This article was first published at The McAlvany Intelligence Advisor on Friday, July 26th, 2013:
In its announcement that Haliburton, the huge international oilfield services company, was found guilty of destroying evidence and is being fined $200,000, the New York Times mentioned in passing that, “in the not-too-distant past, Haliburton [has] found itself under scrutiny over accusations that it performed shoddy, overpriced work … in Iraq, [that it] bribed Nigerian officials … and did business with Iran … when it faced sanctions.”
The fine probably won’t even show up as a footnote in the company’s financials because in light of the company’s $25 billion annual revenue stream, it’s just a rounding error. If it is mentioned at all, it’ll be written off as just another cost of doing business the Haliburton way.
At issue was a study Haliburton conducted that showed that the cement and the collars used to stabilize it in the Deepwater Horizon drilling rig were likely to fail. During the criminal trial brought by the government over the 2010 oil spill, which killed 11 workers and dumped 200 million gallons of oil into the Gulf of Mexico, Haliburton executive Thomas Roth acknowledged that “the cement placement was going to be a job that would have a low probability of success.” A Haliburton lab manager testified that he had conducted “stability” tests of the concrete that showed the same thing, but didn’t prepare the usual “laboratory work sheet” documenting his work. He had, following instructions from above, thrown out his notes.
In simple terms Haliburton tried to cut corners and got caught when the rig blew up. By paying the fine and pleading guilty, “the Department of Justice has agreed that it will not pursue further criminal prosecution of the company.” The news release said:
Efforts to … recover the original destroyed computer simulations … were unsuccessful. In agreeing to plead guilty, Haliburton has accepted criminal responsibility for destroying the … evidence.
Haliburton has been so tightly intertwined with the military-industrial complex for so many years that this slap on the wrist will change nothing.
Dick Cheney served as Secretary of Defense under the Bush I presidency from 1989 to 1993 and upon his exit became chairman and CEO of Haliburton. In 2000 he left Haliburton to run as Bush II’s vice president, but not before receiving a $36 million “severance” package to help him on his way.
Haliburton was corrupt long before Cheney arrived on the scene. In the early 1990s, the company violated trade sanctions against Iraq and Libya by selling them sophisticated drilling equipment and generators. At the time, the company pleaded guilty and paid $4 million in fines and penalties.
In 2001, Haliburton’s offices in Tehran offered the company’s services, which violated the Trading with the Enemy Act. But the company skirted the issue by claiming that “This is a foreign subsidiary and no U.S. person is involved in this. We are not performing directly in that country.” Right. It was a classic example of deflection and misdirection. No charges were brought.
From 1995 to 2002, a Haliburton subsidiary was awarded a $2.2 billion contract to construct and operate military bases in the Middle East. It was a “no-bid” contract, and was set up on a “cost-plus 13%” basis, so the temptation to pad expenses was overwhelming. In fact, employees were specifically trained on how to pass General Accounting Office audits to maximize profits. In total, Haliburton received $7 billion from the US government for its efforts there.
In November 2002, another Haliburton subsidiary was contracted, on a no-bid basis, to fight oil well fires in Iraq. It was awarded to Haliburton because of Cheney’s position as Bush’s VP.
In May 2003, still another Haliburton subsidiary paid a Nigerian official some $2.4 million bribes in order to do business there.
When Bunny Greenhouse, a contracting officer with US Army Corps of Engineers, tried to blow the whistle on Haliburton, she was fired, but not before describing one of these notorious Haliburton “contracts” as … the most blatant and improper contract abuse I have witnessed during the course [20 years] of my professional career.
The beat goes on. In 2009, a Haliburton subsidiary paid $400 million in penalties and fines after admitting that it bribed Nigerian officials. The Federal Contractor Misconduct Database details 10 instances of Haliburton misconduct since 1995 that have cost the company nearly $1 billion in fines. This doesn’t include another 22 instances of misbehavior by one of its primary subsidiaries.
Like a bad penny, the name Cheney keeps showing up. This time it’s his daughter, Liz, who just announced her intention to run against Wyoming’s Republican incumbent Mike Enzi.
With Haliburton’s influence and utter disregard for the law behind her, she’s a shoo-in.