1.3 2000-

• In 2001 it was revealed by the Wall Street Journal that a subsidiary of Halliburton Energy Services called Halliburton Products and Services Ltd. opened an office in Tehran. The company, HPS, operated "behind an unmarked door on the ninth floor of a new north Tehran tower block." HPS was incorporated in 1975 in the Cayman Islands.
• In 2002, Judicial Watch filed suit on behalf of shareholders against Cheney and 13 other Halliburton directors, as well as Halliburton itself and its accounting firm, Arthur Andersen LLP and Arthur Andersen Worldwide.
• In April 2002, a Halliburton subsidiary, Kellogg, Brown and Root (KBR), was awarded a $7 million contract to construct steel holding cells at Camp X-Ray. More recently, the subsidiary was awarded a no-bid contract to conduct oil well firefighting in Iraq worth an estimated $1 billion. In May 2003, Halliburton's role under contract with regard to Iraqi oilfields was expanded to include "operation of facilities and distribution of products". [1]
• Also in May 2003, Halliburton revealed in a filing with the Securities and Exchange Commission that its KBR subsidiary had paid a Nigerian official $2.4 million in bribes in order to receive favorable tax treatment. [2] [3]
• As of 2003, Halliburton was still operating in Iran. CNN, in a report entitled "US companies are operating in Iran despite sanctions," reported that a Halliburton spokesperson told the news agency that HPS helps Iran build oil rigs in the country's south.
• The company is currently (2003, 2004) being investigated by the Securities and Exchange Commission due to allegations of profit inflation by accounting for cost overruns as revenue in shareholder reports. Halliburton counters that the practice was approved by its accounting firm, Arthur Andersen, and conforms to generally accepted practices.
• Halliburton's chairman and CEO is David J. Lesar , who took over the positions from Dick Cheney, now the U.S. Vice President.

2 Iraq Controversy

In recent years the company has become the center of many controversies involving the 2003 Iraq War and the company's ties to US Vice President Dick Cheney. Bill Gertz , defense reporter for The Washington Times, wrote:

Vice President Dick Cheney was chief executive officer of Halliburton from 1995 until 2000, and Democrats repeatedly have tried to link the administration to claims of government favoritism toward the firm. [4]

Overall, KBR (Halliburton Construction subsidiary), formerly known as Kellogg Brown & Root has contracts in Iraq worth up to $18 billion, including a single " No bid " contract known as " Restore Iraqi Oil " (RIO) which has an estimated worth of $7 billion. Influence of the contracts can be seen from company financial reports company posted a second-quarter net loss of $663 million in 2004, revenue rose 38 percent from a year earlier to $5.0 billion. Iraq-related work contributed $1.7 billion in revenue in 2003 and a further $3.8 billion in the first six months of 2004.

Today KBR employ over 30,000 men and women in Iraq. Halliburton's work in Iraq is diverse and complicated. In addition to troop support, Halliburton also provides air traffic control support; produces 74 million gallons of water a month for consumption, hygiene and laundry; deploys as many as 700 trucks a day to deliver essentials to the troops; provides firefighter and crash-rescue services, as well as working to restore Iraqi oil flow.

But KBR has been no friend to Halliburton shareholders, losing money over the past three years as it moved to settle $4.2 billion in asbestos-related claims inherited from a 1998 acquisition. Despite the cronyism allegations, the company's contracts in Iraq are much less profitable than its core energy business. They are expected to have generated more than $13 billion in sales by the time they start to expire in 2006 but most offer low margins - less than 2 per cent on average in 2003 and just 1.4 per cent this year for the logistics work.

At a meeting for investors and analysts in August 2004 it outlined plans to dispose of KBR, the business at the source of its business difficulties and image problem, through a possible sale, spin-off or initial public offering.

Analysts at Deutsche Bank value KBR at up to $2.15 billion, while others believe it could be worth closer to $3 billion by the time management decides what to do with the business in 2005.

Halliburton is the only company mentioned by terrorist Osama bin Laden in an April 2004 tape where he claims that "this is a war [in Iraq] that is benefiting major companies with billions of dollars."

Halliburton is still making annual payments to its former chief executive, the vice-president Dick Cheney. The payments, which appear on Mr. Cheney's 2001 financial disclosure statement, are in the form of " deferred compensation " of up to $1 million (£600,000) a year. The "deferred compensation" accounts has generated an income between $50,000 to $100,000 for the vice president. Dick Cheney also retains unexercised stock options at Halliburton, the vice president's benefits include three batches of stock options comprising 433,333 shares. He also has a 401(k) retirement account valued at between $1,001 and $15,000 dollars.

On the question of Mr. Cheney's income from Halliburton, officials of the Bush-Cheney campaign said that before entering office in 2001, Mr. Cheney bought an insurance policy that guaranteed a fixed amount of deferred payments from Halliburton each year for five years so that the payments would not depend on the company's fortunes. The officials also said he had promised to donate to charity any after-tax profits he made from exercising his stock options. These steps are not unusual for corporate executives who enter government.

In 2002, Cheney's total asset wealth was valued at between $19.1 million and $86.4 million.

3 See also

• List of Halliburton subsidiaries
• Private military contractor

4 External links

• Halliburton official corporate site
• KBR Engineering and construction subsidiary official site

• Halliburton Watch
• Independent Media TV - Dick Cheney and Halliburton media watch
• LookSmart - Halliburton/Cheney Probe directory category
• Halliburton Company from The Handbook of Texas
• Halliburton Is a Handy Target for Democrats from The Washington Post September 18, 2004
• The Halliburton Agenda: The Politics of Oil and Money from Democracy Now May 17th, 2004
• Law firm sets sights on Halliburton from The Financial Times August 7 2003
• Second Quarter Results of the company for 2004 from Yahoo! News July 23, 2004
• A Halliburton Primer from The Washington Post July 11, 2002
• Congress Report in Halliburton contracts from Reuters

Energy companies of the United States Engineering companies of the United States

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