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[casi] Pentagon Iraq Contractor Has History Of Supporting Terrorist Regimes

Pentagon Iraq Contractor Has History Of Supporting Terrorist Regimes

by Jason Leopold
April 16, 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

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

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

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.

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