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Halliburton under attack for doing business with Iran and Libya through Cayman
Monday, March 8, 2004
Halliburton, the company that for decades has gone to war with the US Army, is under sharp attack at home. In particular, the US Treasury has reopened an investigation into whether Halliburton violated US sanctions against Iran and Libya by doing business with the countries through a Cayman Islands subsidiary.

According to the Financial Times, for the first time in its 85-year existence, Halliburton is having to fight a pitched battle for public opinion, a significant turn of events for a company that was scarcely known outside its own industry just five years ago.

The company has mounted a new public relations campaign to counter the damage done to its reputation from the proliferating scandals surrounding it. Halliburton, which was run by Dick Cheney from 1995 until he became vice-president in 2000, insists it is the victim of the highly charged political atmosphere in the run-up to this year's presidential election.

Halliburton has become a lightning rod for controversy and a worldwide symbol for critics of the Bush administration's policies on Iraq and other matters. The controversy has even led to chatter in Washington, among Democrats and some Republicans, about whether Mr Cheney will be replaced as vice-presidential candidate.

Harried Halliburton executives are having to defend the company against charges on everything including price gouging in Iraq, sanctions busting in Libya and Iran and bribe-paying in Nigeria.

The company denies allegations that it has overcharged the military, benefited from its political contacts or otherwise acted inappropriately. But the attacks have become so intense that Dave Lesar, chief executive, has appeared in television advertisements assuring viewers that Halliburton has won government contracts because of "what we know, not who we know".

Indeed, the company's political connections now appear more a hindrance than a help. In its latest regulatory filing, Halliburton took the unusual step of citing its ties to Mr Cheney as a risk factor.

"Halliburton has been and continues to be the focus of allegations, some of which appear to be made for political reasons by political adversaries of the vice-president and the current Bush administration," the company said.

"We expect that this focus and these allegations will continue and possibly intensify as the 2004 elections draw nearer."

Halliburton faces a gamut of investigations into its conduct, many of which are being seized on by Democrats in the run-up to the presidential election. But it is the investigation with which the US electorate is least familiar that arguably poses the greatest risk to the White House.

The probe centres on a series of payments totalling $180 million, by a consortium that includes a Halliburton subsidiary, to a London-based middleman between 1995 and 2002.

It is the only significant inquiry that centres on acts alleged to have taken place while Dick Cheney, US vice-president, was at the helm of the company. And the investigation is the only one occurring outside the auspices of the US government.

While the US Justice Department is investigating, the case has been most vigorously pursued by a French magistrate. The French press has reported that Judge Renaud van Ruymbeke is looking at whether charges should be brought against Mr Cheney for any misuse of funds that may have occurred. Nigerian authorities are also investigating.

The French judge is looking into whether, as a former director of the consortium has contended, the payments were funnelled to Nigerian officials as bribes to secure contracts to build the Nigeria Liquefied Natural Gas project (NLNG).