Passing along this SEC filing from David A. Smith, holder of a single share of Halliburton stock and former KBR employee:
“Halliburton Shareholder Questions Timing of KBR Spinoff, Share Buyback;
Derivative Shareholder Lawsuit May Be Necessary, Smith Says
In a press release filed with the SEC, Smith reviews the sequence of events at Halliburton that he sees as leading to the most recent moves:
“On
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“As most Halliburton shareholders probably now know, the Dresser deal brought with it a great deal of asbestos-related liability.
"Halliburton's SEC filings are replete with the asbestos-related fallout of that deal," says Smith. "Did Dick Cheney and the non-management Directors conduct thorough due diligence into these matters before consumating the deal?"
Smith notes that a New Yorker article claims that Cheney negotiated the $7.7 billion deal "during a weekend of quail hunting." The article, entitled "Contract Sport: What Did the Vice President Do for Halliburton?", appeared
Smith also notes that the longest-serving Director of Dresser Industries was reportedly the late Senator Prescott Sheldon Bush, father of President George Herbert Walker Bush, and grandfather of President George Walker Bush. Prescott Bush served as a Director of Dresser Industries from 1930 to 1952. His son, the former President, worked at Dresser from 1948 until 1951 - while his father, Prescott Bush, was still on the Board of Directors.
"Was the decision to acquire Dresser that Dick Cheney and the Halliburton Board of Directors made a business decision - couched firmly in their fiduciary duties of loyalty and care - or was it a political decision, to effect a quiet, private buyout of the politically embarrassing asbestos and mesothelioma liability?" Smith asks. "The shareholders of Halliburton expect their capital to be managed prudently. The coffers of Halliburton are not a private Resolution Trust Corp.”
"I question whether the 1998 deal was done to keep the Dresser asbestos and mesothelioma lawsuits out of the spotlight until at least after the 2000 election," Smith says . . .
All that the high-powered attorneys advising Dick Cheney and the Halliburton Board of Directors needed to do to uncover this liability was to check the U.S. Case Party Index. There, they would have discovered plenty of then-pending lawsuits naming Dresser Industries.
“On April 14th of this year, KBR filed a Form S-1, setting forth Halliburton's planned spinoff of the unit.”
While working at KBR, Smith received company emails mistakenly sent to him and meant for David R. Smith, a vice president at the company. “Given what was discussed in those e-mails (the Nigerian bribery issue), and given that the Department of the Army has recently issued a Sources Sought Notice to perform a special audit of the settlement between KBR and the U.S. Government, I don't think now is the time for Halliburton to be unloading KBR.”
“The KBR spinoff seemed to be placed on the back burner for a while, says Smith. “But then last week, one day after my proxy filing, the Company filed an amendment to the S-1, and stated an intent to press forward with the spinoff." The amended S-1 filing is available on EDGAR.”
“Last week, the Company announced that the Board of Directors has "authorized an increase of its existing common share repurchase program of up to an additional $2 billion," notes Smith. The increased buyback came one day after MorningStar observed: "This stock has experienced unusually high trading volume of 22,338,400 shares today; its average daily volume over the previous 30 days was 10,924,560 shares.”
The implication is that a huge company is being run in some ways less for profit than for administration geopolitical positioning and for individual political goals. So much for the bottom line. But the worse implication is that some of the highest offices in government are peering nearsightedly at short-term corporate interests to steer their foreign policy. So much for statecraft.
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