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The Halliburton smear

Rich Lowry

September 18, 2003

 

The Democrats have discovered the enemy in the ongoing Iraq war. And it is Halliburton.

 

Nothing quite so angers Democrats about the current situation in Iraq than that Halliburton is making money there. Dennis Kucinich, the out-to-lunch leftist who sounds ever more mainstream given the leftward drift of the rest of the Democratic field, wants the United Nations in Iraq so there will be "no more Halliburton sweetheart deals." Bob Graham huffs, "I will not support a dime to protect the profits of Halliburton in Iraq." John Edwards vows "to stop this president from giving billions of dollars in American taxpayer money to companies like Halliburton in unbid contracts."

 

The Texas oil-services giant formerly headed by Dick Cheney, who still gets deferred compensation from the firm, has achieved iconic status. Halliburton is the equivalent of Dow, the maker of a key ingredient to napalm, during the Vietnam War -- the focus of supposed corporate evil during wartime. It is the equivalent of Mena Airport, the Arkansas site that obsessed anti-Clinton conspiracy theorists during the 1990s -- the focus of dark speculation about the mercenary scheming of a U.S. president.

 

Behind the Democratic outrage is the implicit, and sometimes explicit, charge that Bush waged war in Iraq to fatten the bottom line of one corporation. As The New York Times has put it, Halliburton's Iraq contract "undermines the Bush administration's portrayal of the war as a campaign for disarmament and democracy, not lucre." But to have risked his presidency -- not mention American lives -- on the war in order to benefit Halliburton, Bush would have to be a psychopath. That the Halliburton charge has become a chief Democratic critique of the war is another sign of the party's descent into unhinged ravings.

 

As journalist Byron York has reported, it's not really true that the company got its work without competitive bidding. In the 1990s, the military looked for ways to get outside help handling the logistics associated with foreign interventions. It came up with the U.S. Army Logistics Civil Augmentation Program, or LOGCAP. The program is a multiyear contract for a corporation to be on call to provide whatever services might be needed quickly.

 

Halliburton won a competitive bidding process for LOGCAP in 2001. So it was natural to turn to it (actually, to its wholly owned subsidiary Kellogg Brown & Root) for prewar planning about handling oil fires in Iraq. "To invite other contractors to compete to perform a highly classified requirement that Kellogg Brown & Root was already under a competitively awarded contract to perform would have been a wasteful duplication of effort," the Army Corps of Engineers commander has written.

 

Then, in February 2003, the Corps of Engineers gave Halliburton a temporary no-bid contract to implement its classified oil-fire plan. The thinking was it would be absurd to undertake the drawn-out contracting process on the verge of war. If the administration had done that and there had been catastrophic fires, it would now be considered evidence of insufficient postwar planning. And Halliburton was an obvious choice, since it put out 350 oil-well fires in Kuwait after the first Gulf War.

 

The Clinton administration made the same calculation in its own dealings with Halliburton. The company had won the LOGCAP in 1992, then lost it in 1997. The Clinton administration nonetheless awarded a no-bid contract to Halliburton to continue its work in the Balkans supporting the U.S. peacekeeping mission there because it made little sense to change midstream. According to Byron York, Al Gore's reinventing-government panel even singled out Halliburton for praise for its military logistics work.

 

So, did Clinton and Gore involve the United States in the Balkans to benefit Halliburton? That charge makes as much sense as the one that Democrats are hurling at Bush now. Would that they directed more of their outrage at the people in Iraq who want to sabotage the country's oil infrastructure, rather than at the U.S. corporation charged with helping repair it.

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Clinton Procurement Official Steven Kelman calls allegations that the government rewarded Halliburton "Somewhere between highly improbable and utterly absurd." "One would be hard-pressed to discover anyone with a working knowledge of how federal contracts are awarded - whether a career civil servant working on procurement or an independent academic expert - who doesn't regard these allegations as being somewhere between highly improbable and utterly absurd. ... Many people are also under the impression that contractors take the government to the cleaners. In fact, government keeps a watchful eye on contractor profits - and government work has low profit margins compared with the commercial work the same companies perform. ... As for the much-maligned Halliburton, a few days ago the company disclosed, as part of its third-quarter earnings report, operating income from its Iraq contracts of $34 million on revenue of $900 million - a return on sales of 3.7 percent, hardly the stuff of plunder."

(Steven Kelman, "No 'Cronyism' In Iraq," The Washington Post,11/6/03)

 

Clinton's Undersecretary Of Commerce Says Halliburton Allegations Overblown. "William Reinsch, president of the National Foreign Trade Council in Washington, is a Democrat who served under Clinton as undersecretary of commerce. He said he disagrees with most of the Bush administration's policies, but thinks the Halliburton controversy is overblown. 'Halliburton has a distinguished track record,' he said. 'They do business in some 120 countries. This is a group of people who know what they're doing in a difficult business. It's a particularly difficult business when people are shooting at you. ... I don't think we went to war because we thought it would help selected American companies.'"

(James Rosen, "Is Iraq's Reconstruction Rigged?" The [Raleigh] News &

Observer, 10/5/03)

 

Army Corps Of Engineers: "No Reason To Think Halliburton Has The Inside Track." "Scott Saunders, a spokesman for the [u.S. Army] Corps [of Engineers], said there is no reason to think Halliburton has the inside track. 'We've never really done something like this before - gone in and tried to fix a country while it's still being terrorized,' he said. 'We wouldn't have competitively bid the contracts if we didn't think there was more than one firm in the world that could do the job.'"

(James Rosen, "Is Iraq's Reconstruction Rigged?" The [Raleigh] News & Observer, 10/5/03)

 

Under the Clinton administration, Halliburton received hundreds of millions of dollars worth of construction contracts for rebuilding efforts in Kosovo and Haiti.

 

In a deal cut in June 2000 under President Clinton, the New York Post reports that Halliburton won 11 Navy contracts worth $110 million to build jails at Guantanamo Bay, a base in Kuwait, a ferry terminal on Vieques, an air station in Spain, a breakwater in the Azores and facilities slammed by a typhoon in Guam.

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The Attacks On Halliburton

By Cliff Kincaid  |  July 12, 2004

 

It was big news that Vice President Cheney used bad language to Senator Patrick Leahy.  Cheney was angry about Leahy's relentless attacks on Cheney and his old firm, Halliburton, for alleged "war profiteering."  Cheney was wrong to use such language.  But the Halliburton critics are wrong, too.

 

Exploiting the controversy, an author named Dan Briody is out with a hatchet job on Halliburton.  But during the end of a Federal City Club event featuring Briody and his new book, someone in the audience asked a question about Halliburton being an American company that generates jobs for Americans.  Briody acknowledged that was the case and he went on to admit that Halliburton's main competitor is a French firm, Schlumberger.

 

So the French, who don't support America in Iraq and had sweetheart deals with Saddam Hussein, stand to benefit if Halliburton suffers.  That's certainly newsworthy.  But one searches almost in vain for references to this fact in the major media, or in Michael Moore's 9/11 movie, which also attacks Halliburton.  The attacks are phony; there was no controversy when Halliburton performed similar services in the Balkans under President Clinton.

 

When the Democratic campaign for president got underway, far-left candidates such as Howard Dean started picking on Halliburton.  Soon, John Kerry sounded the cry.  Dave Lesar, chairman and CEO of Halliburton, has written, "In the 2004 campaign season, Halliburton apparently is no longer entitled to answer questions before being accused of mismanagement, profiteering or misuse of funds...  The primary reason for the attacks on our integrity seems to be that the vice president of the United States used to hold my job."

 

While she has been critical of Halliburton, liberal columnist Molly Ivins notes that "Democrats are involved in similar dealings."  She cites former CIA director John Deutsch, who serves on the board of Schlumberger.  She also failed to note that another board member of Schlumberger is Jamie Gorelick, deputy Attorney General under Clinton.  She was accused by Bush Attorney General John Ashcroft of erecting the "wall" that kept U.S. intelligence agencies from cooperating to discover and prevent the 9/11 terrorist plot.  Deutsch, who also served under Clinton, could have been prosecuted for mishandling classified information.  But Clinton gave him a last minute pardon before he left office.  

 

Halliburton today employs 100,000 people in 120 countries.  In Iraq, in addition to helping to rebuild the country's oil infrastructure, it provides housing, meals, and other services for our troops.  It has 24,000 employees in Iraq alone.  But the political attacks on Halliburton make the company's employees targets as well.  To date, 34 Halliburton employees have been killed because of the war.  The liberals attacking Halliburton haven't issued any statements of regret over that.  Why aren't they giving speeches demanding that the media show pictures of those caskets?  We've got news for them—the enemy in Iraq isn't Halliburton.  It's the terrorists killing Halliburton's American employees.  We can understand Cheney's anger.

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Thursday, Jan. 1, 2004 11:43 a.m. EST

Hillary Slams Halliburton for 'Exorbitant Charges'

 

New York Sen. Hillary Clinton is blasting Halliburton, the oil services company formerly run by Vice President Dick Cheney, for what she described as its "exorbitant charges" for gasoline supplied to Iraq - even though the Army Corps of Engineers was singled out as the guilty party in a Pentagon report released yesterday.

 

In a statement that didn't even mention Halliburton, the Pentagon said the Defense Energy Support Center would develop new contracts with its own terms and conditions for the import of fuel to Iraq - a change that would remove Cheney's old firm from the process.

 

In a report detailing the switch, the New York Times noted that it was the Army Corps of Engineers that had been "criticized for its management of a Halliburton contract to bring fuel to Iraq."

 

But that didn't stop Sen. Clinton from zeroing in on Cheney's old firm, telling the New York Daily News yesterday, "Hopefully, [the change] will end the exorbitant charges for the importation and distribution of gasoline."

 

Chiming in alongside Clinton, Rep. John Dingell, D-Mich., said the news shows the need for "tough scrutiny for Halliburton and its fairy godfather, Dick Cheney."

 

Under the Clinton administration, Halliburton received hundreds of millions of dollars worth of construction contracts for rebuilding efforts in Kosovo and Haiti.

 

Halliburton officials said yesterday they were relieved that others would now be responsible for securing gas and oil for the Iraq rebuilding effort, calling the task "dangerous for our people."

 

Since it began work in the country, Halliburton has had four employees killed, and its subcontractor has had three drivers killed and 10 injured, with 60 vehicles damaged or destroyed, according to the Financial Times in London.

 

On Monday the New York Times published the results of its own comprehensive investigation into the company's dealings in Iraq, saying it had uncovered "no evidence of profiteering" by Halliburton.

 

The company's profits in the rebuilding effort so far have in fact been "minimal," the Times said.

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Monday, Dec. 29, 2003

N.Y. Times: No Evidence of Halliburton Profiteering

 

A comprehensive investigation into Halliburton's multibillion-dollar contract to restore Iraq's oil infrastructure shows "no evidence of profiteering" by the Houston-based oil services company.

 

That's the verdict by the New York Times, which assigned its Whitewater sleuth Jeff Gerth and investigative ace Don Van Atta to lay bare all the tawdry details of how Vice President Dick Cheney's former company was reaping big-bucks profits from sweetheart deals imagined by Democrats.

 

One problem: Gerth and Van Atta found almost nothing for Dems to hang their hats on. In fact, not only couldn't the Times find any evidence that Halliburton was stuffing its pockets under the table – even the above-board revenue collected by the company hasn't been much to write home about.

 

"So far this year, Halliburton's profits from Iraq have been minimal," the Times admitted. "The company's latest report to the Securities and Exchange Commission shows $1.3 billion in revenues from work in Iraq and $46 million in pretax profits for the first nine months of 2003."

 

That's a slender 3.5 percent margin, hardly enough to make any self-respecting war profiteer look twice. No wonder this story hasn't been leading TV and radio news reports all day.

 

To be sure, Times editors did their best to make it sound as if something fishy was going on. The report's front-page headline – "Halliburton Contracts in Iraq: The Struggle to Manage Costs" – gave no clue to the exoneration that followed.

 

And subheadlines like "Little Public Disclosure" and "An Absence of Competition" hinted darkly of shady deals where Cheney's friends were lining their pockets with blood money.

 

But even the Times had to admit that Halliburton's original Iraq contract was won "in a bidding process in December 2001."

 

What about that widely cited report last month claiming the company had overpaid by as much as 100 percent for Kuwaiti gasoline? Turns out that news is pretty much a political bust, too.

 

Company spokeswoman Wendy Hall explained that the Army Corps of Engineers needed the fuel imported to Iraq within 24 hours – not much time to launch a competitive bidding process.

 

"There's a premium for getting it done fast," explained Gordon Adams, a military procurement expert at George Washington University.

 

Anyone who disagrees ought to try sending all their mail by next-day air and see what happens to their postage budget.

 

Another factor that sent job cost estimates through the roof: sabotage by terrorists.

 

"As the war wound down, more work came [Halliburton subsidiary] KBR's way, mostly because of acts of sabotage on pipelines and Iraq's oil facilities," the Times noted. "When security problems made the production of fuel inside Iraq even more difficult – leading to shortages – the government asked Halliburton to import fuel."

 

If the Times' report on Cheney's old company is the best the Democrats can do, it's time for Terry McAuliffe to begin searching for a new campaign boogeyman ASAP.

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Monday, Dec. 29, 2003

N.Y. Times: No Evidence of Halliburton Profiteering

 

A comprehensive investigation into Halliburton's multibillion-dollar contract to restore Iraq's oil infrastructure shows "no evidence of profiteering" by the Houston-based oil services company.

 

That's the verdict by the New York Times, which assigned its Whitewater sleuth Jeff Gerth and investigative ace Don Van Atta to lay bare all the tawdry details of how Vice President Dick Cheney's former company was reaping big-bucks profits from sweetheart deals imagined by Democrats.

 

One problem: Gerth and Van Atta found almost nothing for Dems to hang their hats on. In fact, not only couldn't the Times find any evidence that Halliburton was stuffing its pockets under the table – even the above-board revenue collected by the company hasn't been much to write home about.

 

"So far this year, Halliburton's profits from Iraq have been minimal," the Times admitted. "The company's latest report to the Securities and Exchange Commission shows $1.3 billion in revenues from work in Iraq and $46 million in pretax profits for the first nine months of 2003."

 

That's a slender 3.5 percent margin, hardly enough to make any self-respecting war profiteer look twice. No wonder this story hasn't been leading TV and radio news reports all day.

 

To be sure, Times editors did their best to make it sound as if something fishy was going on. The report's front-page headline – "Halliburton Contracts in Iraq: The Struggle to Manage Costs" – gave no clue to the exoneration that followed.

 

And subheadlines like "Little Public Disclosure" and "An Absence of Competition" hinted darkly of shady deals where Cheney's friends were lining their pockets with blood money.

 

But even the Times had to admit that Halliburton's original Iraq contract was won "in a bidding process in December 2001."

 

What about that widely cited report last month claiming the company had overpaid by as much as 100 percent for Kuwaiti gasoline? Turns out that news is pretty much a political bust, too.

 

Company spokeswoman Wendy Hall explained that the Army Corps of Engineers needed the fuel imported to Iraq within 24 hours – not much time to launch a competitive bidding process.

 

"There's a premium for getting it done fast," explained Gordon Adams, a military procurement expert at George Washington University.

 

Anyone who disagrees ought to try sending all their mail by next-day air and see what happens to their postage budget.

 

Another factor that sent job cost estimates through the roof: sabotage by terrorists.

 

"As the war wound down, more work came [Halliburton subsidiary] KBR's way, mostly because of acts of sabotage on pipelines and Iraq's oil facilities," the Times noted. "When security problems made the production of fuel inside Iraq even more difficult – leading to shortages – the government asked Halliburton to import fuel."

 

If the Times' report on Cheney's old company is the best the Democrats can do, it's time for Terry McAuliffe to begin searching for a new campaign boogeyman ASAP.

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I guess it all depends on who's ox is being gored.

 

www.publicintegrity.org

 

Legal Action/Investigations

 

All large companies have their share of lawsuits from competitors, employees and the like, but Halliburton's legal troubles have been unusually public and expensive. Shortly after acquiring Dresser Industries in 1997, Halliburton inherited more than 300,000 asbestos claims filed against a Dresser subsidiary located in Pennsylvania that made construction products containing the substance. Halliburton settled the claims in December 2002 with about $4 billion in cash and stock and placed KBR under Chapter 11 bankruptcy protection. The huge loss, coupled with Cheney's departure and other large settlements the previous year, caused the company's stock to plunge: after three high-ticket asbestos-related verdicts in 2001, shares fell 40 percent in one day.

 

In May 2002, Halliburton received a letter from the Securities and Exchange Commission stating that it was initiating a preliminary inquiry into some of the company's accounting practices. The inquiry came after The New York Times reported that Halliburton illegally claimed cost overruns on construction projects as revenue in financial statements. Several class-action lawsuits, including ones on behalf of Halliburton shareholders and a nonprofit watchdog group called Judicial Watch, were filed alleging that Halliburton violated U.S. securities laws and defrauded stockholders. Halliburton settled the shareholder lawsuits for $6 million last May, while the Judicial Watch lawsuit was dismissed by a U.S. federal court in September.

 

Despite its increasing reliance on military and other U.S. government contracts, Halliburton has run afoul of the government in the past. In 1995, Halliburton was ordered by a federal judge to pay $1.2 million in criminal fines to the Justice Department and $2.6 million in civil penalties to the Commerce Department for violating the 1986 presidential embargo restricting trade with Libya through its subsidiary Halliburton Logging Services. The company still reportedly does business in Libya through its German subsidiary, Halliburton Company Germany GmBH.

 

Members of Congress such as Waxman and Dingell have recently questioned Halliburton's activity in not just Libya but also Iraq and Iran. When Halliburton purchased Dresser Industries, it inherited a stake in a joint project that provided oil services parts to Iraq under the United Nations' Oil-for-food program. Cheney originally denied Halliburton's activities in Iraq but later recanted, claiming he was unaware of the project which the company cut loose in 2000. Halliburton has also provided oil services to Iran in contravention of U.S. sanctions by operating through a foreign subsidiary based in the Cayman Islands which opened an office in Tehran in 2000.

 

In February 2002, Halliburton paid the government $2 million to settle a 1997 lawsuit alleging that KBR improperly billed the U.S. government for services provided at Fort Ord, California. Under terms of the settlement, the company denied any wrongdoing. Also in 2002, a federal jury in Houston rendered a verdict against Halliburton and awarded BJ Services Company $98 million in a patent infringement lawsuit. A jury also recently awarded a $70 million ruling against Halliburton for allegedly breaching a confidentiality agreement with the Anglo Dutch Tenge oil company related to a potential oil field investment in Kazakhstan.

 

Nigeria: Halliburton Pays Bribes to Lower Taxes

 

by David Ivanovich, Houston Chronicle

May 8th, 2003

 

WASHINGTON -- A Halliburton Co. subsidiary paid bribes totaling $2.4 million to a tax official in Nigeria in an effort to obtain favorable tax treatment, the company has revealed.  

 

In a filing Thursday with the Securities and Exchange Commission, the Houston-based firm said a foreign subsidiary made improper payments to "an entity owned by a Nigerian national who held himself out as a tax consultant, when in fact he was an employee of a local tax authority."

 

The bribes were paid over a year's time, between 2001 and 2002, a company spokeswoman said.

 

Halliburton officials said they learned of the bribes while conducting a routine audit of the operation, a subsidiary of Halliburton's KBR, formerly known as Kellogg Brown & Root.

 

Several employees were fired after the discovery. No senior officers were involved, the company said.

 

Halliburton officials are trying to determine how much in back taxes the company owes Nigeria.

 

The company could have to pay as much as $5 million in additional taxes, the filing said.

 

While news of the bribery payments drew attention Thursday, the company publicly announced the details of the bribery incident a year ago in a similar filing with the SEC.

 

A spokesman for the SEC declined to comment on the bribery incident.

 

The Houston-based engineering, construction and oil-field service giant has been involved in a number of projects in Nigeria, including the construction of a huge liquefied natural gas plant and development of an offshore oil and gas facility.

 

Nigeria, when it comes to corruption, routinely scores near the bottom on surveys of world business leaders.

 

In last year's Corruption Perceptions Index, published by Berlin-based Transparency International, Nigeria ranked 101 out of 102, beating out only Bangladesh.

 

www.commondreams.org

 

The Cheney-Halliburton story is the classic military-industrial revolving door tale. As Secretary of Defense under Bush I, Cheney paid Brown and Root services (now Kellogg Brown and Root) $3.9 million to report on how private companies could help the U.S. Army as Cheney cut hundreds of thousands of Army jobs. Then Brown and Root won a five-year contract to provide logistics for the U.S. Army Corp of Engineers all over the globe. In 1995, Cheney became CEO and Halliburton jumped from 73rd to 18th on the Pentagon's list of top contractors, benefiting from at least $3.8 billion in federal contracts and taxpayer-insured loans, according to the Center for Public Integrity.

 

But the Halliburton story is more than just a simple revolving door tale. Even without the Cheney conflicts of interest, serious doubts remain about whether a company with a record like Halliburton's should even be eligible to receive government contracts in the first place. This, after all, is a company that has been accused of cost overruns, tax avoidance, and cooking the books and has a history of doing business in countries like Iraq, Iran and Libya.

 

Cost overruns: In September 2000, the General Accounting Office (GAO) found that the U.S. Army had not taken appropriate steps to limit the $2.2 billion costs Kellogg Brown and Root charged for logistical and engineering support in the Balkans. According to the report, Army officials "frequently have simply accepted the level of services the contractor provided without questioning whether they could be provided more efficiently or less frequently at lower cost."

 

Questionable Accounting: The SEC recently formalized an investigation into whether Halliburton artificially inflated revenue by $234 million over four years. Halliburton switched to a more aggressive accounting method in 1998 under Cheney.

 

Access to Evil -- business dealings in Iraq, Iran, and Libya: News reports suggest that Pentagon is currently using the Iran-Libya Sanctions Act (ILSA) to draw up a blacklist of non-US companies that have done business in Iran. Yet, Halliburton has conducted Business in Iran through subsidiaries. When Cheney was CEO of Halliburton, he inquired about an ILSA waiver to pursue oil field developments in Iran. In 1997, Halliburton subsidiary Halliburton Energy Services paid $15,000 to settle Department of Commerce allegations that the company had broken anti-boycott provisions of the U.S. Export Administration Act for an Iran-related transaction. Halliburton recently agreed to evaluate its operations in Iran, after the Securities and Exchange Commission rebuffed the company's request to dismiss a New York City police and fire pension funds shareholder proposal for the company to examine its role in Iran.

 

Also forgotten is that story about how Cheney's Halliburton did business with Saddam. According to the Washington Post, "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."

 

Halliburton has also done business in Azerbaijan, Burma, Indonesia, Libya and Nigeria. As Dick Cheney once said, "The good Lord didn't see fit to put oil and gas only where there are democratic regimes friendly to the United States."

 

Tax Havens: Under Cheney's tenure, the number of Halliburton subsidiaries in offshore tax havens increased from 9 to 44. Meanwhile, Halliburton went from paying $302 million in company taxes in 1998 to getting an $85 million tax refund in 1999.

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More power to Haleburton , who the fuck would want to work in Iraq?? Lets be fair about this , show me another company thats willing to send a 10000 member workforce into Iraq?

 

Aint happening! Shit I seen some IT jobs I wouldnt mind having , working for the govt! $149k ,no taxes !! But then the life expectancy of a civilian (any nationality) in Iraq is enough to say Not no , Fuck no!

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More power to Haleburton , who the fuck would want to work in Iraq?? Lets be fair about this , show me another company thats willing to send a 10000 member workforce into Iraq?

 

Aint happening! Shit I seen some IT jobs I wouldnt mind having , working for the govt! $149k ,no taxes !! But then the life expectancy of a civilian (any nationality) in Iraq is enough to say Not no , Fuck no!

I'm contemplating sending a division of BadCad Ent. over there!

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I always find it interesting , when people find the bad things that are going on ,they run exhaustive campains to smear them !

 

 

Never once coming up with a plan to make it better , never once offering they're (so-called) expertise to "fix" whats wrong!

 

The democrats are very good at spin , but never want to fix a problem that they have learned about . "I didnt break it, I just found out about it" , "Why should I be burdened with the restructuring"  !

 

Have fun people vote for John Kerry if you think its right , by the way , your retirement funds and stocks and bonds and those mutual funds are going to be taxed , not after you take the money out "during" , read into Big John's economic package of recovery!

 

STAY Indian , STAY Bush! Support the troops and Protect America at all costs !

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  • 2 weeks later...

A Kerry ad implies Cheney has a financial interest in Halliburton and is profiting from the company's contracts in Iraq.  The fact is, Cheney doesn't gain a penny from Halliburton's contracts, and almost certainly won't lose even if Halliburton goes bankrupt.

 

The ad claims Cheney got $2 million from Halliburton "as vice president," which is false. Actually, nearly $1.6 million of that was paid before Cheney took office. More importantly, all of it was earned before he was a candidate, when he was the company's chief executive.

 

Analysis

 

A Kerry ad released Sept 17 once again attacks Cheney's ties to Halliburton, implying that Cheney is profiting from the company's contracts in Iraq. That's false.

 

Kerry-Edwards Ad

 

"Cheney Halliburton"

 

Cheney: I have no financial interest in Halliburton of any kind and haven't had now for over three years.

 

Announcer: The truth: As vice president, Dick Cheney received $2 million from Halliburton. Halliburton got billions in no bid contracts in Iraq. Dick Cheney got $2 million. What did we get? A $200 billion dollar bill for Iraq. Lost jobs. Rising health care costs. It's time for a new direction.

 

John Kerry. Stronger at home. Respected in the world.

 

Announcer: I'm John Kerry, and I approve this message.

 

The ad isn't subtle. It says, "As vice president, Dick Cheney received $2 million from Halliburton. Halliburton got billions in no bid contracts in Iraq. Dick Cheney got $2 million. What did we get?" And it implies that Cheney lied to the public when he said in a TV interview that "I have no financial interest in Halliburton of any kind."

 

But as we document here, Cheney has insulated himself financially from whatever might happen to Halliburton. The Kerry ad misstates the facts.

 

$2 Million

 

To start, the $2 million figure is wrong. It is true that Cheney has received just under $2 million from Halliburton since his election, but nearly $1.6 million of that total was paid before Cheney actually took office on Jan. 20, 2001. Saying Cheney got that much "as vice president" is simply false.

 

We asked Cheney's personal attorney to document that, and he did, supplying several documents never released publicly before:

 

A Halliburton pay statement  dated Jan 2, 2001 shows just under $147,579 was paid that day as "elect defrl payou," meaning payout of salary from the company's Elective Deferral Plan. That was salary Cheney had earned in 1999, but which he had chosen previously to receive in five installments spread over five years.

Another pay statement  dated Jan. 18 shows $1,451,398 was paid that day under the company's "Incentive Plan C" for senior executives. That was Cheney's incentive compensation -- bonus money -- paid on the basis of the company's performance in 2000. Cheney had formally resigned from the company the previous September to campaign full time, but the amount of his bonus couldn't be calculated until the full year's financial results were known.

Cheney's personal financial disclosure forms, together with the pay statements just mentioned, show that Cheney has received $398,548 in deferred salary from Halliburton "as vice president." And of course, all of that is money he earned when he was the company's chief executive officer. Cheney was due to receive another payment in 2004, and a final payment in 2005.

 

The Kerry ad isn't the only place the false $2 million figure appears. The Democratic National Committee also gets it wrong on their website. The dates of the Halliburton payments don't appear on Cheney's personal financial disclosure form from 2001, and the DNC assumed -- incorrectly as we have shown -- that all the 2001 payment were made after he took office.

 

Deferred Salary

 

The $398,548 Halliburton has paid to Cheney while in office is all deferred compensation, a common practice that high-salaried executives use to reduce their tax bills by spreading income over several years. In Cheney's case, he signed a Halliburton form in December of 1998 choosing to have 50% of his salary for the next year, and 90% of any bonus money for that year, spread out over five years. (As it turned out, there was no bonus for 1999.) We asked Cheney's personal attorney to document the deferral agreement as well, and he supplied us with a copy of the form , posted here publicly for the first time.

 

Legally, Halliburton can't increase or reduce the amount of the deferred compensation no matter what Cheney does as vice president. So Cheney's deferred payments from Halliburton wouldn't increase no matter how much money the company makes, or how many government contracts it receives.

 

On the other hand, there is a possibility that if the company went bankrupt it would be unable to pay. That raises the theoretical possibility of a conflict of interest -- if the public interest somehow demanded that Cheney take action that would hurt Halliburton it could conceivably end up costing him money personally. So to insulate himself from that possible conflict, Cheney purchased an insurance policy  (which cost him$14,903) that promises to pay him all the deferred compensation that Halliburton owes him even if the company goes bust and refuses to pay. The policy does contain escape clauses allowing the insurance company to refuse payment in the unlikely events that Cheney files a claim resulting "directly or indirectly" from a change in law or regulation, or from a "prepackaged" bankruptcy in which creditors agree on terms prior to filing. But otherwise it ensures Cheney will get what Halliburton owes him should it go under.

 

Cheney aides supplied a copy of that policy to us -- blacking out only some personal information about Cheney -- which we have posted here publicly for the first time.

 

Stock Options

 

That still would leave the possibility that Cheney could profit from his Halliburton stock options if the company's stock rises in value. However, Cheney and his wife Lynne have assigned any future profits from their stock options in Halliburton and several other companies to charity. And we're not just taking the Cheney's word for this -- we asked for a copy of the legal agreement they signed, which we post here  publicly for the first time.

 

The "Gift Trust Agreement" the Cheney's signed two days before he took office turns over power of attorney to a trust administrator to sell the options at some future time and to give the after-tax profits to three charities. The agreement specifies that 40% will go to the University of Wyoming (Cheney's home state), 40% will go to George Washington University's medical faculty to be used for tax-exempt charitable purposes, and 20% will go to Capital Partners for Education , a  charity that provides financial aid for low-income students in Washington, DC to attend private and religious schools.

 

The agreement states that it is "irrevocable and may not be terminated, waived or amended," so the Cheney's can't take back their options later.

 

The options owned by the Cheney's have been valued at nearly $8 million, his attorney says. Such valuations are rough estimates only -- the actual value will depend on what happens to stock prices in the future, which of course can't be known beforehand. But it is clear that giving up rights to the future profits constitutes a significant financial sacrifice, and a sizeable donation to the chosen charities.

 

"Financial Interest"

 

Democrats have taken issue with Cheney's statement to Tim Russert on NBC's Meet the Press Sept. 14, 2003, when he said he had no "financial interest" in Halliburton:

 

Cheney (Sept. 14, 2003): I've severed all my ties with the company, gotten rid of all my financial interests. I have no financial interest in Halliburton of any kind and haven't had now for over three years. And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government.

 

Shortly after that, Democratic Sen. Frank Lautenberg released a legal analysis he'd requested from the Congressional Research Service. Without naming Cheney, the memo concluded a federal official in his position -- with deferred compensation covered by insurance, and stock options whose after-tax profits had been assigned to charity -- would still retain an "interest" that must be reported on an official's annual disclosure forms. And in fact, Cheney does report his options and deferred salary each year.

 

But the memo reached no firm conclusion as to whether such options or salary constitute an "interest" that would pose a legal conflict. It said "it is not clear" whether assigning option profits to charity would theoretically remove a potential conflict, adding, "no specific published rulings were found on the subject." And it said that insuring deferred compensation "might" remove it as a problem under conflict of interest laws.

 

Actually, the plain language of the Office of Government Ethics regulations on this matter seems clear enough. The regulations state: "The term financial interest means the potential for gain or loss to the employee . . . as a result of governmental action on the particular matter." So by removing the "potential for gain or loss" Cheney has solid grounds to argue that he has removed any "financial interest" that would pose a conflict under federal regulations.

 

Conflict of Interest

 

It is important to note here that Cheney could legally have held onto his Halliburton stock options, and no law required him to buy insurance against the possibility that Halliburton wouldn't pay the deferred compensation it owes him. Both the President and Vice President are specifically exempted from federal conflict-of-interest laws, for one thing, as are members of Congress and federal judges.

 

And even federal officials who are covered by the law may legally own a financial interest in a company, provided they formally recuse themselves -- stand aside -- from making decisions that would have a "direct and predictable effect on that interest." And Cheney says he's done just that.

 

Cheney says he takes no part in matters relating to Halliburton, and so far we've seen no credible allegation to the contrary. Time magazine reported in its June 7 edition that an e-mail from an unnamed Army Corps of Engineers official stated that a contract to be given to Halliburton in March 2003 "has been coordinated w VP's [Vice President's] office." But it wasn't clear who wrote that e-mail, whether the author had direct knowledge or was just repeating hearsay, or even what was meant by the word "coordinated," which could mean no more than that somebody in Cheney's office was being kept informed of contract talks.

 

Indeed, a few days later it was revealed that Cheney's chief of staff Lewis "Scooter" Libby was informed in advance that Halliburton was going to receive an earlier contract in the fall of 2002 -- to secretly plan post-war repair of Iraq's oil facilities. But being informed of a decision after it is made is a far cry from taking part in making it. And according to the White House, Libby didn't even pass on the information to Cheney anyway.

 

So to sum up, this Kerry ad's implication that Cheney has a financial interest in Halliburton is unfounded and the $2 million figure is flat wrong.

 

Sources

 

"Vice President Dick Cheney discusses the war with Iraq, the economy and other topics," NBC News "Meet the Press" 14 Sep 2003.

 

Jack Maskell, "Official's  Stock Options In and Deferred Compensation From a Corporation as a "Financial Interest" of an Executive Branch Official in Such a Corporation," Memorandum , American Law Division, Congressional Research Service, 22 Sep 2003.

 

US Code of Federal Regulations,TITLE 5, CHAPTER XVI--OFFICE OF GOVERNMENT ETHICS, PART 2640--INTERPRETATION, EXEMPTIONS AND WAIVER GUIDANCE CONCERNING 18 U.S.C. 208 (ACTS AFFECTING A PERSONAL FINANCIAL INTEREST) 5CFR2640.103(B)

 

Timothy J. Burger and Adam Zagorin, "The Paper Trail: Did Cheney Okay a Deal?", Time magazine, 7 June 2004: 42.

 

Larry Margasak, "Cheney never heard plan to give work to Halliburton for rebuilding of Iraq," The Associated Press 16 June 2004.

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How amusing :rotfl: The one consistent item in all the stories is Haliburton, not Cheney, the Dems or the Republicans.  

 

Change of Government don't seem to affect the relationship Haliburton has with the taxpayer's money - perhaps both sides are busy fighting each other so the taxpayer can continue to be pillaged?

 

Big business (and big money) runs governments anyway, not you and I.

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How hard could it be to add a filter to "new posts" like we have for "search". You could select the groups you want to see and wam no more political shit.
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Kinda like a remote control for your TV Stu , you dont like channel 10 , dont hit the button!  You dont like the Playboy channel because its sexist , dont turn it on!

 

It doesnt get any easier than that!

Damn that's just what I'd like to see. But I can't turn it off. I do a new posts and I get all the politcal drivel. I tend to read all the new posts without looking at the section so I end up here.

 

I don't care who you vote for. I don't care who you pray to. I don't care what you ride, although I heard it's a girls bike. I'd just like to not hear about your candidate or your particular God. I do like hearing about your scoot. Although what you call straight shooting about the PP100 is more than just straight shooting it's a lot of opinion. And hey its like an asshole, everyone has one. And as much as I disagree with your opinions on the PP100 I like to read it. I don't like to read this.

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Kinda like a remote control for your TV Stu , you dont like channel 10 , dont hit the button!  You dont like the Playboy channel because its sexist , dont turn it on!

 

It doesnt get any easier than that!

"News and Current Events"

 

That is the filter. Use it wisely.

The filter thing must be a very very hard software type concept so I'll just let it go.

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Kinda like a remote control for your TV Stu , you dont like channel 10 , dont hit the button!  You dont like the Playboy channel because its sexist , dont turn it on!

 

It doesnt get any easier than that!

"News and Current Events"

 

That is the filter. Use it wisely.

The filter thing must be a very very hard software type concept so I'll just let it go.

Slightly harder then reading the title of the topic and/or looking to see which forum it is in.

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Aint no question Stu , I read 'em all , I too dont agree with everything in here ! And if you havent noticed (just for you) I havent said anything negative concerning the pp100 in about a month , I really dont have anything against the engine itself , I do have a problem with the way Indian touted it and people like yourself bought it and ultimately paid the price when it didnt work !

But hell , shit happens , and I can honestly say if I ever run across you stranded on the highway , I'll help you with open arms , I'll even set you up with a place to sleep for the night , drink a beer with ya and help you get your ride back on the road!

 

We dont have to agree on everything , just stay Indian and stay safe!

 

Don

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Hey 02 dont stop now, I look forward to your sarcasm.  Thats what makes this forum interesting , Icall you guys the new indian technical support team!
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canuck

Does haliburton got there fingers up there?

Its a very big company, i think the only comparable co, would be a french co. and they wouldnt do anything to cause suspect would they?

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I don't know if Haliburton has their fingers up here or not but I wouldn't be surprised in the least.  Our own Prime Minister has a massive shipping company registered off-shore in a nice tax haven.  

 

It never ceases to amaze me how well the media and governments keep the public occupied with "he-said/she-said" or "they-said/we-said" bullshit all the while continuing to take exactly what they want.

 

Bush stands in front of the crowd and preaches about "our sons and daughters in Iraq" while he cuts their benefits. (Don't get me wrong, I think Kerry is no different).  

 

The Dems raise hell about Haliburton all the while handing them billions when they have the opportunity.

 

The list is endless and the masses eat it up.  The media plays on patrotism and loyalty (with us or against us) doing their best to keep everyone fighting each other instead of paying attention to the truth.

 

Democracy (and Republics and all other 'free' societies) are an illusion of the highest order.

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