"[Halliburton] became the Wal-Mart of the defense service economy." -- Lou Dubose and Jake Bernstein.
Halliburton followed a path similar to Enron's in its growth: unprecedented access to politicians and lawmakers enabing unprecedented growth. Like Enron, which also had its offices in Houston, Halliburton amassed a huge record of political campaign contributions, lobbying outlays, government contracts, Export-Import Bank loans, and OPIC guarantees. Halliburton even managed to help insert its former CEO, Dick Cheney, directly into the Oval Office. -- Kevin Phillips
Dick Cheney, as Halliburton's CEO, routinely supported dealings with countries that his administration denounced as supportive of terrorism and lacking in basic human rights compliance. In 1996, Cheney lobbied the Clinton administration to lift sanctions against US aid to Azerbaijan, an oil-rich country in the Caucasus guilty of ethnic cleansing against its Abkhazian minority. In 1997, KBR bid on a major energy project in that country. Cheney also lobbied against Massachusetts' "Burma law" which proscribed that state from doing business with the horrifically repressive regime in Myanmar. EarthRights International documented Halliburton's complicity in the Burmese government's repression of human rights in that country in 2000. And Cheney lobbied intensively against the 1995 sanctions against Iran and Libya, angling for an exemption that would allow Halliburton to participate in the development of Iranian oil fields as well as in the construction of the controversial Caspian Sea oil pipeline. When Cheney's lobbying efforts failed, he simply ignored the sanctions, spearheading Halliburton's association with Iranian development in flagrant violation of US law. He evaded direct association with Iraq, another country under heavy US sanctions, by establishing two offshore subsidiary corporations that did almost $24 million of business with the Saddam Hussein regime; the corporations managed to evade US legal restrictions by using a myriad of tax-shelter and offshore corporate legal dodges. -- Kevin Phillips
Under Cheney, Halliburton not only managed to defraud the US government of millions of dollars in overcharges and fraudulent accounting practices, but more importantly, helped the company become a "private military adjunct" to the nation, playing on his connections as former Secretary of Defense and later as Vice-President. Kevin Phillips writes, "...Cheney launched the Defense Department privatization effort in 1992, took advantage of it as CEO of Halliburton from 1995 to 2000, and then helped to extend and entrench the 'private army' aspect as vice president." -- Kevin Phillips
"Halliburton's Iraq War revenue stream can be followed back to the military outsourcing that began in 1992, while Dick Cheney was secretary of defense. At Cheney's bidding, the Defense Department paid Halliburton $3.9 million to prepare a classified report on privatizing the logistics of war: housing, feeding, refueling, and clothing troops. Halliburton went through the $3.9 million, secured an additional $5 million for a follow-up, then landed a five-year Corps of Engineers contract to provide logistical support for the Army. The process became the template for Halliburton-KBR Iraq War contracts ten years later. It was an extraordinary deal for Halliburton. On the DOD's dime -- or millions -- the company wrote a classified marketing plan for its own product. Then -- because it owned the proprietory information, which was classified -- it effortlessly moved into the market. As Halliburton followed the Army into Somalia and Bosnia, it became the Wal-Mart of the defense service economy. Halliburton even used Wal-Mart's big-box pricing plan: Accept low margins, squeeze competitors, and make it up on volume. The cost-plus pricing model the company devised guaranteed one percent profit on contracts -- with the possibility of bonuses that would push the profit margin up to almost eight percent. It wasn't a win-win proposition, it was win-and-win-bigger, with an incentive to increase expenditures in order to increase the company's return. It was particularly lucrative when buying and shipping commodities, which entailed little work, but was subject to the same one-percent-plus billing."
During the planning for the Iraq invasion of 2003, Halliburton's daughter company, KBR, secured a $1.9 million contract to put out the oil well fires Hussein's troops were expected to ignite. The entire "Restore Iraq Oil" (RIO) contract was worth as much as $2 billion to the company that won the contract, and Halliburton, using the procedures it had drawn up ten years beforehand, had the inside track on "competitive" bidding. Of course, this put Halliburton squarely in conflict with the Army Corps of Engineers' procurement guidelines. The Corps was directly responsible for issuing the contract, among other equally lucrative rebuilding and restoration contracts. Though the Corps's guidelines don't allow for companies who draft contingency plans to bid on the contracts those plans create, the Pentagon waived the guidelines, and Halliburton submitted a bid. The unusual arrangement caught the attention of the Corps's Bunnatine Greenhouse, the Principal Assistant Responsible for Contracting (PARC), who thought something was amiss during a February 26, 2003 meeting at the Pentagon that was attended by an array of Halliburton executives. See the page for specifics. -- Lou Dubose and Jake Bernstein
"In any future wars involving US energy interests, Kevin Phillips writes, "To the extent that fighting takes place near oil fields, gas fields, pipelines, or offshore rigs, private armies may play important combat-zone roles. Halliburton uniforms may have their own insignia and service stripes." -- Kevin Phillips