Of course, by now everybody has at least heard of Halliburton, the all-time poster child for war profiteering. But I'll bet most people don't understand exactly how this company has gone the full financial circle in Iraq. Some background info may be helpful.
First of all it helps to know that between 1999 and 2002, Halliburton gave more than $700,000 in political contributions, almost always to Republicans. In 2000, it donated $17,677 to Bush. In fact, the 70 or so companies that were awarded contracts in Iraq have contributed more money to Bush than they have to any other candidate over the past 12 years.
But overall, Halliburton owes most of its good fortune to Vice President Dick Cheney. While he was Bush Sr.'s secretary of defense, Cheney directed millions of tax dollars in government business to Halliburton.
Toward the end of his tenure, Cheney decided to turn over the business of planning and providing support for military operations abroad, such as preparing food, doing the laundry, and cleaning the latrines, to one company, Halliburton. He commissioned Halliburton to do a study of how this plan might work. In effect, you might say that Cheney paid Halliburton to create its own market.
It was paid $3.9 million for its initial report, which offered a strategy for providing support for 20,000 troops. The Pentagon then paid Halliburton $5 million to do a follow-up study. In August 1992, Halliburton was selected to do all the work needed to support the military during the next five years. For its services in Somalia, Halliburton was paid $109 million and over the next five years; it was paid $2.2 billion for work in the Balkans.
When Bush Senior lost the election to Bill Clinton, and Cheney lost his government job, he called in the markers and cashed in big time by becoming Halliburton's CEO.
Five years later Cheney waltzed back through the revolving door right into the vice president’s office, with a retirement package from Halliburton said to be worth more than $34 million. Not bad for a guy who never so much as ran a lemonade stand prior to being hired by one of the world's largest companies.
But it didn't end there. Cheney still draws over $150,000 a year in deferred compensation from Halliburton, and he still holds over 400,000 stock options, at an estimated worth of $18 million (and rising).
Cheney Does Good By Halliburton
I have to admit, in the second half of the 1990s, as CEO, Cheney did rack up a number of notable accomplishments. He increased Halliburton’s offshore tax havens nearly five-fold, from 9 to 44. And that sure paid off. The company went from paying $302 million in federal taxes in 1998, to getting an $85 million refund in 1999. All of which comes as no surprise considering the fact that Halliburton is one of the world’s most notorious corporate crooks. Cheney and Halliburton was a match made in heaven. Together they found ways to make money off of just about every known terrorist county on God's green earth, regardless of the strict US laws against it.
While he was CEO, American companies were barred from doing business with Iran. So Cheney set up an address in the Cayman Islands. 60 Minutes did an investigation of the offshore subsidiary called Halliburton Products and Services, and discovered that the company had no known office or employees. The only sign of the phantom company was a forwarding address to Houston, Texas. So this bogus company was used to avoid US sanctions while doing business with Iran.
Halliburton’s bad habits don’t set so well with some of its shareholders these days. New York City's controller, William Thompson, who watches over the city workers’ $80 million pension fund, said that city workers affected by 9/11, were “outraged that their retirement portfolios included stock in US firms getting fat off contracts with rogue nations like Iran, which funds the terror groups Hezbollah and Hamas and is suspected of giving sanctuary to Al Qaeda leaders.”
But this conduct is nothing new. While Cheney was CEO, Halliburton even used a subsidiary in the Cayman Islands to make tens of millions of dollars off Iraq. According to UN records and oil industry executives, quoted in the June 23, 2004 Washington Post, Halliburton held stakes in two firms that sold over $73 million in oil production equipment and spare parts to Iraq.
And yet, listen to what Cheney (the pathological liar that he is), said when he was running for VP in 2000, and was interviewed on ABC's This Week on July 30, 2000: “I had a firm policy that we wouldn't do anything in Iraq, even arrangements that were supposedly legal. We've not done any business in Iraq since U.N. sanctions were imposed . . ..” Cheney really needs to get some help for that out-of-control compulsive lying disorder.
Anything To Make A Buck
Halliburton has been doing business with terrorists for years. In 1995, it was fined $3.8 million for doing business with Libya. The company sold Libya oil drilling tools that critics say could also be used to trigger nuclear bombs. So, keep in mind, whenever Bush starts bragging about dismantling Libya's WMD program, it was Halliburton that helped create the program in the first place.
Under Cheney's watch, Halliburton was caught time and time again over-billing the Pentagon. In 1997, the US Government Accounting Office (GAO) found that it had inflated expenses in the Balkans, charging $85.98 for a sheet of plywood that only cost $14.06. A follow-up report in the year 2000 found more inflated costs, including charges for cleaning the same offices up to four times a day. In February 2002, Halliburton paid a $2 million fine for defrauding taxpayers on its work in the Balkans.
However, don’t think for one minute that Halliburton has turned over a new leaf just because it was forced to pay a few million in fines. That is never going to happen. By now, I’m convinced that Halliburton estimates the cost of potential fines and lists them under “war profiteering expenses” when it submits the bid. Of course, that's if the company is even required to submit a bid.
In the fall of 2002, Halliburton geared up to make big bucks while Bush was preparing to destroy Iraq. On the very day that Congress voted on the war resolution, someone within the Bush administration got on the phone and told Halliburton it had nine weeks to build a base to house 7,000 soldiers. It was awarded several no-bid contracts, and its been driving a gravy train through Iraq ever since.
Who Cares About The Troops
As part of the LOGCAP contract, Halliburton serves meals to troops in Iraq and Kuwait. In December 2003, the Pentagon inspected the military kitchens and found dirty pans, dirty grills, dirty salad bars, blood all over the floor, and rotting meats and vegetables in kitchens operated by Halliburton.
In May 2004, the Defense Contract Audit Agency (DCAA) determined that the company had charged for thousands of meals that were never served. Auditors then decided to look into food contracts at 50 other locations.
In June 2004, the DCAA completed its review and found that Halliburton had billed for 36% more meals than were actually served. The Pentagon has refused to reimburse the company for overcharges that amount to about $186 million. In addition, the DCAA has ordered Halliburton to send all future bills to their agency for prior approval, before submitting them for reimbursement.
If Halliburton had not been handed the no-bid food contract, taxpayers could have saved a fortune. According to the LA Times, “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 a middle man like Halliburton, the Army knocked 40% off the cost of the contract.”
According to GAO Controller David Walker, since the Pentagon started dealing directly with the Kuwaiti company, the price fell from about $5 a meal to about $3.
On another front, in line with its usual and customary behavior, Halliburton has also been caught with its hand in yet another till. The Pentagon began another investigation after an audit revealed that the company had overcharged the Army by $61 million for gasoline it delivered to Iraq.
And this $61 million is over and above the $6.3 million it already had to pay back when employees got caught taking kickbacks, in return for awarding a Kuwaiti-based company a contract.
While continuing to rip off taxpayers, and making a fortune off an endless war, Halliburton went full circle when it was awarded billions of dollars worth of no-bid reconstruction contracts (guaranteed payment by tax payers), to rebuild the same country it helped destroy. Only in America (with a corrupt Vice President in your pocket) could something like this ever happen.
Evelyn J. Pringle is a columnist for Independent Media TV and an investigative journalist focused on exposing corruption in government. She can be reached at: firstname.lastname@example.org. (C) Copyright 2005 Evelyn J. Pringle.
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