Bringing Halliburton To Heel

By Charlie Cray, TomPaine.com. Posted September 27, 2004.

Criminologist Edwin Sutherland could not have imagined the heights of war profiteering reached by Halliburton in Iraq. In his 1949 groundbreaking study White Collar Crime , Sutherland wrote about the role of corporations in last century’s world wars. He observed that: “… the large corporations in time of war, when Western civilization was endangered, did not sacrifice their own interests and participate wholeheartedly in a national policy, but instead they attempted to use this emergency as an opportunity for extraordinary enrichment of themselves at the expense of others. … Profits are more important to large corporations than patriotism.”

As the largest contractor in the war on terror, Halliburton deserves all the scrutiny it has received—disregarding the partisan expectation that any resulting scandal would rub off on ex-CEO Dick Cheney.

Recently, John Kerry finally took off the gloves and used the H-word in a blistering attack on the Bush administration’s Iraq quagmire.

“As president,” Kerry said, “I will stop companies like Halliburton from profiting at the expense of our troops and taxpayers. … And as commander in chief, I will have two words for companies that cheat the U.S. military: ‘You're fired.'”

Leading Pentagon watchdogs have been calling for Halliburton’s debarment or suspension from Pentagon contracts since August. At that time the Defense Contract Audit Agency (DCAA) issued a memo complaining that Halliburton could not account for more than $1.8 billion of $4.3 billion of work in Iraq and Kuwait. For the third time, the DCAA recommended that the Pentagon not pay Halliburton until it coughed up all the receipts.

The long list of waste, fraud, bribery and other abuses associated with Halliburton’s Iraq contracts now fill volumes. Vigilant oversight by Rep. Henry Waxman’s office and Pentagon investigators — with the help of company whistleblowers — have uncovered attempts to charge taxpayers $45 per case of soda, $100 per bag of laundry, $10,000 a day to use five-star hotels in Kuwait. (Meanwhile, the troops are sweating it out in tents in the desert). There’s been $167 million worth of price gouging for imported gasoline, and $186 million charged for meals that were never served to the troops, and a $6 million kickback to two employees (fired by the company) from a subcontractor.

Nor has the company’s record in Iraq been the only basis for calls for debarment, which come not only from members of Congress but also from watchdog groups like the  Project on Government Oversight. POGO is a Washington, D.C.-based non-partisan non-profit organization with more than two decades experience monitoring Pentagon contracts. 

Halliburton’s Rap Sheet

In fact, there have been so many Halliburton scandals that it’s been hard to keep up (go to Halliburton Watch for an up-to-date rap sheet). A few of the bigger ones:

U.S., Nigerian and French government officials continue to investigate bribery allegations involving a natural gas consortium directed by Halliburton in Nigeria. Jack Stanley — the former head of KBR (the Halliburton subsidiary that also does most of the company’s contracting with the military) — was let go after it was discovered that $5 million was siphoned off into a personal bank account. The Financial Times  recently reported  that while Dick Cheney was CEO the company forced its consortium partners to reappoint a business agent believed to have masterminded the scheme, which involved the use of offshore subsidiaries and Swiss bank accounts.  

For years, Halliburton has been questioned about circumventing a ban on conducting business with the government of Iran, a member of Bush and Cheney’s so-called “axis of evil.” After the Treasury Department referred the case to the Department of Justice, a grand jury in Houston opened up an investigation. During Cheney’s time as CEO, the company also did business with Saddam. Cheney also led an effort to lobby against the sanctions. “The problem is that the good Lord didn’t see fit to put oil and gas reserves where there are democratically elected regimes friendly to the interests of the United States,” Cheney once explained.

Charlie Cray is the director of the Center for Corporate Policy and a collaborator on Halliburton Watch. His book, "The People’s Business: Controlling Corporations and Restoring Democracy," (co-authored with Lee Drutman) will be published by Berrett-Koehler in November.

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