How to Stay Out of Sight While Making Millions from the War in Iraq

By Pratap Chatterjee, Tomdispatch.com. Posted June 3, 2009.

And the record shows that KBR did "respond accordingly."

Remembering Halliburton

In the meantime, Halliburton, which provided so many years of corporate "oversight" for KBR, has been cleansed of all charges in the court of public opinion and has essentially dropped from view. It has also done its best to ignore a shareholder resolution brought by Patrick Doherty, the comptroller of the city of New York, that raises the obvious issue of war profiteering in Iraq, based on the Pentagon dollars it raked in while its former CEO helped oversee the war that was making it so much money.

Some shareholder activists continue to pursue the company by other means. For instance, the pension fund of the Policemen and Firemen Retirement System of the City of Detroit filed a lawsuit in mid-May against David Lesar and other executives of KBR and Halliburton, accusing them of a "reign of terror." The lawsuit listed a number of complaints including bribes in Nigeria, overcharging the Pentagon for services rendered, accepting kickbacks, engaging in human trafficking, and concealing the rape of an employee.

"Under defendants' watch, and supposedly under their control and supervision, the companies were permitted to engage in conduct so notorious that the name 'Halliburton' has become virtually synonymous with 'corruption,'" the pension fund said in a complaint filed at the Harris County District Court in Houston. "Defendants' failures have caused the Companies to suffer hundreds of millions of dollars in damages, and to be exposed to substantial additional judgments in the future."

Heather Browne, a company spokeswoman, responded: "It appears that the lawsuit is based on unfounded allegations. We intend to vigorously defend ourselves."

Another shareholder activist, John Harrington, a socially responsible investment manager in California, used his KBR shares to file a protest resolution against the company this May. According to Harrington's press release:

"KBR's management is obviously not taking their human rights footprint very seriously. The board of directors is accountable to shareholders, but only if we assert ourselves as the real owners of the company. Understandably, shareholders don't like being associated with atrocities. If ever there was a need for responsible fiduciary human rights oversight within a company, it is with KBR. This company has been castigated in the press, sued, and accused of bribery, rape, murder, political corruption, tax avoidance, and who knows what else."

KBR nonetheless took in another $5.7 billion from the U.S. taxpayer in 2008, up 15% from the $4.8 billion it received in 2007. With the planned drawdown of U.S. troops in Iraq, KBR expects its revenue to fall this year. But shareholders need not worry: its contract with the Pentagon, signed in April 2008, potentially sets it up to make more than triple the maximum profits allowed in the previous six years.

Recently, the Financial Times ran an interview with KBR's Utt, aptly headlined "KBR believes it is ready to construct a new image." The same day stock analyst Will Gabrielski raised his profit estimate for KBR, causing company shares to jump.

If forgiving and forgetting are now the norm when it comes to the records of Halliburton and KBR in the Bush years, the question remains: Will the Pentagon complete this cleansing ritual or engage in the serious task of investigating both companies?

See more stories tagged with: war, iraq, halliburton, pratap chatterjee, profiteer

Pratap Chatterjee is the author of Halliburton's Army: How a Well-Connected Texas Oil Company Revolutionized the Way America Makes War. He is the former executive director of CorpWatch and a shareholder of both Halliburton and KBR.

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