CHENEY’S DEALINGS IN IRAQ

“Under the guidance of Richard Cheney, a get-the-government-out-of-my-face conservative, Halliburton Company over the past five years [1995 to 2000] has emerged as a corporate welfare hog, benefiting from at least $3.8 billion in federal contracts and taxpayer-insured loans,” stated a report by the Washington-based Center for Public Integrity.

And it was Cheney who led the effort to wage war on Iraq and Afghanistan. “But Cheney isn't just selling the policy. He is on the inside making it,” noted Kenneth T. Walsh of US News & World Report. “In fact, to understand the Bush presidency, it is necessary to understand how central Cheney's role actually is and how his innate conservatism is an anchor for administration policy not just on Iraq but across the board.”

In 1991, the elder President Bush awarded Cheney the Presidential Medal of Freedom. Cheney, age sixty-one in 2002, was an important choice for Bush Jr. in the election year of 2000. Cheney had, ironically, promised the nation “light at the end of the tunnel” in Vietnam during his stint with the Nixon administration. He was a crucial part of the defense policy team around Rumsfeld, Wolfowitz, and other up-and-coming neo-conservatives who succeeded in exaggerating the Soviet threat of WMDs during the Ford and Reagan administrations; these efforts led to the greatest peace-time military buildup in American history, and to a nuclear confrontation with USSR in the mid-1980s. Cheney had also staunchly supported such questionable covert operations as the Contra war in Nicaragua and the CIA-led war in Afghanistan during his congressional service under the Reagan administration. And he had overseen the 1989 invasion of Panama, with its egregious loss of civilian life, and the massive destruction of Saddam Hussein's war machine while serving as Secretary of Defense during the Gulf War under the previous Bush administration. He then helped push through onerous trade sanctions against Iraq through the United Nations that impoverished the country.

Following the defeat of Bush Sr. in 1992 Cheney entered the world of corporate business and by 1995 became president and chief executive officer of the Halliburton Company of Dallas. Halliburton is the world's largest oil service firm and, according to Oil & Gas Journal, the company ranks twenty-fourth in the top energy corporations in the world, with a market value of $18.2 billion. The company employs about 100,000 people in 120 countries.

Cheney's firm soon began to lay down a record of questionable ethics—and through a subsidiary, gained a lion's share of the $30 billion emergency funds appropriated in 2001 by Congress in the War on Terrorism.

“From building cells for detainees at Guantanamo Bay in Cuba to feeding American troops in Uzbekistan, the Pentagon is increasingly relying on a unit of Halliburton called KBR, sometimes referred to as Kellogg, Brown & Root,” reported Jeff Gerth and Don Van Natta Jr. of the New York Times. “Although the unit has been building projects all over the world for the federal government for decades, the attacks of September 11 have led to significant additional business. KBR is the exclusive logistics supplier for both the Navy and the Army, providing services like cooking, construction, power generation and fuel transportation. The contract recently won from the Army is for 10 years and has no lid on costs, the only logistical arrangement by the Army without an estimated cost.”

As detailed in Crossfire: The Plot That Killed Kennedy, George and Herman Brown, who created the construction firm back in the late 1930s, are credited with putting Lyndon B. Johnson in Congress and have benefited from prime government contracts ever since, beginning with a large naval base in Corpus Christi, Texas, and later in South Vietnam. After merging with Halliburton, the company provided logistical support for the Pentagon in Haiti, Somalia, the Balkans and more recently, in Afghanistan and Iraq.

Halliburton officials denied that Cheney played any role in assisting KBR in obtaining government contracts but did admit that the senior vice president responsible for the lucrative KBR contracts, former four-star navy admiral Joe Lopez, was hired in 1999 on the recommendation of Cheney.

There have been a number of other accusations made against Halliburton during Cheney's stint as CEO. According to the Environmental Rights Action (ERA) group, Halliburton ordered Nigerian Mobile Police officers to shoot youthful demonstrators protesting what they perceived as environmental damage caused by Chevron Oil, which had contracted for Halliburton's services. One youth, Gidikumo Sule, was killed, and others claimed to have been beaten. The oil companies countered this charge by claiming the youth was killed during an attempt to rescue officers who had been detained and disarmed by the youths.

It should come as no surprise that environmental groups have long been upset with Halliburton in general and Cheney in particular. Among other actions in his career unfriendly to environmental concerns, Cheney has co-sponsored legislation to open the Arctic Wildlife Refuge in Alaska to oil drilling and supported it while in the White House. He had even voted against the Clean Water Act while serving as a representative from Wyoming. And Halliburton's environmental record was deplorable under Cheney's tenure. Its Duncan, Oklahoma, facility was identified by the Environmental Protection Agency in 1997 as one of the top 20 percent of polluting companies in the nation.

Aspersions have also made about the fact that Halliburton joined Bush's now-defunct Harken Energy in maintaining offshore subsidiaries in the Cayman Islands, the favorite site for tax dodgers, such as Enron, which had 692 subsidiaries of its own there.

Under Cheney's leadership, Halliburton's subsidiaries in tax havens grew from nine in 1995 to forty-four in 1999. This coincided with a drop in Halliburton's federal taxes from $302 million in 1998 to an $85 million tax refund in 1999.

But the deepest criticism of Cheney came from his company's dealings in Iraq and his role in the Enron scandal.

In 1998, the UN passed a resolution permitting Iraq to purchase material to repair and maintain its oil industry, which had become dilapidated following the country's defeat in the Gulf War. Immediately, US companies, including Halliburton, Baker Hughes, Schlumberger, Flowserve, Fisher-Rosemount and others, moved surreptitiously to get a part of this lucrative business.

These firms used European subsidies to front for multimillion-dollar business deals. “It is a wonderful example of how ludicrous sanctions have become,” noted Raad Alkadiri, an analyst for Petroleum Finance Company, a Washington consulting firm.

Furthermore, Halliburton brought in substantial business in other markets by hiding behind other business entities. Reporter Carola Hoyos noted, “From September 1998, until it sold its stake last February [2000], Halliburton owned fifty-one percent of Dresser-Rand. It also owned forty-nine percent of Ingersoll-Dresser Pump, until its sale in December 1999. During the time of the joint ventures, Dresser-Rand and Ingersoll-Dresser Pump submitted more than $23.8 million worth of contracts for the sale of oil industry parts and equipment to Iraq. Their combined total amounted to more than any other US company; the vast majority was approved by the sanctions committee.”

Cheney also came under fire for Enron-like accounting practices. According to Judicial Watch, which in 2002 filed a lawsuit in Dallas, Texas, against Cheney on behalf of Halliburton shareholders, he artificially boosted the share price of Halliburton stock while he was CEO. The suit charges that Cheney overstated profits by $445 million between 1999 and 2001, resulting in “huge losses” for some investors.

In early 2002, Cheney was considered as the object of an unprecedented lawsuit by the General Accounting Office for his failure to give congressional investigators documents relating to the formulation of energy plans by the energy task force he once headed. Cheney claimed the GAO did not have the authority to demand the information, despite the fact that the Bush administration task force was funded by public money. The task force's energy proposals carried many provisions sought at the time by the energy giant Enron, a major contributor to the Bush/Cheney campaign, but Cheney never disclosed which energy corporations and lobbyists had met with his task force. In early 2003, the GAO, under pressure from Republicans who threatened to cut its budget, quietly dropped the matter. A private lawsuit asking for full disclosure, launched soon thereafter by the Sierra Club and the conservative Judicial Watch, made its way to the US Supreme Court. The Justices upheld Cheney's claim to complete secrecy.

During the 2000 campaign, Cheney told audiences that since leaving government under the original Bush administration, he had been “out in the private sector creating jobs.” He did not mention that just after Halliburton absorbed Dresser, Cheney laid off 10,000 workers.

Meanwhile, Halliburton announced in May 2002 that the Securities and Exchange Commission was investigating the company for accounting practices related to how it reported cost overruns on construction projects, but no charges were immediately filed.

Many researchers and more knowledgeable members of the public have questioned the hypocrisy and ethics of Cheney, the man who prosecuted a war against Iraq in the early 1990s, and then oversaw $23.8 million in business to Iraq during a time of UN sanctions against that nation. Next, as Vice President, he led the effort to put an end to the “murderous dictator” that was marked by fear-mongering and deception, and whose firm had now became embroiled in profiting from a second war in that country.

Such talk only gained strength as reports of no-bid contracts and overcharges continued to plague Halliburton.

In early 2003, Bunnatine Greenhouse, the top contracting officer for the Army Corps of Engineers, objected to Halliburton's $7 billion no-bid contract for services in Iraq. She said the Halliburton deal should have been the standard one-year contract and that an official of the company should not have been present during contract discussions.

Halliburton was forced to bid for half the contract and Greenhouse was forced into protection under Whistleblower legislation. In early 2006, she was still fighting Halliburton misconduct while making appearances on CNN and PBS.

Meanwhile, the FBI apparently is still investigating Halliburton after a December, 2003 audit revealed that the company overcharged the government $61 million for fuel in Iraq. Halliburton subsidiary KBR had hired a Kuwaiti firm, Altanmia Commercial Marketing Company, to supply fuel at twice the current price while adding a markup.

Following in the steps of Bunnatine Greenhouse, Mary Robertson, a senior contracting officer at the Army Corps of Engineers, protested that Altanmia's cost estimates were too high. “Since the US government is paying for these services, I will not succumb to the political pressures from the [government of Kuwait] or the US embassy to go against my integrity and pay a higher price for fuel than necessary,” she wrote in an internal memo made public by Corpwatch.org.

The internal documents also revealed that due to the Altanmia deal, US taxpayers were paying an average of $2.64 a gallon and as much as $3.06 for fuel. By comparison, the Defense Department's Energy Support Center (ESC) had been doing a similar job supplying fuel at $1.32 a gallon, and SOMO, the local oil company, was doing the same provision for only $0.96 a gallon. The total bill to the taxpayer for 61 million gallons of fuel from Kuwait and about 179 million gallons from Turkey was $383 million, more than $100 million more than local providers would have charged.

In mid-2004, the Pentagon's Defense Contract Audit Agency “strongly” urged the Army to withhold about $60 million a month from Halliburton payments until full documentation was provided for $1.8 billion of charges made by the company.

In late 2004, several sub-contractors working for Halliburton in Iraq filed suit to recover what they said were unpaid bills. One firm, La Nouvelle, filed a lawsuit against Halliburton subsidiary KBR in the US District Court of Eastern Virginia demanding $224 million.

A separate lawsuit charged that KBR refused to pay $20.4 million for food services and other work near the city of Tikrit provided in 2003 by the Kuwait Company for Process Plant Construction & Contracting (KCPC) and the Morris Corporation of Australia for several months after the invasion of Iraq.

Allegations of demands for a $3 million kickback during the original 2003 contract negotiations from individuals associated with KBR first surfaced after KBR fired KCPC and Morris because the two companies had fallen behind schedule.

“They wanted kickbacks of 3 percent to 4 percent, which pushed up the prices because then the subcontractors would add the price of the kickbacks to their costs,” an unnamed source told the Sydney Morning Herald.

Laszlo Tibold, a former KBR official, told journalist David Phinney that if anyone is to blame for KBR’s poor contracting process in Iraq, it is KBR’s senior management and planners at the US Defense Department who were woefully unprepared for establishing an immediate presence for occupying the war-torn country.

Tibold said when he first arrived at Anaconda base in Iraq, KBR failed to provide even the most basic of office supplies such as computers, reliable telephones, contract forms or a list of pre-approved contractors to work with.

“Everyone was in pure reactionary mode,” he said, adding that KBR’s staff at Camp Anaconda began with six employees who were burdened with work “by industry standards” that only a staff of 185 could effectively handle. After a month, KBR’s staff at Camp Anaconda was increased to 30, he said, yet was responsible for writing contracts totaling a value in the hundreds of millions of dollars.

“KBR had no clue,” he said. “They didn't know what they were getting into.”

And there is even more: In mid-2005, even as the Bush administration tried to work up national passion against Iran's nuclear program, Halliburton sources leaked to the press the fact that the scandal-plagued oil services company had sold Iran key components for a nuclear reactor.

Company sources said Halliburton officials worked with Cyrus Nasseri, vice chairman of the board of directors of Oriental Oil Kish, one of Iran's largest private oil companies, on oil development projects. Nasseri has been identified as a key member of Iran's nuclear development program. According to Iranian officials, Nasseri was questioned in mid-2005 regarding his providing Halliburton with Iran's nuclear secrets and accepting as much as a $1 million bribe from the company.

This connection became public in January 2005, when Halliburton announced it had subcontracted an Iranian natural gas drilling project to Halliburton Products and Services, a subsidiary of Dallas-based Halliburton registered in the Cayman Islands.