Under Cheney, Halliburton Helped Saddam Hussein Siphon Billions from UN Oil-for-Food Program

by Jason Leopold

When the Iraqi Survey Group released its long awaited report last week that said Iraq eliminated its weapons programs in the 1990s, President George W. Bush quickly changed his stance on reasons he authorized an invasion of Iraq. While he campaigned for a second term in office, Bush justified the war by saying that that Saddam Hussein was manipulating the United Nation’s oil-for-food program, siphoning off billions of dollars from the venture that he intended to use to fund a weapons program.

The report on Iraq’s non-existent weapons of mass destruction, prepared by
Charles Duelfer, a former U.N. weapons inspector and head of the Iraqi
Survey Group, said Saddam Hussein used revenue from the oil-for-food program
and "created a web of front companies and used shadowy deals with foreign
governments, corporations, and officials to amass $11 billion in illicit
revenue
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the decade before the US-led invasion last year," reports The New York
Times.

"Through secret government-to-government trade agreements, Saddam Hussein’s
government earned more than $7.5 billion," the report says. "At the same
time, by demanding kickbacks from foreign companies that received oil or
that supplied consumer goods, Iraq received at least $2 billion more to
spend on weapons or on Saddam’s extravagant palaces."

The oil-for-food program was supervised by the U.N. and ran from 1996 until
the war started in Iraq last year. It was designed to alleviate the effects
sanctions had on Iraqi citizens by allowing limited quantities of oil to be
sold to buy food and medicine.

But the one company that helped Saddam exploit the oil-for-food program in
the mid-1990s that wasn’t identified in Duelfer’s report was Halliburton,
and the person at the helm of Halliburton at the time of the scheme was Vice
President Dick Cheney. Halliburton and its subsidiaries were one of several
American and foreign oil supply companies that helped Iraq increase its
crude exports from $4 billion in 1997 to nearly $18 billion in 2000 by
skirting U.S. laws and selling Iraq spare parts so it could repair its oil
fields and pump more oil. Since the oil-for-food program began, Iraq has
sold $40 billion worth of oil. U.S. and European officials have long argued
that the increase in Iraq’s oil production also expanded Saddam’s ability to
use some of that money for weapons, luxury goods and palaces. Security
Council diplomats estimate that Iraq was skimming off as much as 10 percent
of the proceeds from the oil-for-food program thanks to companies like
Halliburton and former executives such as Cheney.

U.N. documents show that Halliburton’s affiliates have had controversial
dealings with the Iraqi regime during Cheney’s tenure at the company and
played a part in helping Saddam Hussein illegally pocket billions of dollars
under the U.N.’s oil-for-food program. The Clinton administration blocked
one deal Halliburton was trying to push through sale because it was "not
authorized under the oil-for-food deal," according to U.N. documents. That
deal, between Halliburton subsidiary Ingersoll Dresser Pump Co. and Iraq,
included agreements by the firm to sell nearly $1 million in spare parts,
compressors and firefighting equipment to refurbish an offshore oil
terminal, Khor al Amaya. Still, Halliburton used one of foreign subsidiaries
to sell Iraq the equipment it needed so the country could pump more oil,
according to a report in the Washington Post in June 2001.

The Halliburton subsidiaries, Dresser-Rand and Ingersoll Dresser Pump Co.,
sold water and sewage treatment pumps, spare parts for oil facilities and
pipeline equipment to Baghdad through French affiliates from the first half
of 1997 to the summer of 2000, U.N. records show. Ingersoll Dresser Pump
also signed contracts — later blocked by the United States — according to
the Post, to help repair an Iraqi oil terminal that U.S.-led military forces
destroyed in the Gulf War years earlier.

Cheney’s hard-line stance against Iraq on the campaign trail is hypocritical
considering that during his tenure as chief executive of Halliburton, Cheney
pushed the U.N. Security Council, after he became CEO to end an 11-year
embargo on sales of civilian goods, including oil related equipment, to
Iraq. Cheney has said sanctions against countries like Iraq unfairly punish
U.S. companies.

During the 2000 presidential campaign, Cheney adamantly denied that under
his leadership, Halliburton did business with Iraq. While he acknowledged
that his company did business with Libya and Iran through foreign
subsidiaries, Cheney said, "Iraq’s different." He claimed that he imposed a
"firm policy" prohibiting any unit of Halliburton against trading with Iraq.

"I had a firm policy that we wouldn’t do anything in Iraq, even arrangements
that were supposedly legal," Cheney said on the ABC-TV news program "This
Week" on July 30, 2000. "We’ve not done any business in Iraq since U.N.
sanctions were imposed on Iraq in 1990, and I had a standing policy that I
wouldn’t do that."

But Cheney’s denials don’t hold up. Halliburton played a major role in
helping Iraq repair its oil fields during the mid-1990s that allowed Saddam
to siphon off funds from the oil-for-food program to fund a weapons program,
which Cheney and President Bush insist was the case.

As secretary of defense in the first Bush administration, Cheney helped to
lead a multinational coalition against Iraq in the Persian Gulf War and to
devise a comprehensive economic embargo to isolate Saddam Hussein’s
government. After Cheney was named chief executive of Halliburton in 1995,
he promised to maintain a hard line against Baghdad.

But that changed when it appeared that Halliburton was headed for a
financial crisis in the mid-1990s. Cheney said sanctions against countries
like Iraq were hurting corporations such as Halliburton.

"We seem to be sanction-happy as a government," Cheney said at an energy
conference in April 1996, reported in the oil industry publication Petroleum
Finance Week.

"The problem is that the good Lord didn’t see fit to always put oil and gas
resources where there are democratic governments," he observed during his
conference presentation.

Sanctions make U.S. businesses "the bystander who gets hit when a train
wreck occurs," Cheney told Petroleum Finance Week. "While virtually every
other country sees the need for sanctions against Iraq and Saddam Hussein’s
regime there, Cheney sees general agreement that the measures have not been
very effective despite their having most of the international community’s
support. An individual country’s embargo, such as that of the United States
against Iran, has virtually no effect since the target country simply signs
a contract with a non- U.S. business," the publication reported.