Thursday, August 25, 2005
Halliburton: Another Very Special Company
In the first chapter of The Challenge To Power, I write a great deal about one of America’s most beloved companies: Halliburton. Our brave Vice President, Dick Cheney (remember the duct tape episode?), ran Halliburton from 1995 to 2000. As early as 1991, Cheney told a group of his oil company buddies that he was against getting rid of Sadam Hussein because the corporation needed Hussein’s money and our country needed his oil.
Also, when Cheney was running Halliburton, two subsidiaries, Dresser-Rand and Ingersol Dresser Pump Company, sold Hussein $73 million in oil field supplies. At that time, this fortuitously did not violate U.S. sanctions against Iraq for supporting a terrorist state because the company had conveniently located the subsidiaries “off shore.” Alas, Halliburton’s subsidiary in the Cayman Islands received an embarrassing grand jury subpoena last year for documents regarding their Iranian operations; since then, the office of Foreign Assets Control has referred their investigation of Halliburton to the U.S. Department of Justice. Thanks to the foresight in locating at least 44 of Halliburton’s subsidiaries in tax havens, the company also pays very little in federal taxes; in fact, Halliburton received an $85 million rebate in 1999.
Halliburton, of course, receives plenty of Defense Department contracts, from building prison cells in Guantanamo, Cuba, to running mess halls, dorms, and laundry services for U.S. military troops all over the world. The company has a lock on rebuilding Iraq’s oil industry even if Halliburton consistently over-bills the U.S. government. When Cheney was the company’s “leader,” Halliburton paid the government $2 million in fines for overbilling; in August 2004, the company paid $7.5 million to the SEC for failing to disclose how the company accounted for certain cost overruns, which resulted in the company issuing misleading profit numbers in 1998 and 1999.
Cost overruns, overbilling and faulty accounting are “business as usual” at Halliburton. The company is under investigation by the Pentagon to determine whether they overcharged the military $1.2 billion in fuel sales in Iraq, and a Pentagon audit found that Cheney’s old company failed to adequately account for about $4.2 billion the company was paid for providing logistical support for troops in Iraq and Kuwait. Oh, I forgot to add that the FBI is investigating the company employees who were reported to have accepted $6 million in illegal kickbacks. Halliburton has also been accused of overcharging on contracts in Afghanistan, another flowering oasis of company profits.
Following Halliburton’s disclosure of $2.4 million in “improper” payments by a company employee to a Nigerian tax official, an ongoing investigation has now pulled Chicago Bridge and Iron into the company’s web of crime partners. Chicago Bridge and Iron is a Halliburton subcontractor on the multibillion dollar TSKJ Bonner Island liquefied natural gas plant project. The SEC, the U.S. Department of Justice, and French and Nigerian officials are all investigating. The investigation has widened to not only looking for a violation of the U.S. Corrupt Practices Act, but a violation of U.S. antitrust laws. It seems that the former chairman of Halliburton’s Kellogg Brown & Root unit announced that he took payments from a British lawyer who was responsible for funneling between $130-140 million from the construction consortium to Nigerian officials.
What makes you feel warm inside is to know that Halliburton continues to receive large multi-billion dollar taxpayer-funded contracts, uses tax havens to avoid paying U.S. taxes to support the government that they bilk, overcharges on contracts, bribes foreign government officials, engages in business with terrorist nations, and “cooks the books,” all while former company executive Cheney receives $180,000 a year in deferred compensation.
Don’t you get a nice fuzzy feeling knowing that our government has so recognized what a good patriotic job Halliburton is doing for our country in Iraq and Afghanistan – at a cost of $10.5 billion – that the U.S. Army recently approved $9.4 million in bonus payments to the company’s Kellogg Brown & Root subsidiary?
Last year, Medea Benjamin, representing Global Exchange, and Pratap Chatterjee, representing Harrington Investments, Inc., were denied entry into the shareholders meeting in Houston, Texas. Both were holding shares of Halliburton and were serving as proxies for owners of the company, but were still denied entry. In fact, Medea was physically accosted and searched by corporate-paid security personnel. They were not allowed to attend the Halliburton meeting because they wanted to question the company’s management on all of the multiple ongoing government investigations. This year Medea was able to gain entry on behalf of Global Exchange and questioned management. The answers, of course, were evasive and promised to be supplied in the future. Don’t count on it. Corporations believe they are answerable to no one, certainly not the U.S. government or the legal owners of the company.
America is being privatized and corporatized at an increasing rate. American citizens are losing their sovereignty. In fact, we may have given up our nation’s sovereignty to the corporate-controlled World Trade Organization (WTO). Perhaps supreme power no longer rests with the people through our elected government, but with a sovereign that is corporate. Perhaps it is high time to reverse this loss of sovereignty and deconstruct the beast that we created. Perhaps it is time to return to a market economy and democratic control of capital: stay tuned.
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