Tuesday, January 27, 2004
Halliburton III: The Domination -- All Halliburton, All the Time
(and The American Leftist Halliburton-related Scandal Challenge)
With a new Halliburton scandal-related program activity unfolding as I write this, I thought it would be a good time to do a recap for those of you who are keeping score at home. Halliburton scandals are spread across three eras that I denote as follows: [I] The Hey-Cheney's-Old-Company-Was-Like-Enron era, [II] the Has-Halliburton-No-Shame era, and [III] the new I-Can't-Believe-There's-Another-Halliburton-Related-Scandal era. Plus, eras [I] and [II] are separated from each other by the ur-Halliburton scandal.
[I] Hey Cheney's Old Company Was Like Enron: With Cheney at the helm, Halliburton engaged in at least two kinds of Enron-like questionable business practices. It used fraudulent accounting to overstate its profits leading to scandal #1 when Halliburton, along with Cheney personally, was sued by the conservative watchdog group, Judicial Watch. According to Judicial Watch Chairman, Larry Klayman:
Vice President Cheney owes a full explanation to the American people concerning the accounting practices he instituted while heading Halliburton. The value of the company’s shares have dropped like a stone and many investors have been seriously hurt. Retirements and pensions have been wiped-out. But, Mr. Cheney cashed-out his stock options for $35 million dollars. Unfortunately, in Washington, DC, many investigations end up going nowhere, or the results turn out to be a ‘whitewash.’*
The lawsuit was eventually dismissed.
It is important to note that when I say Judicial Watch is a "conservative watchdog group" I don't mean it's a liberal nonprofit that monitors conservatives; rather, it monitors the federal government from a right-wing starve-the-beast perspective, an organization that spent most of the nineties filing lawsuits against the Clintons. So you can say what you like about this lawsuit, but you can't say it was a partisan attack.
Scandal #2: Halliburton's use of shill companies to avoid paying taxes. The number of Halliburton subsidiaries based in Carribean tax havens grew from 9 to 44 during Cheney's tenure as CEO. This led to the company's federal taxes dropping from 300$ million to less than zero over the course of a single year. All the while, of course, the company received billions in government handouts.
The Ur-Halliburton Scandal: Next came the main scandal associated with Halliburton, scandal #3. Halliburton was granted, without competitive bidding, contracts valued at 2$ billion for the reconstruction of Iraq at a time when the vice president of the United States was still on its payroll. Cheney maintains that he no longer has financial ties to the company of any consequence, but such claims were refuted by a report from the Congressional Research Service. According to the Washington Post, the report concluded that Cheney's deferred salary and stock options "may represent a continuing financial interest as defined by federal ethics laws."*
[II] Has Halliburton No Shame: Once Halliburton actually started doing things in Iraq all hell broke loose -- in particular, a set of scandals resulting from either incompetence and malfeasance or just malfeasance, depending on your level of cynicism. In scandal #4 Halliburton served US troops "dirty" food from kitchens featuring "blood all over the floor," "dirty pans," "dirty grills," "dirty salad bars", and "rotting meats ... and vegetables." On the malfeasance front, around this time Halliburton was accused of gouging US taxpayers by inflating the price of imported gasoline (scandal #5).
[III] I Can't Believe There's Another Halliburton-related Scandal: Which leads us to this new incident ... actually two seperate flaps that came out at the same time, scandal #6, chronologically of era [I] (but I'm including it here because, hey, what the hell, I'm writing this post and this is where I think it goes), occurred when the company disclosed that it paid $2 million in bribes to get tax breaks in Nigeria. A French judge warned Cheney that he could face criminal charges in France, for this one. The other recent flap, scandal #7, goes as follows. The US gave Halliburton subsidiary KBR two contracts in Iraq: one dealt with oil infrastructure; the other, with everything else. The oil infrastructure contract was the one involved in the gas gouging scandal; the 'everything else' contract was the one that led to serving unsanitary food to GI's. In the newest scandal, Halliburton employees working on the 'everything else' contract took 6$ million in kickbacks from a Kuwaiti subcontractor. Halliburton has admitted that this transaction occurred, the employees involved have been fired, and Halliburton has promised to pay back the government for any overbilling by the subcontractor resulting from the incident*.
It's pretty incredible that Halliburton is still going about its business in Iraq. Or maybe it isn't -- I mean, if you assume Halliburton is getting favorable treatment because of friends in high places what you would expect is that it wouldn't be held accountable for illegal activities, gross incompetence, occasional bribery, accepting kickbacks, and using questionable business practices.
If anyone knows of any scandals that I forgot about, put them in the comments of this post. It's the American Leftist Halliburton-related Scandal Challenge! To win you have to be able to back up your claim with a report from the mainstream media or a reputable leftwing source, but, you know, it can't just be your own blog posting in which you claim Halliburton killed your cat, and the Cheney energy commission stuff doesn't count -- it's got to be about Halliburton not just Cheney.