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July 23, 2004

Halliburton Ignores Sanctions


by Jason Leopold

Vice President Dick Cheney can toss around the F-word all he wants in response to the criticism directed at him as a result of his close ties to Halliburton, the company he headed from 1995-2000, but he can't hide from the truth.

It was Cheney who urged Congress in 1996 to ease sanctions against Iran, a country that's part of President Bush's axis of evil, so Halliburton could legitimately do business there.

During a trip to the Middle East in March 1996, Cheney told some U.S. businessmen that Congress should ease sanctions in Iran and Libya to foster better relationships with those countries.

"Let me make a generalized statement about a trend I see in the U.S. Congress that I find disturbing, that applies not only with respect to the Iranian situation but a number of others as well," Cheney said at the time. "I think we Americans sometimes make mistakes. ... There seems to be an assumption that somehow we know what's best for everybody else and that we are going to use our economic clout to get everybody else to live the way we would like."

The last part of Cheney's statement could easily sum up the Bush administration's past three years in office, but that's another story.

Now Halliburton is being investigated by a grand jury for possibly violating federal sanctions while Cheney was chief executive of the company by doing business in Iran. That hasn't stopped Cheney from repeatedly sticking his foot in his mouth. On the campaign trail, Cheney has been saying that Iran has ties to al-Qaeda and some of the 9-11 hijackers. But when Cheney was chief executive of Halliburton he wasn't concerned about that. But former president Bill Clinton was. The Clinton administration said U.S. companies conducting business in Iran may have been inadvertently helping fund terrorist activities in that country.

In March 1995, Clinton signed an executive order that prohibited "new investments [in Iran] by U.S. persons, including commitment of funds or other assets." It also restricts U.S. companies from performing services "that would benefit the Iranian oil industry. Violation of the order can result in fines of as much as $500,000 for companies and up to 10 years in jail for individuals."

When Bush and Cheney were sworn into office in 2001 the administration decided it would not punish foreign oil and gas companies that invest in Iran or other countries that sponsor terrorism, including Syria and Libya.

The sanctions imposed on countries such as Iran and Libya before were blasted by Cheney before he became vice president, despite claims that those countries may have ties to terrorism.

"I think we'd be better off if we, in fact, backed off those sanctions [on Iran], didn't try to impose secondary boycotts on companies ... trying to do business over there ... and instead started to rebuild those relationships," Cheney said during a 1998 business trip to Sydney, Australia, according to Australia's Illawarra Mercury newspaper.

Halliburton first started doing business in Iran as early as 1995. According to a February 2001 report in the Wall Street Journal,

"U.S. laws have banned most American commerce with Iran. Halliburton Products & Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is 'non-American.' But, like the sign over the receptionist's head, the brochure bears the Dallas company's name and red emblem, and offers services from Halliburton units around the world."

In the February 2001 report, the Journal quoted an anonymous U.S. official as saying "a Halliburton office in Tehran would violate at least the spirit of American law." Moreover, a U.S. Treasury Department website detailing U.S. sanctions against Iran bans almost all U.S. trade and investment with Iran, specifically in oil services. The website adds: "No U.S. person may approve or facilitate the entry into or performance of transactions or contracts with Iran by a foreign subsidiary of a U.S. firm that the U.S. person is precluded from performing directly. Similarly, no U.S. person may facilitate such transactions by unaffiliated foreign persons."

Wendy Hall, a spokeswoman for Halliburton, said in an interview with me last year that Halliburton may not agree with Iran's "policies or actions" and the company makes "no excuses for their behaviors," but "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."

Hall added that "decisions as to the nature of such governments and their actions are better made by governmental authorities and international entities such as the United Nations as opposed to individual persons or companies. Putting politics aside, we and our affiliates operate in countries, to the extent it is legally permissible, where our customers are active as they expect us to provide oilfield services support to their international operations."

Recently, evidence surfaced showing that Cheney's office was aware that Halliburton would receive a no-bid contract to secretly plan restoration of Iraq's oil facilities five months before the Iraq war began.

Halliburton also had legal problems when Cheney was officially at the helm. In 1995, Halliburton paid a $1.2 million fine to the U.S. government and $2.61 million in civil penalties for violating a U.S. trade embargo by shipping oilfield equipment to Libya. Federal officials said some of the well-servicing equipment sent to Libya by Halliburton between late 1987 and early 1990 could have been used in the development of nuclear weapons. President Reagan imposed the embargo against Libya in 1986 because of alleged links to international terrorism.

But the fact that Halliburton may have unwillingly helped Libya obtain a crucial component to build an atomic bomb only made Cheney push the Clinton administration harder to support trade with Libya and Iran.

Cheney's anger at being linked to Halliburton suddenly makes sense.


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  • Jason Leopold is the former Los Angeles bureau chief of Dow Jones Newswires. He spent two years covering the Enron bankruptcy and the California energy crisis. He just finished writing a book on the energy crisis, due out in December through Rowman & Littlefield.

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