When the smoke cleared at the site of the massive oil spill in the Gulf of Mexico, a name appeared in the various stories of the even. It is a name long familiar to those in the oil industry for more than 80 years and also familiar to some in the general public. But not very favorably. The name? Halliburton.
There are many negative things to say about Halliburton, so perhaps the first thing that should be cleared up is to debunk one story. Halliburton’s Dresser division had considerable trouble because of some asbestos problems. And some people said that the company was founded by George W. Bush’s grandfather, Prescott Bush. That is not true.
Prescott Bush was an investment banker with the Brown Brothers, Harriman firm in New York. Dresser which was merged into Halliburton during the time that Dick Cheney was president of Halliburton was founded by by a man named Solomon Dresser who invented several oil field devices that became widely used. After Dresser died, Brown Brothers, Harriman took the firm public. That is the connection.
The original Halliburton company was founded in the early days of the oil boom before the First World War. By the 1950s they were well established as one of the premier oil field service companies (now the 2nd largest, to Schlumberger.) Their early technology involved oil well cementing, part of the production process. As their technology proved successful and as the oil industry grew, Halliburton purchased many other oil field services companies.
One of the companies they purchased in the early 1960s was Kellogg Brown and Root, one of the country’s largest construction companies with world-wide operations, and thanks to a very close relationship with Congressman, Senator and President Lyndon Johnson the beneficiary of many huge government contracts for dams, military bases and other projects. A number of their projects were in the oil industry, which tied in closely with Halliburton’s extensive oilfield operations.
Throughout all the problems of the 1990s and 2000s of Halliburton and KBR with the mishandling of what The Center for Public Integrity says were a total of $16 billion in Iraq War contracts, the oil field services company continued its original business, oil well cementing. Halliburton in its own literature describes itself as the premier oil well cementing business in the world.
Halliburton continues as a major government contractor despite the accusations that billions in no-bid contracts were ordered given to them by Vice President Cheney, (formerly President of Halliburton) including a $7 billion contract to put out potential oil field fires in Iraq…before the war started! Cheney, despite stating publicly that he was no longer receiving any money from Halliburton while Vice President, did in fact receive deferred income averaging over $250,000 per year from 2001 to 2004. (and perhaps after.)
Cheney, by the way, did not become President of Halliburton by accident or through some executive search. When he was Secretary of the Treasury, Halliburton saw what he could do for them when he gave them a $9 million contract to create plans that would show how a private company would handle support services for the military. Once Halliburton had created plans that essentially created the job that Cheney wanted them to have, he then hired them as the principal contractor to support the military for the next five years. That August 1002 contract earned them over $100 million for support in Somalia and over the next five years another $2.2 billion for support, including the military operations in the Balkans. When Clinton was elected that November, Cheney was out of a job. Not surprisingly, he was hired by Halliburton.
Just to recap…Cheney went from a career entirely in government to a job at Halliburton after seeing to it that they got $2.2 billion in contracts. The most they had ever billed up to that point with the government was for construction projects through KBR totaling $350 million. While Cheney was at Halliburton, he earned something like $44 million. After engineering his own candidacy for Vice President with Bush, he then immediately began the process of building more military contracts with Halliburton to the tune of $16 billion. (To put it in context, their total sales are only around $22 billion.)
While Cheney was Vice President, unlike all previous Vice Presidents, he continued to receive deferred income from Halliburton of over $1,000,000 while signing off on no-bid contracts passed to the military where Rumsfeld kept all details secret. Many people would say that Cheney should be in jail. It was clear that he not only looted the country’s military for contracts from which he benefited (his stock went up by 2000% while in office) but he was responsible for a war for oil in which hundreds of thousands of people were mutilated or killed for his personal greed.
But…not only was Halliburton granted these non-bid contracts but they were paid over $80 million in bonuses, even after government inspectors said that their work was the shoddiest and worst of all their years in the inspection of government contracts and after 5 American soldiers had been electrocuted by faulty wiring in their showers.
Halliburton’s military contracts during the Bush Administration were so secret that government employees were not allowed to see them, but were handled closely by Secretary of Defense (and long-time close Cheney pal) Donald Rumsfeld’s office. When Bunnatine Greenhouse one of the chief contracting officers for the Corps of Engineers complained of problems with excesses and overages and protested the preferential treatment for Halliburton and KBR, she was demoted and transferred.
With that as background, it turns out that Halliburton working for Transocean drilling, an international drilling company with over 26,000 employees, was responsible for cementing the well owned by British Petroleum that blew out in the Gulf. It appears that a faulty cementing job was likely the catalyst for all the current problems. In fact, it is surprising to know that there were 39 such blow outs in the Gulf of Mexico over the last 14 years. In 18 of those, faulty cementing was responsible.
If Halliburton refers to itself as the premier cementing company for oil wells in the world, one would imagine that a large percentage of those 18 faulty cementing jobs leading to blow outs came from Halliburton. It also makes us wonder why we have not heard more about all these blowouts when we were being told how safe and secure offshore oil drilling has become. So many other safety factors were bypassed by Transocean, Halliburton and British Petroleum, that it becomes what seems to the layman to be negligent behavior.
The cost may be incalculable to Gulf Coast fishermen. We may be able to live without shrimp and oysters and certain kinds of fish. But the bare costs of recovery of some kind, the attempt to clean up this huge, huge mess will be over $25 billion at least. If the oil leaking out at thousands of barrels a day cannot be stopped, as some are afraid it may not, for at least three months…the costs could climb to over half a trillion dollars. This all borders on, and may be, criminally negligent behavior.
Now, three Democratic Senators, Lautenberg and Menendez of New Jersey and Nelson of Florida have proposed raising the limits on the damages that can be charged to the Oil Spill Liabiliity Fund, which is now $75 million to a new upper limit of $10 billion. Even $10 billion may not come close if this spill continues and reaches the shore.
So here we are again, being screwed by Halliburton or KBR. Or having oil dumped on us again by BP or EXXON or some other oil company. The people pay, just as we did on the Bush Wall Street bailout…because we pay more for gas and a percentage of that price goes to the cleanup fund. But more importantly they will never pay for the lost incomes of fishermen or the dead animals or the inconvenience of dirty shorelines even after the clean up is accomplished. If we lose our Gulf Coast fishing industry the amounts are basically incalculable. An entire source of income for millions of people, a culture and a way of life are at stake for citizens in the Southeast, if the fishing industry is destroyed.
Halliburton again, and now they aren’t even an American-headquartered corporation. They are headquartered in Dubai, with Arabs. No corporate taxes and no personal taxes. There is a great deal of knowledgeable talk that one of the other big reasons they are there is to make it much more difficult for their executives to be brought to justice. Now you can see why. Fraud, cheating on government contracts, paying off the Vice President of the United States while he is still in office, and now this total negligence in the handling of an offshore well, when even they admit that they have the skill and the technology to have prevented it.