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The Bigger Picture
2.03.02
CHENEY LIED ABOUT HALLIBURTON MULTIBILLION$$ IRAQ DEALS
Duh.
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http://www.truthout.com/02.03E.Hallib.Iraq.htm
Halliburton's Iraq Deals Greater Than Cheney Has Said
** Affiliates Had $73 Million in Contracts
By Colum Lynch
Special to The Washington Post
UNITED NATIONS -- During last year's presidential campaign, Richard B.
Cheney acknowledged that the oil-field supply corporation he headed,
Halliburton Co., did business with Libya and Iran through foreign
subsidiaries. But he insisted that he had imposed a "firm policy"
against trading with Iraq.
"Iraq's different," he said.
According to oil industry executives and confidential United Nations
records, however, Halliburton held stakes in two firms that signed
contracts to sell more than $73 million in oil production equipment and
spare parts to Iraq while Cheney was chairman and chief executive
officer of the Dallas-based company.
Two former senior executives of the Halliburton subsidiaries say that,
as far as they knew, there was no policy against doing business with
Iraq. One of the executives also says that although he never spoke
directly to Cheney about the Iraqi contracts, he is certain Cheney knew
about them.
Mary Matalin, Cheney's counselor, said that if he "was ever in a
conversation or meeting where there was a question of pursuing a project
with someone in Iraq, he said, 'No.' "
"In a joint venture, he would not have reviewed all their existing
contracts," Matalin said. "The nature of those joint ventures was that
they had a separate governing structure, so he had no control over them."
The trade was perfectly legal. Indeed, it is a case study of how U.S.
firms routinely use foreign subsidiaries and joint ventures to avoid the
opprobrium of doing business with Baghdad, which does not violate U.S.
law as long as it occurs within the "oil-for-food" program run by the
United Nations.
Halliburton's trade with Iraq was first reported by The Washington Post
in February 2000. But U.N. records recently obtained by The Post show
that the dealings were more extensive than originally reported and than
Vice President Cheney has acknowledged.
As secretary of defense in the first Bush administration, Cheney helped
to lead a multinational coalition against Iraq in the Persian Gulf War
and to devise a comprehensive economic embargo to isolate Saddam
Hussein's government. After Cheney was named in 1995 to head
Halliburton, he promised to maintain a hard line against Baghdad.
But in 1998, Cheney oversaw Halliburton's acquisition of Dresser
Industries Inc., which exported equipment to Iraq through two
subsidiaries of a joint venture with another large U.S. equipment maker,
Ingersoll-Rand Co.
The subsidiaries, Dresser-Rand and Ingersoll Dresser Pump Co., sold
water and sewage treatment pumps, spare parts for oil facilities and
pipeline equipment to Baghdad through French affiliates from the first
half of 1997 to the summer of 2000, U.N. records show. Ingersoll Dresser
Pump also signed contracts -- later blocked by the United States -- to
help repair an Iraqi oil terminal that U.S.-led military forces
destroyed in the Gulf War.
Former executives at the subsidiaries said they had never heard
objections -- from Cheney or any other Halliburton official -- to
trading with Baghdad.
"Halliburton and Ingersoll-Rand, as far as I know, had no official
policy about that, other than we would be in compliance with applicable
U.S. and international laws," said Cleive Dumas, who oversaw Ingersoll
Dresser Pump's business in the Middle East, including Iraq.
Halliburton's primary concern, added Ingersoll-Rand's former chairman,
James E. Perrella, "was that if we did business with [the Iraqi regime],
that it be allowed by the United States government. If it wasn't
allowed, we wouldn't do it."
Dumas and Perrella said their companies' commercial links to the Iraqi
oil industry began before the U.N. Security Council imposed an oil
embargo on Baghdad in the wake of its 1990 invasion of Kuwait.
They returned to dealing with Iraq after the council established the
"oil-for-food" program in December 1996, permitting Iraq to export oil
under U.N. supervision and use the proceeds to buy food, medicine and
humanitarian goods. The program was expanded in 1998 to allow Iraq to
import spare parts for its oil facilities.
The Halliburton subsidiaries joined dozens of American and foreign oil
supply companies that helped Iraq increase its crude exports from $4
billion in 1997 to nearly $18 billion in 2000. Since the program began,
Iraq has exported oil worth more than $40 billion.
The proceeds funded a sharp increase in the country's nutritional
standards, nearly doubling the food rations distributed to Iraq's poor.
But U.S. and European officials acknowledged that the expanded
production also increased Saddam Hussein's capacity to siphon off money
for weapons, luxury goods and palaces. Security Council diplomats
estimate that Iraq may be skimming off as much as 10 percent of the
proceeds from the oil-for-food program.
Cheney has offered contradictory accounts of how much he knew about
Halliburton's dealings with Iraq. In a July 30, 2000, interview on
ABC-TV's "This Week," he denied that Halliburton or its subsidiaries
traded with Baghdad.
"I had a firm policy that we wouldn't do anything in Iraq, even
arrangements that were supposedly legal," he said. "We've not done any
business in Iraq since U.N. sanctions were imposed on Iraq in 1990, and
I had a standing policy that I wouldn't do that."
Cheney modified his response in an interview on the same program three
weeks later, after he was informed that a Halliburton spokesman had
acknowledged that Dresser Rand and Ingersoll Dresser Pump traded with Iraq.
He said he was unaware that the subsidiaries were doing business with
the Iraqi regime when Halliburton purchased Dresser Industries in
September 1998.
"We inherited two joint ventures with Ingersoll-Rand that were selling
some parts into Iraq," Cheney explained, "but we divested ourselves of
those interests."
The divestiture, however, was not immediate. The firms traded with
Baghdad for more than a year under Cheney, signing nearly $30 million in
contracts before he sold Halliburton's 49 percent stake in Ingersoll
Dresser Pump Co. in December 1999 and its 51 percent interest in Dresser
Rand to Ingersoll-Rand in February 2000, according to U.N. records.
Perrella said he believes Halliburton officials must have known about
the Iraqi links before they purchased Dresser. "They obviously did due
diligence," he said.
And even if Cheney was not told about the business with Baghdad before
the purchase, Perrella said, the CEO almost certainly would have learned
about it after the acquisition. "Oh, definitely, he was aware of the
business," Perrella said, although Perrella conceded that this was an
assumption based on knowledge of how the company worked, not a fact to
which he could personally attest because he never discussed the Iraqi
contracts with Cheney.
A long-time critic of unilateral U.S. sanctions, which he has argued
penalize American companies while failing to punish the targeted
regimes, Cheney has pushed for a review of U.S. policy toward countries
such as Iraq, Iran and Libya.
In the first expression of that new thinking, the Bush administration is
campaigning in the U.N. Security Council to end an 11-year embargo on
sales of civilian goods, including oil-related equipment, to Iraq.
U.S. officials say the new policy is aimed at easing restrictions on
companies that conduct legitimate trade with Iraq, while clamping down
on weapons smuggling and other black-market activity.
If the plan is approved, there would be "nothing to stop Iraq from
importing [as many] oil spare parts as it needs" from Halliburton and
other suppliers, according to a British official who briefed reporters
on the proposal when it was introduced last month.
Cheney resigned as chairman of Halliburton last August. Although he has
retained stock options worth about $8 million, he has arranged to donate
to charity any profits from the eventual exercise of those options,
Glover Weiss said.
Confidential U.N. documents show that Halliburton's affiliates have had
broad, and sometimes controversial, dealings with the Iraqi regime.
For instance, the documents detail more than $2.5 million in contracts
between Ingersoll Dresser Pump Co. and Iraq that were blocked by the
Clinton administration. They included agreements by the firm to sell
$760,000 in spare parts, compressors and firefighting equipment to
refurbish an offshore oil terminal, Khor al Amaya.
The Persian Gulf terminal was badly damaged during the 1980-88 Iran-Iraq
War and later was destroyed by allied warplanes during Operation Desert
Storm. At the time, Cheney was secretary of defense.
Washington halted the sale because the facility was "not authorized
under the oil-for-food deal," according to U.N. documents. Under the
terms of the oil-for-food program, Baghdad is permitted to export crude
oil, subject to U.N. supervision, through only two terminals, Ceyhan in
Turkey and Mina al Bakr on the Persian Gulf.
The equipment was never delivered to Iraq, but Baghdad subsequently
repaired the Khor al Amaya facility on its own.
A senior Iraqi oil ministry official, Faiz Shaheen, told an official
Iraqi newspaper that Iraq would soon be able to export about 600,000
barrels a day of crude oil from the terminal.
Dumas said he was not aware of the dispute over the Khor al Amaya
terminal. It was unlikely, he added, that Cheney or other top
Halliburton executives would have known about the specific deals. "We
had great independence in running our business," he said.
U.S. officials say the Bush administration is prepared to allow Iraq to
resume exports from Khor al Amaya, as long as the earnings are placed in
a U.N. escrow account that is used to pay for humanitarian supplies and
further improvements to the oil industry.
"The U.S. attitude towards Iraqi exports has evolved considerably," said
James A. Placke, a Washington-based analyst for Cambridge Energy
Research Associates, a consulting firm. "They used to tightly restrict
Iraqi oil exports, and now there is no limitation on Iraqi exports."
Iraq's power to entice foreign investment, meanwhile, has increased with
the soaring demand for oil. U.S. companies, which have been able to
trade with Iraq only through foreign subsidiaries and middlemen, are
wary of dealing with Baghdad but eager to get a piece of the action,
according to industry sources.
"The American oil industry is very interested in trying to enter Iraq,"
said J. Robinson West, chairman of Petroleum Finance Co., a consulting
firm. "But I think that they are quite respectful of U.S. policy towards
Saddam Hussein. There is a very strong feeling that in fact he is the
greatest threat to oil production in the Middle East."
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