The trouble started last year when the company
was awarded a contract to extinguish any possible oil fires
that might be set off by retreating Iraqi troops, or terrorists.
of the many problems with the contract was the fact that Halliburton’s
involvement in Iraq went beyond fighting oil fires, and included
among other things importing gasoline into Iraq, operating
facilities, and distributing oil products (USA Today).
One of the most outspoken critics of Halliburton’s dealings
in Iraq is democrat senior member of the House Government Reform
Committee, Rep. Henry Waxman, who last year criticized the involvement
of Halliburton in Iraq because the contract was awarded without
bidding by other companies, which implied preferential treatment
for Cheney’s former company. Waxman also criticized the
use of humanitarian funds for profit (USA Today, May 7, 2003).
That was only the beginning to what would become an intense
evaluation of Halliburton and its involvement in Iraq and other
in the region.
Last October, the company was accused of overcharging for oil,
when Waxman and another democratic congressman, Rep. John Dingel,
wrote in a letter sent to the White House Office of Management
and Budget that: “Halliburton seems to be inflating gasoline
prices at a great cost to American tax payers...The overcharging
by Halliburton is so extreme that one expert has privately called
it ‘highway robbery’” (The New York Times,
Oct. 17, 2003).
The letter specified that a Halliburton subsidiary, Kellogg
Brown & Root
(KBR), was charging the government about 45 cents per liter
of gasoline, when it could be bought in the Persian Gulf for
19 cents and transported to Iraq for about 7 cents. Halliburton
was keystoning its costs and adding its expenses, a typical
business procedure, not illegal, but costing U.S. taxpayers
19 cents per
However, while key- stoning may be normal business practice,
the source of the money being paid to Halliburton was also
suspect. Waxman, in the same letter, criticized the use of
funds to pay Halliburton for the imported fuel. He said that “Serious
questions have been raised about what happened to the $1 billion
in Oil-for-Food funding…It now appears that this money
is being used to pay Halliburton to import gasoline into Iraq
at outrageously high prices…I deplore the use of these
humanitarian funds from the U.N. to enrich Halliburton” (Congress
Press Release, October 17, 2003).
Despite Halliburton’s denial of any wrongdoing (Houston
Business Journal, Dec. 31, 2003), the agitation against it resulted
in the contract being terminated and passed on to the Pentagon’s
Defense Energy Support Center, which took control of efforts
to rebuild Iraq’s oil industry.
This year, more allegations of unethical behavior have surfaced.
According to Forward, Feb. 6, 2004, a French court is investigating
Kellogg Brown & Root and two French companies for using bribery
to obtain, in the late ‘90s, a $6.7 billion contract for
a liquefied natural gas project in Nigeria. Forward reported
that $180 million was wired to offshore accounts, using “shell
companies in Gibraltar and the Portuguese island of Madeira.” It
also reported that the money may have ended up in “the
hands of former Nigerian dictator Sani Abacha.”
The possibility of Halliburton facing serious charges is implicit
in statements by French Judge Renaud van Ruymbeke, who is conducting
the investigation regarding the involvement of Vice President
Cheney, who was Halliburton CEO at the time (Forward, Feb.
KBR is also being investigated by the Defense Department on
charges of bribery in Iraq and Kuwait, and allegations have
made by Waxman that Halliburton violated U.S. sanctions against
doing business in countries such as Iran (Forward).
Halliburton denies any wrongdoing. CEO Dave Lesar welcomed
investigations saying, “We welcome a thorough review of any and all of
our government contracts” (Forward).
Editor’s note: this story was filed in late April. Since
then, the U. S. government has begun investigations of both
Mr. Cheney and Halliburton.