arch/ive/ief (2000 - 2005)

*(well the $900 million contract for rebuilding the basic infrastructure of Iraq)

1

In the catalogue of bad multinationals, it is possible to point to a few who are so unapologetic in their abuse of power and so totally morally bankrupt in their pursuit of profit, as to shock even the most hardened of cynics. In this current "War on Terrorism TM” a number of companies, such as Exxon, Lockheed Martin and Halliburton, will do "very nicely, thank you' out of the illegal attack on Iraq. It's not surprising really, as they, through their cosy links with government and key think-tanks such as Project for a New American Century, have written the script.

Halliburton is the least well known of this trio. It describes itself as "one of the largest providers of products and services to the oil and gas industries'2, as well as working closely with the US military in logistics planning and large scale infrastructure projects. Halliburton ranks 153 in the 2002 Fortune 5003. It is divided into two independently-run segments: Halliburton Energy Services and Kellogg, Brown and Root (although it is also known as KBR and sometimes just Brown and Root). Based in Houston, Texas, Halliburton operates in 100 countries and has over 85,000 employees world-wide. It also has many operations in the UK relating to the oil and gas industry as well as running Devonport Management Ltd., the company which runs the Devonport Naval dockyard where it is currently contracted to refit Britain's Trident nuclear submarines.

Halliburton has worked as a contractor for the US Government from the 1940s, notably throughout the Vietnam War when it built roads, landing strips, harbours and military bases. In December 2001, Kellogg, Brown and Root (KBR), a subsidiary of Halliburton, hit the jackpot, securing a 10 year deal known as the Logistics Civil Augmentation Program (LOGCAP) from the Pentagon. The contract basically means that the federal government has an open-ended mandate and budget to send Brown and Root anywhere in the world to run military operations at a profit.4 This has included a $22 million deal to run support services at Camp Stronghold Freedom, located at the Khanabad air base in central Uzbekistan, one of the main bases for US soldiers in the Afghanistan War.5

It is Halliburton's blatant connections to the current and previous Bush administrations which fundamentally discredits the motives of one of the leading warmongers in the Bush regime. Until 2000, when he left the company to become George W's running mate, current US Vice President, Dick Cheney, was Chief Executive of Halliburton. He joined the company in 1995 after it was awarded the job of studying, and then implementing the privatisation of routine army functions under the then secretary of defence…Dick Cheney.

And Cheney is still being paid by Halliburton. When he left in 2000, he opted not to have his leaving payment in a lump sum, but instead to have it paid to him over five years, possibly for tax reasons. The obligatory disclosure statement filled by all top government officials says only that these yearly payments are in a range of $100,000 and $1 million. Nor is it clear how they are calculated.6

Another current director of Halliburton is Lawrence Eagleburger, who was United States Secretary of State under George H.W. Bush from 1992 to the end of the administration. He was an executive assistant to Henry Kissinger during the Nixon administration, and helped set up the National Security Council staff.7

According to the Washington-based Centre for Responsive Politics, Halliburton gave 95 percent of its federal campaign contributions during the past two election cycles to the Republicans.8 Halliburton has also strongly supported the election funds of relevant chairmen of Senate and Congressional committees, including Ted Stevens, Republican chair of the appropriations committee.9

Halliburton was one of five US corporations controversially invited by USAID to make a bid for a $600 million contract to rebuild the basic infrastructure of Iraq. Although it has not been short-listed for this project,10 has already made a "killing' out of the attack on Iraq. Thousands of Halliburton employees are worked alongside US troops in Kuwait and Turkey under a package deal worth close to a billion dollars. According to US Army sources, the company built tent cities to support 80,000 foreign troops (complete with Burger King, Subway and Baskin-Robbins) and provided logistical support for the war on Iraq. Halliburton has already clinched a contract to develop a plan for extinguishing oil field fires and rebuilding damaged petroleum infrastructure, a role they also played in the first Gulf War.11

Approximately 1500 civilians also reportedly worked for Brown and Root and the United States military near the city of Adana, in Turkey, from where US soldiers were monitoring the no-fly zone over Northern Iraq. These troops were catered for and housed at Incirlik military base outside Adana, by Vinnell, Brown and Root, a joint venture between Brown and Root and the Vinnell corporation of Fairfax, Virginia, which includes two more minor military sites in Turkey (and the maintenace of a golf course!). The US military is unabashed for their reason for outsourcing this maintenance work - cheap labour.

"The reason that the military goes to contracting is largely because its more cost effective in certain areas…we don't have to pay health care and all the other things for the employees', says Major Toni Kemper, head of public affairs at Incirlik base.12

Despite having missed out on the current reconstruction contract, after Iraq is flattened it has been estimated, by a bipartisan panel of experts convened by the Council on Foreign Relations, that reconstruction will cost $20 billion a year, so Halliburton still has all to play for. Especially since oil exploration and development deals for post war Iraq are still unresolved.

The punch-line to all this, of course, is that despite Cheney having helped to design UN economic sanctions to isolate Iraq, through foreign subsidiaries and affiliates, Halliburton became the biggest oil contractor for Iraq during the period of sanctions, selling more than $73 million in goods and services to Saddam Hussein's regime.13

Other Halliburton crimes and misdemeanours:

1) Operating in countries with dubious human rights records

Halliburton operate in Afghanistan, Algeria, Angola, Colombia, Indonesia, Libya (where it was fined for violating US sanctions) Nigeria and Russia - all countries which are currently politically unstable with dubious human rights records.

In Venezuela last year (2002), Halliburton found its offshore oil rigs seized by protestors which disrupted its ability to operate.14

Halliburton's operations in Burma have come under heavy scrutiny, although it is no longer clear if the company is still operating there. Halliburton joined oil companies in Burma working on two notorious gas pipelines, the Yadana and Yetagun. According to an Earth Rights report,15 "from 1992, until the present (2000), thousands of villagers in Burma were force to work in support of these pipelines and related infrastructure, lost their homes due to forced relocation, and were raped, tortured and killed by soldiers hired by companies as security guards for the pipelines. One of Halliburton's projects was undertaken during Dick Cheney's tenure as CEO.

KBR has so far been awarded contracts worth $33 million to build the US detention camp at Guantanamo Bay, Cuba, where 641 Al-Qaida suspects are at the time of writing being illegally detained and being denied the basic rights guaranteed to Prisoners of War under the Third Geneva Convention. Reports suggest that they are being subjected to "torture lite', being deprived of sleep and subjected to constant bright light.16

Halliburton has been asked to review its operations in Iran by two major investors, the New York City Police and Fire Pension funds, because of corporate ties to states sponsoring terrorist activities. Current government sanctions prohibit US corporations from virtually all trade and investment with Iran. Halliburton opened an office in Iran via its Cayman Island subsidiary, Halliburton Products and Services Ltd.17

2) Dodgy business practices
Halliburton is currently subject to a Securities and Exchange Commission probe for questionable accounting practices relating to cost overruns on projects carried out during Cheney's tenure as CEO.18

Furthermore, in July 2002, Judicial Watch filed a shareholder lawsuit accusing US vice president Dick Cheney, Halliburton, and accounting firm Andersen of accounting fraud. "They overstated their revenues by tens of millions of dollars and that's an understatement," claimed Larry Klayman, chairman and general counsel at Judicial Watch, as the suit was filed in Dallas federal court. "We're seeking millions and millions of dollars ... it's to punish the people involved."19

The change in accountancy practices could well be put down to the company's auditors, the discredited accountancy firm, Arthur Andersen. Both Dick Cheney and the company's current CEO, David Lasar have close personal connections with the accountancy firm.20

According to the Government Accounting Office (GAO), Halliburton has seriously overrun its budget in Bosnia by almost £300 million.21 The GAO suspectsts foul play, or at the very least extremely sloppy business practices.

3) Stalling on paying-up for asbestos claims
In 1998, Halliburton bought smaller rival Dresser Industries Inc., only to have it backfire on them when Dresser suffered defeat in a key asbestos litigation case. This paved the way for asbestos lawyers to come down heavily on Halliburton.

Since 1976, approximately 578,000 asbestos claims have been filed against Halliburton.22 In December 2002, they reached a settlement for around $4.2billion under which they will have to legally restructure, followed by prepackaged bankruptcy filings of DII Industries and Kellogg Brown & Root, Inc as well as certain other DII and KBR subsidiaries with US operations and named as defendants in asbestos lawsuits. Unfortunately Halliburton itself won't be bankrupted by these claims as most of the costs will be covered by Halliburton's liability insurance. However, it could seriously affect share prices as Moody's Investor Services are considering cutting Halliburton's share ratings.23

It seemed as though Halliburton's cosy connections could have got them off this one. The idea of limiting asbestos liability has been kicking around in Congress for years. And the company has contributed more than $100,000 to legislators who supported the notion. Cheney even kicked in $13,500 when he was a corporate officer.24

4) Serious security lapse and radioactive leaks at the nuclear dockyard in Plymouth
Halliburton runs Devonport Management Ltd (DML). DML has controlled the Devonport dockyards, in Plymouth since they were privatised in 1985.It is here that the UK's Trident nuclear submarines are currently being refitted and four are decommissioned.

In November 2002, two activists from the Trident Ploughshares group broke into the military dock, managed to climb on the submarine, HMS Vanguard, that was being refitted and ring its bell. It had had its nuclear warheads removed before coming into the dock.25

A recent Red Pepper article revealed the threat posed to the health and safety of the people of Plymouth by the negligence of DML and the UK government, which allows increased levels of radioactive pollution (tritium) to leach into the River Tamar, and has failed to mend the serious cracks in the coolant systems of the UK's nuclear submarines.26

And if you were thinking of paying Halliburton a visit they have numerous sites in the UK including

KBR (and Granherne Ltd.)
Hill Park South
Springfield Drive
Leatherhead
Surrey
England
Phone numbers: 01372 865000 and 01372 868296

Devonport Management Ltd
Devonport Dockyard
Plymouth
Devon PL1 3SG
01752 605665

For all UK locations see: http://www.halliburton.com/ofc_loc/location_search.jsp?USA=0&rgn=EU&cnt=United%20Kingdom

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1 Harvey Wasserman author of "The Last Energy War' quoted by Pratap Chatterjee in "Halliburton Makes a Killing on Iraq War' 20/3/03, http://www.corpwatch.org/issues/PID.jsp?articleid=6008 , viewed 21/4/03.

2 About Halliburton, http://www.halliburton.com/about/index.jsp , viewed 21/4/03.

3 Fortune (2003) The 2003 Fortune 500, http://www.fortune.com/fortune/fortune500/0,16741,101,00.html , viewed 21/4/03.

4 Chatterjee, P. (2003) Cheney's Close Ties to Brown and Root, 20/3/03, http://www.corpwatch.org/issues/PID.jsp?articleid=6028 , viewed 21/4/03.

5 Chatterjee, P. (2003) Halliburton makes a killing from Iraq War, 20/3/03, http://www.corpwatch.org/issues/PID.jsp?articleid=6008 ,viewed 21/4/03.

6 Bryce, R. & Borger, J. (2003) Cheney is still paid by Pentagon contractor, The Guardian, 12/3/03, http://www.guardian.co.uk/Iraq/Story/0,2763,912515,00.html , viewed 21/4/03.

7 CNN (2001) Lawrence Eagleburger: Not removing Saddam was probably a mistake, 21/11/01, viewed at: http://216.239.37.100/search?q=cache:lXGuJubRX48C:http://www.cnn.com/2001/COMMUNITY/11/20
/eagleburger.cnna/+lawrence+eagleburger&hl=en&ie=UTF-8 , viewed 21/4/03.

8 Mattera, P. (2003) Privatising the Spoils of War: Paying companies to rebuild post-invasion Iraq. Corporate Research e-letter No. 33. March 2003, http://www.ctj.org/itep/crp/mar03.htm , viewed 21/4/03.

9 Morgan, O. (2003) Bush's Republican Guard, The Observer, 16/3/03, http://www.observer.co.uk/iraq/story/0,12239,914977,00.html , viewed 21/4/03.

10 Reuters (2003) Report: Halliburton out of Iraq deal race, available at: http://news.findlaw.com/business/s/20030328/iraqusahalliburtondc.html , viewed 21/4/03.

11 Chatterjee, P. (2003) Halliburton makes a killing from Iraq War, 20/3/03, http://www.corpwatch.org/issues/PID.jsp?articleid=6008 ,viewed 21/4/03.

12 Chatterjee, P. (2003)Vinnel, Brown and Root at Turkey's Incirlik airbase, 20/3/03, http://www.corpwatch.org/issues/PID.jsp?articleid=6030 , viewed 21/4/03.

13 Lynch, C. (2001) Halliburton's Iraq Deals Greater Than Cheney Has Said, Affiliates Had $73 Million in Contracts, Special to The Washington Post, 23/7/01, http://gwbush.com/spots/postpage.html , viewed 21/4/03.

14Halliburton (2003) SEC form 10-K, filed 28/3/03, available at: http://ir.thomsonfn.com/InvestorRelations/SecFilings.aspx?partner=Mzg0TlRJNE1nPT1QJFkEQUALSTO&product
=MzgwU1ZJPVAkWQEQUALSTOEQUALSTO , viewed 21/4/03.

15 Earthrights International (2000) Halliburton's destructive engagement, http://www.earthrights.org/halliburton/report.pdf , viewed 21/4/03.

16 Monbiot, G. (2003) One rule for them: Five PoW are mistreated in Iraq and the US cries foul. What about Gunatanamo Bay? The Guardian, 25/3/03, http://www.guardian.co.uk/Print/0,3858,4632629,00.html , viewed 21/4/03.

17Thompson, W.C. (2003)Press Release: Comptroller calls for review of U.S. Firms' ties to terrorism, http://www.comptroller.nyc.gov/press/2003_releases/pr03-02-012.shtm , viewed 21/4/03.

18 Berenson, A. (2002) Halliburton and Inquiry by the S.E.C., New York Times. 30/5/02, http://www.nytimes.com/auth/login?URI=http://www.nytimes.com/2002/05/30/business/30HALL.html&OQ=todaysheadlines , viewed 21/4/03.

19 Tran, M. (2002) Fraud lawsuit filed against US vice president, 10/7/02, The Guardian, http://www.guardian.co.uk/bush/story/0,7369,752722,00.html , viewed 21/4/03.

20 Ibid.; Berenson, A. (2002) Halliburton and Inquiry by the S.E.C., New York Times. 30/5/02, http://www.nytimes.com/auth/login?URI=http://www.nytimes.com/2002/05/30/business/30HALL.html&OQ=todaysheadlines , viewed 21/4/03.

21 Chatterjee, P. (2003) Cheney's Close Ties to Brown and Root, 20/3/03, http://www.corpwatch.org/issues/PID.jsp?articleid=6028 , viewed 21/4/03.

22 Halliburton SEC Form 10-K – filed 28/3/03

23 AFX News (2002) Halliburton settles asbestos claims for about $4 billion in cash and stock, 18/12/02 http://www.ananova.com/business/story/sm_730510.html?menu , viewed 21/4/03.

24 France, M., Anderson Forest, S., Cohn, L. & Arndt, M. (2001) The Asbestos Monster: How Scary for Halliburton?, Business Week, 24/12/01, http://www.businessweek.com/magazine/content/01_52/b3763046.htm , viewed 21/4/03.

25 BBC (2002) Nuclear base 'intruders' charged, 16/11/02, http://news.bbc.co.uk/1/hi/england/2483963.stm , viewed 21/4/03.

26 Carey, J. (2001) Nuclear Submarines, Tritium Release and Plymouth, Red Pepper, February 2001 http://www.redpepper.org.uk/natarch/xplymouth.html , viewed 21/4/03