Sunday, October 17, 2004

Halliburton: wholesaler to the axis of evil

Considering how Rupert Murdoch's Fox News is so rabidly pro-Bush, it's somewhat surprising to learn that his Sunday Times has been conducting an investigation designed to politically harm Vice President Dick Cheney.

Everyone knows that Cheney's connection to oil company Halliburton sounds a tad dodgy, especially considering the fact that his former employer is now the biggest private contractor for the US armed forces, but The Sunday Times has uncovered evidence that the company is also flaunting US trade sanctions, and has been supplying Iran - part of the axis of evil - with oil drilling equipment for the last nine years. Coincidentally, it was nine years ago that Dick Cheney became Chairman and CEO of the company...

In case it gets moved to the subscription-only section, here is an edited-down (and slightly re-arranged) version:

A Sunday Times investigation has established that Halliburton has been supplying Iran with oil drilling equipment through its companies based in Arbroath and Leatherhead.

The exports — estimated to be worth more than £30m a year — have continued despite sanctions introduced by the US government nine years ago barring Americans from trading or “facilitating” business with the Islamic state.

The subsidiary’s trade with Iran soared after Cheney took over as chief executive of Halliburton in 1995. Last year it shipped more than $6m in drilling equipment and goods to Iran, but trade has grown substantially this year. The Sunday Times has learnt that the company has orders worth $2.6m for October alone.

Although he resigned as Halliburton’s chief executive four years ago, Cheney has retained a substantial interest, owning an estimated $18m (£10m) in share options... He earned $44m during his tenure at Halliburton and continues to collect deferred compensation worth approximately $150,000 a year as well as the options he retains.

Halliburton's trade with Iran was acknowledged in a confidential letter from Halliburton to one of its shareholders in October last year. It listed five subsidiaries involved: three in Britain, one in the Cayman Islands and another in Sweden.

The company said the contracts were not a breach because the subsidiaries were operating independently and no US citizens had carried out or “facilitated” the work.

However, inquiries by The Sunday Times have revealed that the company does appear to be flouting sanctions because some goods and equipment supplied to Iran were manufactured and designed in America.

The exports range from high specification oil drilling equipment, such as pumps, castings and “hole completion screens”, to domestic toiletries. They are imported into Britain from the United States by Halliburton Manufacturing and Services Limited (HMSL) in Arbroath. According to company insiders, the goods are then shipped on to Iran.

The company believes this is not a breach of the sanctions because it is supplying Britain with what it calls “stock items”, rather than equipment that was deliberately earmarked for Iran.

The Arbroath subsidiary is one of the area’s biggest employers, and Iran is a growing market for its engineering and manufacturing services.

The unit makes high-grade drilling, boring and well completion tools and equipment. But according to company insiders, they are made to Halliburton’s US designs with cosmetic modifications to make them appear British.

A former director of HMSL said the Arbroath subsidiary in fact reported directly to senior Halliburton staff at its US manufacturing base in Duncan, Oklahoma. “Our firm in Arbroath is a manufacturing base, so it reported to our main manufacturing base in the US,” he said.

Another senior figure at Arbroath said: “There is a dotted line from Arbroath to the US because it is a wholly-owned subsidiary of an American company. We are a part of the Halliburton organisation and at some point everybody reports back to the US.”

These latest disclosures come as the company faces fraud, corruption and overcharging inquiries in the US, France and Nigeria. President Bush has ordered an investigation into the firm following allegations that it overcharged the American government by $90m to supply equipment for troops in Iraq and to revive the country’s war-damaged oil industry.

The company’s trade with Iran is already being investigated by the FBI for a federal grand jury inquiry ordered by the US Justice Department.

The company has already been fined $7.5m by the US Securities and Exchange Commission for secretly changing its accounting practices, which resulted in exaggerated earnings. The charges amounted to misleading shareholders about the value of the company and related to accounting practices in 1998 when Cheney was chief executive.

If the company is found to have broken sanctions, former or current Halliburton executives could face penalties of up to 10 years in prison and fines of up to $50,000.


Cheney could well be screwed. Couldn't happen to a nicer fella...

Update: Rising Hegemon has more on axis of evil corruption - including the news that Halliburton has received $18million of "reparations" from Iraq since the ousting of Saddam Hussein...

2 Comments:

Anonymous Anonymous said...

Shocking!
And should it surprise us that Haliburton has been profiteering out of the Axis of Evil companies, in defience of US law (the intent of the law if not the technicalities):
http://www.timesonline.co.uk/printFriendly/0,,1-523-1313325,00.html

10/17/2004 11:59:00 pm  
Blogger Catherine Vocalist said...

Aw, poor baby. hmph, give me a break...

10/19/2004 02:03:00 am  

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