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Halliburton Company

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Learn more about the threat drilling for methane gas poses to fresh water.

The Halliburton Company was founded in 1919 and is one of the world's largest providers of products and services to the oil and gas and military services industries.

Subsidiary KBR largest receiver of non-competitive defense contracts

Kellogg Brown and Root (KBR), formed as an offshoot of parent company Halliburton in 2007, is the largest recipient of defense contract funding as of March, 2013. KBR privately provides military support services which were once operated by the U.S. military. Over the past ten years KBR has received $39.5 billion in Iraq-related contracts much of which came without having to bid against competing firms. A $568 million contract to provide housing and food services for soldiers led to a Justice Department lawsuit filed in 2010 by whistle-blowers for never being put up to bid by the Army and under suspicion of kickbacks. As stated by Business Insider:[1]

"Even without the graft, the costs of paying for these services are higher than paying governement employees or soldiers to do them because of the profit motive involved. No-bid contracting -- when companies get to name their price with no competing bid -- didn’t lower legitimate expenses. (Despite promises by President Barack Obama to reel in this habit, the trend toward granting favored companies federal contracts without considering competing bids continued to grow, by 9 percent last year, according to the Washington Post.)"

The "Halliburton loophole" for Methane Gas Drilling

In 2005, at the urging of Vice President Dick Cheney, Congress created the so-called "Halliburton loophole" to clean water protections in federal law to prevent the U.S. Environmental Protection Agency from regulating this process, despite serious concerns that were raised about the chemicals used in the process and its demonstrated spoiling and contamination of drinking water. In 2001, Cheney's "energy task force" had touted the benefits of hydrofracking, while redacting references to human health hazards associated with hydrofracking. Halliburton, which was previously led by Cheney, reportedly earns $1.5 billion a year from its energy operations, which rely substantially on its hydrofracking business.)[2]

According to Pro Publica reporter Abrahm Lustgarten, the EPA under Christine Todd Whitman's tenure as Administrator engaged in secret negotiations with industry, while purportedly addressing drinking water issues related to "fracking."[3] In 2004, the EPA undertook a study on the issue and "the EPA, despite its scientific judgment that there was a potential risk to groundwater supplies, which their report clearly says, then went ahead and very surprisingly concluded that there was no risk to groundwater," Lustgarten noted in September 2009. "[P]art of my reporting found that throughout that process the EPA was closer than seemed comfortable with the industry. I filed FOIA requests for some documents and found conversations between Halliburton employees and the EPA researchers, essentially asking for an agreement from Halliburton in exchange for more lax enforcement. The EPA, in these documents, appeared to offer that and agree to that. And it doesn’t appear, by any means, to have been either a thorough or a very objective study." [4]

In June 2009, U.S. Representatives Diana DeGette, John Salazar and Maurice Hinchey and Senators Robert P. Casey Jr. and Chuck Schumer introduced the Fracking Responsibility and Awareness of Chemicals Act (FRAC ACT).[5] The proposal is aimed at closing the 'Halliburton loophole' and requiring the oil and gas industry to disclose the chemicals used in drilling projects which can contaminate ground water and drinking water.

In late October 2009 the House of Representatives agreed to include a statement in the Interior and Environment Appropriations bill and report for fiscal year 2010 urging the EPA to reassess the impact of fracking on water supplies. The report stated:

"The conferees urge the EPA to carry out a study on the relationship between hydraulic fracturing and drinking water, using a credible approach that relies on the best available science, as well as independent sources of information. The conferees expect the study to be conducted through a transparent, peer-reviewed process that will ensure the validity and accuracy of the data. EPA shall consult with other federal agencies as well as appropriate state and interstate regulatory agencies in carrying out the study, and it should be prepared in accordance with EPA quality assurance principles."[6]

On March 18, 2010, the Environmental Protection Agency announced that it would lead a $1.9 million for this comprehensive, peer-reviewed study on the impacts hydrofracking would have on water quality and public health.[7] Despite the study, Rep. Diana DeGette (D-CO) has expressed that it is crucial to continue the push forward for the passing of the FRAC Act[8]

More information about other legislative proposals can be found in the main page on this topic, Marcellus Shale.

Hazardous Substances, Drinkable Water, and Hydrofracking

To force natural gas out of shale or rock, millions of gallons of fresh, drinkable water are forced through a pipe drilled into the shale. A variety of chemicals are added to the water to keep the fractures in the shale open and keep the gas flowing to the surface. While there is no complete list of the cocktail of chemicals used in this process, information obtained from environmental clean-up sites demonstrates that known toxins are routinely being used, including hydrochloric acid, diesel fuel (which contains benzene, tuolene, and xylene) as well as formaldehyde, polyacrylimides, and chromates.[9] These chemicals include known carcinogens and other hazardous substances.

According to the Union of Concerned Scientists:

"When an EPA study concluding that hydraulic fracturing "poses little or no threat" to drinking water supplies was published in 2004, several EPA scientists challenged the study's methodology and questioned the impartiality of the expert panel that reviewed its findings. The Bush administration has strongly supported hydraulic fracturing, an oil extraction technique developed by Halliburton Co., but environmental groups as well as scientists within the EPA have warned that the practice may contaminate drinking water and needs to be regulated."[10]

For more information about the health harms and environmental problems caused by the fracking process, please go to our main page on the Marcellus Shale issue, by clicking Marcellus Shale. A summary of related issues and the impact on drinking water can be viewed by clicking the word "Water" in the Hot Topics column on the left or by going here.

Halliburton and fracking

In 2011, Halliburton posted record revenues of $25 billion, based almost entirely on the growth of its U.S. shale explorations, and it is on pace to top that in 2012, with first-quarter revenue of $6.9 billion. According to the National Journal, Halliburton's unofficial company motto has become "Frac the Future." Oil and gas companies hire energy service providers like Halliburton to extract fossil fuels, including cement casing and fracking.[11]

Under investigation and relocating to Dubai

"Halliburton is under Justice Department Securities and Exchange Commission investigation over allegations of improper dealings in Iraq, Kuwait and Nigeria," Whitley Strieber wrote March 12, 2007.

Halliburton announced on March 12, 2007, that "it would open a corporate headquarters in the United Arab Emirates city of Dubai and move its chairman and chief executive, David J. Lesar, there." [3] "Halliburton will remain a US company subject to US laws, but Dubai has no extradition agreement with the United States, meaning that Mr. Lesar could not be compelled to return to the US to testify, stand trial or serve any sentence related to any Halliburton activities under investigation."

The company will also maintain its existing corporate office in Houston, Texas, "as well as its legal incorporation in the United States, meaning that it will still be subject to domestic laws and regulations." [4]

"According to this 2004 GAO report, the company is incorporated in Delaware, but has (or had at that time) 17 subsidiaries in tax-haven countries." [5]

In February 2007, "Congress was told that $2.7 billion paid to Halliburton and its subsidiaries and subcontractors for work done in Iraq was either excessive or unsupported," Strieber wrote. "Another upcoming investigation that affects Halliburton is the current scandal at Walter Reed Army Medical Center. The Washington Post reported that the Army agreed to privatize the operation of Walter Reed by awarding a $120 million contract to IAP Worldwide Services, a contractor with connections to KBR, a Halliburton subsidiary."

"Although the announcement of the new Dubai arrangement took many by surprise, Halliburton said that the move was part of a strategy announced in mid-2006 to concentrate its efforts in the Middle East and surrounding areas, where state-owned oil companies represent a growing source of business." [6]

Halliburton's political influence

Report: Cheney Facilitated No-Bid Contracts

According to a June 1, 2004, Reuters article, there were "fresh calls on Capitol Hill" for "probes into whether Vice President Dick Cheney helped his old firm get the deals."

A "newly unearthed" March 2003 "Pentagon e-mail says action on a no-bid Halliburton contract to rebuild Iraq's oil industry was 'coordinated' with Cheney's office. Cheney was chief executive officer of the oilfield services giant from 1995 until he joined George W. Bush's presidential ticket in 2000."
"The e-mail, reported by Time magazine [in its June 7, 2004, Issue], provided 'clear evidence' of a relationship between Cheney and multibillion-dollar contracts Halliburton has received for rebuilding Iraq, Sen. Patrick Leahy said," according to Reuters. "'It totally contradicts the vice president's previous assertions of having no contact' with federal officials about Halliburton's Iraq deals, Leahy, a Vermont Democrat, said in a conference call set up by John Kerry's presidential campaign. 'It would be irresponsible not to hold hearings.'"

Iraq reconstruction corruption

The Wall Street Journal' reported January 23, 2004, that Halliburton "told the Pentagon that two employees took kickbacks valued at up to $6 million in return for awarding a Kuwaiti-based company with lucrative work supplying U.S. troops in Iraq.

The disclosure is the first firm indication of corruption involving U.S.- funded projects in Iraq and raises new questions about Halliburton's dealings there. The company's work already is being scrutinized because of accusations that the U.S. government was overcharged for gasoline under another controversial contract." [7]

Halliburton Company PAC

(Note, this section needs to be updated.) Halliburton Co. PAC gave $171,600 to federal candidates in the 05/06 election period - 7% to Democrats and 93% to Republicans. [12]

"Halliburton Co. PAC reports giving out $15,000 in April, [2003] including $4,000 to Speaker Dennis Hastert and Sen. Orrin Hatch. The PAC has $207,089 cash on hand on 4/30. In the last cycle they gave 88.6% of their contributions to Republicans." [8]

Joel Brinkley, wrote in the February 13, 2004, New York Times that "As the accusations and investigations of the Halliburton Company's federal contracts in Iraq expand in size and number, Democrats say they will use the company's ties to the Bush administration as a campaign issue, and Halliburton is responding with television advertisements implying that it is being unfairly singled out."

Lobbying

Halliburton is one of the largest energy company contributors to both Republican and Democratic candidates for Congress. These contributions total $150,514 to the 110th US Congress (as of the third quarter), the largest of which has been to Rep. John Cornyn(R-X) for $10,000. Rep. Cornyn, for his part, has consistently voted with the coal industry on energy, war and climate bills.[9]

Contributions like this from fossil fuel companies to members of Congress are often seen as a political barrier to pursuing clean energy.

More information on oil industry contributions to Congress can be found at FollowtheOilMoney.org, created by the nonpartisan, nonprofit organization Oil Change International.

Halliburton spent $380,000 for lobbying in 2006. $120,000 went to two outside lobbying firms with the remainder being spent using in-house lobbyists.[13]

Accusations of gang rape

In 2007, a 22 year old female Halliburton/KBR employee stationed in Iraq said she was drugged and gang-raped by her co-workers, and then imprisoned in a shipping container for 24 hours without food or water and warned that if she sought medical treatment outside of Iraq she would be fired. While imprisoned in the container, Jamie Leigh Jones, who is originally from Houston, Texas, convinced a sympathetic guard to loan her a cell phone. She called her father in Texas and told him what happened, and that she was being held against her will. Her father called Representative Ted Poe (R-Texas) who arranged for representatives to free Jones from the container and help her get out of Baghdad to safety. Jones filed a federal lawsuit over the attack, but after two years the Justice Department has not brought any criminal charges in the matter, and Congressman Poe is unable to get any answers from the State Department or the Justice Department on the status of the investigation into the attack. [14] A federal judge has set a trial for Feb 7, 2011. [15]

History

The following comes from Halliburton's website halliburton.com:

In 1919, Erle P. Halliburton established the New Method Oil Well Cementing Company in Oklahoma. At the same time, brothers George and Herman Brown partnered with their brother-in-law, Dan Root, to found Brown & Root in Texas.

When Erle Halliburton died in 1957, "the Company had 201 offices in 22 states and 20 foreign countries. Five years later, Halliburton acquired Brown & Root following Herman Brown's death. At the time, Brown & Root was renowned as a road construction company, general contractor and builder of the world's first offshore platform in 1947."

Dresser Industries was founded in 1880 by Solomon Dresser "during the nation's first oil boom late in the 19th century. A patent for a cylindrical packer in 1880 launched Dresser's oilfield products manufacturing business...In 1988, Dresser Industries acquired M.W. Kellogg, a pipe fabrication business started by Morris W. Kellogg in 1900. Kellogg created technology for petroleum refining and petrochemical processing and built facilities based on those technologies."

Halliburton's expansion since 1919 included the purchase in 1962 of Brown & Root, "an engineering and construction company" and in September 1998 of Dresser Industries, a "major provider of integrated services and project management for the oil industry." According to Business Week, the merger of Halliburton and Dresser Industries formed the "world's largest oilfield services company. About 63% of 2001 revenues were derived from international activities (14% from the U.K.)." [10]

At the time, the Halliburton executive committee included CEO Dick Cheney and Donald C. Vaughn as vice chairman. Five members of the Dresser board of directors, including William E. Bradford, Lawrence S. Eagleburger, Ray L. Hunt, J. Landis Martin and Jay A. Precourt, joined the Halliburton Board of Directors.[11]

In 1988, Dresser acquired M.W. Kellogg, "a leader in petroleum refining and petrochemical processing, technology, engineering and construction." William E. Bradford, then Halliburton's new Chairman of the Board, stated that

"Halliburton's vision is to be the premier global solutions provider for energy services, engineering and construction, and energy equipment. The strategy the company has adopted to achieve this vision is based upon our commitment to integration -- both the internal integration of all business operations, as well as integration of Halliburton's core competencies with those of our customers. We support the vision with 4 key goals to serve our customers -- operational excellence, technological leadership, innovative business relationships and maintenance of a dynamic workforce."[12]

Following the merger with Dresser, Halliburton's worldwide revenues "increased significantly," reaching $13 billion in 2001 ... Dresser's well-known and respected brands -- Sperry-Sun Drilling Services, Baroid Drilling Fluids and Security DBS -- were integrated into Halliburton and the Dresser Equipment Group was divested.

Halliburton's Landmark Graphics supplied information systems and software to help companies find and produce oil and gas. The Engineering and Construction Group was restructured during the first quarter 2001 and the engineering, construction, fabrication and project management capabilities were made part of Halliburton Kellogg Brown & Root (KBR). Halliburton acquired PGS Data Management, a division of Petroleum Geo-Services ASA, in March 2001 and in November 2001, and it also purchased Magic Earth, Inc., a 3-D visualization and interpretation technology company. In 2002, Halliburton sold its 50% interest in Bredero-Shaw and agreed to sell its mono pumping business. Also in 2002, Halliburton sold its 50% interest in European Marine Contractors Ltd.[13]

Halliburton's "compression and pumping product line included two joint ventures": Dresser-Rand, and Ingersoll-Dresser Pump. Ingersoll-Dresser Pump was sold on December 30, 1999, and Dresser-Rand was sold on February 2, 2000. In April 2001, the company sold its remaining Dresser Equipment Group businesses to a group led by First Reserve and Odyssey Investment Partners. Part of the terms of the transaction was that Halliburton would retain a 5.1% equity interest in the Dresser Equipment Group, which has been renamed Dresser, Inc.[14]

In March 2002, Halliburton separated into "two wholly-owned operating subsidiaries": Halliburton's Energy Services Group and KBR (Kellogg Brown and Root) Engineering and Construction ... Halliburton employs 85,000 people in more than 100 countries working in two major operating groups:

  • "Halliburton's Energy Services Group offers a broad array of products and services to upstream oil and gas customers worldwide, ranging from the manufacturing of drill bits and other downhole and completion tools and pressure pumping services to subsea engineering.
  • KBR "serves the energy industry by designing and building liquefied natural gas plants, refining and processing plants, production facilities and pipelines, both onshore and offshore. KBR's non-energy business meets the engineering and construction needs of governments and civil infrastructure customers. KBR also provides operations and maintenance for a wide variety of facilities."[15]

During 2002, the Securities and Exchange Commission undertook an investigation of Halliburton's accounting practices, relating to events in 1998, which has not been completed.

Halliburton's "current contract in Kuwait began in September 2002 when Joyce Taylor of the U.S. Army Materiel Command's Program Management Office, arrived to supervise approximately 1,800 Brown and Root employees to set up tent cities that would provide accommodation for tens of thousands of soldiers and officials."[16]

The Center for Cooperative Research says "Manipulating U.S. foreign policy isn't the only strategy in Halliburton¹s repertoire of means to securing profits. Another method that has apparently proven extremely successful is doing business with the government and bidding on contracts financed by U.S. dominated bilateral and multilateral aid agencies. Although Dick Cheney had once lashed out at Joseph I. Lieberman saying that his success at Halliburton 'had absolutely nothing to do with' the government, the real facts have shown otherwise." Cooperative Research calls this practice corporate welfare. The organization gives a detailed listing of Halliburton's business dealings in this regard.

"Even without the Cheney conflicts of interest, serious doubts remain about whether a company with a record like Halliburton's should even be eligible to receive government contracts in the first place. This, after all, is a company that has been accused of cost overruns, tax avoidance, and cooking the books and has a history of doing business in countries like Iraq, Iran and Libya." [17]

"Tax Havens: Under Cheney's tenure, the number of Halliburton subsidiaries in offshore tax havens increased from 9 to 44. Meanwhile, Halliburton went from paying $302 million in company taxes in 1998 to getting an $85 million tax refund in 1999."

"Confidential U.N. documents show that Halliburton's affiliates have had broad, and sometimes controversial, dealings with the Iraqi regime. The firms traded with Baghdad for more than a year under Cheney, signing nearly $30 million in contracts before he sold Halliburton's 49 percent stake in Ingersoll Dresser Pump Co. in December 1999 and its 51 percent interest in Dresser Rand to Ingersoll-Rand in February 2000, according to U.N. records." [18]

Only weeks before Halliburton made headlines by announcing it was pulling out of Iran ... the Texas-based oil services firm quietly signed a major new business deal to help develop Tehran’s natural gas fields," Newsweek's Michael Isikoff and Mark Hosenball wrote in February 2005. "But overlooked in most of the press coverage of the announcement was that [Halliburton CEO David] Lesar’s statement contained enough wiggle room to permit Halliburton to continue participating in the new South Pars project. ... 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."[19]

Damage Control for "Iraq for Sale"

In October 2006, filmmaker Robert Greenwald and his production studio, "Brave New Films" (BNF), released a new documentary that was highly critical of Halliburton's work in Iraq. The movie was titled, "Iraq for Sale: The War Profiteers."

In late September, O'Dwyer's reported that "Halliburton's KBR engineering and services unit has launched a strike against the documentary. ... Halliburton posted a statement on its website, claiming the movie is 'nothing more than a theory in search of a conspiracy.'" [20]

O'Dwyer's wrote: [21]

BNF tried to interview Halliburton CEO Dave Lesar for the film. It sent four emails and made four phone calls to Cathy Mann, Halliburton's director of communications, attempting to arrange a meeting. She did not respond to any of those contacts, according to BNF. Melissa Norcross, KBR PR supervisor, did return an email to say that Lesar was not available for an interview.
This website emailed Mann, asking why she did not respond to BNF. She referred the site to Halliburton's statement. Norcross could be reached about whether any Halliburton or KBR execs have viewed the movie.

Halliburton Company subsidiaries

Source: Halliburton profile, Cooperative Research. Also see Wikipedia list.

Organizational structure

Board of Directors:

Accessed January 2009: [16]

Former directors:

Corporate Officers and 2006 pay: [17]

Former:

PR staff:

Former PR staff:

Contact information

Corporate office:
1401 McKinney Street
Suite 2400
Houston, TX. 77010
USA
Phone: (713) 759-2600
Web: http://www.halliburton.com

Related SourceWatch resources

External links

Profiles

Trading with the enemy

Halliburton relocation to Dubai

Halliburton: The War and Rebuilding of Iraq

Other Articles & Commentary

References

  1. Angelo Young,Former Halliburton Subsidiary Received $39.5 Billion in Iraq-Related Contracts Over The Past Decade, Business Insider, March 19, 2013.
  2. Tom Hamburger and Allen C. Miller, "Halliburton's Interests Assisted by the White House", Los Angeles Times, October 14, 2004.
  3. See http://www.democracynow.org/2009/9/3/fracking_and_the_environment_natural_gas.
  4. Interview with Abrahm Lustgarten, "Fracking and the Environment: Natural Gas Drilling, Hydraulic Fracturing and Water Contamination," Democracy Now!, September 3, 2009.
  5. "Senators, Representatives act to close Halliburton Loophole in the Safe Drinking Water Act", Media Release, June 9, 2009.
  6. Congressman Maurice Hinchey, "Congress Gives Final Approval to Hinchey Provision Urging EPA to Conduct New Study on Risks Hydraulic Fracturing Poses to Drinking Water Supplies", Media Release, October 29, 2009.
  7. [1], "EPA Initiates Hydraulic Fracturing Study: Agency seeks input from Science Advisory Board." Environmental Protection Agency, March 18, 2010.
  8. [2], "EPA to study hydraulic fracturing, but calls for FRAC Act continue." Colorado Independent. March 18, 2010.
  9. Weston Wilson, Letter to Senators Allard and Campbell and Representative DeGette, October 8, 2004. This letter, from a U.S. Environmental Protection Agency Employee, describes how the Bush Administration's EPA produced a scientifically unsupportable conclusion that hydrofracking should not be regulated under the Clean Water Drinking Act.
  10. Union of Concerned Scientists, "EPA Findings on Hydraulic Fracturing Deemed 'Unsupportable'", Union of Concerned Scientists website, undated, accessed October 2009.
  11. Coral Davenport and Yochi J. Dreazen, "The Revival of Big Red,"] National Journal, June 4, 2012.
  12. 2006 PAC Summary Data, Open Secrets, accessed July 2007.
  13. Halliburton lobbying expenses, Open Secrets.
  14. Ross B, ABC News [http://abcnews.go.com/blotter/Story?id=3977702&page=2 Victim: Gang-Rape Cover-Up by U.S., Halliburton/KBR: KBR Told Victim She Could Lose Her Job If She Sought Help After Being Raped, She Says] December 14, 2007
  15. Associated Press Judge Sets 2011 Trial Date for Iraq Rape Case December 8, 2009
  16. Directors, Halliburton, accessed January 19, 2009.
  17. Corporate Officers, Halliburton, accessed February 2008.
  18. David J Lesar, Forbes, accessed February 2008.
  19. Albert O Cornelison Jr, Forbes, accessed February 2008.
  20. Mark A McCollum, Forbes, accessed February 2008.
  21. C Christopher Gaut, Forbes, accessed February 2008.