A Handy Guide to
Halliburton for the VP Debate
Directory of information:
1) Conflict of interest: Cheney continues to receive income from Halliburton
2) Cheney’s
involvement in awarding no-bid contract to Halliburton
3) Iraq contracts:
Criminal investigations and rampant waste, fraud and abuse
4) Doing business
with “Axis of Evil” countries like
5) Halliburton’s
sales to Saddam Hussein under Cheney
6) Halliburton paid
bribes during Cheney's reign, say investigators
7) Halliburton and
‘frivolous’ lawsuits
8) Leaving workers
and retirees behind
9) Accounting fraud
10) Corporate welfare
11) Asbestos
liability: Cheney’s legacy
12) Donald
Rumsfeld
13) Offshore tax havens
1) Conflict of interest: Cheney continues to receive income from Halliburton
In 2003, Cheney said
“I have no financial interest in Halliburton of any kind.” But he continues to
receive income
of over $150,000
from Halliburton each year and holds 433,333 shares of unexercised stock options
in the company. Congressman Henry Waxman (D-CA) of the House Government Reform
Committee has asked
Cheney to provide further information.
2) Cheney’s involvement in awarding no-bid contract to Halliburton
Cheney told NBC's Meet the Press
"I have absolutely no influence of, involvement of, knowledge of in any
way, shape or form of contracts led by the [Army] Corps of Engineers or anybody
else in the Federal Government." But an internal Pentagon email
contradicts Cheney's denial, explaining that months before the war "action"
on the Iraqi oil contract was "coordinated" with Cheney's
office. Moreover, two months before the U.S.-led invasion of Iraq, the Wall Street Journal reported, "The Bush administration is eager to secure Iraq's oil fields and rehabilitate them, industry officials say. They say Mr. Cheney's staff hosted an informational meeting with industry executives in October, with Exxon Mobil Corp., Chevron Texaco Corp., ConocoPhillips and Halliburton among the companies represented. Both the Bush administration and the companies say such a meeting never took place." (Thaddeus Herrick, "U.S. Oil Wants to Work in Iraq," Wall Street Journal, Jan. 17, 2003.) In addition, Cheney resisted public requests for disclosure of documents relating to his secret Energy Task Force that proved he was investigating Iraq's oil fields prior to the war. The documents were released only after a judge ordered Cheney to make them public.
3)
As the recipient of contracts worth an estimated $18
billion, Halliburton is the biggest war profiteer in the
a) The Department of Justice is conducting a criminal
investigation into allegations
that Halliburton gouged
the taxpayers for $61 million for gasoline;
a separate criminal investigation is ongoing into charges that two employees
took kickbacks
from a subcontractor.
b) The Pentagon's Defense Contract Audit Agency (DCAA) completed a
comprehensive review
of Halliburton's system for billing the government for meals served to the
troops in the
c) A number of ex-employees have returned from the Middle East and blown the whistle on all
kinds of waste, fraud and abuse, including charges
of $45 per case of soda, $100 per 15-pound bag of laundry, the ditching of
$85,000 trucks because of flat tires and other minor repair problems and the
use of five-star hotels in Kuwait while the troops are sweating it out in tents
in the desert.
d) In August the Pentagon’s auditors
and Halliburton could not justify
$1.8 billion of $4.3 billion (or 43 percent) in bills
submitted by the company under one contract. Although at least 25 separate
criminal investigations into various reconstruction contractors are underway,
the Bush administration has yet to suspend or debar a single contractor in
e) Halliburton is under investigation
by the Justice Department for possible over billing on government services work
done in the Balkans from 1996 through 2000, i.e., the period when Cheney was
CEO. The GAO found
inflated costs, including charges
for cleaning some offices up to four times a day. Based on an internal
investigation, Halliburton credited the government approximately $2 million
during 2000 and 2001 related to its work in the Balkans as a result of
unsupported billings.
f) The Los Angeles Times reported that "the Army recently renegotiated a
contract that Halliburton had with a Kuwaiti company to provide meals. By
contracting directly with the Kuwaiti company instead of going through
Halliburton, the Army knocked 40 percent off the cost of the contract."
Once the Pentagon dealt directly with the Kuwaiti-owned company, known as
Timimi Co., the cost per-meal dropped from about $5 to about $3, according
to GAO Comptroller David Walker. (
g) Last December, amid allegations of overcharging, the Pentagon fired
Halliburton from its gasoline importation contract
and assigned it to an office within the Pentagon known as the Defense Energy
Support Center (DESC). The result was a 50
percent reduction in gasoline prices charged to
4) Doing business with “Axis of Evil” countries like
Cheney has said
the
5) Halliburton’s sales to Saddam Hussein under Cheney
In 2000, Cheney claimed
Halliburton had no business deals with Saddam Hussein during his time as CEO.
But he misled
6) Halliburton paid bribes during Cheney's reign, say investigators
A scheme to bribe the government of Nigeria –
hatched before Cheney arrived -- continued when he was CEO, when a lawyer who allegedly
masterminded the use of Swiss bank accounts was rehired over objections from
other partners involved in a large liquid natural gas (LNG) project. Cheney
also hired Albert “Jack” Stanley -- a top KBR executive who was fired this year
after $5 million was found in his Swiss bank account in association with the
scheme. Cheney and his lawyers have refused comment. Bribing foreign
governments is a criminal offense under the U.S. Foreign Corrupt Practices Act.
7) Halliburton and ‘frivolous’ lawsuits
Cheney says
the court system is filled with too many lawsuits. But during his 5-year tenure
as CEO, Halliburton was more than willing to file its own lawsuits in
8) Leaving workers and retirees behind
As CEO of Halliburton, Cheney masterminded a business merger that
robbed $25 million from worker pensions. Nine months after plundering the
company’s pensions, the board of directors, with Cheney as chairman, awarded
Cheney a $20 million pension. Pension experts
say Cheney’s pension-profiteering was “scandalous.”
9) Accounting fraud
The Securities and Exchange Commission (SEC) said Halliburton provided
"materially misleading" information on its accounting statements
during the period when Cheney was CEO, thereby defrauding Wall Street and
individual investors. Cheney signed those accounting statements as “accurate”
and “honest.” The SEC agreed to settle the
investigation in August after Halliburton agreed to pay a $7.5 million fine and
stop "committing or causing future securities law violations." A
In 1996, Cheney appeared
in a promotional video
for the now disgraced accounting firm Arthur Andersen. "I get good advice, if you
will, from their people, based upon how we are doing business and how we are
operating, over and above the normal, by-the-books auditing arrangement,"
Cheney said. Andersen was convicted of obstructing justice by shredding
documents relating to the failed
10) Corporate welfare
During the 2000 debate
with Senator Lieberman, in referring to the $44 million he received for five
year's work at Halliburton -- Cheney said, "I tell you that the government
had absolutely nothing to do with it." But it was Cheney himself who as
Secretary of Defense paid Brown & Root Services, a Halliburton subsidiary,
$9 million to conduct a study that led to the creation of the logistics
contract (LOGCAP) that first went to KBR in 1992 and has allowed Halliburton to
rise to the top of the Army’s list of contractors today. Halliburton’s LOGCAP
III contract for its work in
11) Asbestos liability: Cheney’s legacy
Cheney’s tenure as CEO for Halliburton is erroneously reported by the
mainstream media as a “success.” In fact, his incompetence and lack of business
experience are the reason why Halliburton failed to earn a profit over the last
two years despite skyrocketing revenues from
12) Donald Rumsfeld
In 1966, Donald H. Rumsfeld, then a Republican member of the House of
Representatives from
13) Offshore tax havens
Congress reported that Halliburton owns 17 subsidiaries in tax haven countries, including 13 in the Cayman Islands, which has no corporate income tax, two in Liechtenstein and two in Panama.
An analysis by CitizenWorks.org found a far greater number Halliburton tax havens. The nonprofit public interest group found that, while Dick Cheney was CEO of Halliburton (between 1995 and 2000), the number of Halliburton subsidiaries incorporated in offshore tax havens rose from 9 to 44. CitizenWorks.org also found that the Fortune 500 companies with the most offshore tax havens are dominated by energy firms, including El Paso (#1), AES (#2), Aon (#5), Mirant (#7), Halliburton (#8), and Williams (#14).
Tax havens have benefited corporate America tremendously. The tax savings to Halliburton, and the corresponding tax loss to individual American taxpayers, are enormous. Halliburton paid only $15 million of its $80 million in total taxes (or 19 percent) to the U.S. government in 2002. The remaining 81 percent of the company's taxes went to foreign governments. Although Halliburton is an "American" corporation on paper, it is actually a foreign corporation that has no allegiance to the United States.