Political Forecast

UPDATE: Evidentally the Army will indeed withhold the money from Halliburton after all. On Monday, Halliburton announced that they would be receiving a 45-day extension. However, the company said today that the Army would begin withholding 15% of Halliburton’s payments.

In a statement released today, Halliburton said their initial statement was based on “clear oral assurances from senior Pentagon representatives.” I wonder if that senior representative might’ve been a former CEO named Dick Cheney.

The Houston Chronicle is reporting the story here.

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The New York Times is reporting today about more and more breaks Vice President Dick Cheney’s former company Halliburton (and its subsidiaries) are getting at the behalf of the Bush Administration.

Halliburton has been granted additional time by the U.S. Army to substantiate its costs in Iraq and Kuwait, staving off a threat of having 15 percent of its payment withheld.

Government contractors normally cannot be paid more than 85 percent of their invoices until they fully account for their costs, but Halliburton said on Monday that it had been given a respite.

Twice this year, the army set this rule aside for Halliburton as the company cataloged its costs and explained how it was billing the government. The most recent reprieve expired on Sunday.

The story is here on the International Herald Tribune’s website (via the NY Times).

Halliburton is the largest corporate recipient of contracts from the US government for rebuilding Iraq. They have received more than $8 billion in contracts. They have also been charged in Congress for overcharging and overspending in Iraq, then passing the bill to the government.

Furthermore, Halliburton was fined $7.5 million by the Securities and Exchange Commission for accounting changes that were not reported under the tenure of former CEO Dick Cheney and now Vice President.

Evidentally the majority of the money in the fine comes from an attempt to hinder the SEC investigation, which began mid-2002. From the SEC press release:

Halliburton’s penalty for the disclosure failure reflects lapses in the company’s conduct during the course of the Commission investigation, which commenced in mid-2002.

Moreover, there’s nothing like doing business with the enemy. A Halliburton subsidiary in the Cayman Islands offers contracts and services to Iran.

Halliburton isn’t the only company that does this, however it is illegal for any American company to do business with “rogue states.” However, these companies have found a loophole to help them: The law does not apply to any foreign or offshore subsidiary so long as it is run by non-Americans.

So, thanks to this law, Halliburton Products and Services, Ltd. is able to safely do business with the Iranian government. According to a CBS News report:

Halliburton Products and Services, Ltd., is wholly owned by the U.S.-based Halliburton and is registered in a building in the capital of the Cayman Islands – a building owned by the local Calidonian Bank. Halliburton and other companies set up in this Caribbean Island, because of tax and secrecy laws that are corporate friendly.

Halliburton is the company that Vice President Dick Cheney used to run. He was CEO in 1995 to 2000, during which time Halliburton Products and Services set up shop in Iran. Today, it sells about $40 million a year worth of oil field services to the Iranian Government.

Just another example of how being in a position of power can help your former employer (who still gives you benefits) keep in business and only worry about the bottom line, not worrying about what is right and what is wrong.

The CBS News story is here.