HOME
DV NEWS
SERVICE ARCHIVE SUBMISSIONS/CONTACT ABOUT DV
Cheney’s
Old Company Continues To
Break
Laws While Profiting From Terror
by
Jason Leopold
May
13, 2003
Halliburton
Corp., the second largest oil services company in world, is the poster child
for corporate greed and terror. And it seems that nothing will stop Vice
President Dick Cheney’s old company from repeatedly breaking the law to save
and earn mountains of cash.
In
a Securities and Exchange Commission filing this week, Kellogg Brown &
Root, the Halliburton unit that won a controversial no-bid contract to
extinguish Iraqi oil well fires, disclosed that it paid $2.4 million in bribes
to a Nigerian tax official to obtain favorable tax treatment in the country
where it’s building a natural gas plant and an offshore oil and gas
facility.
The
bribes were paid between 2001 and 2002 to “an entity owned by a Nigerian
national who held himself out as a tax consultant, when in fact he was an
employee of a local tax authority,” the company said in the SEC filing, which
was discovered during an internal audit.
That
was also the time frame which some of Nigeria’s worst human rights abuses took
place. KBR has been scrutinized by human rights organizations for doing
business in countries like Nigeria, where human rights are routinely
violated.
In
1997, while Cheney was chief executive of Halliburton, KBR was alleged by
Environmental Rights Action to have collaborated with Nigeria’s Mobile Police
unit who shot and killed a protestor, playing a similar role to Shell and
Chevron in the mobilization of this 'kill and go" unit to protect company
property, Wayne Madsen reported in The Progressive in 2000.
When
it comes to corruption, Nigeria routinely scores near the bottom on surveys of
world business leaders.
In
last year's Corruption Perceptions Index, published by Berlin-based
Transparency International, Nigeria ranked 101 out of 102, beating out only
Bangladesh.
In
March, Halliburton launched an investigation it has started a probe involving
U.S. and Nigerian government officials over theft of a radioactive device used
at its Nigerian operations that officials feared could be used to make a “dirty
bomb,” an explosive device designed to scatter radioactivity in a densely
populated area. The theft occurred between the Nigerian towns of Wari and Port
Harcourt in the Niger Delta, in the heart of the West African country's oil
producing region.
According
to one expert, if the device's radioactive material were combined with a pound
of TNT and exploded, an area covering 60 city blocks would be contaminated with
a radiation dose in excess of safety guidelines of the Environmental Protection
Agency.
The
tax scheme is just the latest development in a long list of laws the company
broke over the past decade—including skirting U.S. sanctions imposed on
countries such as Syria, Libya, Iran and Iraq—in an effort to boost its stock
price and enrich the company’s shareholders.
A
Halliburton spokeswoman said the tax scheme did not involve any of the
company’s senior officials, but several employees of the company involved in
the scam were fired after the discovery.
Halliburton
officials said KBR may have to pay as much as $5 million in additional taxes to
Nigeria, according to the SEC filing.
This
week, Congressman Henry Waxman, D-California, disclosed in a letter sent to him
by the Army Corps of Engineers, that KBR has gone from fixing Iraq's oil wells to
running them, turning the no-bid contract to extinguish oil well fires into a
multimillion deal to supply Iraq's emergency energy needs. The U.S. Army Corps
of Engineers on Wednesday disclosed the wider role for KBR in response to an
inquiry from Waxman, who accused the company of conducting business in
countries that sponsored terrorism.
News
of KBR’s expanded role in Iraq prompted criticism from some congressional
critics who were under the impression that the company's job would be limited
to putting out fires and repairing damage to Iraq's rich petroleum fields. The
Army Corps of Engineers said KBR actually had been authorized under the
original contract to operate and distribute oil produced in Iraq, but the Corps
of Engineers played down that aspect of the deal in its initial communications
with Congress and the media. For pumping oil from Iraq's oil fields and
importing gasoline and propane from Turkey and other countries, Halliburton
will receive $24 million, raising to $76.8 million the amount it will have
received since being awarded the contract in March, said Scott Saunders, a
spokesman for the Corps of Engineers. Saunders said the Halliburton subsidiary
now is pumping 125,000 barrels of oil a day, far short of the demand that is
expected to reach 400,000 barrels.
Meanwhile, while KBR is skirting U.S. laws
and profiting off rebuilding Iraq’s oil fields, the SEC is still investigating
the company for alleged accounting fraud. The SEC is examining how Halliburton
booked and disclosed cost overruns on construction contracts beginning in 1998,
when Cheney was chief executive officer. The SEC, according to a lawyer
familiar with the matter, has not contacted Cheney. Cheney's office confirmed
he hasn't been questioned, Reuters reported.
The
company said Thursday it turned over about 300,000 documents to the SEC, a
process that "is essentially complete," according to a regulatory
filing. The company said it is continuing to make people available to testify
under subpoenas.
Jason Leopold is a freelance
journalist based in California, he is currently finishing a book on the
California energy crisis. He can be contacted at jasonleopold@hotmail.com. This
article first appeared in The Free Press (www.freepress.org)