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Halliburton Plc - Corporate Crimes

Halliburton Plc.

A Corporate Profile

By Corporate Watch UK
Completed July 2003

Corporate crimes


Presented below is a mere taster of the foul world of Halliburton and is by no means a comprehensive overview of the company's corporate crimes. The company has been accused of a wealth of misdemeanours, including racial discrimination, not allowing its employees to file discrimination suits and of being viciously anti-union. 'Brown & Root as an entity has never had a labor agreement,' claims Dale Wortham, president of the Harris County AFL-CIO in Houston. 'They have been one of the most anti-union, anti-worker corporations in the world.'74

Respect for human rights
Halliburton has succeeded by partnering or engaging with governments around the world –– including some of the most repressive regimes in the world - and has been complicit in numerous human rights violations. In order to do business with dictators and despots, Halliburton has skirted US sanctions and made considerable efforts to eliminate those sanctions. Halliburton’s dealings in seven countries – Burma, Cuba, Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria – show the extent of its willingness to do business where human rights are not respected.75

Adventures in Burma...
'We don’t do business in Burma,' claims Halliburton spokesperson Wendy Hall. But while the company may have no current direct investments in Burma, it has participated in a number of energy development projects there, including the notorious Yadana and Yetagun pipelines. Prior to the gas pipeline’s construction, the Burmese military forcibly relocated towns along the onshore route. According to the US Department of Labor, 'credible evidence exists that several villages along the route were forcibly relocated or depopulated in the months before the production-sharing agreement was signed.'76 According to an Earth Rights report: 'From 1992, until the present (2000), thousands of villagers in Burma were forced to work in support of these pipelines and related infrastructure. They lost their homes due to forced relocation and were raped, tortured and killed by soldiers hired by companies as security guards for the pipelines.'77 In addition, as the largest foreign investment project in Burma, the pipelines will provide revenue to prop up the regime, perhaps for decades to come.

Shortly before the US presidential election, Dick Cheney admitted on the Larry King Live! show that Halliburton had done contract work in Burma. Cheney defended the project by saying that Halliburton had not broken the US law imposing sanctions on Burma, which forbids new investments in the country. 'You have to operate in some very difficult places and oftentimes in countries that are governed in a manner that’s not consistent with our principles here in the United States,' Cheney told Larry King. 'But the world’s not made up only of democracies.' Halliburton’s engagement in Burma predates Dick Cheney’s tenure as CEO. Halliburton had an office in Rangoon as early as 1990, two years after the military regime took power by voiding the election of the National League for Democracy, the party of Aung San Suu Kyi. In the early 1990’s, Halliburton Energy Services joined with Alfred McAlpine (UK) to provide pre-commissioning services to the Yadana pipeline. In 1997, after Dick Cheney joined Halliburton, the Yadana field developers hired European Marine Services (EMC) to lay the 365-kilometer offshore portion of the Yadana gas pipeline. EMC is a 50-50 joint venture between Halliburton and Saipem of Italy. From July to October 1997, EMC installed the 360-inch diameter line using its pipelaying barges. The route followed by Halliburton and Saipem was chosen by the Burmese government to minimize costs, even though the onshore pipeline path would cut through politically sensitive areas inhabited by ethnic minorities in the Tenasserim region of Burma. Given the Burmese military’s well-documented history of human rights violations and brutality, human rights groups say the western companies knew or should have known that human rights crimes would accompany Burmese troops into the onshore pipeline region. They say there was ample evidence in the public domain that such violations were already occurring when Halliburton chose to lay pipe for the project. As Katie Redford, a lawyer with EarthRights International puts it, 'To be involved in the Yadana pipeline is to knowingly accept brutal violations of human rights as part of doing business.'

Cuba...
The US Navy announced in June 2003 that it had awarded Halliburton a $12.5 million contract to build new troop facilities at Guantanamo Bay, Cuba where suspected al Qaeda prisoners are being held and may be tried before military tribunals.78 This is in addition to the $33 million contract it received to build the US detention camp where 641 Al-Qaida suspects are being illegally detained and 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.79 The new contract, awarded to subsidiary, Brown & Root Services, will build sleeping quarters as well as dining facilities for troops, construct traffic control checkpoints, and reinforce detention buildings in case of extreme weather, the Pentagon said.

Azerbaijan...
Dick Cheney lobbied to remove Congressional sanctions against aid to Azerbaijan, sanctions imposed because of concerns about ethnic cleansing. Cheney said the sanctions were the result only of groundless campaigning by the Armenian-American lobby. In 1997, Halliburton subsidiary Brown & Root bid on a major Caspian project from the Azerbaijan International Operating Company.80

Indonesia...
Halliburton had extensive investments and contracts in Suharto’s Indonesia. One of its contracts was cancelled by the post-Suharto government during a purging of corruptly awarded contracts. Indonesia Corruption Watch named Kellogg Brown & Root (Halliburton’s engineering division) among 59 companies using collusive, corruptive and nepotistic practices in deals involving former President Suharto’s family.81


Iran...
Dick Cheney has lobbied against the current government Iran-Libya Sanctions Act which prohibits US corporations from virtually all trade and investment with Iran. Even with the Act in place, Halliburton has continued to operate in Iran. The company opened an office in Iran via its Cayman Island subsidiary, Halliburton Products and Services Ltd. Two major investors, the New York City Police and Fire Pension funds, have asked Halliburton to review its operations in Iran because of corporate ties to states sponsoring terrorist activities. Halliburton settled with the Department of Commerce in 1997, before Cheney became CEO, over allegations relating to Iran for $15,000, without admitting any wrongdoing.82


Iraq...
Dick Cheney cited multilateral sanctions against Iraq as an example of sanctions he supported. During the 2000 presidential campaign, Cheney said Halliburton did business with Libya and Iran through foreign subsidiaries, but maintained he had imposed a 'firm policy' against trading with Iraq. 'Iraq's different,' the Post quoted him as saying. Despite this it was subsequently revealed that Halliburton had signed contracts with Iraq worth $73 million while Cheney was at the helm.83 Since the decision to invade Iraq was made public, people have come to accept the inevitability of the reconstruction process. However, a story reported in the Wall Street Journal on the 16th of January claimed that the vice president's office met with Halliburton and members of other companies as far back as October 2002 to plan oil production in Iraq.84 So far, Halliburton has gained $500 million worth of work in Iraq. The ceiling of how much it could potentially earn in its contract with the US Army Corps of Engineers currently stands at $7billion.85

Libya...
Before Cheney’s arrival, Halliburton was deeply involved in Libya, earning $44.7 million there in 1993. After sanctions on Libya were imposed, earnings dropped to $12.4 million in 1994. Halliburton continued doing business in Libya throughout Cheney’s tenure. One Member of Congress accused the company 'of undermining American foreign policy to the full extent allowed by law.'86

Nigeria...
Local villagers have accused Halliburton of complicity in the shooting of a protester by Nigeria’s Mobile Police Unit, playing a similar role to Shell and Chevron in the mobilisation of the ‘kill and go' unit to protect company property. Additionally, in May 2003, Halliburton subsidiary, Kellogg Brown & Root, revealed to the Securities and Exchange Commission that it paid bribes totalling $2.4 million to a tax official in Nigeria in an effort to obtain favourable tax treatment. The company may have to pay as much as $5 million in back taxes to the Nigerian government.87

Corporate corruption
In April 2002 Halliburton decided to replace the discredited Arthur Anderson LLP accounting firm with KPMG LLP. This is despite CEO Dave Lesar's claim that 'for more than 50 years Andersen has provided Halliburton with outstanding audit services and adhered to a high standard of professionalism'.88
A brief look at Anderson's history suggests that Lesar's definition of 'professionalism' is slightly unusual. The accounting firm was ordered to pay $500,000 and sentenced to five years probation in October 2002 for obstructing justice in a probe of its client Enron.89 This was in addition to a $7 million fine in June 2002, the biggest civil penalty ever assessed against a Big Five accounting firm, after the SEC said its audits of Waste Management's financial statements were 'false and misleading.' Anderson also provided a change in accounting rules enabling Halliburton to collect on cost overruns on myriad construction projects. This meant that Halliburton was able to inflate profits by $234 million over a four-year period. When the Securities and Exchange Commission found out, more than a dozen law suits emerged alleging fraud and they began an ongoing probe for questionable accounting practices. 90 According to the Government Accounting Office (GAO), Halliburton has also seriously overrun its budget in Bosnia by almost £300 million. The GAO suspects foul play.91

Attempting to avoid paying-up for asbestos claims
Since 1976, approximately 578,000 asbestos claims have been filed against Halliburton.92 In December 2002, the company reached a settlement for around $4.2 billion under which it will have to legally restructure, followed by pre-packaged bankruptcy filings of DII Industries and Kellogg Brown & Root Inc.
Unfortunately, Halliburton itself won’t be bankrupted by these claims as most of the costs will be covered by Halliburton’s liability insurance. However, they could seriously affect share prices as Moody’s Investor Services are considering cutting Halliburton’s share ratings.93
However, it seems 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 support the notion. Cheney even kicked in $13,500 when he was a corporate officer.94

Security lapses and radioactive leaks at nuclear dockyard
Halliburton runs Devonport Management Ltd (DML). DML has controlled the Devonport dockyards in Plymouth (South West England) since they were privatised in 1985. It is here that the UK’s Trident nuclear submarines are currently being refitted and four are decommissioned.
A 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, who have allowed increased levels of radioactive pollution (tritium) to leak into the River Tamar, and have failed to mend the serious cracks in the coolant systems of the UK’s nuclear submarines.95

References
74'Cheney's corporate past,' Seth Gitell, The Boston Phoenix, 21.09.00 www.bostonphoenix.com/archive/features/00/09/21/TALKING_POLITICS.html viewed: 22.07.03
75'Cheney & Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, 22(5), May 2001, http://multinationalmonitor.org/mm2001/01may/may01corp10.html , viewed: 18.07.03
76 Ibid.
77Halliburton's Destructive Engagement – Earth Rights International www.earthrights.org/halliburton/report.pdf viewed: 17.07.03
78 'US Navy awards Halliburton unit Guantanamo deal', Reuters, 13.06.03 www.uslaboragainstwar.org/inthenews.php?singleItemFlag=1&news_id=1006 viewed: 17.07.03
79'One rule for them: Five PoWs are mistreated in Iraq and the US cries foul. What about Guantanamo Bay?', George Monbiot, The Guardian, 25.03.03
80 'Cheney & Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, 22(5), May 2001, http://multinationalmonitor.org/mm2001/01may/may01corp10.html , viewed: 18.07.03
81 Ibid
82 Ibid
83'Halliburton Iraq ties more than Cheney said,' NewsMax Wires, 25.06.01 www.newsmax.com/archives/articles/2001/6/24/80648.shtml viewed: 17.07.03
84'War Profiteering And Halliburton,' Scott Harris & Charlie Cray, 20.05.03 www.globalpolicy.org/security/issues/iraq/after/2003/0520warprofit.htm viewed: 10.07.03
85'Halliburton Iraq contract queried,' BBC, 30.05.03 http://news.bbc.co.uk/2/hi/business/2950154.stm viewed: 10.07.03
86'Cheney & Halliburton: Go where the oil is,' Bruno K & Valette J, Multinational Monitor, Vol. 22, No. 5, May 2001
87'Nigeria: Halliburton Pays Bribes to Lower Taxes', David Ivanovich, Houston Chronicle, 08.05.03 www.corpwatch.org/news/PND.jsp?articleid=6872 viewed: 07.07.03
88'Halliburton Names KPMG LLP as Independent Auditor', Halliburton press release, 17.04.02 www.halliburton.com/news/archive/2002/corpnws_041702.jsp viewed: 17.07.03
89'Andersen Gets $500,000 fine and 5-year probation,' Sri Media, 17.10.02 www.srimedia.com/artman/publish/article_233.shtml viewed: 10.07.03
90 'Dick Cheney's slimy business trail,' Robert Scheer, 12.07.02 http://archive.salon.com/news/col/scheer/2002/07/17/cheney/ viewed: 10.07.03
91'Cheney's close ties to Brown and Root,' Pratap Chatterjee, CorpWatch, 20.03.03 www.corpwatch.org/issues/PID.jsp?articleid=6028 viewed: 17.07.03
92Halliburton SEC Form 10-k – filed 28.03.03 www.halliburton.com/news/archive/2002/corpnws_081302.jsp viewed: 10.07.03
93'Halliburton settles asbestos claims for about $4 billion in cash and stock,' 18.12.02 www.annova.com/busiiness/story/sm_730510.html?menu= viewed: 05.07.03
94'The asbestos monster: How scary for Hallburton? Damages may be a greater threat than the company realizes,' Business Week, 24.12.01 www.businessweek.com/magazine/content/01_52/b3763046.htm viewed: 17.07.03
95'Nuclear Submarines, Tritium release and Plymouth,' Jim Carey, Red Pepper, February 2001: www.redpepper.org.uk/natarch/xplymouth.html viewed: 17.07.03
 
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