Halliburton ignores sanctions

Mar 08 2005 02:24:01:727PM

New York - Halliburton Company in January won a contract to drill at a huge Iranian gas field called Pars - which an Iranian government spokesperson said "served the interests" of Iran - despite US sanctions tightly restricting the ability of US companies to do business there, NBC News reported.

Halliburton says the operation, which was videotaped by NBC News, is entirely legal.
It's run by a subsidiary called Halliburton Products and Services, based outside the US.
In fact, the law allows foreign subsidiaries of US corporations to do business in Iran under strict conditions, the NBC report noted.

Other US oil services companies, like Weatherford and Baker Hughes, also are in Iran, according to the report.

And foreign subsidiaries of NBC's parent company, General Electric, have sold equipment to Iran, though the company says it will make no more sales, NBC said.

Still, Halliburton stands out because its operations in Iran are now under a federal criminal investigation.

Government sources, according to NBC, said the focus of the investigation is on whether the company set out to illegally evade the sanctions imposed 10 years ago by President Bill Clinton.

Sources close to the Halliburton investigation told NBC News that after that announcement of the US sanctions under Clinton, Halliburton decided that business with Iran, then conducted through at least five companies, would all be done through a subsidiary incorporated in the Cayman Islands.

For Halliburton to have done this legally, the foreign subsidiary operating in Iran must be independent of the company's main operation in Texas.

Yet, when a NBC producer approached managers in Iran, he was sent to company officials in Dubai. But they said only Halliburton headquarters in Houston could talk about operations in Iran.

Still, Halliburton maintains its Iran subsidiary does make independent business decisions, the report said.

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Halliburton scores big in Iraq

Washington - The largest US contractor in Iraq, Halliburton Co, has passed the US$10bn mark in work orders from the American Army for services supporting troops and rebuilding the country's oil industry.

The army has ordered $8.3bn worth of work from Halliburton under a contract to support soldiers with meals, housing, laundry and other services.

Halliburton got $2.5bn more in work from the Army Corps of Engineers to put out oil well fires and shore up Iraq's dilapidated oil infrastructure.

Allegations of financial misdeeds, including corruption and overcharging, have led to criminal, congressional and Pentagon investigations of Halliburton's work in Iraq.

Congressional critics say George W. Bush's administration is going easy on the oil services company, which Vice President Dick Cheney ran from 1995 to 2000. Cheney and Halliburton deny any preferential treatment.

The investigations of Halliburton's work in Iraq include:

A criminal investigation into whether kickbacks were involved in Halliburton's use of a Kuwaiti subcontractor to provide gasoline for Iraq's civilian market.

Halliburton says it notified federal authorities after an internal probe found two of its former employees may have been involved in corruption worth $6.3m.

A review of that fuel contract by the Defense Contract Audit Agency, which concluded Halliburton overcharged the army by $61m.

An investigation by the former Coalition Provisional Authority's internal watchdog which found Halliburton could not account for scores of items in Iraq worth millions of dollars.

A report by Congress' Government Accountability Office, which found a "pattern of contractor management problems" by the army on Halliburton's largest Iraq contract.

The nonpartisan GAO said the problems including taking more than a year to finalise the documentation on work orders worth billions of dollars.

A Pentagon audit, which found that Halliburton charged the army for meals it never served to troops.

Halliburton said the problem was caused by the widely fluctuating levels of troops in and around Iraq. Halliburton has repaid $36m and set aside more than $140m for a possible settlement as it negotiates with the Army on that issue.

Separately, a federal grand jury in Houston is hearing evidence to decide whether to indict Halliburton or current or former executives for violating the US trade embargo on Iran.

Foreign subsidiaries of Halliburton dramatically expanded their trade with Iran while Cheney headed the company. At issue is whether any US citizens were involved in that work, which would violate the Iran embargo.

Halliburton and Cheney have denied any wrongdoing regarding Iran, one of the three countries Bush termed as part of an "axis of evil" with ties to both terrorists and weapons of mass destruction.

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