210:10,
11,13,' 214:17,25,' 215:1,2,
6; 218:9,15
stocks [1]
105:6
stole [1]
58:21
stolen [1]
246:13
stop [3]
28:23,' 42:4; 202:12
stopped [1]
18:1
stopping [1]
266:24
store [4]
76:17,' 239:16; 242:3, 11
stored [2]
105:6; 236:4
storing [2]
152:18,' 239:4
straight [3]
117:14; 132:7,9
straightforward [2]
54:18; 236:2
strategically [1]
16:12
street [2]
7:14,' 199:10
stress [1]
90:6
stressing [1]
89:23
strict [2]
245:22; 263:13
strictly [1]
252:9
strike-outs [1]
141:10
stringent [1]
47:22
strong [2]
187:7; 232:23
structure [3]
16:12; 85:2; 206:9
structured [2]
201 :9; 214:23
stuck [1]

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005 09-24-2007

BSA

262:19
studied [5]
36:17; 99:17, 19; 105:17,'
241:13
studies [2]
41:17,' 244:2
study [12]

37:22,' 160:6,' 167:6 11 18
20,' 170:20; 171 :6,
15,' '
178:9,' 182:11
studying [1]
100:17
stuff (11]
35:2,' 38:6,' 81:16,17,'118:13,'
149:17,'157:23,' 191:7,20;
242:18; 268:5
stugart [1]
122:18
style [1]
41:6
sub-exhibits [1]
138:5
sub-tab (3]
142:6,' 178:2; 183:16
subject [2]
12:18; 123:2
subjectively [1]
152:3
submit (2]
48:4, 6
submits [1]
55:22
submitted [2]
33:2; 162:10
subpart [5]
76:4; 103:24; 121 :6; 127:16,'
147:12
subscribe [1]
81:17
subsequent [12]
69:11,' III :17; 112:22;
116:21; 121 :13,' 137:8; 168:5,
6, 9, 16,' 175:25
subsequently [2]
11 0:19; 169:25
subset [2]
54:25; 55:19
substance [5]
107:5,'151:3,' 219:3; 223:17,'
231:4
substance-over-form [2]
85:7,' 107:4
substantial [5]
99:11; 101:22,' 112:2; 243:10,'
250:2
substantially [1]
188:4
substantive [3]
67:9, 20,' 270:6
successful [3]
29:13, 15,' 249:17
sudden [1]
20:16
suffering [1]
227:19
sufficient [1]
15:9
sufficiently [1]
169:9
suggest [1]
19:7

9,

suggested [4]
7:4,' 88:11,' 199:2,' 215:11
suggesting [2]
236:19; 261 :23
suggestion [1]
36:9
suggestions [3]
40:11,'148:14,'149:17
suggests [3]
263:21; 264:17, 19
suIt [24]
20:14,' 36:13, 15; 86:18;
93:10, 11; 95:19, 23, 24;
96:11,' 97:2; 110:3, 5; 144:4;
171 :14, 20,' 176:24; 211 :6, 8,
14, 16, 25; 261 :22
suIt's [1]
212:3
summarize [1]
267:2
summary [3]
10:8,' 254:10,' 270:13
summer [4]
69:25,' 75:14,' 84:17; 116:22
summit [5]
45:16; 130:3,'131:17,25;
158:20
superior [2]
166:13,' 205:16
supervisors [2]
48:18; 50:9
support [6]
22:25,' 84:2; 95:12,' 144:18,'
173:23; 254:4
supported [3]
78:3; 182:20; 183:20
supporting [1]
83:25
supports [1]
183:1
suppose [1]
18:5
supposed [3]
46:24,' 134:16; 220:2
supreme [1]
28:1
surfaced [1]
92:19
surrounding [2]
43:21,' 202:2
surveyed [1]
270:3
susan [14]
71 :18; 72:15; 75:18; 83:16;
84:14; 85:24; 128:9, 10, 12,
14,17,' 200:14,' 216:11;
217:10
suspect [1]
120:15
suspicious [1]
211:1
sustain [6]
65:5; 98:10,' 155:14, 25,'
165:22,' 185:1
sustained [4]
65:9; 147:3, 9; 249:24
switch [3]
6:22,' 226:12
sworn [2]
68:14,' 194:14
system [1]

24:15
systematic [4]
17:2,5; 219:18,19
systematically [1]
8:2

tab [14]
76:3; 85:19,' 149:16; 187:14,
16; 198:2; 233:22, 25; 234:4,
5, 21; 254:15,' 259:16, 25
tabbed [1]
76:2
tactical [1]
53:11
takes (5]
90:24,' 91 :7; 92:21,' 189:24;
222:14
talk [48]
12:12,23,'13:2; 41:19; 42:1,
25; 43:2; 45:22,' 53:9,' 74:18,'
80:19; 88:16,' 89:25; 97:21;
106:12; 113:16; 119:6; 134:6,
17,25; 135:1; 136:11;
178:12, 16; 179:6, 8; 181 :19,'
183:25,'184:19,20,' 204:23,'
205:11, 20; 211 :5,' 220:8,'
221 :12,' 226:12,' 229:12,'
240:5,' 242:25,' 243:21; 244:3;
245:3,' 250:8; 264:14, 15;
265:15
talked [38]
14:20,' 36:12; 53:13, 14,' 78:2,'
82:21; 89:24; 92:13; 97:20,
22; 110:11; 113:17,' 142:17,'
153:18,'157:15; 176:10;
178:22, 23; 179:4, 22,'
182:11,'184:2,13; 191:2,'
193:9,' 215:19; 221:19;
226:17,' 231 :6, 7; 232:18;
243:1,12; 245:1; 251:17,'
253:7,' 258:14,' 268:19
talking [43J
17:22; 25:11; 31:3, 17,' 52:3,
6; 88:25; 89:3; 93:20,' 98:1,
17,'101:25; 104:19; 119:19;
122:8,' 125:1; 127:15, 25;
128:9,21; 131:20; 132:24;
136:7,13; 140:22; 141:18;
149:5; 176:6; 183:13; 184:24;
189:21,' 191 :3,' 200:23;
203:24,' 211 :25,' 223:2;
226:16,' 234:11,' 238:11;
244:12,' 257:5, 23,' 267:11
talks [1]
84:25
tandem [2]
109:23; 168:24
tape (2]
42:20, 24
taped [2]
22:7,' 28:18
task (5]
11:13; 32:12; 192:11, 13;
227:25
tasked [1]
107:19
taught [6]
45:15; 130:8,' 233:9; 234:9,
11,' 235:5

Look-See(95)

tawney [1]
87:13
tax [1]
256:12
taxes [1]
14:6
taylor [3]
164:1, 2,' 165:6
taylor's [3]
164:21,' 165:9, 12
tcp [28]
75:17, 20,' 76:12, 13, 16, 17,'
77:7; 80:16; 88:5, 6; 95:11,'
97:10, 11,' 102:3, 12, 24;
106:17; 109:16,'111:11,'
176:6; 178:20,'179:7,'180:11,'
232:18,' 255:21,' 257:20,'
267:6
teach [6]
26:1; 158:22, 23,' 159:23;
196:9,' 199:6
teaching [6]
129:25,' 131:3,4,12,'158:21,'
243:25
team [4]
22:9; 25:21,' 30:1; 106:11
technical (27]
6:15; 7:1; 39:11, 17,23; 42:8;
47:6, 10; 71 :5; 72:18,' 73:9,
25; 81 :11,' 85:20,' 87:25;
108:14,'130:6; 156:17; 157:9;
158:3; 161:14,21; 167:4,'
181 :5; 196:22; 197:25; 198:8
technically [1]
190:1
technology [2]
164:22,' 201:3
telephone [2]
135:25,' 175:21
telling [13]
13:15~' 40:13,' 60:3,'118:10,
16,' 119:8,' 145:18,' 151:7;
161 :8, 12,' 217:11; 255:10;
269:8
tells [3]
29:12; 61 :24,' 270:12
temporarily [2]
28:15,' 35:12
temporary [1]
199:25
ten-minute [1]
156:7
tend [1]
55:12
tendered [1]
138:2
tenets [1]
263:13
term [18]
7:11,' 73:15; 74:21,' 79:25,'
101:10,'105:11,'112:16,18;
132:12,' 143:5, 7,25; 144:4,
6; 175:18,' 230:14,' 241 :2, 3
terminal [1]
14:24
terms [52]
14:20; 17:16,19; 20:9,23;
25:22,' 27:23; 35:10; 48:14,'
49:2, 3, 17,' 66:10,' 73:9, 22,
2{' 79:24; 88:7; 99:6; lOJ :2,'
106:8; 109:18; 110:25;
SIUlOl€~O

to terms

 BSA

Anthony Menendez v. Halliburton, Inc. 2007 -STA-OOOOS 09-24-2007

116:15; 118:9; 134:24; 137:4;
138:20,'172:21,'181:10,'
186:22,'195:12,'199:1,'
205:10, 12; 207:11; 209:22;
210:7, 8; 221 :22; 223:8, 23;
224:4; 225:18; 228:14;
235.'17; 236:6; 237:22,'
249:14; 250:10; 253:10
test [6]
47:21; 100:6; 185:17; 238:16;
239:8; 252:19
tested [1]
253:1
testified [23]
7:3, 5; 22:4, 10; 63:16; 68:15;
84:16; 87:24; 98:22; 112:8;
156:18; 157:15,'158:10,19;
160:4; 162:9; 167:17; 168:3;
172:17; 178:8; 189:25;
194:15; 254:21
testifies [1]
172:12
testify [15]
40:18; 44:16; 47:10; 49:9, 12;
84:13; 98:25; 100:7; 112:8;
116:25; 125:4; 151:3,11;
178:24; 270:17
testifying [3]
63:15,' 119:12; 129:17
testimony [28]
16:1; 28:19; 33:5; 44:11;
45:2; 80:1, 15; 98:7; 107:16;
121:21; 129:19; 141:1;
166:24; 167:22; 169:2, 3;
176:21; 179:18,' 182:13,'
190:5; 193:17,' 266:16,' 267:3,
5,' 270:14,' 271:7,12,16
testing [1]
239:13
texas [2]
68:24; 272:6
thank [17]
4:22; 6:5; 30:8, 9, 10; 49:14,'
50:13,' 67:23; 78:1; 100:14;
125:25; 156:12,' 180:19;
186:16, 23; 187:18; 188:23
thanks [5]
5:4; 68:16; 194:1, 16; 269:21
theirs [1]
41:21
themself [2]
208:3, 10
theoretical [1]
64:23
theory (6]
5:25; 39:14; 40:9, 16; 51 :2;
216:25
there's [43]
7:25; 9:11; 14:21; 18:9;
19:13; 21:9; 23:19; 33:17;
35:15; 38:9; 50:11; 53:21;
59:21; 61 :4; 74:25; 140:5;
142:1; 143:18; 163:19; 175:2;
179:25; 190:12; 205:17, 18,'
209:4; 222:10,11; 224:13;
231 :20, 25,' 237:23,' 242:5;
248:9; 249:15,' 250:9, 14, 17;
252:22; 262:12; 267:4; 268:8
they'd [1]
134:24
they'll [2]

test to

55:12; 59:3
they're [24]
9:15,' 41:3,' 63:16,' 67:8,'
90:22; 95:1,' 107:3, 15,'
121 :16; 146:9; 190:2; 206:3;
224:15, 18; 228:20; 229:9,
10; 236:10,' 238:2,' 239:17,'
259:2; 260:24; 262:15
they've [1]
226:21
thinl\:ing [4]
55:10; 66:12; 96:4; 125:7
third [6]
17:20; 21 :6; 75:10; 181 :24;
231:14; 271:10
third-party [2]
182:4; 240:14
thirdly [1]
18:13
thoughts [2]
148:11; 149:12
threaten [1]
27:24
threatened [1]
118:15
three (21]
14:17,' 15:8,' 26:22; 32:8, 15;
43:5, 12; 44:8, 9; 80:9; 83:17,'
104:24; 143:24; 152:8; 174:6;
202:14; 203:18; 205:8;
213:16; 250:1
three-day [1]
130:5
three-man [2]
190:24,' 191 :18
throw [2]
115:8,' 206:16
thrust [1]
267:5
timeline [2]
91:15; 111:1
times [1]
52:17
timing [5]
133:20,21,' 152:6; 237:19;
257:13
title [30]
14:6; 20:11; 36:2; 46:18;
72:16; 87:15; 164:13; 177:21;
197:24; 199:20,' 212:6;
232:21; 236:7, 16,' 241 :7,'
242:22; 247:7; 248:5, 8, 9,
12; 249:10,15; 251:1;
259:15; 262:6, 18, 23; 272:3
titled [1]
105:5
tomorrow [4]
172:12; 265:15,' 266:4;
270:20
tony [51]
4:21; 6:13; 25:12; 44:20, 23;
71 :24; 77:20; 78:2, 6; 83:16;
84:14; 85:21, 24; 86:1; 93:7,
11; 100:18; 118:24; 119:11,
13; 126:14,16; 127:1,4,12,
19,' 128:5; 130:10, 15, 19;
131:10; 134:8; 136:8, 11;
144:19; 154:12, 15, 23,'
164:11; 184:2, 13, 18, 19, 20;
185:11; 186:19; 194:9; 211:4;
260:23

tony's [5]
119:14,'125:17,'134:16,'
144:12,14
tool [9]
13:9; 19:3, 7, 11, 23; 102:4;
237:24; 252:23, 25
tools [5]
13:8,' 34:23; 102:3; 228:25;
262:14
topic [3]
74:7; 150:25; 205:15
topics [4]
130:6, 7, 8; 256:9
tore [1]
256:3
total [4]
85:9; 172:18,25; 173:5
totally [2]
119:21; 152:10
touch [2]
98:14; 124:8
touch-up [1]
252:13
touched [1]
129:17
towards [2]
224:5, 7
tower [1]
244:12
traded [1]
189:8
traditionally [1]
13:9
traffic [4]
161 :14, 20, 25; 162:6
trail [1]
245:24
train [1]
199:6
trainer [1]
130:10
training [49]
25:23; 26:1; 39:17,' 40:17, 19;
72:18; 73:9; 85:21; 115:7, 13,
16, 18, 21,' 116:5, 8, 21;
129:19; 130:12, 19; 131:13,
16,24; 132:1, 7,9,18;
133:22, 24; 176:1; 181:6;
196:22; 198:1; 200:16;
219:25; 221:3,4; 233:20;
234:16; 235:3, 7, 9; 243:24,
25,' 244:8; 251 :25
trainings [2]
234:6; 235:4
transaction [7]
167:24; 227:4; 230:12;
232:24; 264:2, 14, 16
transactions [17]
89:11; 136:24; 169:19,20;
171 :12; 187:22, 23; 188:2, 3;
192:6; 225:25; 235:15;
244:13; 255:19, 20; 264:20;
269:13
transcribe [1]
140:24
transcript [4]
9:20; 55:12; 56:16; 62:21
transcripts [1]
42:21
transfer [2]
262:18,23

Look-See(96)

transferred [2]
90:22,24
transfers [1]
179:20
traveling [1]
135:5
traylor [2]
164:11,12
treat [2]
15:18; 44:20
treated [4]
16:21; 119:18; 146:7; 154:15
treating [1]
146:17
treatment [22]
7:19; 8:1; 16:5,13; 20:4,25;
25:22; 26:3; 28:21; 29:14;
38:23; 39:1; 203:12; 205:21;
209:12; 215:11; 221 :9; 224:2;
226:3, 10; 235:17, 19
treatments [2]
7:24; 202:15
tree [12]
233:19, 25,' 234:3; 235:1, 3,
16, 22, 24; 236:22; 237:7;
248:7; 249:8
tries [1]
151:21
triggered [1]
100:24
triggers [1]
90:19
trouble [5]
7:22; 22:2; 24:5, 6; 191:7
true [11]
13:3; 36:11; 94:15; 170:10;
177:7; 180:3; 218:6, 12;
222:7; 252:7,' 272:11
truly [1]
245:8
trust [1]
29:22
truth [2]
98:19; 99:13
tuesday [1]
271 :22
turner [6]
23:19; 259:1, 5, 6; 260:3,9
turning [1]
170:5
turns [4]
47:14,15; 122:1; 206:3
twenty-five [1]
18:3
twice [2]
137:22; 151 :12
two-day [2]
220:5; 221 :4
two-hour [1]
156:6
type [4]
77:9; 153:2; 192:12; 195:12
types [4]
85:2; 100:11; 110:23; 171:12
typical [9]
14:1; 17:17; 229:18; 238:11,
12; 239:12, 25; 240:3; 249:19
typically [7]
16:2; 18:25; 74:3; 83:10, 14,
16,24

 Anthony Menendez v. Halliburton, Inc. 2007-STA-00005

BSA

-uu.s. [1]
51:10
uh-huh [21]
147:18; 154:20; 160:8; 174:8;
177.'6; 187:24: 191:12.: 209:9;
215:20; 220:7; 228:1; 231 :9;
232:7; 233:23; 235:2; 240:7;
242:4; 246:23; 247:2; 256:23;
265:12
uk [17]
76:18; 77:6; 80:15; 87:13;
89:1, 8; 102:20; 106:17;
111:11; 177:17,21; 232:18;
233:17; 235:5; 249:6, 7;
251:25
ultimate [2]
120:8; 160:5
ultimately [10]
12:7, 9; 22:2; 25:13,' 27:6, 9;
86:13; 121:16; 196:24;
213:13
unable [1]
135:18
unassembled [1]
253:6
unclear [1]
177:21
uncomfortable [1]
144:18
uncovered [2]
259:19; 260:10
underlined [1]
89:18
underlying [2]
219:13,' 236:6
understand [58]
8:14, 16; 11 :23, 24; 50:22;
52:14, 17, 25; 53:11, 24;
54:9, 15,' 61 :5,' 63:25,' 80:14;
81:4; 90:1, 11, 13,' 91 :13, 19,'
105:3; 112:6; 116:6; 128:12;
132:17; 136:23; 137:14;
138:23; 140:18; 141:13,16,
17; 150:6; 152:7, 10; 160:20;
190:5,10; 193:16; 196:17,
23; 197:5,' 198:7; 219:24;
223:17,' 228:8; 241:16,18;
243:23,' 244:10,' 251:11;
256:13,' 266:25; 267:3,'
268:21,' 270:14
understanding [32]
6:10; 8:21; 77:22; 84:21;
86:10; 89:14; 93:18; 94:15;
101:6; 102:20; 103:19; 105:1;
108:25; 11 0:3; 111 :4; 112:23;
116:16; 124:11; 130:12;
131:2,7; 133:23; 134:23;
146:20; 169:21,'190:6; 198:9,'
229:23; 231:16,' 233:17;
269:1; 271 :15
understands [1]
35:19
understood [10]
26:18; 94:14; 140:22; 196:18,'
220:25; 233:21; 241 :11;
244:14; 268:10; 271:6
undisputed [4]
12:25; 13:19; 15:10; 22:19
unhelpful [1]

40:21
unique [3]
80:3; 258:22,' 264:14
united [6]
4:9; 27:25; 34:25; 35:1;
176:14; 272:9
university [2]
69:15; 194:25
unlike [1]
108:21
unpredictable [1]
13:18
untold [1]
16:8
unusual [3]
134:17,20,' 195:25
upcoming [1]
82:19
update [1]
73:1
updated [3]
97:5, 6,' 115:11
updates [5]
72:21, 22,' 73:9; 147:25;
148:1
upset [4]
118:13; 150:24,' 186:13,'
211:10
useful [1]
137:3
utilizing [1]
132:14

-vvague [1]
155:3
vagueness [1]
131:6
valid [2]
22:12; 119:23
value [16]
29:7; 151 :12; 177:14,' 178:4,'
204:24; 210:12; 228:10, 11,
12, 15; 229:13; 230:10, 11,
15; 246:17; 263:11
value-added [1]
29:4
valueless [1]
210:23
values [1]
172:18
variable [7]
32:13; 53:1,16,' 82:13,' 85:1;
205:2,' 206:2
variable-interest [1]
201:22
variance [2]
264:25; 265:7
varied [1]
82:17
vast [1]
257:21
vehemently [1]
36:8
venture [31]
15:17, 19; 16:3, 19; 25:21;
32.)3; 38:9, 24; 53:2, 4, 16;
200:7, 8, 19, 20, 21; 201:1, 8;
204:4; 214:8; 216:14; 218:25;
224:14,16,17,19,21;

09~24-2007

225:19; 226:2, 5
venture's [1]
217:22
ventures [36]
8:7,10; 9:8,'15:14,15; 16:8;
17:8; 18:10; 38:1,15,16,17,
23; 39:2, 4; 200:23; 201 :19;
212:14; 213:19; 214:3;
215:22; 219:19; 220:3, 10,
22,' 221:7, 10, 17; 222:2, 19;
223:5, 23, 25; 224:10, 11;
225:5
verbiage [1]
168:1
verify [1]
142:4
version [5]
14:11; 62:21, 22, 23; 227:13
versus [5]
4:5; 102:11; 153:17; 182:4;
184:1
vested [1]
219:5
vet [1]
255:17
vetted [1]
22:3
vetting [2]
45:18,' 119:21
via [3]
35:9; 101 :14; 135:25
vice [2]
7:5; 212:7
viciously [1]
49:7
victoria [1]
69:15
vie's [1]
84:25
view [15]
16:4; 32:3,' 36:10; 116:4;
153:13,'166:17; 167:1; 192:6;
218:5; 219:18; 268:16, 20,'
269:21; 270:6, 7
viewing [1]
267:13
views [10]
41:21; 42:2; 144:12,13,14,
19; 167:10,13,19
vilify [1]
33:10
violated [2]
49:2,3
violating [1]
22:17
violation [6]
12:10; 21 :25; 22:18; 45:13;
51:21; 53:18
violations [4]
12:12; 34:2; 50:25; 52:10
virtually [5]
25:6, 14; 31 :6; 40:23; 45:8
voiced [2]
43:25; 64:19
volume [1]
161:24
vp [3]
114:24; 115:1; 198:18

-w-

Look-See(97)

wait [6]
150:17; 217:25; 229:20;
232:20; 266:17; 268:22
waived [1]
244:23
walk [1]
244:2
walked [1]
251:25
wall [2]
7:14,' 199:10
wandering [1]
125:8
wanted [19]
17:23; 45:12; 72:25,' 77:14;
126:16; 131 :12; 141 :25;
158:2; 196:9; 199:2,3, 5;
206:11, 23; 213:25; 217:2;
239:21; 241 :25; 265:2
wants [2]
188:14; 223:9
warehouse [49]
13:11,22,' 14:2; 17:14; 18:16;
19:5,17,18; 31:13; 35:6,11,
13,17; 76:18; 77:15; 102:10,
11, 14; 106:5, 24; 174:16, 20;
175:8, 23,' 176:2, 10, 14, 16,
17; 177:23; 182:4, 5, 7;
229:20, 25; 232:10,' 233:8,'
238:1, 8, 13; 239:5, 15, 23;
240:2; 242:11,' 250:6; 252:1,'
263:8; 271:3
warehouses [10]
18:8; 34:16; 101:8,20; 102:1;
172:2,19; 173:1; 188:14;
235:21
warehousing [4]
230:16, 23,' 231 :14; 250:14
ways [1]
203:18
we'd [3]
63:5; 245:16; 264:22
we'll [19]
4:18; 55:21,' 59:4; 61 :9,'
66:15; 150:17; 151:3; 156:5,
7; 185:5, 7; 194:3; 204:21;
229:21, 22; 266:4, 11;
270:20; 271 :18
we're [61]
4:3; 5:16,18; 6:13; 8:1;
19:18; 30:7; 31:2,17,22,'
52:18, 19; 53:12; 54:13, 16;
55:7, 18,' 62:23; 66:9; 74:1,'
84:12; 98:17; 99:22; 116:24;
119:11,12,13,'127:15;
129:5,10, 22; 131:19,20;
132:24; 135:4; 141:18; 145:4;
156:5, 6; 188:23; 191:5, 6,
20; 197:20; 203:24; 204:24,'
205:17; 229:18, 19, 20;
232:20; 235:11,' 238:13,'
241 :23; 249:9; 255:17;
265:20; 269:16, 17, 22; 271:2
we've [23]
14:20; 29:5; 30:23; 53:14;
56:17; 58:5; 81 :20; 89:24;
110:11; 131.~19; 149:4; 152:8;
178:2; 183:3; 191:7,9;
218:20; 226:17; 227:18;
231:7; 235:10; 246:5; 267:7
weakness [1]

 Anthony Menendez v. Halliburton, Inc. 2007 -ST A-00005 09-24-2007

BSA

261:18
wealth (1]
43:17
website [4]
81:13; 88:15; 95:3; 148:3
weel{ [4]
92;11, 12; 163:5; 164:17
weel{s [3J
28:2; 211:11; 214:12
weight (2]
8:19; 67:9
welcome [1]
6:8
welldynamics [2]
38:25; 39:3
wells [4]
34:24; 76:20; 237:18, 19
weren't [10]
7:12; 11 0:24; 119:24; 132:15,'
169:12; 192:5; 220:9; 221 :20;
239:4; 249:2
whalen [1]
221:19
what's [24]
11 :2; 18:14; 59:5; 63:9;
65:12; 79:21; 100:3; 118:9;
121 :6; 126:4, 5; 140:17, 18;
150:20; 188:25; 211 :2;
223:16; 225:10, 19; 231 :5;
233:8; 236:13; 255:23
whatnot [2]
106:22; 237:23
whatsoever [2]
23:1; 262:12
whenever [1]
13:18
whereas (2]
132:9; 197:10
whereupon [16]
56:1, 8,' 57:4, 9, 14; 59:9;
63:1,' 65:17; 66:18; 67:16;
68:1, 12,' 156:9; 194:5, 12;
271:20
whichever [1]
11:13
whistle [3]
25:7; 185:13,' 186:20
whistleblower [2]
135:1, 3
whistleblowing [2]
134:22; 135:3
white [10]
32:20; 36:19, 20, 23,' 37:23,
25,' 120:1, 2; 130:22,' 140:7
who's [7]
19:8; 70:11; 85:7, 10; 106:24;
208:11,12
whoever [2]
74:8; 131:12
wholesaler [1]
228:21
wholly [1]
40:21
wildly [1]
13:17
willing [2]
246:3; 248:17
willis [1]
164:9
willrodt [12]
71:18; 75:18; 113:21,'128:10;

to

VOUlrseU

165:25; 166:4,5,12,17;
200:14; 216:12; 217:10
winter [4]
116:20; 117:2; 120:25; 256:9
wire [3]
51 :3, 10, 11
wish [1]
193:9
withdraw [1]
185:7
withdrawing [1]
62:23
withdrawn [3]
62:22, 23; 261:7
witness [81]
23:21,' 68:7, 14,' 74:21; 75:21;
78:23; 84:20; 86:16; 91 :4;
94:14, 21; 96:6; 97:11; 98:9;
117:25; 118:4; 124:13;
125:16; 126:6; 128:16, 20,
24; 131:9; 140:21,'141:5;
149:20, 24; 150:2,5; 154:20;
155:15; 156:1, 4; 163:16;
165:21; 180:20; 185:2; 189:2,
8, 12, 16, 20; 190:4, 9, 16,
21; 191:1,10,12; 192:1,3, 7,
11,20,24; 193:12,15; 194:7,
14; 254:22; 256:17, 23;
257:1, 7, 22, 25; 258:4, 6;
265:25; 267:9, 22; 268:3, 14,
17; 269:10, 19, 24; 270:2, 8,
15, 17
witness's [1]
266:16
witnessed [1]
109:11
witnesses [7]
7:3; 40:18; 44:16; 47:10;
49:8,' 62:4; 66:3
won't [1]
119:7
woodlands [1]
130:5
word [6]
49:6; 79:14; 89:17; 140:11,
14;271:10
words [15]
7:11; 11:9; 15:15; 16:19;
39:25; 93:20; 143:15,'158:2;
189:17; 202:17; 210:9;
223:12; 239:7; 240:19,'
255:24
work [34]
19:11; 27:11; 29:23; 40:7;
41:24; 42:13,19; 47:14; 69:6;
70:7,15,18; 71:2,11,23;
72:2; 75:1; 76:20; 106:11;
110:5; 120:7; 129:10; 162:12;
166:4; 195:12; 200:3; 219:13;
221 :18; 237:19; 247:5;
252:14; 255:17; 258:9; 268:6
work's [1]
237:21
work-related [1]
157:25
worked [29]
6:15, 18; 42:9; 64:20; 69:24;
73:25; 74:8, 11, 12; 83:23;
84:5; 85:22; 87:21; 104:20;
112:4; 116:8; 128:13; 154:12;
156:16; 158:3; 166:7,16;

169:20; 173:16; 184:15;
193:5,' 214:5; 216:12; 219:24
workers [4]
209:8; 210:3, 8, 15
working [34]
36:14; 45:4; 47:24; 52:7;
66:5; 71 :9, 17; 72:5, 8; 75:14;
83:19; 104:6; 106:12; 108:9;
115:14; 116:16; 126:13,14,
24; 127:1,21; 128:14;
129:18; 135:16; 139:22;
145:1; 148:24; 149:3; 153:3,
6,'162:20; 181:1; 196:19;
200:3
works [4]
76:20,' 110:7; 195:13; 250:12
world [8]
30:15; 34:17; 40:23; 75:3;
82:17; 172:19; 195:16;
243:25
worth [4]
61:25; 209:21; 230:20;
252:14
wouldn't [18]
10:7; 14:18; 19:21, 25; 21 :8,
16; 28:20; 30:2; 62:2; 63:24;
94:19; 134:17; 180:7; 184:20;
192:21, 22; 253:3; 268:24
wrap [2]
110:12; 152:15
write [7]
29:3; 105:25; 209:16; 212:5,
21; 213:9; 256:15
write-offs [3]
113:18, 22,' 114:1
write-up [1]
160:22
writing [6]
48:20; 140:21; 213:5, 21;
251:12,' 259:8
written [17]
23:4; 65:16; 85:25,' 114:3;
144:1,'178:19,20,25; 179:3,
10; 210:24; 215:12, 15;
217:12; 246:22; 258:19;
260:5
wrong [19]
8:2,' 20:9; 32:22; 36:24;
40:10; 41:19; 160:25; 191:7;
192:19; 225:7; 234:2; 235:23,
25; 241:23,24; 242:1; 250:9,
17; 253:17
wrote [12]
85:21,25; 177:1; 178:1;
182:23; 183:23; 191:15;
213:15; 250:5; 251:5,' 256:14;
257:17

-yyards [1]
75:13
yeah [51J
8:24; 9:18; 50:17; 64:1; 73:1,
17; 97:20; 103:8; 114:13;
117:11; 118:20; 123:14;
124:25; 125:12; 135:20;
140:4; 142:3; 145:21; 148:22;
155:2; 161:18; 163:9; 173:23;
186:11,14; 194:25; 195:5;
212:1, 11; 216:6; 224:6;

Look-See(98)

230:13,' 234:13, 15; 238:6;
244:7, 22; 248:6; 249:5;
250:23; 251:23; 252:19;
254:7; 255:8; 256:18; 258:8,
17; 269:3, 8; 270:22, 25
year [13]
17:11; 30:24; 43:7; 45:20;
47:20; 70:2; 71:1; 181 :25;
216:2, 3; 217:3; 222:13;
233:10
year's [lJ
147:24
years [12J
13:3; 30:18; 31:11, 17, 20;
32:2; 69:7; 77:10; 195:7, 11,
14
yo [lJ
177:19
you'd [9]
68:10; 118:23; 142:25;
172:13; 199:23; 224:19;
230:19, 21; 267:20
you'll [8]
12:4; 42:4; 85:18; 165:4;
198:2; 263:20; 266:20,21
you've [22J
56:13; 61:24; 64:25; 82:21;
93:9; 95:9; 106:9; 113:13, 17;
147:16; 153:18; 201:21;
215:17; 231 :6,' 232:3; 240:5;
246:24; 252:12; 263:6;
264:13; 266:21; 267:24
young [7]
64:19; 195:2,6,17; 196:20;
253:23; 254:9
youngblood [15]
87:18; 103:10, 12; 104:20;
117:3; 130:18,21; 160:6,11;
167:6,11; 170:21; 171:6;
182:11; 191:21
youngblood's [3]
103:15; 106:11; 167:18
youngest [1]
5:2
yours [3]
75:8, 12; 202:18
yourself [8]
23:24; 29:22; 78:25; 118:2;
127:24; 166:17; 240:23;
242:10