The Rest of the Story

I told myself that I was going to write about science today, perhaps this or this; but I got sidetracked.

You may recall that Halliburton announced, in January 2005, that it would be pulling out of Iran, citing "a poor business climate."  We learned later that this was not really true.  

Business As Usual?
Halliburton’s CEO says his company is pulling out of Iran. But a corporate subsidiary is still going ahead with a deal to develop Tehran’s natural gas fields

By Michael Isikoff and Mark Hosenball
Newsweek
Updated: 6:10 p.m. ET Feb. 16, 2005

Feb. 16 - Only weeks before Halliburton made headlines by announcing it was pulling out of Iran—a nation George W. Bush has labeled part of the “axis of evil”—the Texas-based oil services firm quietly signed a major new business deal to help develop Tehran’s natural gas fields.

Halliburton’s new Iran contract, moreover, appears to suggest a far closer connection with the country’s hard-line government than the firm has ever acknowledged. [...]

But in March, Halliburton reiterated its pledge, under pressure from the New York City Comptroller, who was troubled by the fact that the City invested a large sum, via its pension plans, in a company that did business with the Axis of Evil.  As reported in the Washington Post:

Halliburton Won't Seek Iran Work
Company Makes Vow in Response to Shareholder Pressure

By Henry Goldman
Bloomberg News
Friday, March 25, 2005; Page E02

Halliburton Co., the world's largest oil-field services company, has pledged not to seek new work in Iran, a country accused by the State Department of state-sponsored terrorism, said New York City Comptroller William C. Thompson, a steward of pension funds holding company stock worth about $42 million.

Halliburton's vice president and corporate counsel, Margaret E. Carriere, wrote in a letter faxed to Thompson's office from the company's Houston headquarters yesterday, "Halliburton will take appropriate corporate action to cause its subsidiaries to not bid for any new work in Iran," while continuing on work previously undertaken. [...]

Now it turns out that things are not going so well for Halliburton: Agenzia Gournalistica Italia has a news section, News for Arab Countries, which it describes as a "Special service by AGI on behalf of the Italian Prime Minister's office."  They are reporting something about Halliburton that American news agencies are not, but that American voters, as well as certain investors, might like to know:

News for Arab Countries
Special service by AGI on behalf of the Italian Prime Minister's office

---

HALLIBURTON: LOSES IRAN CONTRACT DUE TO CORRUPTION CHARGES

(AGI) - Tehran, Iran, Aug 23 - US multinational Halliburton lost a 310 million dollar contract for natural gas extraction in the Iranian site of South Pars. According to Tehran authorities, Oriental Oil Kish, a subsidiary of Halliburton operating in the Middle East, won the contract last January thanks to bribes. The activities of the company in South Pars have been suspended and the contract annulled. Halliburton, once led by US Vice President Dick Chaney, is under investigation for the same contract in the US as well, on the basis of a 1996 law that punishes companies, both American and foreign, which invest more than 40 million dollars in Iran. The contract should now be passed on to the National Iranian Drilling Company, the Iranian state-owned energy company. (AGI) -
231946 AGO 05 COPYRIGHTS 2002-2005 AGI S.p.A.

(Beret tip to PA Liberal, who starts college tomorrow; congratulations, Samantha!)

Readers may want to know how Halliburton is able to do business in Iran, given that it is illegal for American firms to do so.  Halliburton spokeswoman Wendy Hall has the answer:

Halliburton Set to Begin Work in Iran

DALLAS (CBS) -- Halliburton, under investigation for its operations in Iran, is set to begin oilfield services work in that country as a subcontractor for Oriental Kish, a spokeswoman said.

Halliburton shares closed at $38.19, up 35 cents. Halliburton spokeswoman Wendy Hall said that she did not know the value of the contract and noted that Oriental had won the contract, not Halliburton. Halliburton's products-and-services division is to help Oriental Kish, which is based in Iran, develop the South Pars natural-gas field.

"Halliburton's business is clearly permissible under applicable US laws and regulations," Hall said. "Also, we are in the service business, not the foreign-policy business. We have followed and will continue to follow applicable laws."

She added that Halliburton has no ownership in Oriental Kish and had played no role in its creation.

Because of Iran's suspected links to terrorism, US companies are severely restricted in their dealings with the country. The 1996 Iran-Libya Sanctions Act limits companies to an investment of $20 million or less a year in Iran's oil and gas sectors, according to the US Energy Information Administration.

However, "separately incorporated foreign subsidiaries are not included in the definition of US persons under the current Iranian executive order," a US Treasury official said. "If a US person is involved, that person may be in violation of the sanctions."

The Halliburton unit is registered in the Cayman Islands as Halliburton Products and Services.

"These entities and activities are staffed and managed by non-US personnel," Hall said.

In July, the company said in a regulatory filing that a federal grand jury was investigating Halliburton operations in Iran. [...]

Is there reason to think that a "US person" might be involved?  CC reports, you decide:

60 Minutes decided to ask Halliburton's subsidiary about its work in Iran. But we weren't allowed to enter the building with a camera. So we went in with a hidden camera, and were introduced to David Walker, manager of the local Calidonian [sic] Bank, where the subsidiary is registered.

60 Minutes was expecting to find a bustling business, but, to our surprise, Walker told us that while Halliburton Products and Services was registered at this address, it was in name only. There is no actual office here or anywhere else in the Caymans. And there are no employees on site.

We were told that if mail for the Halliburton subsidiary comes to this address, they re-route it to Halliburton headquarters in Houston. [...]

It actually was the Caledonian Bank.  Oddly, www.caledonian.com is not responding.  Maybe it's the hurricane.

Maybe the Flying Spaghetti Monster is punishing them for doing business with a bunch of crooks.