EXPOSED! is a series of articles published weekly on decentralize.today that seeks to publicize the malfeasance of multinationals, often in conjunction with corrupt or compliant governments. Everything is in the public domain, we just feel it deserves a wider audience
This week, we're taking a look at one of the USA's most prominent and controversial oil services companies: The Halliburton Company. Never heard of them? Well the shadow cast by their dirty deeds (and some of their key players) will be sadly familiar to you.
"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist."
Excerpt from President Dwight D. Eisenhower's Farewell Address given on January 17, 1961
Not what you would expect from a military man, is it? And whilst it's not entirely clear who first framed the phrase, the fact that a decorated war hero cum US President saw fit to use it in a warning to his successors speaks volumes.
And this was stated before the US got involved in Vietnam, before it engineered the two Gulf Wars and before they led the invasion of Afghanistan...was the warning heeded? It seems not, as the combination of large and powerful companies in cahoots with their lawyers, lobbyists and legislators have essentially been responsible for driving US (and by extension the world's) foreign policy for decades!
If you were to look for an example of one of the key proponents, and beneficiary, of the USA's military-industrial complex than you could hardly do better than to consider the subject of today's EXPOSED!, The Halliburton Company.
Halliburton (as it would become) was founded in Duncan, Oklahoma by Erle P. Halliburton in 1919, so it's just over one hundred years old.
It is, to quote from Wikipedia:
One of the world's largest oil field service companies, it has operations in more than 70 countries. It owns hundreds of subsidiaries, affiliates, branches, brands, and divisions worldwide and employs approximately 55,000 people
So how did they manage to become so big, and did their performance warrant their vaunted status in their primary field? Well, if we start with a look at their involvement with one of the worst offshore petroleum production disasters of all-time, that will leave you scratching your heads and wondering how they could be!
The Deepwater Horizon Disaster - April 20th 2010
There are thousands of oil rigs in the Gulf of Mexico, off the US southern coast. Being headquartered in Houston, Texas, the epicentre of the US (and the global) oil industry, it makes sense that Halliburton have been heavily involved in the Gulf's development and exploitation.
Aside from the 'normal' run of spills and leaks, Halliburton had had a reasonable record in the Gulf up until the night of April 20th 2010.
The Deepwater Horizon drilling rig explosion was an April 20, 2010 explosion and subsequent fire on the Deepwater Horizon semi-submersible mobile offshore drilling unit, which was owned and operated by Transocean and drilling for BP in the Macondo Prospect oil field about 40 miles (64 km) southeast off the Louisiana coast.
What did this have to do with Halliburton? They helped build the well, that is how and as was shown in the subsequent investigations and inquiries, their negligence and substandard work has a cataclysmic impact on the outcomes of that night.
The explosion and subsequent fire resulted in the sinking of the Deepwater Horizon and the deaths of 11 workers; 17 others were injured.
Halliburton were responsible for the concreting on the wellhead, not only was the concrete used unstable and therefore unusable, they knew about it and still went ahead with the project. Had they addressed this timeously, there would have been no blowout that night.
The same blowout that caused the explosion also caused an oil well fire and a massive offshore oil spill in the Gulf of Mexico, considered the largest accidental marine oil spill in the world, and the largest environmental disaster in U.S. history.
In September 2014, Halliburton agreed to settle legal claims against it for its involvement in the Deepwater Horizon incident by paying $1.1 billion into a trust. Sadly, no amount of money could bring the lost personnel back or restore the natural environment.
The Pentagon stated in January 2005:
"Halliburton Co., the world's second-biggest oilfield services company, became the sixth-largest U.S. military contractor last year on the strength of its work to help rebuild Iraq and care for U.S. troops"
Halliburton expanded their size and scope of operations in order to drink long and deeply from the taxpayer well when the opportunities presented themselves in the Gulf. But it wasn't without concerns and complications!
"Halliburton defrauded American taxpayers of hundreds of millions of dollars in Iraq"
Arianna Huffington on 'This Week' in June 2010
"The truth is that right now we have precisely the regulatory system that the Bush-Cheney Administration wanted -- full of loopholes, full of cronies and lobbyists filling the very agencies they're supposed to be overseeing,"
"Right here, we have the poster child of Bush-Cheney crony capitalism. Halliburton (was) involved in this, and we haven't said (anything) about that. They after all were responsible for cementing the well. Here's Halliburton, after it defrauded the American taxpayer (of) hundreds of millions of dollars is involved again..."
There is a mountain of evidence that many American companies profited off the inefficient contracting and accounting system employed during the rebuilding of Iraq.
Many of the allegations of waste and/or fraud involve a Halliburton subsidiary company known as Kellogg, Brown & Root, or KBR.
KBR 'won' one of the biggest contracts awarded during the 2nd Iraq war, in the Logistics Civil Augmentation Program (LOGCAP), which reflected the then recent government moves to outsource as much as possible, including military duties, to the private sector.
"Just as USAID had outsourced much of its work in the years after the Cold War, the military also had turned to the private sector to perform work once done by its own personnel. Under the LOGCAP contract, which KBR held for all but a few years since the program's inception in 1985, contractors provide services ranging from building bases to cooking food and doing laundry. LOGCAP grew out of the post-Vietnam downsizing of the armed services, reflecting the government-wide growth of outsourcing, which would dramatically affect the war and reconstruction efforts in Iraq. In World War II, one contractor was deployed for every seven soldiers. During the 2003 invasion, that number had increased to one for every 2.4. By 2006, contractors outnumbered soldiers in Iraq."
Office of the Special Inspector General for Iraq Reconstruction
This report also noted that some officials had raised concerns that there might be a conflict of interest because of Dick Cheney's (USA VP) former position (CEO) with Halliburton, but that:
"White House officials said the mission took priority over whatever political fallout might occur"
Over time, the US government has awarded KBR work worth more than $31 billion.
However, officials raised many questions about their fulfillment of contractual obligations, from billing for meals it didn't serve to charging inflated prices for gas to excessive admin charges.
Over many months, the Defense Contract Audit Agency (DCAA) found that $553 million in payments should be disallowed to KBR, according to 2009 testimony by agency director April Stephenson to the bipartisan Commission on Wartime Contracting in Iraq and Afghanistan.
Commissioner Charles Tiefer, a professor at the University of Baltimore stated that the amount represents a small portion of everything that auditors examined as potentially questionable.
KBR itself acknowleges it may not get paid for all of its contract services. In its most recent annual report filed with the Securities Exchange Commission (SEC), it states:
the Defense Contract Audit Agency was recommending withholding $289 million in contract costs not yet paid and asking for the return of $121 million already paid.
But there is one notable allegation where KBR is being accused of fraud, in that they "knowingly included impermissible costs" in its bills.
In April 2010, the U.S. Department of Justice filed a civil fraud case against KBR over the use of private security in Iraq to protect its employees and subcontractors. Private security wasn't allowed under the LOGCAP contract because the U.S. military was to provide protection.
The lawsuit alleges that internal documents showed KBR executives knew private security wasn't allowed but charged for it anyway. The director of DCAA said the total could be in excess of $99 million.
Halliburton sold KBR in 2007 stating that the war contracts weren't adding much to the corporate bottom line. At the same time, they opened a second headquarters in Dubai..
At the end of the day, the simple and substantiated truth is that hundreds of millions of dollars that Halliburton's KBR attempted to charge to the government have been denied and many millions more have been requested for return.
The history of KBR's LOGCAP contracts are documented in Hard Lessons: The Iraq Reconstruction Experience, a 2009 report prepared by the Office of the Special Inspector General for Iraq Reconstruction:
The Kellog-Brown & Root (KBR) subsidiary, before being sold in 2007, was also involved in environmental violations too numerous to mention, corruption in Nigeria that resulted in them paying another massive settlement and lawbreaking in Iran, in contravention of US and International sanctions, and all this by a company led by the man who would become VP.
Dick Cheney was the Secretary of Defense for President George H. W. Bush (the Elder) from 1989 to 1993. In 1995, he became chairman and chief executive officer of Halliburton which he led until 2000, when he left to run for Vice President alongside George W. Bush (the Younger).
They won and he served for two terms as the Vice President, where his hawkish demeanor and close associations with the military and the arms industry earned him the nickname of 'Darth Vader', and it was one that he reveled in. He once even quipped at a company's sales conference that he was invited to address:
"Well if you're going to discuss space weaponry, it is only appropriate thet you should invite me."
Here was a career politician, who went away to a highly lucrative position in the private sector and undoubtedly used his contacts, connections and position to lobby for work on behalf of his company.
If Halliburton is the epitome of a Military-Industrial Complex company, in its values and behaviors, then Dick Cheney was exactly the right person to head it up...unfortunately, for so many people!
Halliburton are, to be frank, the 'tip of the iceberg' when it comes to the modern incarnation of the Military-Industrial Complex. Along with the influence peddlers, the war profiteers, the lobbyists, lawyers and politicians who exploit the system for their own grubby personal or corporate gain.
However, it also represents the known side of the equation, it has an established public persona along with the likes of Boeing, Raytheon, Lockheed-Martin etc., near household names because of their retail presence but what of the ones that live in the shadows, the Blackwaters and the Palantirs of the world...these are the ones that should really concern us.
The information on the activities of Halliburton and many other companies involved is all out there, it just needs to be bought to people's attention. That is why we do this...so they can't get away with it entirely scot-free, and every small action helps.