Halliburton Looks to Greener Pastures
WASHINGTON, 17 May (IPS) -
As Halliburton held its annual meeting Wednesday in Houston, Texas, the Washington-based Corpwatch released its own "Alternative Annual Report" which details the alleged wrongdoings of the company and its former subsidiary, Kellogg Brown and Root (KBR), and questions the motivation behind Halliburton's planned move to the United Arab Emirates.
Despite being one of the 10 largest contractors for the United States' military, Halliburton announced in March that it will open a new headquarters in Dubai. Critics believe the expansion is a possible bid to avoid U.S. taxes and shield top executives from prosecution in the U.S. justice system.
The company will remain incorporated in the United States.
"If employees spend 10 months outside the country, they are no longer U.S. tax residents," Pratap Chatterjee, programme director of CorpWatch, told IPS.
"David Lesar, the CEO of Halliburton, told me that he will remain a U.S. citizen but that doesn't answer the question of if he'll remain a U.S. tax resident," added Chatterjee, who attended the annual meeting in Houston.
Moving to Dubai, say Halliburton executives, will move them closer to the centre of the energy industry. But others believe the move is calculated to shield the company from U.S. laws by moving to a region referred to as a "comfort zone for corporate corruption" by CorpWatch.
Halliburton has earned over 20 billion dollars from U.S. military-related contracts since the March 2003 invasion of Iraq. However, the company recently lost two of its most lucrative contracts -- oil infrastructure reconstruction and military base support.
"With the loss of its two biggest taxpayer-funded contracts in Iraq, Halliburton has decided that its future lies outside the United States. The company's decision to move its headquarters to Dubai could spell a major financial loss to the U.S. Treasury," said Chatterjee.
Serious questions have begun to emerge here in Washington regarding Halliburton's contracts in Iraq and the 20 billion dollars Halliburton has billed the U.S. government for its work in Iraq.
In February, Congressman Henry Waxman, a California Democrat, released a report saying that out of the 20 billion dollars charged to the U.S. government by Halliburton, 2.4 billion dollars were "unsupported" and "questioned" costs.
At the annual meeting, Halliburton executives refused to answer questions surrounding its contracts in Iraq, citing the fact that the Iraq contracts were mostly conducted through Halliburton's former subsidiary, Kellogg, Brown and Root, which broke ties with Halliburton on Apr. 5.
"...(KBR) has absolutely nothing to do with Halliburton as the two companies are completely separate entities," wrote Cathy Mann, director of communications at Halliburton, when contacted by IPS for comment. "To confirm, Halliburton Company has never been contracted for services by the U.S. government, particularly none of the logistics support services frequently discussed in the media today. Also, to confirm, Halliburton and its subsidiaries have no employees or work in Iraq or Afghanistan."
CorpWatch called on Halliburton and KBR to make serious changes in their business practices, both in Iraq and in U.S.
In Iraq, the report calls for the companies to make public the bidding processes by which they acquired contracts; disclose the overseas subsidiaries it says are used to circumvent U.S. tax laws; and provide better working conditions for its employees in Iraq and the U.S. state of Louisiana, where Halliburton won government contracts after the Hurricane Katrina disaster.
Halliburton has also faced serious criticism for its use of private security guards, like Blackwater and Triple Canopy, in Iraq.
The report charges that Triple Canopy contractors were observed firing at unarmed Iraqis for sport.
KBR/Halliburton's main contract in Iraq had specified that the company was not permitted to hire its own security and must depend on the U.S. military for protection. But Halliburton contends that the use of private security contractors was conducted through sub-contractors, thereby staying in accordance with their government contract.
Halliburton estimates that it may have to return up to 400 million dollars to the U.S. government for hiring military contractors, says the report.
Truck drivers who worked for Halliburton, meanwhile, have contended that the company did not do enough to adequately protect them in Iraq, as evidenced on Sep. 20, 2005 when a Halliburton convoy was ambushed and three of its drivers were killed.
CorpWatch also called on the U.S. government to cancel all of its contracts with Halliburton and KBR and to improve congressional oversight and transparency in issuing government contracts.
"(Halliburton's wasteful spending) is an intolerable mess. It's important that we hold people accountable for it, and just as important that we prevent these outrages from happening again," said Waxman at a Feb. 15 congressional hearing on Iraq's reconstruction.
Vice President Dick Cheney was the chief executive officer of Halliburton from 1995 through August 2000, although he has denied any continuing relationship with the company.