Halliburton: Business As Usual in Iran

Halliburton, as we know from it's activity in Iraq, is just another Texas company that thinks it is above the law. After over charging the US for gasoline in Iraq, it has been doing business with Tehran for many years. Dick Cheney did a great job as CEO of this company. He got them deals no one else could. Thanks to War and Piece for the link.
MSNBC - Business As Usual?

Halliburton’s new deal, in which it will participate in a $308 million project to develop Iran’s huge South Pars natural gas fields, was not at first publicly announced by the company. But after the South Pars project, and its role, was reported in the Iranian press in mid-Janury, Halliburton publicly confirmed that its Dubai-based subsidiary, Halliburton Products & Services Limited, had been awarded a subcontract on the project that, a Halliburton official told NEWSWEEK today, will net the parent firm between $30 million and $35 million over the next several years.


The new Halliburton project, congressional investigators say, raises substantial questions about the Jan. 28, 2005 public announcement by Halliburton CEO (and Cheney successor) David Lesar that the firm plans to cease doing business in Iran. Lesar made no reference to the South Pars project in his conference call with investment analysts that day, when he blamed “the political nature of the attacks on Halliburton” for the media attention given the company’s Iranian business.

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MSNBC.com
Business As Usual?
Halliburton’s CEO says his company is pulling out of Iran. But a corporate subsidiary is still going ahead with a deal to develop Tehran’s natural gas fields
WEB EXCLUSIVE
Newsweek
Updated: 6:10 p.m. ET Feb. 16, 2005
Feb. 16 - Only weeks before Halliburton made headlines by announcing it was pulling out of Iran—a nation George W. Bush has labeled part of the “axis of evil”—the Texas-based oil services firm quietly signed a major new business deal to help develop Tehran’s natural gas fields.
Halliburton’s new Iran contract, moreover, appears to suggest a far closer connection with the country’s hard-line government than the firm has ever acknowledged.
The deal, diplomatic sources tell NEWSWEEK, was signed with an Iranian oil company whose principals include Sirus Naseri, Tehran’s chief international negotiator on matters relating to the country’s hotly-disputed nuclear enrichment program—a project the Bush administration has charged is intended to develop nuclear weapons.
There are few matters more sensitive for Halliburton than its dealings with Iran. The company, formerly headed by Vice President Dick Cheney, last year disclosed that it had received a subpoena from a federal grand jury in Texas in connection with a Justice Department investigation into allegations that the firm violated U.S. sanctions law prohibiting American companies from directly doing business in Iran. (U.S. firms are barred from doing direct business in Iran, but under a confusing quilt of federal regulations, their foreign subsidiaries may do so as long as they operate “independently” from U.S. management.)
Documents disclosed by the company indicate that the Justice Department probe into Halliburton’s Iran dealings, like a separate Justice investigation into alleged foreign bribes paid by a Halliburton-connected consortium to officials in Nigeria, cover the period that Cheney was Halliburton CEO.
There have been no allegations that Cheney was directly involved in any of the conduct that is under scrutiny by Justice, although as Halliburton CEO, Cheney repeatedly and forcefully criticized the U.S. sanctions laws restricting business in Iran, arguing that they caused U.S. firms like Halliburton to lose business to international competitors. (As it has in the past, Cheney’s office today declined to say whether the vice president has been questioned by investigators on either the Iran or Nigerian matters.)
Halliburton’s new deal, in which it will participate in a $308 million project to develop Iran’s huge South Pars natural gas fields, was not at first publicly announced by the company. But after the South Pars project, and its role, was reported in the Iranian press in mid-Janury, Halliburton publicly confirmed that its Dubai-based subsidiary, Halliburton Products & Services Limited, had been awarded a subcontract on the project that, a Halliburton official told NEWSWEEK today, will net the parent firm between $30 million and $35 million over the next several years.
The new Halliburton project, congressional investigators say, raises substantial questions about the Jan. 28, 2005 public announcement by Halliburton CEO (and Cheney successor) David Lesar that the firm plans to cease doing business in Iran. Lesar made no reference to the South Pars project in his conference call with investment analysts that day, when he blamed “the political nature of the attacks on Halliburton” for the media attention given the company’s Iranian business.
But overlooked in most of the press coverage of the announcement was that Lesar’s statement contained enough wiggle room to permit Halliburton to continue participating in the new South Pars project. After telling the analysts that “we have decided to exit Iran and will wind down our operations there”—a decision he attributed to the current “business environment” in Iran—Lesar quickly added that the company would continue “fulfilling our existing contracts and commitments.” He also added another caveat: “If the U.S. sanctions are lifted in the future, or more of our customers go there, we will return to this market.”
Lesar’s announcement was little more than “PR damage control,” said one congressional investigator who has closely followed Halliburton’s dealings. “They’re still acting like the sanctions law are a big joke,” the investigator added. Lesar’s comments also raise another question that are central to questions about the Iran sanctions: How could Lesar, as Halliburton CEO, decide to pull out of the Iran market at all and then reserve the right to “return to this market” if all of its business in Iran is, as Halliburton has repeatedly argued, been conducted by a foreign subsidiary (Halliburton Products and Services) that is acting “independently” of management in Houston?
Halliburton has consistently argued that it is not in violation of U.S. sanctions law because Halliburton Products & Services Limited (which is registered in the Cayman Islands but located in Dubai) operates autonomously without direction from senior management in Houston. In documents the company has submitted to investigators, for example, Halliburton has stated that Halliburton Product & Services' 133 employes include no Americans and that its five-person board of directors includes four British citizens and one Canadian citizen; “none of them is a U.S. permanent resident alien” or green card holder. “Day to day management and decision-making responsibility at HPSL resides with the Management Director (who is a British citizen) and other local management, all of whom reside in Dubai.”
But other company documents and sources familiar with the Justice Department investigation suggest that, at the very least, U.S. government officials have had questions about the Dubai-based subsidiary’s “independence” for some time. Company disclosures show that the Treasury Department’s Office of Foreign Assets Control first questioned Halliburton about whether it was in compliance of U.S. sanctions against Iran as early as mid-2001. In January, 2004, Treasury raised the issue again after a "60 Minutes" report that Halliburton Products & Services was located in, and receiving mail, in the same Dubai office tower address where another of the company’s principal—and indisputably U.S.-controlled subsidiaries, Kellog Brown & Root—also had offices. This led, according to a company report filed with the Securities and Exchange Commission, to a referral of the matter by Treasury to the Justice Department for a criminal investigation. Halliburton then received its first a grand jury subpoena for documents on September 16, 2004, according to the firm’s latest filing with the SEC.
A Halliburton official, who asked not to be identified, noted that a Congressional anti-Iran sanctions law—and Treasury Department regulations interpreting it—expressly allowed foreign subsidiaries of U.S. companies that “ran their own affairs” to continue doing business in Iran. This, the official said, is in contrast to U.S.-imposed sanctions on Cuba and North Korea, which explicitly cover all foreign subsidiaries of U.S. companies. (Sen. Frank Lautenberg, a New Jersey Democrat, is pushing legislation to close what he considers the current loophole in the law by prohibiting any foreign subsidiaries of U.S. companies from doing business in Iran.)
Responding to questions from NEWSWEEK, Halliburton spokeswoman Wendy Hall noted today that Halliburton is merely one of a number of U.S. subcontractors to Oriental Kish, the Iranian oil company that is in charge of the South Pars natural gas project. “I’d like to point out that we have no ownership in Oriental Kish Co. and we certainly did not form it,” Hall said in an e-mail response. “We are a subcontractor to Oriental. In addition, many of our American-based competitors were awarded a piece of this work as well. The facts show that HPSL (Halliburton Products and Services Limited), a foreign-owned subsidiary, was selected for about $30-$35 million in work out of an anticipated $308 million for the total project.”
Still, the figures cited by Hall for the size of the new project—even though spread out over about three years—are substantial in relation to Halliburton’s overall business dealings in Iran. Company documents obtained by NEWSWEEK show that Halliburton’s revenue from Iran—principally through the Dubai-based Halliburton Products and Services, but also including five other foreign subsidiaries—grew from $31 million a year in 2001 (when Bush first called Iran an “axis of evil” nation for its support of terrorism) to $42.5 million in 2003.
In addition, the role of Naseri—Iran’s nuclear negotiator—as a principal in Oriental Kish and the South Pars project has raised questions about the project. Naseri, according to a Western diplomatic source, was a former senior Iranian diplomat who, until two years ago, served as Tehran’s ambassador to a permanent United Nations disarmament conference in Geneva. A couple of years ago, the diplomat said, Naseri left the Iranian government to get involved in the oil business and is widely known to be involved with Halliburton Product & Services in oil-field activities.
But when the U.S., its allies and the International Atomic Energy Agency recently stepped up pressure on Iran regarding its nuclear activities, the diplomat said, Naseri rejoined the Iranian team handling international negotiations. He is described as one of the Iranian's main negotiators in talks with the IAEA, Britain, France and Germany and is described as a "very slick and sophisticated" negotiator. This week, Naseri was reportedly in Vienna and also traveled to other European capitals in connection with the nuclear talks. Diplomats say he serves as a key advisor to Hassan Rowhani, Iran's hard-line national security advisor, on the nuclear issue.
Halliburton spokeswoman Hall said the company “does not have any knowledge” that Naseri was “directly involved” in negotiations with Halliburton Products and Services and is “not aware of any other roles.” As for how Halliburton’s role in Iran fits in with larger U.S. foreign policy in Iran, Hall responded: “We are in the [oil] service business, not the foreign policy business. We have followed and will continue to follow applicable laws.”
© 2005 Newsweek, Inc.