ABOUT HALLIBURTON

"We hope Iraq will be the first domino and that Libya and Iran will follow. We don't like being kept out of markets because it gives our competitors an unfair advantage," John Gibson, chief executive of Halliburton's Energy Service Group, told International Oil Daily in an interview in May of 2003.¹

Some of the most significant sanctions against doing business with Libya were put in place by President Reagan in 1986, in response to the country's use and support of terrorism against the United States and other countries. The sanctions banned most sales of goods, technology and services to Libya. They provided for criminal penalties of up to 10 years in prison and $500,000 in corporate and $250,000 in individual fines.²

Despite these sanctions, Halliburton subsidiary Brown & Root had worked in Libya ever since the 1980s. The company helped construct a system of underground pipes and wells that purportedly are intended to carry water. But according to Congressman Waxman, "some experts believe that the pipes have a military purpose. The pipes are large enough to accommodate military vehicles and appear to be more elaborate than is needed for holding water. The company began working on the project in 1984 and transferred the work to its British office after the 1986 sanctions were enacted in the United States.³

In 1995, Halliburton was fined $3.8 million for re-exporting U.S. goods through a foreign subsidiary to Libya in violation of U.S. sanctions.⁴ The company reportedly peddled oil drilling tools (pulse neutron generators) that critics say can be used to trigger nuclear bombs.⁵ So, while the Bush administration triumphs over Libya's recent surrender of weapons of mass destruction programs to U.S. authorities, it was Halliburton which contributed to their creation in the first place.

As is the case with the company's business in Iran, Halliburton works in Libya through foreign subsidiaries, a legal route around sanctions. In March, 2004, Halliburton reported to the SEC that it continues to own "several non-United States subsidiaries and/or non-United States joint ventures that operate in or manufacture goods destined for, or render services in Libya."⁶ News reports indicate that the Libyan branch of Halliburton Germany GmbH is involved in Libya.⁷ In 2003, US government officials warned RWE, the second-largest German utility, that it could face sanctions against its US operations if it does not scale back plans for a project in Libya.⁸

At a 1998 Cato Institute meeting Cheney argued that sanctions "don't work. � I think it is important for us to recognize as a nation the enormous value of having American businesses engaged around the world." During Cheney's tenure as CEO Halliburton was a leading member of USA Engage, a lobbying group organized to oppose U.S. sanctions policy. In 2000, Congressman Brad Sherman (D-CA) accused Halliburton of "undermining American foreign policy to the fullest extent allowed by law" by doing business in countries like Iran and Libya. He predicted "a slow wearing down" of sanctions against Iran and Libya in the event that Bush-Cheney won the election.⁹

In April 2001, the Washington Post reported that Cheney's Energy Task Force recommended reviewing the sanctions against Iran and Libya as part of a plan to increase U.S. oil supply.¹⁰ UN sanctions were lifted on September 12, 2003. In February, the White House lifted a 23-year-old ban on Americans traveling to Libya and said U.S. companies that had been in Libya before the sanctions can start negotiating their return, pending the end of the trade ban. Conveniently, Halliburton was in Libya before the ban. Washington is expected to lift all sanctions in 2004 after Libya surrendered its programs for weapons of mass destruction.

As vice president, Cheney recommended a "comprehensive review of sanctions" as part of the National Energy Review, suggesting that sanctions against oil-producing nations should be relaxed to improve "energy security." In 2002, the administration supported a bill that would have weakened trade restrictions on high-speed computers and other technology that can be used to develop nuclear weapons.

As the New Yorker has suggested, "In some ways, the Libya and Iran transactions were consistent with Cheney's views. He had long opposed economic sanctions as a political tool, even against South Africa's apartheid regime.

Footnotes

1. "Halliburton Eager for Work Across the Mideast," International Oil Daily, May 7, 2003.

2. Rep. Henry Waxman, letter to Donald Rumsfeld, Secretary of Defense, April 30, 2003. http://www.house.gov/reform/min/pdfs/pdf_inves/pdf_admin_halliburton_contract_april_30_let.pdf

3. Id.

4. Id.

5. "Feds Scrutinize Halliburton Exports," Dallas Business Journal, April 24, 1992.

6. Halliburton 10-K for 2003. Filed on March 15, 2004.

7. Niko Price, "Sanctions keep U.S. Business out of Libya," Edmonton Journal, March 1, 2004.

8. "Contracting Draws US Warning for RWE," Financial Times, August 5, 2003.

9. "Cheney Profited Richly from His time in Office," Baltimore Sun, August 16, 2000.

10. Peter Behr and Alan Sipress, "Energy Panel Seeks Review Of Sanctions," Washington Post, April 19, 2001.