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Company Chosen By Pentagon To Extinguish Iraqi Oil Well Fires Has History Of Supporting Terrorist Regimes
by Jason Leopold
April 15, 2003

Kellogg Brown & Root, the company chosen last month by the Pentagon to extinguish oil well fires in Iraq, has a long history of supporting the same terrorist regimes vilified by the Bush administration and on at least one occasion defrauded the United States government to the tune of $2 million, according to public documents.

Halliburton, headed by Dick Cheney before he became vice president, and it’s KBR subsidiary did business with some of the world's most notorious governments and dictators - in countries such as Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria. The company has routinely skirted U.S. sanctions placed on these countries and lobbied the U.S. government to lift sanctions so it could set up new partnerships and create new business opportunities in these countries.

Still, the Pentagon awarded the Iraqi oil well contract to KBR without competitive bidding; a move that some Democratic lawmakers in Congress said was based on favoritism because of Cheney’s ties to the company.

Charges of cronyism led the U.S. Army Corps of Engineers on Monday to open the job of putting out Iraqi oil well fires to other firms that will now bid for the multibillion -dollar and KBR would have to compete with other companies for the right to finish the job. The Army Corps of Engineers said it would seek new bidders to rebuild Iraq's oil infrastructure, considered the key to reviving that country's economy.

KBR and Halliburton have broken U.S. laws on numerous occasions while Cheney was chief executive and as far back as 1978. Moreover, the company inflated the price of some of its military contracts and defrauded the government.

Last year, KBR agreed to pay the U.S. government $2 million to settle allegations it defrauded the military while Cheney was chief executive of parent company Halliburton. KBR was accused of inflating contract prices for maintenance and repairs at Fort Ord, a now-shuttered military installation near Monterey, Calif. The lawsuit, filed in Sacramento, alleged KBR submitted false claims and made false statements in connection with 224 delivery orders between April 1994 and September 1998.

KBR and Halliburton has also paid out settlements to end investigations and lawsuits on half-a-dozen other occasions.

In 1978, a grand jury indicted KBR on charges that it colluded with a competitor on marine construction work. KBR paid a $1 million fine to settle the charges. In 1995, the U.S. fined Halliburton $3.8 million for violating a ban on exports to Libya. Four years later, a Halliburton subsidiary opens an office in Iran, despite a U.S. ban on doing business in that country. In 2001, Halliburton shareholders lash out at company executives for its pipeline project in Burma, citing that country's human-rights abuses.

Also in 2001, watchdog groups blast Cheney for placing 44 Halliburton subsidiaries in foreign tax havens.

Halliburton's dealings in six countries - Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria - show that the company's willingness to do business where human rights are not respected is a pattern that goes beyond its involvement in Burma. A May 2001 report in the Multinational Monitor identified the following countries in which Halliburton and its KBR unit did business with, despite U.S. sanctions and charges of human rights abuses.

Azerbaijan. Dick Cheney lobbied to remove Congressional sanctions against aid to Azerbaijan, sanctions imposed because of concerns about ethnic cleansing. Cheney said the sanctions were the result only of groundless campaigning by the Armenian-American lobby. In 1997, Halliburton subsidiary Brown & Root bid on a major Caspian project from the Azerbaijan International Operating Company.

Indonesia. Halliburton had extensive investments and contracts in Suharto's Indonesia. The post-Suharto government during a purging of corruptly awarded contracts canceled one of its contracts. Indonesia Corruption Watch named Kellogg Brown & Root (Halliburton's engineering division) among 59 companies using collusive, corruptive and nepotistic practices in deals involving former President Suharto's family.

Iran. Dick Cheney has lobbied against the Iran-Libya Sanctions Act. Even with the Act in place, Halliburton has continued to operate in Iran. It settled with the Department of Commerce in 1997, before Cheney became CEO, over allegations relating to Iran for $15,000, without admitting any wrongdoing.

Iraq. Dick Cheney cites multilateral sanctions against Iraq as an example of sanctions he supports. Yet since the war, Halliburton-related companies helped to reconstruct Iraq's oil industry. In July 2000, the International Herald Tribune reported, "Dresser-Rand and Ingersoll-Dresser Pump Co., joint ventures that Halliburton has sold within the past year, have done work in Iraq on contracts for the reconstruction of Iraq's oil industry, under the United Nations' Oil for Food Program." A Halliburton spokesman acknowledged to the Tribune that the Dresser subsidiaries did sell oil-pumping equipment to Iraq via European agents.

Libya. Before Cheney's arrival, Halliburton was deeply involved in Libya, earning $44.7 million there in 1993. After sanctions on Libya were imposed, earnings dropped to $12.4 million in 1994. Halliburton continued doing business in Libya throughout Cheney's tenure. One Member of Congress accused the company "of undermining American foreign policy to the full extent allowed by law."

Nigeria. Local villagers have accused Halliburton of complicity in the shooting of a protester by Nigeria's Mobile Police Unit, playing a similar role to Shell and Chevron in the mobilization of this 'kill and go" unit to protect company property. Dick Cheney has been a strong advocate for preventing or eliminating federal laws that place limits on Halliburton's ability to do business in these countries.

Before it awards the contract this time around, the Pentagon ought to consider that KBR, which the Army Corps of Engineers says is most qualified to extinguish Iraq’s oil well fires, supports the same terrorist regimes we’re at war with.