Having simmered on the back burner through the aftermath of September 11, Congress’s effort to obtain records from Vice President Dick Cheney’s energy task force has now reached the boiling point. The Enron collapse has only made Cheney dig in his heels even harder, such that the whole country is now wondering just what Ken Lay asked for–that is, recommended–at those meetings, and what Cheney delivered. But is it Enron’s dealings with the task force Cheney is trying to hide, or Halliburton’s? The huge Dallas-based oilfield services conglomerate, for which Cheney served as CEO from 1995 to July 2000, may yet become Cheney’s own poison pretzel.
Cheney joined Halliburton just two and one-half years after leaving his post as Secretary of Defense under Bush I. Halliburton, principally through its construction subsidiary Brown & Root, had already begun reaping the gains from privatization initiatives pushed by Cheney during the Gulf War. As Robert Bryce reported in The Texas Observer, in 1992 the Pentagon paid Brown & Root for a study of how private companies could better be used to provide logistics support for US troops across the globe. Later that year the company won such a contract from the US Army Corps of Engineers. But the money didn’t really start rolling in until Cheney joined Halliburton in 1995. At that time, Brown & Root was bringing in less than $350 million per year in Defense Department contracts. And according to the Baltimore Sun, by 1999, after four years with Cheney at the helm, that had grown to over $650 million. When Cheney left to join the Bush ticket in July 2000, Halliburton executives made sure he would stay their man with an eye-popping retirement package worth over $33 million.
Last December, the Pentagon awarded a nine year contract to Halliburton to build forward operating bases for troop deployments. It’s a no-cap, cost-plus contract, with no estimate of its total worth given. But according to a report by the Institute for Southern Studies, Halliburton reported its revenue from base support services in the 1990s at roughly $2.5 billion.
We don’t yet know if that gift, along with at least a quarter-million dollars donated to the Republican Party in the 2000 election cycle, earned Halliburton an audience with Cheney’s energy task force, but we can take a pretty good guess at what they hope to get from their former CEO. Although there have been no accusations of Enronesqe machinations, Halliburton is having troubles of its own. Dresser Industries, a Halliburton subsidiary acquired while Cheney was CEO, is facing enormous exposure to asbestos litigation, so much so that Dresser dragged Halliburton’s stock down over 70 percent in the last year. (Cheney himself got out while the getting was still good, selling his stock and options in summer 2000 for over $20 million.) Then, in mid-January, Halliburton’s stock rebounded dramatically, apparently on speculation that the White House would announce some kind of relief plan for asbestos defendants. That has yet to happen, and former Senator John Ashcroft’s asbestos industry bill was killed by Congress last year. But a more generic tort-reform initiative would not be surprising; Bush made restricting access to the courts a centerpiece of his tenure as Texas governor.
On the energy side, Halliburton execs may have wanted to discuss US sanctions policy with the Vice President. It’s a sensitive topic for Cheney. While overseeing the Department of Defense, he helped enforce sanctions regimes against first Libya and then Iraq. Later, at Halliburton, he developed a more nuanced view of American foreign policy, and the company earned millions on contracts in both countries. Cheney argued in a 1998 speech that the United States had become sanctions-happy, and that it was very hard to find specific examples in which sanctions actually achieved a policy objective. That same year, Robert Bryce reported, Cheney lobbied Congress for an exemption from the Iran Libya Sanctions Act. In 1995, Brown & Root was fined $3.8 million, according to the Baltimore Sun, for using a foreign subsidiary to violate the Libya sanctions. The Financial Times has documented similar deals with Iraq, where Halliburton’s oilfield services contracts obtained through foreign subsidiaries have made it the single biggest US contractor operating in Iraq (point No. 1 on Bush’s Axis of Evil) since the sanctions began.
Brown & Root has long been a kingmaker in Texas politics. Their money put Lyndon Johnson on the path to the presidency, but only after LBJ steered enough government contracts to the firm to make the Brown brothers very rich men. Campaign contributions have to be reported now, and they aren’t generally given in sacks of cash as they were in Texas in the 1940s. But the basic deal hasn’t changed.