A recent New Yorker cartoon shows a corporation chairman telling his board of directors: “Don’t think of them as terrorist states. Think of them as terrorist markets.” It sounds like the Halliburton company, which has made millions in contracts with Iraq, Iran and Libya, and now stands to make billions under open-ended, no-bid contracts with the United States government to rebuild Iraq.
Halliburton’s record of dealing with terrorist states has been laid out in detail by Rep. Henry Waxman a California Democrat and the ranking minority leader of the House Committee on Government Reform, in a letter to Secretary of Defense Donald Rumsfeld.
Mr. Waxman reminded Mr. Rumsfeld that many of those deals were carried out while Vice President Dick Cheney headed Halliburton. Mr. Waxman asked how the company could have been rewarded with valuable government contracts after Mr. Cheney’s chief of staff had testified that Marc Rich, who was pardoned by President Clinton, could be considered a “traitor” for trading with Iran even if his actions were technically legal.
Relying largely on various newspaper accounts, Mr. Waxman wrote that Halliburton apparently had sought to circumvent U.S. restrictions dating back to the 1980s by setting up subsidiaries in foreign countries and territories such as the Cayman Islands. He cited a Financial Times article that quoted Mr. Cheney as saying that Halliburton was allowed to operate legally in Iran through its foreign subsidiaries.
In Iraq, according to the letter, Halliburton had stakes in two companies that signed contracts to sell more than $73 million in oil field products and spare parts while Mr. Cheney was the CEO Mr. Cheney at first denied having done any business with Iraq since United Nations sanctions were imposed. He later said he had not known about the sale of spare parts to Iraq. He said that when he found out, Halliburton sold off the two subsidiaries.
In Libya, said the letter, Halliburton’s construction subsidiary, Brown & Root, had worked since the 1980s on a huge water project that looked suspiciously like an underground weapons plant but transferred the job to its British office after the embargo on U.S. trade with Libya. Halliburton’s latest annual report says that “restrictions on our ability to provide products and services to Iran, Iraq, and Libya” were among the “risks and uncertainties” that the company faced.
Asked for comment, Halliburton said, “Where the United States government has mandated that United States companies refrain from commerce, we comply, often to the advantage of our international competitors. We do not always agree with policies or actions of governments in every place that we do business and make no excuses for their behaviors. Due to the long-term nature of our business and the inevitability of political and social change, it is neither prudent nor appropriate for our company to establish our own country-by-country foreign policy.”
The Senate last week approved legislation that requires the Department of Defense to publicly justify the awarding of any Iraqi reconstruction contract without an open and competitive bidding process. Sens. Susan Collins, Ron Wyden, Hillary Rodham Clinton, Robert Byrd and Joe Lieberman sponsored the Sunshine in Iraqi Reconstruction amendment, which is in the Senate defense authorization bill. It is a step in the right direction and should be supported by the House.
In selecting Halliburton as lead contractor in Iraq, the Bush administration is rewarding a company that has skirted the edge of legality and helped build the threats that the United States confronts in its war on terror. The administration would have done far better by employing normal open-bidding procedures instead of displaying hypocrisy and cronyism.
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