War Profiteering And Halliburton

Well before the Bush administration launched its war against Baghdad, U.S. corporations were lining up to win lucrative contracts for the rebuilding of Iraq, a nation devastated by war and 12 years of economic sanctions. But because companies with close ties to the White House, such as Halliburton, Bechtel, and the Carlyle Group have been awarded multi-million dollar contracts in postwar Iraq, questions are now being raised about the appearance of ethical impropriety and conflicts of interest.

The revolving door between big business and government is easily illustrated in the Bush White House. Richard Perle, a key architect of the Iraq war, resigned his chairmanship of the Pentagon’s Defense Policy Board in March after press reports revealed he was acting as a highly paid consultant for companies hoping to profit from conflicts in Iraq and North Korea. And before becoming Secretary of Defense, Donald Rumsfeld sat on the board of a Swiss company which had signed a $200 million dollar contract with North Korea in 1999 to design and build components for two light water nuclear reactors there.

But the most disturbing example of possible conflicts of interest in the Bush administration are seen in Vice President Dick Cheney’s association with Halliburton, an oil services and construction company that regularly does business with the Pentagon. Halliburton, where Cheney served as CEO from 1995 to 2000, was awarded a no-bid contract in March to put out oil fires in postwar Iraq — and as revealed by the U.S. Army in May — to operate Iraq’s oil fields and distribute its petroleum products. Between The Lines’ Scott Harris spoke with Charlie Cray, corporate reform campaigner with Citizen Works, who examines the charges of war profiteering leveled against Halliburton and other companies with close ties to the White House.

Charlie Cray: Well, the Defense Policy Board has 30 members, nine of whom have ties to companies that have won more than $76 billion in defense contracts in 2001 and 2002. Four members are registered lobbyists and one represents two of the three largest defense contractors. You have kind of issues of conflicts of interest. You have larger questions concerning whether or not some of the ostensible basis of our foreign policy is contradicted by the private activities of some of the people involved. For instance, take Vice President Dick Cheney. Dick Cheney was CEO of Halliburton. One of the stories that has not come out except for the good graces, the persistence of Rep. Henry Waxman (D-Calif.), is the fact that Halliburton has done business in Iran and during Saddam Hussein’s regime in Iraq through off-shore subsidiaries. Cheney was confronted about this and at first denied that early on in his vice-presidency or while he was a candidate for office. It was later proven to be t rue and he sort of avoided responsibility for it, I guess, by claiming that this was an activity of a subsidiary and that the company didn’t really know much about it. The hypocrisy there is that here’s a company that’s doing business with regimes that this administration has deemed to be supporters of terrorism.

Between The Lines: Vice President Dick Cheney still gets quite a bit of money every year from Halliburton, a company that has been recently awarded contracts from the U.S. government. Do you want to outline the compensation package that Dick Cheney is still getting and the lucrative contracts that Halliburton is receiving right now?

Charlie Cray: Dick Cheney’s relationship with Halliburton’s goes back 11 years to when he was secretary of defense under President Bush. And he at that time established a relationship with Halliburton by hiring Kellog, Brown and Root, their subsidiary, to look at how the Defense Department could more efficiently manage some of its operations by inviting private contractors into perform those services. Then he went to work at Halliburton and became the CEO and Halliburton grew to become from something like the 78th largest to the 17th largest defense contractor under Dick Cheney’s leadership. And then he of course, came back into government office but it apparently seems like he hasn’t lost his connection to Halliburton. He continues to receive almost $200,000 in annual compensation as a retirement package from Halliburton.

Also, a little known story is that the vice president’s office met with Halliburton in October along with other representatives of the oil industry to discuss oil production in Iraq after Saddam was gone. This is back in October before any decision of going to war was even officially made. That’s a meeting that we don’t know a lot about. It was reported on by the Wall Street Journal by Thaddeus Herrick on the 16th of January, and the administration denied it even occurred. Much like they won’t cough up the documents from the national energy strategy. There’s a lot of secrecy involved in the relationships between this administration and the corporations that they have deep ties with, particularly the oil and gas industry. The administration has about 41 members, top level administration representatives that came out of the oil and gas industry, including people like Condoleeza Rice who once had an oil tanker owned by Chevron named after her.

Between The Lines: Do the connections between Vice President Dick Cheney and Halliburton just have the appearance of impropriety or through your research, do you feel that there is a basis for a congressional investigation of what’s going on here?

Charlie Cray: I think there is enough evidence for a congressional investigation into Dick Cheney and Halliburton based on two lines of evidence. One is the story reported in the Wall Street Journal on the 16th of January that the vice president’s office met with Halliburton and members of other companies back in October to plan oil production in Iraq. There is evidence that this was a closed-bidding process that excluded companies that had the qualifications to be able to do business there. And why were they shut out? I think that question needs to be answered.

The second line of evidence is that this is an administration, and Dick Cheney in particular, has a long-standing relationship that makes it way too cozy with the company. Where is the evidence that there is some kind of accountability to the taxpayer for cost overruns given this company’s track record in the past? I think it may be time for us to start calling on members of Congress to set up a special prosecutor or investigator at least to look into these conflicts of interest and to answer questions that so far only Waxman has had the courage to pursue. I think people can ask for, at minimum, greater transparency, that these contracts should be posted on a Web site for everybody to see.

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