Halliburton keeps doing biz in Iran, despite fines, concerns of terrorism

US laws have banned most American commerce with Iran. Halliburton Products & Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is "non-American." But, like the sign over the receptionist's head, the brochure bears the Dallas company's name and red emblem, and offers services from Halliburton units around the world.

An executive order signed by former President Bill Clinton in March 1995 prohibits "new investments (in Iran) by US persons, including commitment of funds or other assets". It also bars US companies from performing services "that would benefit the Iranian oil industry". Violation of the order can result in fines of as much as $500,000 for companies and up to 10 years in jail for individuals.

In the February 2001 report, the Journal quoted an anonymous US official as saying “a Halliburton office in Tehran would violate at least the spirit of American law”. Moreover, a US Treasury Department website detailing US sanctions against bans almost all US trade and investment with Iran, specifically in oil services. The website adds: "No US person may approve or facilitate the entry into or performance of transactions or contracts with Iran by a foreign subsidiary of a US firm that the US person is precluded from performing directly. Similarly, no US person may facilitate such transactions by unaffiliated foreign persons."

When Bush and Cheney came into office in 2001, their administration decided it would not punish foreign oil and gas companies that invest in those countries. Halliburton has continued doing business in Iran by skirting US laws. Its Tehran office is registered through a Cayman Island subsidiary and does not employ anyone from the US

The sanctions imposed on countries like Iran and Libya before Bush became president were blasted by Cheney, who gave frequent speeches on the need for US companies to compete with their foreign competitors, despite claims that those countries may have ties to terrorism.

"I think we'd be better off if we, in fact, backed off those sanctions (on Iran), didn't try to impose secondary boycotts on companies … trying to do business over there ... and instead started to rebuild those relationships," Cheney said during a 1998 business trip to Sydney, Australia, according to Australia’s Illawarra Mercury newspaper.

David Lesar, Halliburton’s current chief executive explained why the company does business with countries that may or may not sponsor terrorism.

"A lot of our competition is non-US companies," Lesar said in an interview with Knight-Ridder in July 2000. "We do operate in some other sanctions-countries by complying with sanctions rules. You operate in those countries using non-US subsidiaries and non-US employees." Lesar said at the time he couldn't specify the amount of business that Halliburton did in Iran and Libya, but he called it "not substantial."

In 1995, Halliburton paid a $1.2 million fine to the US government and $2.61 million in civil penalties for violating a US trade embargo by shipping oilfield equipment to Libya. Federal officials said some of the well servicing equipment sent to Libya by Halliburton between late 1987 and early 1990 could have been used in the development of nuclear weapons. President Reagan imposed the embargo against Libya in 1986 because of alleged links to international terrorism.

But the fact that Halliburton may have unwillingly helped Libya obtain a crucial component to build an atomic bomb only made Cheney push the Clinton administration harder to support trade with Libya and Iran.

During a trip to the Middle East in March 1996, Cheney told a group of mostly US businessmen that Congress should ease sanctions in Iran and Libya to foster better relationships—a statement that when read today seems hypocritical considering the Bush administration’s foreign policy.

Let me make a generalized statement about a trend I see in the US Congress that I find disturbing, that applies not only with respect to the Iranian situation but a number of others as well," Cheney said. “I think we Americans sometimes make mistakes...There seems to be an assumption that somehow we know what's best for everybody else and that we are going to use our economic clout to get everybody else to live the way we would like.