Monthly Archives: August 2011

Halliburton, Cheney and the Bush administration in Iraq: 2003

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Halliburton, Cheney and the Bush administration in Iraq: 2003

 

Vice President Dick Cheney

This history is intended as summary and a reminder for anyone who might wonder why connections between former Vice President Cheney’s Halliburton, Inc., and subsidiaries and the George W. Bush administration matter for Iraq. The key facts were not widely reported to the public, or with adequate focus and emphasis, when they would have been timely during the lead-up to the invasion of Iraq, and during the first two years of the Iraq war.

To begin with, under the second Bush administration the U.S. had a trade deficit with Iraq: In other words, while top administration figures were inveighing against Saddam Hussein, the administration’s oil-industry donors and staunchest supporters were quietly running up record oil imports from Saddam. Until May 2003, the U.S. imported more goods from Iraq in regular commerce, even while preparing war against it, than exported to it. According to the U.S. Census Bureau, Foreign Trade Division, in January through June 2003 the U.S. imported $2,516,700,000 worth of products from Iraq.  During the same period it exported $30 million worth of products to Iraq, for a trade deficit of about $2.4 billion.

UK consulted Big Oil before invading Iraq

That’s a lot of doing business with the devil.

In 2002, the U.S. trade deficit with Iraq was $3.5 billion. For 2001, our trade deficit with Iraq was $5.7 billion: We exported $46 million worth of goods to the Iraqis and imported $5.8 billion worth. Interestingly, our trade deficit with Iraq actually peaked in election year 2000, at $6 billion, a fact not emphasized on the campaign trail by those evil-doer-haters George W. Bush and Dick Cheney.

The previous U.S. trade surplus with Iraq lasted through 1996.

U.S. oil imports from Iraq

Perhaps  this should not be surprising. Major U.S. industries, like the oil industry to pick a random example, have done large-scale commerce with the strife-torn Middle East for decades. Our trade deficit with Iraq was dwarfed by our trade deficit with Saudi Arabia, with whom we last had a trade surplus in 1998. Our monthly trade deficit with ally Kuwait almost doubled from 2002 to 2003. (Needless to say, the U.S. consistently runs huge trade deficits over-all, our #1 trade deficit partner being China.)

Given that the second Bush administration invaded and occupied Iraq, it is a good idea to remember the extensive U.S.  commerce between Big Oil and that pitiful nation.

According to those bruisers at the Census Bureau, by some strange chance Iraqi imports fell into the single category of “mineral fuels, lubricants and related materials,” i.e. oil. From January through April of 2003 we imported hundreds of millions of dollars’ worth of oil from Iraq, with imports nearly doubling in February and March, when the invasion took place. Then in May 2003, at the height of the direct invasion, our Iraq imports dropped to $80 million, still a trade deficit. In June 2003, U.S. imports of Iraqi oil fell so far that, for the first time since 1996, the U.S. had a trade surplus ($8 million) with Iraq.

U.S. oil companies, in fact, were consistently Saddam’s biggest customers. In 2001, the U.S. was “the main market for Iraqi crude,” according to the Middle East Economic Survey. Forbes estimated that U.S. companies purchased 70 percent of Iraq’s oil in 2001. One of the single biggest U.S. customers was Chevron, where Bush’s National Security Adviser and second Secretary of State Condoleezza Rice was an executive. Chevron merged with Texaco less than a month after the attacks of September 11, 2001, and the merged giant ChevronTexaco continued its purchases of Iraqi oil, with no sign that the White House considered this a security breach.

Not that U.S. exports to Iraq were nonexistent. Our two biggest categories of export to Iraq in 2002, by far, were “drilling and oilfield equipment”–$16 million–and “excavating machinery”–$4 million. That would be Halliburton Company, headed from 1995 to 2000 by Richard Cheney, who left Halliburton to join the Bush ticket in the election.

That’s a lot of selling to the devil, especially considering that Halliburton subsidiaries were basically responsible for restoring Saddam’s oil fields after not one but two wars, the Iran-Iraq War and the first Gulf War. One might argue that Vice President Cheney’s former company was doing what it could to reverse our trade deficit with Iraq. On the other hand, it seems obvious that if the Bush administration had really wanted to know more about Iraq’s supposed ‘weapons of mass destruction’, it could have asked Halliburton. The giant conglomerate produces and distributes oilfield equipment and related services worldwide, including in Iraq. “Parts for boring or sinking machinery” were the second-largest category of exports from Texas, where Halliburton is based, for every year immediately preceding and following Cheney’s transition from the company to government.

Indeed, while Cheney was head of Halliburton, Halliburton subsidiaries were forging ahead in their continuing project of rebuilding and maintaining Iraq’s oil industry for Saddam. Dresser-Rand and Ingersoll-Dresser Pump Company, two Halliburton subsidiaries, had contracts worth more than $73 million with Iraq during Cheney’s stint at Halliburton.

Halliburton, originally founded in Great Britain but subsequently incorporated in Delaware, has more than 500 subsidiaries, including some located in those notable oil-producing nations the Cayman Islands, Barbados, and Bermuda. Halliburton acquired Dresser Industries in September of 1998. During the presidential campaign, Cheney said under questioning that he had a firm policy against dealing with Iraq, but senior company executives handling Iraqi business reportedly did not hear of a prohibition against it.

News reports subsequently revealed that Houston-based Kellogg, Brown & Root, another chief Halliburton subsidiary, received a noncompetitive-bid contract from the U.S. Army Corps of Engineers in 2003 to rebuild and repair Iraq’s oil fields. The contract was officially stated as capped at $7 billion but with no official projection of actual costs.

Image problems and imaging

The petrochemicals industry has capabilities beyond well-drilling and extinguishing oil field fires, and Halliburton has other subsidiaries besides Dresser and Brown & Root that could have been relevant to operations in Iraq. In September 1996, Halliburton merged acquired a company named Landmark Graphics Inc, acquiring with it Landmark’s five-year plan and its technological capabilities. The September 9, 2001, prospectus for the Halliburton-Landmark merger reads in part:

“Landmark, together with its subsidiaries, designs, markets and supports sophisticated computer-aided exploration (“CAEX”) and computer-aided reservoir management (“CARM”) software and systems. In more than 70 countries, geologists, geophysicists, petrophysicists and engineers use Landmark products in exploration for and production of oil and gas. Landmark’s applications software transforms vast quantities of seismic, well log and other data into detailed computer models of the subsurface. These models reveal critical information about subsurface formations.”

In simple, non-scientific terms, companies such as these have spent years trying to see underground in places like Iraq, this one in particular.

As we know by now, the myth that Iraq had nuclear weapons had about as much dignity as the one that the late Osama bin Laden was going to fly in on a magic carpet at any moment, white beard flowing in the wind, and sprinkle anthrax dust over some D.C. press briefing. But the WMD myth was particularly brazen in flouting commerce as well as science. With its capabilities, the company would have detected sub-surface testing of nuclear weapons or development of missiles in Iraq, where Halliburton itself operates—literally–on the ground.

The key term is “subsurface imaging.” As its SEC filings describe,

“Landmark is engaged in the business of designing, creating and marketing an extensive line of integrated software applications to the oil and gas exploration, development and production industry for seismic processing, 3D and 2D seismic interpretations, geologic and petrophysical interpretation, including reservoir analysis, mapping and modeling of geophysical information, well log and production analysis, drilling and production engineering and data management.”

So why wouldn’t some subsurface imaging, already used to see underground, even in the desert, have worked in Iraq, to detect WMDs (if any)? The number of reporters in Washington, D.C., who posed this question in 2003 is not legion.

One scientist who prefers not to be named, but who worked for five years with a Landmark director, explains that Landmark’s mega-computing-power software does indeed do subsurface 3-D tomography (imaging). As he explained it, however, the imaging is “based on traditional seismic inputs.” That is, you “shoot a small explosion or use a thumper truck, and capture the echoes with an array of many (can be several hundred) geophones [microphones firmly in contact with the ground]. The echoes are then digitally recorded in massive data files” and processed. The output is then color plotted on wall-size sheets of paper, or on monitors, where geologists can study it. The scientist suggests that this software may not be designed to work with voids–caves, tunnels—or with very shallow formations less than 200 feet down.

What would help would be ground penetrating radar. The U.S. government, he pointed out, has had ground penetrating radar, which can get shallow (less than 50 feet underground) subsurface information, since the sixties and seventies. GPR was used to discover camouflaged missile silos back during the Cold War.  The government disclosed this secret capability “by publishing maps of the underground tributaries of the Nile soon after the first launch,” he added.

Military uses aside, ground penetrating radar is well known in the oil business. Geologists use it to find oil. It has also been applied in other fields. Archaeologists have used it to locate dinosaur bones. Its fairly simple process of penetrating the earth with radio waves and then returning the signals to a computer is also used in detective work (forensic tomography), to discover human remains.  The basic idea parallels sonograms used in pregnancy.

So again, couldn’t this process have worked in Iraq? – Or, for that matter, to scrutinize underground caves in Afghanistan?

One expert on this matter is Dr. H. Roice Nelson, a geoscientist in the global oil business who founded Landmark Graphics.

“Yes,” he said, the technique could work, “if the data were available.” But, he said flatly, “they’re not.” Data are not available for Iraq and Afghanistan, because no one had done the large-scale seismic surveys. “It would be very expensive.” Remote-satellite technology is always expensive. [emphasis added]

Asked whether the financial cost would be greater than having the operations handled by troops on the ground, he demurred.

“If I had two or three days,” he remarked rather casually, “and got together with other people in the field,” he could probably come up with a good cost estimate for the necessary “large-scale remote,” “air-mag surveys.”

“But I can’t afford to do it on spec.” Did anyone in the administration get in touch with him, asking for volunteer expertise on what lies beneath, in Iraq? No. Nor, apparently, is there word out on the geologist street that others are being approached. If any geologists are contracted, or have been used, to employ these capabilities, there is no sign of it. A big question, obviously, is whether the process would work. Nelson does not predict an outcome but comments that it still might not turn up hidden weapons. In a short telephone interview, we did not discuss the human cost of the effort in Iraq.

He declines to speculate on whether this effort has been made, at all, by the government.

“I read the same news reports you do.” “You might ask Dick Cheney,” he signed off.  “He used to head Halliburton.”

Before 2003

For the record, here is some further background on Dresser, Halliburton, and Bush-Cheney:

George W. Bush’s father was George H. W. Bush, 41st president of the United States. The Bush family was from Connecticut, where the elder George Bush’s father, Prescott Bush, was a U.S. senator. Prescott Bush–and this background was not reported during the 2000 election cycle—also was on the board of directors of Dresser Industries from 1930 to 1952.  A director for twenty-two years, Prescott Bush was Dresser’s longest-serving director, according to David A. Smith.

George H. W. Bush also worked for Dresser, from 1948 to 1951.

Dick Cheney, while CEO of Halliburton, agreed to acquire Dresser Industries in 1998. Dresser had just acquired M.W. Kellogg, which subsequently merged with Houston firm Brown & Root, becoming Kellogg Brown & Root and then KBR. As everyone attuned to politics knows, the Bush team was already gearing up for the White House run at the time. This is one of those sequences that makes politics look unsavory:

1)      Liability-ridden, Bush-connected Dresser got quietly conveyed to Cheney’s Halliburton, at HAL shareholder expense, distancing George W. Bush from the asbestos-mesothelioma scandal and litigation by Dresser retirees, at a time when Cheney was not overtly connected to Bush;

2)      Cheney subsequently got the nod to be George W. Bush’s vice-presidential pick; and

3)      Once in office, the Bush-Cheney administration provided Halliburton and its business allies with billions of USD worth of federal contracts, while quietly working to delay or to prevent plaintiffs’ lawsuits in U.S. courts.

Halliburton earnings at start of Bush-Cheney administration

The fact that virtually none of this was reported by the Washington political press does not speak well for the political press corps at the time. Contrast the topic above, or any fraction of it, to Al Gore’s switching to brown suits or the canard that Gore claimed to have invented the internet.

A large part of the problem was that insider political reporting back then was dominated by the Washington Post, and most regrettably, the paper’s parent Washington Post Co. had just recently finished buying Kaplan Learning, the giant standardized-testing conglomerate. At a time when the paper was losing money—it still is, as are newspapers in general–the Bush team made explicit overtures to the Post newspaper on the issue of ‘education reform’, which meant billions of dollars’ worth of standardized testing. Both the Bush-brother governors, Jeb Bush in Florida and George W. Bush in Texas, had already increased standardized testing in their respective states. This policy adjustment should have gotten more press scrutiny, given how it flew in the face of both rightwing libertarianism and their state GOPs’ usual attitude toward education.

Al Gore and earth tones

But scrutiny was not the watchword in the 2000 campaign, as we know by now. Candidate Bush got free passes from the Post and from the ensconced press corps—on his drunk driving, his alcoholism, his wife’s having killed another teenager in an automobile accident, his lack of knowledge of national and international affairs, his lack of experience in high office, the inconsistencies and misrepresentations in his military record, the family favors in his career record, the sketchiness of his academic credentials, etc., etc. Meanwhile, Al Gore got taken apart for every trifling detail of clothes or manner. No minutiae went unexamined in regard to Gore; no issue of gravity got the attention it deserved in regard to Bush. And Bush got commendations—especially from the Washington Post—for bringing up the topic of ‘education reform’ or for that matter for bringing up education at all.

Once in office, the administration did get ‘No Child Left Behind’ passed, and the Post Co.’s SEC filings reveal that the push for standardized testing across the nation, in all schools, at all levels–largely what NCLB boils down to—enriched the Post Co. by billions. The company has now officially re-branded itself to the SEC as an education and media company.

None of this was reported by the Post newspaper, which also has gone for years without detailed reporting on continuing asbestos problems in the U.S.

And needless to say, no major publication clued in the public on the Bush-Cheney wish to invade Iraq, already formed when they entered the White House in 2001.

Bush Treasury Secretary Paul O'Neill

 

More later

 

Anti bribery versus anti bribery reporting: Halliburton, KBR, and Bush-Cheney

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Anti bribery versus anti bribery reporting: Halliburton, KBR, and Bush-Cheney

Follow-up to previous post:

Before and after the interview reviewed in last week’s post, former Halliburton contract employee David A. Smith continued to press for investigation on matters raised by the mis-sent company emails that he received by error. As previously written, the Bush administration ceased publication of the Department of State annual report titled Battling International Bribery after Colin Powell, who supported the report’s findings, was replaced as Secretary of State by Condoleezza Rice. The last issue of the report came out in 2004; the company formerly headed by Vice President Dick Cheney, Halliburton, involved in long-running inquiries into its dealings with the government of Nigeria among others, would seem to have benefited from the halt.

Secretary of State Colin Powell

David Smith’s on-site observations indicate that HAL was equally averse to investigation closer to home. In the interview, along with his partner, Smith corroborated the experience narrated in SEC filings in October 2006. Parent company Halliburton at the time still owned subsidiary KBR, formerly Kellogg Brown & Root, which had its own long-term problems including asbestos liability and retiree litigation associated with the former Dresser Industries, part of KBR after a series of acquisitions. The company spun off KBR in 2006 and 2007, continuing the spin-off during the time Smith was filing his complaints.

 

KBR, formerly Kellogg Brown & Root

KBR/Halliburton, like other military contractors, was subject to audit by the Defense Contract Audit Agency. Among the audit procedures were unannounced visits, including those at the facility at 1550 Wilson Boulevard in Arlington, Va., where Smith worked. Smith states unequivocally that company compliance officers and other personnel engaged in stalling the auditors. “When the DCAA auditors arrived unannounced,” Smith stated, Halliburton compliance officers “stalled them in the lobby with polite conversation and offers of refreshment.” Meanwhile, Human Resources personnel “raced to spread the word that everyone should get their timekeeping records in order, and shuttled ‘problem’ employees away from their desks.” DCAA auditors were conducted through the offices only when compliance officers got the ‘all clear’ from Human Resources, Smith says.

“I distinctly recall one auditor commenting on how many people were out of the office that day. One of the KBR [compliance] officers responded smoothly, to the effect that some were out sick, but many were at an off-site meeting. I was stunned to hear this blatant lie . . . I can distinctly remember the person whose timekeeping record they used to demonstrate compliance for our group . . . and the [compliance] officer coming by later in the day to joke with him about what a great job he’d done as the auditor-facing facade for our group. It was a Potemkin procession, carefully choreographed for the auditors’ perception.”

Oversight and accountability are ongoing needs. Need for oversight, transparency and accountability at KBR in particular is extensively documented by now. Smith’s narrative gives a worm’s-eye view of the company ethos. Smith sat in on, for example, business development meetings where Halliburton’s bid to rebuild the American Embassy in Kabul, Afghanistan, was discussed:

“When I asked one of the business development guys whether the situation on the ground was secure enough for our employees, he joked that we could handle a few ‘towelheads with slingshots’ . . . “When I persisted, and asked what would happen if–during construction–the Embassy and our employees and equipment were to be hit, he joked that we’d just bill the Federal Government for a do-over.” [emphasis added]

The reasonable inference is that KBR’s internal atmosphere reflected Halliburton’s coziness with the Bush-Cheney administration, and Smith has particulars to corroborate the inference. “In all seriousness . . . it was very common to see the KBR bigwigs getting off the elevator on floors where Halliburton/KBR had no operations, for meetings with the principals of other tenants of the building.” The offices were located at 1550 Wilson and 1560 Wilson at the time. Tenants included private security consulting company AALC, founded by Richard Armitage, former Bush Deputy Secretary of State. Smith goes on, “During business development and proposal development meetings at KBR’s offices at 1550 Wilson, frequent references were made to phone calls, breakfast meetings, and other ‘outreach efforts’ that our business development team would make to sitting members of the Bush Administration, to help secure Federal contracts.”

 

Even internally, KBR cultivated a positive image, showing “slideshows, videos, and other internal marketing pieces, aimed at cultivating the image that the group’s proposal bids were leading to good works around the globe,” Smith says. “Just before one holiday party, the Proposals group had to sit through a video showing the laundry, galley, and other support services that KBR was purportedly providing to our military personnel stationed overseas. Smiling, happy-looking Halliburton/KBR employees were posed mid-task, while the narrator intoned soothingly about the important work we were doing.” At the time, Smith says, “KBR was desperately recruiting to backfill these positions, offering to train anyone how to be a forklift operator or truck driver, if they’d only sign up to go work overseas. Enticements such as signing bonuses, presentations about the tax-free earnings one could earn while working overseas, and the like were used to try to staff the contract’s shortfall roster.”

Coincidentally, Smith was privy to a different perspective. A Marine cousin of his had returned from Camp Bondsteel, near Kosovo:

“Since Camp Bondsteel was prominently featured in those corporate propaganda presentations as one of KBR’s [crowning achievements] (the company was the prime contractor both for building and operating the base), I was eager to hear my cousin’s firsthand, on-base experiences. Boy, did I ever get an earful about the true living conditions. My cousin’s compassion and enthusiasm for helping the locals was matched only by the ferocity with which he decried the base’s operations. He brought his laptop to the [family] reunion, to show his pictures of the local customs, countryside, and people; it didn’t take a photography critic to see that his off-base pictures were decidedly positive and upbeat, while his on-base pictures were pretty bleak. His pictures looked nothing like the ones the Proposal Group had been shown in KBR’s offices at 1550 Wilson Boulevard.”

 

Camp Bondsteel and landscape

(Smith notes that the company received the Afghanistan contract:

“As shown on FedBizOpps, the Department of State awarded the contract (valued at $114,989,000) to Brown and Root Services at 1550 Wilson Blvd. To view the award notification, use the search feature of FedBizOpps, and restrict your search as follows: 1. Change “Documents to Search” to “Both” active and archived documents; 2. Uncheck “All” and Check “Award”; and 3. Type “Afghanistan AND embassy” in the “Full Text Search” box. The award notification number is: SALMEC-02-C0042, and the contact information for the Department of State contracting office that oversaw the solicitation effort is included (e.g., for making FOIA requests to see Halliburton’s bid for the work).”)

Coziness, of course, is a two-edged sword. Smith noted “purges/layoffs in KBR’s Northern Virginia offices” in 2006. Smith emphasized in further email correspondence that “Vice President Cheney was not ‘out of the loop’ on the Foreign Corrupt Practices Act bribes paid in Nigeria on his watch as CEO,” and “Those bribes were not paid by ‘rogue elements’ within Halliburton.”

Smith also noted that appropriately the Associated Press story mentioning his allegations was picked up by an offshore publication, the Jamaica Gleaner. Halliburton’s global holdings include numerous island tax-haven offices, located in places like the Caymans that are not noted for oil production, in service to places like Iraq that are.

 

Company invitation for Islanders

As previously written, the emails received by David A. Smith were intended for Halliburton executive David R. Smith, Vice President of Tax. The tax connection appears to be key. One question Smith raises—which seems not to have been answered in previous correspondence with the company or during investigations—is why a high-level executive whose bailiwick was taxes was looped in on matters such as the Nigeria investigation in the first place. Not that David R. Smith was a newcomer to corporate embarrassments and public-relations challenges; he had come on board with the company in 1998, at the time when the Bush family’s Dresser Industries, with its liability-ridden asbestos contagion, was being acquired by Halliburton. (As David A. Smith points out, the timing of the transaction successfully removed Bush’s embarrassing asbestos associations from the 2000 election.)

 

As with any other corporate money, one question about money used to pay foreign bribes always is whether it has been taxed properly under U.S. law.

Added:

Regarding bribery, it is noteworthy that under the gun of the 2008 election, the Bush Justice Department did conduct some prosecutions of Halliburton personnel. On Sept. 3, 2008, former CEO and Chairman of KBR Albert Jackson “Jack” Stanley filed a guilty plea in federal court in Houston. One article here, picked up here, re-posted here.  Stanley pled guilty to bribing Nigerian officials.

Anti bribery, Halliburton, Murdoch anti investigation

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Anti bribery?

Read on:

 

Secretary of State Colin L. Powell

The late years of the Clinton administration produced an anti-corruption inspection that could have been advantageous to United States interests, if the George W. Bush administration had not discontinued it when Colin Powell was replaced as Secretary of State by Condoleezza Rice.

In 1999-2000, the U.S. State Department began publishing an annual report on international bribery. Titled Battling International Bribery, it came out six times, ceasing in 2004. As Secretary of State Colin Powell noted in the release accompanying the 2001 publication, the report

“analyses the implementing legislation of seven of the countries that have ratified the [Organisation for Economic Co-operation and Development] Convention since our 2000 report and updates the information on 21 other Parties to the Convention. The report also provides updated information on enforcement of the Convention, measures taken by the signatories to end the tax deductibility of bribes, areas where the Convention might be strengthened, and efforts at encouraging additional non-OECD key exporting states to join the Convention.” [emphasis added]

OECD bribery awareness handbook for tax examiners

The U.S. ratified the OECD Convention against bribery in 1998 and, as said, began publishing its annual track-down, within scrupulously detailed limits, the next year.

Bush’s first Secretary of State supported the endeavor. In his 2001 statement, Powell noted that

“The OECD Convention represents a key element in the Administration’s wider campaign to combat corruption and promote fair competition. The United States initiated and hosted the first of a series of Global Forums on Fighting Corruption. The first was held in Washington, D.C. in February 1999, and the Second Global Forum, held in the Netherlands in May 2001, was co-sponsored by the United States. These meetings have placed a strong emphasis on combating corruption in the public service. In our own hemisphere, the United States and over 20 other nations have ratified the Inter-American Convention Against Corruption, which was negotiated under the auspices of the Organization of American States in 1996.”

The anti-bribery Convention seems to have shown hopeful signs of progress. Seven countries ratified it from 2000 to 2001; by the 2003 report, 35 countries had ratified it; as of the 2004 report, Ireland had joined the list.

An early question that leaps to mind is why, why, any such beneficial endeavor would be discontinued. Perhaps a clue can be found in the public release:

“Another import part of this [anti-bribery] strategy is to reach out to American companies and business associations to make them better aware of the international anticorruption environment. In May 2001, the Departmetn of State, in cooperation with the Commerce and Justice Departments, published a new edition of our brochure titled Fighting Global corruption: Business Risk Management. This booklet contains information about the benefits of strong corporate antibribery policies and gives guidance to businesses on the requirements of U.S. law and the OECD Convention.”

Powell included a reminder, or hint, in his foreword to the brochure:

“Since the enactment of the Foreign Corrupt Practices Act of 1977, the United States has provided indispensable leadership so that business enterprise can compete fairly in the global economy. Today, rule of law and anticorruption initiatives are key foreign policy elements that promote integrity and confidence in both government institutions and in the global marketplace.”

 

Nigeria rounds up HAL employees in bribery investigation

The 2001 statement continues further hints:

“Our review of the legislation of the 27 foreign countries in this report indicates that most Parties have taken effective steps to make bribery of foreign public officials illegal under their domestic law. We believe, however, that the laws of some countries fall short of the Convention’s requirements. We are also disturbed by continuing reports of alleged bribery of foreign public officials by firms based in countries for which the Convention is in force. We will continue both bilaterally and in the OECD to urge these countries to remedy these legislative and enforcement deficiencies. All signatories have an interest in ensuring that all Parties vigorously implement and enforce the Convention.” [emphasis added]

Out of Africa

Regrettably, the list of ratifying OECD nations did not include Nigeria. It still does not, to this day.

If the OECD Convention was not operating in Nigeria, however, Halliburton was; Nigeria has copious oil and natural gas resources. And as most Americans know, or anyway Americans who get their news from other sources in addition to corporate media outlets, the words “Halliburton,” “bribery,” and “Nigeria” have been significantly joined for several years now.

Now let’s put our thinking caps on. Who, in public life, was connected to Halliburton around the time of the second Bush administration? Who?

Dick Cheney

Details of the years of U.S. investigation and non-investigation of Halliburton’s practices in Nigeria are beyond the scope of one article. Suffice it to say that investigation moved slowly under the Bush administration, and that a number of Bush officials successfully ‘burrowed’ in the departments of State, Justice and Commerce before the inauguration of President Obama. Some matters under federal investigation were resolved early on, under the new administration—very early, as the company moved swiftly in the post-election period to avoid worse problems down the road.

Previously, under the Bush administration, Halliburton sent an interesting little cache of documents to an unknown contract worker by mistake.

The Washington-type high-grade office temp was David A. Smith, a northern Virginian by way of West Virginia and Harvard, who worked at Halliburton subsidiary KBR. What Smith received perturbed him so much that he took the trouble to become a Halliburton (HAL) shareholder, on a small scale, better to communicate with the company and the Securities & Exchange Commission. As he notified the SEC in a filing Sept. 21, 2006,

“I worked at Halliburton’s Kellogg, Brown & Root offices in Arlington, Virginia from August 2001 (just before the September 11th attacks) until April 2003 (just after we went to war in Iraq). Needless to say, this was a very interesting time to be in the belly of the war machine beast. I worked in the Government Proposals group, responding to Federal, State, and local requests for proposals. The proposal responses I worked on included the logistics support contracts for Iraqi operations (LOGCAP III), Iraqi oilfield reconstruction (RIO), embassy security upgrades and rebuilding (e.g., the Afghan embassy re-build project), nuclear non-proliferation (DTRA CTRIC), and other crucial projects.”

A hot set of topics, it would seem, and from the point of view of HAL probably ill coupled with any investigation of bribery, anywhere. While working in this setting, Smith goes on, “I received a series of mis-directed e-mails intended for David R. Smith, the Vice President of Tax for Halliburton . . . These e-mails pertained to the as-yet-unannounced Federal investigations into bribery and public corruption charges in Halliburton’s Nigerian operations.”

The back-story to the emails is likewise interesting:

“One day, the entire Proposals Group was summoned to a meeting that lasted quite a while (a couple of hours at least). When I returned to my desk after that meeting, I was surprised to discover that my corporate e-mail inbox was overflowing with new messages.”

“’That’s odd,’ I thought. ‘Everyone who would have been e-mailing me was in that meeting’.”

“Scrolling through the e-mails, I discovered that I was on the ‘cc: list’ – along with many others inside and outside the company – for the original e-mail. The other e-mails cluttering my inbox were the ‘Reply to All’ responses that some of the other ‘cc: list’ recipients had made in response to the original e-mail.”

‘The original e-mail should have been sent to David R. Smith–the Vice President of Tax for Halliburton, appointed to that role during Vice President Dick Cheney’s tenure as CEO […] See also the insider trade filings for the other David Smith, at the SEC’s EDGAR website.”

“The Halliburton attorney who authored the original e-mail chose the first David Smith in the internal address book by mistake (I surmise he was thinking hierarchically, rather than alphabetically). Alphabetically, the first David Smith in the address book (and there were several of us with that common name who worked for the company) was me: David A. Smith. I guess the Halliburton attorney’s kindergarten teacher didn’t teach him his alphabet; mine did.”

“As I scrolled through the responses, it became clear that the subject under discussion was certain projects Halliburton was seeking to undertake in Nigeria, including a liquefied natural gas (LNG) plant. So far, the e-mails pertained to my job function, and I continued to scan them for whatever specific action item(s) I was being asked to perform. It was not uncommon for my proposal group to work with our counterparts in overseas offices, to produce key personnel curriculum vitae, past project write-ups, etc.”

Then the plot, as they say, thickened:

“However, it quickly became clear that something was wrong. The e-mails centered around how to defend the company from a Federal investigation that the Houston home office had just learned about, arising under the Foreign Corrupt Practices Act. Intrigued – I am a policy wonk and [Sen. Robert] Byrd Scholar after all–I began to read the e-mails more carefully. As I did, it became apparent that the responses I had mistakenly received were from the company’s entire ‘damage control fire brigade’: the public relations flaks were weighing in on how to spin the investigation, should it become public knowledge. The attorneys (both in-house and external) were weighing in on how to mount a legal defense, and how to keep the DOJ and SEC thrown off the scent. Government Relations personnel were weighing in on how to call in favors from the Executive Office of the President–including specific mention of making contact with the Vice President’s office.” [emphasis added]

“Aghast, I continued to search the e-mails for the specific action I was being asked to undertake. ‘Why has this correspondence been sent to me?’ I kept wondering.”

“The answer soon became clear. The other David Smith–VP of Tax at Halliburton–was being asked to weigh in on how to explain away the source of the bribes paid to Nigerian officials. After all, a dirty foreign bribe is usually paid with dirty, offshore, untaxed money, right?”

 

Feeling a trifle vulnerable, Smith nevertheless did not drop the matter:

“I approached my supervisor with my problem. He said that I should just ignore them. I protested, pointing out that my silence might be misconstrued, and land me in hot water. Mulling it over, he told me to go ahead and alert the original sender. (As an aside, it was not uncommon for me to receive mis-directed e-mails–intended for one of the other David Smiths in the company – but they usually were either benign, or at worst, a dirty joke.)”

“When I alerted the original sender (the Halliburton attorney), he fired back an angry e-mail, ordering me to destroy all copies of the e-mails I had received, and to send him a signed written letter to the effect that I had done so. Rather than thanking me for proactively (and quietly) alerting him to his mistake, he essentially ‘shot the messenger’–acting as if I were the one who had done something wrong.”

This writer met Smith and his partner in Northern Virginia, after he got in touch—frustrated at some lack of investigation and reporting—and interviewed him at some length. Without going into full detail, Smith clarified that he had taken steps to protect the emails.

There were the beginnings of an investigation in those years. Smith’s message to the SEC continues,

“In late July 2004, I received a phone call from Mr. Peter Clark, the Deputy Chief of the Fraud Section of the Criminal Division of the Department of Justice. He informed me that another U.S. Attorney was on the line with him, along with two FBI agents from the Houston Field Office. He asked if he could record the conversation. I agreed.”

(For the record, Smith also suspects that Peter Clark may have been one of the name-redacted Justice Dept attorneys slated for firing, back when.)

“At Mr. Clark’s request, I recounted the information above. […] I explained to Mr. Clark that the young man who maintained Halliburton’s e-mail backups for the Arlington, Virginia office could surely produce copies [of the e-mails] directly from the company’s own storage system, and also pointed out that the e-mails that would be of most interest to the ongoing FCPA investigation would be those e-mails that were exchanged by the damage control fire brigade after the correct David Smith was looped in (e.g., what did the Tax group down in Houston have to say about how to spin the dirty bribe money’s tax status and offshore source?). Excitedly, Mr. Clark rang off, promising to call with further updates.”

“Later that same day–much to my surprise–he did just that. He informed me that following the morning phone call, FBI agents showed up in both Arlington, Virginia and Houston, Texas, demanding copies of both my e-mail account’s backups, and the other David Smith’s. [emphasis added]

Unfortunately if unsurprisingly, the investigation went nowhere. David A. Smith was not forbidden to share his information with others, but with some regret he chose not to go public at the time, getting in touch with authorities and with journalists later. The actions of Halliburton in Nigeria were consistently under-reported.

Halliburton to settle Nigerian bribery allegations with fines

Going forward with recently added hindsight, it would be only reasonable to follow up on entities and individuals benefiting from the cessation of State’s bribery report. Up top, we have Halliburton and its subsidiaries and spin-offs. Farther afield from the oil industry, we have Rupert Murdoch and his media empire.

 

Murdochs, News Corp face questions

More later

 

 

Note: Parts of this article were previously published under the tongue-in-cheek title “The importance of being earnest at Halliburton.” No major newspaper during the Bush years got in touch with David Smith, whose information still sounds relevant.

Earthquake in Cheverly, Maryland

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Earthquake in Cheverly, Maryland

August 23–About ten minutes or a quarter to 2:00 p.m., my whole house shook. So did my neighbors’. This was a real earthquake. My house is brick; everything shook from basement to roof; heavy things fell off the mantel and a bookcase. I am sitting in the room I use for a home office–like most of the rest of the house–and behind me some books and papers are strewn on the floor that were more or less where they belonged, a short time ago. A first for me individually, and don’t let anyone tell you this is a small event. A four-story house (counting basement) does not shake lightly.

Little damage in my home–I’m about to go out to case the neighborhood.

If only the climate-change deniers would stop denying. These bouts of extreme drought, followed by serious monsoon-type flooding, are not much better for the earth’s crust than they are for farmers, or for ordinary people who would like to have their yards, flowers and trees flourish.

In simplest terms, our planet’s atmosphere is eroding. We need to think about how to slow down that process, and then how to reverse it. We need our atmosphere to protect us from being whipsawed by what are nowadays termed ‘weather events’.

No word yet on how the rest of the Washington, D.C., suburbs have fared.

 

more later

Update 2:13 p.m.:

This was bigger than I thought–my next-door neighbor felt the quake in her vehicle, in New Carrollton. She thought something was wrong with her car–got out to check to see whether a tire was flat, when her daughter told her, “Mom, the whole car is shaking.”

Walking around outside to view the neighborhood, no visible signs of damage, though my next-door neighbor had some breakage when objects fell. No trees seem to be down, fortunately, and no cracks in nearby streets or sidewalks so far. Plenty of sirens, though.

 

Update 5:50 p.m.:

For the sake of contributing a little to science, I tried to input my local (home) data for the U.S. Geologic [Survey] here. No luck: after filling out the form, when I tried to submit it, the server basically froze up. Either this was another communications snafu like our cell phones–can’t use those in a real emergency, America–or the usgs website was overloaded by too many people trying the same thing at once.

Would seem to be typical of an emergency . . .

I guess the all-destructo GOPers will be happy at that one. After doing everything they can do to harm the legitimate operations of government, to prevent responsible governance, and to defame anyone who sees the whole thing differently, they can point to ‘gummint failing.’

Apology from Texas, humor from the Yellow Dog Dems

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Apology from Texas, humor from Yellow Dog Dems

If I do laugh at any mortal thing, ’tis only that I may not weep . . .

 

Rick Perry in state office

 

A little humor helps. View video here:

Dear America

 

From the Great State, or more specifically The Democratic Party of Texas (n.b. not the ‘Democrat Party.’ Yellow Dogs tend to know the difference between a noun and an adjective.), comes this invitation:

“Dear Friend,

Last Saturday while Rick Perry was busy spinning his hyped record for his Tea Party friends in South Carolina, we launched MeetRickPerry.com to shine a spotlight on the Governor’s real record.
We would like to thank the thousands of you who shared the info-site with your family, friends, and colleagues. With your help, MeetRickPerry.com made national news, was viewed on six continents, in 67 countries, and in all 50 states.
As we move forward we will be featuring new and enlightening videos, additional content like RickiLeaks, as well as a detailing of Perry’s state agency scandals.
You can help us today by sharing our newest video, in which we encourage the citizens of the United States to follow the advice of the last Texas Governor who became President: “Fool me once, shame on you. Fool me twice…..you can’t get fooled again.” And as Molly Ivins said, “please pay attention this time.””

Rick Perry explains his previous reluctance to run

 

Perry wants constitutional amendments re gay marriage, abortion

 

Using Perry to winnow the GOP field?

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If GOP strategists plan to use Rick Perry to thin the Republican field, they risk further disasters

 

It’s too early to be writing about the White House race for 2012, but here goes anyway–

 

The GOP candidates line up in Iowa

The GOP field is shaping up, against all odds, to be interesting. Here’s the game:

Ron Paul

First, only one candidate, Rep. Ron Paul (R-Tex.), stands out. Of all the possible Republican candidates announced and unannounced, Paul is the only one who combines genuine personal character, a genuinely conservative belief system, and the ability to connect with audiences because he says valid things—as far as they go—clearly. He does not equivocate; he does not backpedal on past positions; he does not characterize himself in metaphors. Michele Bachmann has called herself a “voice” probably dozens of times in interviews since winning the Iowa straw poll Saturday. Paul does not do that kind of thing; he tends to be given too little air time to waste any part of it in indirectness or vagueness. Paul also does not attack other candidates in personal terms, and he does not blame others for his actions—again unlike Bachmann, who as an attorney does not hesitate to blame her specialization in tax law on her husband. Paul is also consistent. For these and whatever other reasons, he is also a big money getter, in small donations, and has strong organization and widespread grass-roots support.

 

From those wonderful people who brought you the Iraq war

All the other GOP candidates, regardless of flavor, are essentially corporate mouthpieces. Differences in degree do not become a difference in kind. Huntsman and Romney may look the part more than do Bachmann and Palin, but the core fiscal hooey remains intact: whether the messenger is Gingrich or Giuliani, Perry or Palin, Santorum or Satan, the message is rich-get-richer. They don’t put it that way, of course. But it’s always there.

Undoubtedly Paul’s intense fiscal conservatism, or conservative libertarianism, would conduce to the same end. But with Paul, the inevitable benefit to the wealthy and to corporations from refusing to raise taxes is a by-product of policy. It is not an end in itself as it is for all the others. Opposition to the war in Iraq, opposition to the ‘war on terror,’ opposition to the ‘war on drugs’–he is not Wall Street controlled, though the anti-tax stand works that way. He represents a threat.

Second, all the other GOPers split the not-Ron-Paul vote. And all the others are weaker candidates individually, and there are a lot of them—Bachmann, Herman Cain, Newt Gingrich, Rudy Giuliani maybe, Jon Huntsman, maybe Sarah Palin, Rick Perry, Mitt Romney, Rick Santorum. Even with Tim Pawlenty’s unsurprising winnowing out, there are so many Republican candidates that nothing prevents the entry of yet more latecomers into the race.

 

So (as I was musing in notes last week, while away on family matters) we should see a lot of rightist commentators and pollsters, and a lot of corporate-media headline writers, working overtime to winnow the not-Ron-Paul field. The goal will be to shut out Ron Paul, and these are people who understand the logic of arithmetic–except when it comes to the benefit of issuing U.S. Treasury bonds at a lower interest rate, to pay off bonds with a higher rate. (The analogy is to refinancing your mortgage, and it would be illuminating to know which members of Congress have refinanced their own houses, but that information is not publicly available. Residences of congress members are exempted from financial disclosure.) The interim project will be to clear a path for someone they consider plausible as GOP nominee. That would be Romney, for most, or Perry, they fondly believe. Little do they know.

And who will be doing the path-clearing?–anyone who has been touting Tim Pawlenty for months as a likely starter. See examples here and here and here, among others.

 

As to tactics, the immediate tactics are simple. One, ignore or downplay Ron Paul. Paul’s near-win was a virtual tie with Bachmann in the Iowa straw poll, but that fact would be difficult to glean from the political reporting:

“A victory by Paul would have been a blow to Bachmann, who brought considerable momentum to the vote and needed the victory to validate her standing as the frontrunner in the state. It also would have hurt the credibility and future of the straw poll, a number of Republicans here said.”

[emphasis added]

Two, anoint a very few candidates as instant ‘top tier.’ Already done. As of this week the putative top tier comprises Bachmann, Perry, and Romney.

And third, bring out the conservative troops—in politics and in the media–to ridicule and/or to disparate the cannon fodder. Paradoxically, Bachmann straddles both the top-tier category and the cannon-fodder category.

Space precludes a round-up of entertaining examples of the third tactic at this time. More later.

Update Aug. 16:

Validating any sensible person’s summation, Rick Perry came out swinging–in a way to prevent anyone’s thinking he is ready for prime time. Here is the putative future president, on the topic of the Federal Reserve:

““If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.”

You can put lipstick on a hog . . .

If Perry is actually going to run for the White House, rather than just being the pool stick to open the table for some media-anointed figure with more credibility, he will have to learn that he is addressing the nation, not a bunch of  half-drunks stumbling into the political remarks after a rib feast sponsored by the local savings & loan.

Should be a lesson, meantime, to all the pundits eager to attribute gravitas to any candidate with a proven ability to fund-raise while simultaneously being white and male.

 

 

 

 

 

It was never about the debt ceiling

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It was never about the debt ceiling

What a time for my domain to become live again, just when Congress leaves town after finalizing a rise in the ‘debt ceiling.’

There will be several parts to this post.

First, to some of the more sweeping or superficial distortions and debt-ceiling politics:

  •  On balance, I think the Democrats in Congress, the White House, and the public came out better—given the situation–than has been indicated by some progressive outlets. Admittedly I am influenced by the fact that some of the most vitriolic ‘progressive’ voices against Dems and the WH are also corporate-allied. They do tend to get all rabble-rousing in the abstract, simultaneously resisting options to help improve the lot of working people (such as writers) themselves. They also tend not to be very effective, politically speaking. They also tend to have dismissed candidate Obama’s chance of winning early. So in a sense it is natural for them to lob attacks on the president, rather than fight 1) against the GOP corpo-party and 2) for working people. That aside, the final bill avoided default (more on default later); prohibited another debt-ceiling ruse for the next couple of years; and kept the GOP on the hook for its program cuts, government spending, and tax favoritism for the wealthy and corporations.
  • That last item is so significant that I have been a little surprised to see it so neglected in political commentary over the last few days. The lift on the debt ceiling was passed by Republicans in the House.
  • Let me repeat that: After all the hoopla about the Tea Party, a ‘rift’ or schism in the GOP, threats to John Boehner’s position as Speaker, etc., etc., the bill raising the debt ceiling was passed by Republicans in the House. The bill was supported by more Republicans than Democrats, with 174 Republicans voting to raise the debt ceiling and 95 Democrats. The bill was opposed by more Democrats than Republicans, with 95 Dems voting against it and only 66 GOPers.
  • Our political reporters have not highlighted this fact. While the final tally pretty much had to be reported, the party break-down is being spun so far as a revolt against the president in Democratic ranks; or as a sign of weakness for Dems/WH; or as a sticking point for progressives re 2012; etc. (Again the refrain: So much for the liberal media.)
  • Even in the Senate, where the bill passed 74-26 and more Democrats voted for it, more Republicans voted for it (28) than opposed it (19).
  • Btw, one factoid sheds some light on the supposed popularity of opposing, or rebelling, or shaking things up, re those Republican primaries. Of the 19 Republican senators who voted not to raise the debt ceiling, 13 are not up for re-election until 2016. Four are not up for re-election until 2014. Every GOPer up for election in 2010 voted to raise the debt ceiling, except Hatch (R-Utah) and Heller (R-Nev.). Theoretically Hatch and Heller know the electorates of their states best. In any case, the final vote tally casts some doubt on the much-vaunted electoral clout of the Tea Party, at least measured against the importance of Wall Street contributions.
  • Any Dem running for Congress who allows himself to be put on the defensive about ‘gummint spending’ after this deserves to lose.

 

The bigger distortions are misrepresentations on a more fundamental level. Some of the deeper issues go to the heart of political reporting in large media outlets:

  •  This fight in Congress was never about the debt ceiling. With the exception of a few Tea Party members, mainly from South Carolina, who were genuinely ready to become defaulters, the GOP in both House and Senate has repeatedly voted in the past to raise the debt ceiling, under both Republican and Democratic presidents, or to vote no only in a symbolic gesture after it was already clear that it would be raised. Every member of Congress had access to former Federal Reserve Chairman Alan Greenspan’s remarks on the debt ceiling, including Greenspan’s call for eliminating the debt ceiling. (Yes, the right wing distrusts the Fed. That doesn’t mean they mistake Greenspan for Greenpeace.) Every experienced Congress member knows that, as the president said, raising the debt ceiling simply allows the U.S. “to pay its bills on time, as we always have.”
  • The fight from Republicans in Congress was never about reducing the deficit. As President Obama said earlier, “There’s nothing serious about a plan that claims to reduce the deficit by spending a trillion dollars on tax cuts for millionaires and billionaires.” The congressional GOP could have attempted what Sen. Tom Coburn (R-Okla.) is attempting, to find genuine examples of waste, fraud and abuse to cut. It could have voted—for the past thirty years—to trim military spending, reining in federal contractors. It could have eliminated tax breaks, unneeded by any measure, for Big Oil. It could have voted against the Iraq War. It could have reined in the intelligence establishment, which failed to prevent 9/11 and was rewarded for failure by more far-flung billions than ever, with the massive additional layer of bureaucracy known as the Department of Homeland Security. Congress could even have opted to run itself more frugally.

  • Instead, the Republican apparatus in government has worked, often behind the scenes, to drive up the cost of government more, regardless of the wishes of ordinary Republican voters. Every delay in Congress adds to the cost of government—added on top of other damage done in delaying needed legislation (the FAA is a prime example). Every delay in confirming judges and other federal appointees adds to the cost of running the agencies involved, and this GOP has delayed judicial confirmations and backlogged the courts more than any other party in U.S. history. The delay in raising the debt ceiling alone cost U.S. taxpayers billions. Furthermore, top GOPers have resisted efforts to make large federal contracts (mainly in military-security spending) more competitive, sometimes while simultaneously resisting efforts to exempt small contracts from competition. All this, of course, comes on top of the massive trillion-dollar hole of two wars and tax breaks for the wealthy and corporations, all funneled into effect by the GOP with some acquiescent Democrats.
  • The fight was never over the national debt. What GOPer has seriously called (publicly) for refusing to pay the interest, let alone the principle, on U.S. Savings Bonds bought by Americans or by other people? Come to think of it, what Republican in office has mentioned U.S. Savings Bonds recently?

  • Conclusory statement: Regardless of ‘red-meat’ campaign rhetoric, the GOP in office never strays far from the Wall Street fold. If you really want to analyze current GOP politics you can forget guns, god and gays.
  • Second conclusory statement: Regardless of ‘the base,’ the middle class, or the rest of the electorate, Republican policy in office is about using the power of office to break the middle class. GOP honchos have tried to replace Social Security; they are trying to weaken Medicare and Medicaid, using Orwellianisms the while; they fought tooth and nail to prevent enlightened single-payer health coverage and to keep insurance companies the gatekeepers for health care. For three decades they have boosted corporate efforts to undermine pension plans. They support every corporate effort to jettison pensions and health benefits. Their financial policy, if you call it that, enabled the mortgage-derivatives industry to damage trillions of dollars worth of pension security. They support easy bankruptcy for corporations and impose stringent bankruptcy standards on the unemployed. They oppose every effort toward accountability and transparency (‘regulation’) in both government and corporate bureaucracies. They oppose every effort to protect ordinary people’s ability to seek redress for harm, harm up to and including death, in our taxpayer-funded courts. The strategy is to reduce the clout of the middle class—i.e. the bottom 90 percent of the population, as Inside Job puts it—and to make most of the population ever more dependent on the few. And when individual GOP congress members interrupt the over-all strategy on some particular legislation, they lose. The one exception to this big-picture GOP rule in his own way, the one congressional Republican who opposed the invasion of Iraq, Rep. Ron Paul (R-Tex.), is retiring from Congress.

All of this has passed largely unreported in the same news media that also missed (among other things) the lead-up to the Iraq War, the bubble and bust in the real estate boom, and the impending crisis in the mortgage-derivatives industry.

 

Thought for the week, passed along from Local 2336 of Communications Workers of America (CWA): “Do you remember when teachers, public employees, Planned Parenthood, NPR and PBS crashed the stock market, wiped out half of our 401K’s, took trillions in taxpayer funded bailouts, spilled oil in the Gulf of Mexico, gave themselves billions in bonuses and paid no taxes?  YEAH, ME NEITHER!”

 

Side note: In what is being reported as bad news financially, Americans are spending less and saving more. Setting aside if one could that that is actually good news, what did they expect after the charade over what should have been a routine rise of the debt ceiling?

Did anyone catch the language coming out of Washington last month, along with the name-calling? Debtdebtdebtdebtdebtdebtdebt . . .

 

More later