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Cheney: Iranian Sanctions Were Bad for Halliburton

Cheney Called Clinton-Era Sanctions Against Iran Bad for Halliburton


By Jason Leopold
The Public Record

When Dick Cheney was chief executive of Halliburton in the 1990s, he urged Congress to ease sanctions against Iran and enter into diplomatic discussions with the country’s leaders so the oil-field services company could legally do business there.

"Let me make a generalized statement about a trend I see in the U.S. Congress that I find disturbing, that applies not only with respect to the Iranian situation but a number of others as well," Cheney said at the time. "I think we Americans sometimes make mistakes...There seems to be an assumption that somehow we know what's best for everybody else and that we are going to use our economic clout to get everybody else to live the way we would like."

In March 1995, Clinton signed an executive order that prohibited "new investments [in Iran] by U.S. persons, including commitment of funds or other assets." It also restricts U.S. companies from performing services "that would benefit the Iranian oil industry. Violation of the order can result in fines of as much as $500,000 for companies and up to 10 years in jail for individuals."

Cheney was highly critical of the Clinton administration’s policy toward Iran.

"I think we'd be better off if we, in fact, backed off those sanctions [on Iran], didn't try to impose secondary boycotts on companies ... trying to do business over there ... and instead started to rebuild those relationships," Cheney said during a 1998 business trip to Sydney, Australia, reported by Australia's Illawarra Mercury newspaper.

Despite assertions by the vice president that Iran has been trying to build a nuclear weapon since the 1990s, the Bush administration decided it would not punish foreign oil and gas companies that invest in Iran or other countries that sponsor terrorism.

Recently, Bush administration officials said they would not rule out military action against Iran for allegedly interfering in U.S. interests in Iraq.

Halliburton first started doing business in Iran as early as 1995. According to a February 2001 report in the Wall Street Journal, "U.S. laws have banned most American commerce with Iran. Halliburton Products & Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is "non-American." But, like the sign over the receptionist's head, the brochure bears the Dallas company's name and red emblem, and offers services from Halliburton units around the world."

In the February 2001 report, the Journal quoted an anonymous U.S. official as saying "a Halliburton office in Tehran would violate at least the spirit of American law." Moreover, a U.S. Treasury Department website detailing U.S. sanctions against Iran bans almost all U.S. trade and investment with Iran, specifically in oil services. The Web site adds: "No U.S. person may approve or facilitate the entry into or performance of transactions or contracts with Iran by a foreign subsidiary of a U.S. firm that the U.S person is precluded from performing directly. Similarly, no U.S. person may facilitate such transactions by unaffiliated foreign persons."

Wendy Hall, a spokeswoman for Halliburton, said in an interview with me last year that Halliburton may not agree with Iran’s “policies or actions” and the company makes “no excuses for their behaviors” but “due to the long-term nature of our business and the inevitability of political and social change, it is neither prudent nor appropriate for our company to establish our own country-by-country foreign policy."

Hall added that "decisions as to the nature of such governments and their actions are better made by governmental authorities and international entities such as the United Nations as opposed to individual persons or companies. Putting politics aside, we and our affiliates operate in countries, to the extent it is legally permissible, where our customers are active as they expect us to provide oilfield services support to their international operations."

In 1995, Halliburton paid a $1.2 million fine to the U.S. government and $261 million in civil penalties for violating a U.S. trade embargo by shipping oilfield equipment to Libya. Federal officials said some of the well servicing equipment sent to Libya by Halliburton between late 1987 and early 1990 could have been used in the development of nuclear weapons. President Reagan imposed the embargo against Libya in 1986 because of alleged links to international terrorism.

But the fact that Halliburton may have unwillingly helped Libya obtain a crucial component to build an atomic bomb only made Cheney push the Clinton administration harder to support trade with Libya and Iran.

Additionally, while Cheney headed Halliburton the company engaged in secret business dealings with Saddam Hussein’s regime by selling Iraq oil production equipment and spare parts to get the Iraqi oil fields up and running, according to confidential United Nations records.

During the 2000 presidential campaign, Cheney vehemently denied that Halliburton did business with Iraq while he was chief executive. He acknowledged that Halliburton did business with Libya and Iran through foreign subsidiaries, Cheney said, "Iraq's different."

"I had a firm policy that we wouldn't do anything in Iraq, even arrangements that were supposedly legal," Cheney said on the ABC-TV news program "This Week" on July 30, 2000. "We've not done any business in Iraq since U.N. sanctions were imposed on Iraq in 1990, and I had a standing policy that I wouldn't do that."

But it turns out that Cheney was not telling the truth.

In 1998, Cheney oversaw Halliburton's acquisition of Dresser Industries Inc, the unit that sold oil equipment to Iraq through two subsidiaries of a joint venture with another large U.S. equipment maker, Ingersoll-Rand Co.

The Halliburton subsidiaries, Dresser-Rand and Ingersoll Dresser Pump Co., sold water and sewage treatment pumps, spare parts for oil facilities and pipeline equipment to Baghdad through French affiliates from the first half of 1997 to the summer of 2000, U.N. records show. Ingersoll Dresser Pump also signed contracts -- later blocked by the United States -- to help repair an Iraqi oil terminal that U.S.-led military forces destroyed in the GGulf War, the Post reported in a June 2001 story.

The Halliburton subsidiaries and several other American and foreign oil supply companies helped Iraq increase its crude exports from $4 billion in 1997 to nearly $18 billion in 2000.

U.S. and European officials have argued that the increase in production also expanded Saddam's ability to use some of that money for weapons, luxury goods and palaces. Security Council diplomats estimate that Iraq may be skimming off as much as 10 percent of the proceeds from the oil-for-food program, according to documents obtained by the United Nations Security Council.

During his tenure as chief executive of Halliburton, Cheney pushed the U.N. Security Council, after he became vice president; to end an 11-year embargo on sales of civilian goods, including oil related equipment, to Iraq.

Under Cheney, Halliburton and its subsidiaries were one of several American and foreign oil supply companies that helped Iraq increase its crude exports from $4 billion in 1997 to nearly $18 billion in 2000 by exploiting a loophole in the law and selling Iraq spare parts for its oil fields so it could pump more oil. U.S. and European officials have long argued that the increase in Iraq's oil production also expanded Saddam's ability to use some of that money for weapons, luxury goods and palaces.

UN documents show that Halliburton's affiliates have had controversial dealings with Saddam Hussein’s regime during Cheney's tenure at the company played a part in helping the late dictator pocket billions of dollars under the UN's oil-for-food program. The Clinton administration blocked one deal Halliburton was trying to push through because it was "not authorized under the oil-for-food deal," according to UN documents. That deal, between Halliburton subsidiary Ingersoll Dresser Pump Co. and Iraq, included agreements by the firm to sell nearly $1 million in spare parts, compressors and firefighting equipment to refurbish an offshore oil terminal, Khor al-Amaya. Still, Halliburton used one of its foreign subsidiaries to sell Iraq the equipment it needed so the country could pump more oil, according to a report in the Washington Post in June 2001.

The Halliburton subsidiaries, Dresser-Rand and Ingersoll Dresser Pump Co., sold water and sewage treatment pumps, spare parts for oil facilities and pipeline equipment to Baghdad through French affiliates from the first half of 1997 to the summer of 2000, UN records show. Ingersoll Dresser Pump also signed contracts – later blocked by the United States, according to the Post – to help repair an Iraqi oil terminal that U.S.-led military forces destroyed in the Gulf War years earlier.

As secretary of defense in the first Bush administration, Cheney helped to lead a multinational coalition against Iraq in the Persian Gulf War and to devise a comprehensive economic embargo to isolate Saddam Hussein's government. After Cheney was named chief executive of Halliburton in 1995, he promised to maintain a hard line against Baghdad.

But Cheney’s position against Iraq radically changed when he was named CEO of Halliburton. Cheney said sanctions against Iraq took a financial toll on the corporation he headed.

"We seem to be sanction-happy as a government," Cheney said at an energy conference in April 1996, reported in the oil industry publication Petroleum Finance Week. "The problem is that the good Lord didn't see fit to always put oil and gas resources where there are democratic governments," he observed during his conference presentation.

Sanctions make U.S. businesses "the bystander who gets hit when a train wreck occurs," Cheney said. "While virtually every other country sees the need for sanctions against Iraq and Saddam Hussein's regime there, Cheney sees general agreement that the measures have not been very effective despite their having most of the international community's support. An individual country's embargo, such as that of the United States against Iran, has virtually no effect since the target country simply signs a contract with a non- U.S. Business."

"That's exactly what happened when the government told Conoco Inc. that it could not develop an oil field there," Cheney told Petroleum Finance Week. Total S.A. "simply took it over."

*************

Jason Leopold launched a new online investigative news magazine, The Public Record.

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