Cheney & Halliburton: Go Where the Oil Is

by Kenny Bruno and Jim Valette

Probably the most entertaining exchange in the vice-presidential debate last year occurred when Joe Lieberman, referring to the millions of dollars Dick Cheney had made as CEO of Halliburton Co., noted that Cheney was considerably “better off” than he had been eight years earlier.

Cheney, refusing to give the Clinton administration any credit for his own prosperity, or the nation’s, replied that his new wealth “had nothing to do with the government.”

The assertion was disingenuous, as in fact Halliburton’s growth and Dick Cheney’s own $37 million stock and option windfall were directly related to profits made with the help of foreign aid packages and military contracts. Cheney’s own connections from a long career in government clearly played a role in the company’s success. Moreover, the chuckling after this understated paean to private sector superiority helped to obscure the fact that Dick Cheney’s Halliburton has succeeded by partnering or engaging with governments around the world –– including some of the most repressive regimes in the world –– and its complicity with egregious human rights violations.

Halliburton In Burma

“We don’t do business in Burma,” claims Halliburton spokesperson Wendy Hall. But while the company may have no current direct investments in Burma, it has participated in a number of energy development projects there, including the notorious Yadana and Yetagun pipelines.

Natural gas deposits, later named the Yadana field, were first discovered offshore near Burma in the Andaman Sea in 1982. Beginning in the late 1980s, the Burmese government sought investors for a pipeline planned from the Yadana field across Burma to Thailand. In 1991, the government reached a preliminary agreement, formalized later, to deliver gas to the Petroleum Authority of Thailand (PTT). In 1992, Total, a French oil corporation, agreed to develop the field with Myanma Oil and Gas Enterprise (MOGE). Unocal, a U.S. oil company, joined the venture in 1993. Finally, the Yadana field consortium –– known as the Moattama Gas Transportation Company –– was incorporated in December 1994. Its stakeholders include Total (31.24 percent), Unocal (28.26 percent), PTT (25.5 percent) and MOGE (15 percent).

Spie Capag of France completed the 62-kilometer onshore section of the Yadana pipeline to Thailand in 1998. Prior to the pipeline’s construction, the Burmese military forcibly relocated towns along the onshore route. According to the U.S. Department of Labor, “credible evidence exists that several villages along the route were forcibly relocated or depopulated in the months before the production-sharing agreement was signed.”

EarthRights International (ERI) has charged in a lawsuit that the Yadana and Yetagun pipeline consortia — Unocal, Total and Premier — knew of (especially from their own consultants) and benefited from the crimes committed by the Burmese military on behalf of the projects.

An ERI investigation concluded that construction and operation of the pipelines has involved the use of forced labor, forced relocation and even murder, torture and rape. In addition, as the largest foreign investment projects in Burma, the pipelines will provide revenue to prop up the regime, perhaps for decades to come.

Halliburton failed to respond to repeated requests for comment on these allegations and other issues raised in this article.

Shortly before the election, Dick Cheney admitted on the Larry King Live! show that Halliburton had done contract work in Burma. Cheney defended the project by saying that Halliburton had not broken the U.S. law imposing sanctions on Burma, which forbids new investments in the country. “You have to operate in some very difficult places and oftentimes in countries that are governed in a manner that’s not consistent with our principles here in the United States,” Cheney told Larry King. “But the world’s not made up only of democracies.”

Halliburton’s engagement in Burma predates Dick Cheney’s tenure as CEO. Halliburton had an office in Rangoon as early as 1990, two years after the military regime took power by voiding the election of the National League for Democracy, the party of Aung San Suu Kyi. In the early 1990’s, Halliburton Energy Services joined with Alfred McAlpine (UK) to provide pre-commissioning services to the Yadana pipeline.

In 1997, after Dick Cheney joined Halliburton, the Yadana field developers hired European Marine Services (EMC) to lay the 365-kilometer offshore portion of the Yadana gas pipeline. EMC is a 50-50 joint venture between Halliburton and Saipem of Italy. From July to October 1997, EMC installed the 360-inch diameter line using its pipelaying barges.

The route followed by Halliburton and Saipem was chosen by the Burmese government to minimize costs, even though the onshore pipeline path would cut through politically sensitive areas inhabited by ethnic minorities in the Tenasserim region of Burma. Given the Burmese military’s well-documented history of human rights violations and brutality, human rights groups say the western companies knew or should have known that human rights crimes would accompany Burmese troops into the onshore pipeline region. They say there was ample evidence in the public domain that such violations were already occurring when Halliburton chose to lay pipe for the project. As Katie Redford, a lawyer with EarthRights International puts it, “To be involved in the Yadana pipeline is to knowingly accept brutal violations of human rights as part of doing business.”

(This was not the last time that a Halliburton company did business with Burma. In 1998, a subsidiary of Dresser Industries called Bredero-Price (now Bredero Shaw) manufactured the coating for the Yetagun pipeline, the onshore portion of which runs parallel to the Yadana pipeline. Dresser was purchased by Halliburton that same year.)

For years, ERI has worked to document an extensive pattern of forced relocation and forced labor associated with the Yadana pipeline. Earthrights International has used the evidence mounted to build its legal case against the western multinationals involved. Halliburton, which only worked on the offshore portion of the pipeline, is not a defendant in the case.

ERI believes a consistent pattern of human rights and economic rights violations in the pipeline region are a predictable and direct result of the investments made by western multinationals.

In August 2000, a U.S. federal district court concluded that the Yadana pipeline consortium “knew the military had a record of committing human rights abuses; that the Project hired the military to provide security for the project, a military that forced villagers to work and entire villages to relocate for the benefit of the Project; that the military, while forcing villagers to work and relocate, committed numerous acts of violence; and that Unocal knew or should have known that the military did commit, was committing and would continue to commit these tortious acts.”

Although the judge eventually dismissed the case –– Doe et. al. v. Unocal et. al. –– because, in his opinion, Unocal did not control the Burmese military, which committed the abuses, the case is being appealed. (ERI is co-counsel in the case.)

Halliburton's Global Reach

Founded by Earl Halliburton in Texas in 1919, Halliburton now provides a wide range of engineering services, technology and equipment for oil and gas fields, platforms, pipelines, refineries, highways and military operations around the world. In the Cheney years, the company’s revenues rose from $5.7 billion in 1994 to $14.9 billion in 1999, fueled primarily by growth outside the United States. During Cheney’s tenure as CEO, Halliburton’s overseas operations went from 51 percent of revenue to 68 percent of revenue.

“You’ve got to go where the oil is. I don’t think about it [political volatility] very much,” Cheney told the Panhandle Producers and Royalty Owners Association annual meeting in 1998.

Halliburton is now the world’s largest diversified energy services, engineering, construction and maintenance company, with some 100,000 employees and 7,000 customers in more than 120 countries.

While most of Halliburton’s revenues come from contracted oil and gas industry services, it also earns considerable income from major civil and military projects, such as building roads and deploying infrastructure for overseas U.S. operations. Halliburton ranked as the seventeenth leading recipient of U.S. defense contracts in 1999. Halliburton’s Kellogg, Brown & Root subsidiary brought in all but $1 million of Halliburton’s $657.5 million military loot.

Going Where the Oil Is

Burma is not the only country in which engagement by Halliburton has been controversial.

During Cheney’s tenure, Halliburton created or continued partnerships with some of the world’s most notorious governments –– in countries such as Azerbaijan, Indonesia, Iran, Iraq, Libya and Nigeria.

In order to do business with dictators and despots, Halliburton has skirted U.S. sanctions and made considerable efforts to eliminate those sanctions. Halliburton’s pattern of doing business with U.S. enemies and dictators started before Dick Cheney joined the company, and may well continue after his tenure as CEO.

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:

• 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. One of its contracts was canceled by the post-Suharto government during a purging of corruptly awarded 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.

Dick Cheney and USA*Engage

The strands of Dick Cheney’s business and policy interests come together in his support of a corporate coalition called USA*Engage. The mission of this coalition, with some 50 active companies and 600-plus total members, is to promote business “engagement” and prevent U.S. sanctions for human rights or other kinds of violations. Dick Cheney’s position on sanctions has been virtually identical to that of USA*Engage, and Halliburton has been an active member of USA*Engage and its campaigns against almost all forms of sanctions.

For example, Cheney signed an amicus brief against the Massachusetts Burma law. Modeled on successful anti-apartheid legislation of the 1980s, the law would have prevented Massachusetts from doing business with companies doing business in Burma. The Massachusetts law was struck down by the U.S. Supreme Court last June.

Similarly, Cheney has opposed sanctions against almost all the countries that Halliburton does business in, including Iran, Libya and Azerbaijan. The one exception is Iraq.

Now that Dick Cheney is back in government, his position on sanctions is likely to become more influential. Secretary of State Colin Powell has already echoed the sentiment of Cheney and USA*Engage, saying he wanted to reduce the use of sanctions as a foreign policy tool. This would leave Cheney’s ex-colleagues back at Halliburton freer than ever to pursue profits even where environmental and human rights norms are disregarded.

Among the sanctions USA*Engage seeks to eliminate are those against the pariah regime of Burma, even though the leader of the democratically elected party, Aung San Suu Kyi, has expressed her support for the sanctions. If USA*Engage is successful, Halliburton may resume dealings with the Burmese military dictatorship, a destructive engagement that could extend Burma’s nightmare.

Dick Cheney’s pro-engagement, anti-sanctions policies have remained consistent whether he is in government or business. These policies might be summarized as, “what’s good for Halliburton is good for the world, and vice versa.”

It is one thing for the CEO of Halliburton to hold such a view. It is quite another for the Vice President of the United States.

Kenny Bruno is campaigns coordinator with the Washington, D.C.-based EarthRights International. Jim Valette is an investigative reporter based in Seawall, Maine. This article is based on “Halliburton’s Destructive Engagement: How Dick Cheney and USA*Engage Subvert Democracy at Home and Abroad,” a report by EarthRights International.