Conflict of interest

Activist Pratap Chatterjee says Dick Cheney's move from Defense to the world's largest oil services company illustrates how business and government make money at the expense of the environment.


Anthony York
July 25, 2000 11:30PM (UTC)

Before he was tapped to be George W. Bush's running mate, Dick Cheney was best known for his years as secretary of defense under President George Bush.

But after he left government, Cheney became CEO of Halliburton Co., the world's largest oil services company, which he joined in 1995. With Bush himself a former oil executive tapping Cheney, the former secretary's years at Halliburton are sure to receive scrutiny. A Reuters headline Tuesday screamed "Bush-Cheney is U.S. oil industry dream team," doing the Gore campaign's dirty work for them.

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Halliburton does business in more than 120 countries and employs more than 100,000 people worldwide. Most interesting, in light of Cheney's work as defense secretary during the Gulf War, the company made hundreds of millions of dollars cleaning up after that war in Kuwait.

As Democrats race for their paint brushes to color the GOP ticket black, for big oil, Salon talked to activist Pratap Chatterjee, who has monitored the oil industry, and Halliburton, for years. Chatterjee is author of "The Earth Brokers: Power, Politics and World Development," and the architect of a World Bank spoof site on the Internet. He has also worked with Project Underground, a Berkeley, Calif., group which monitors the activities of the oil industry, and the environmental impacts of oil drilling projects.

Describe Halliburton.

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Halliburton is the world's largest oil services company. It was started in 1916, and it became the biggest employer in Houston. It's very prominent in Texas. The thing that really made it big was when Dick Cheney took it over and merged it with Dresser Industries. After the merger, they became a kind of one-stop shop for all the different elements and services involved in drilling for oil. Whether you need a drill bit or seismic testing, they offer the complete array of services. Halliburton is now the biggest company in that business. They are in 120 countries around the world. Their income last year was $15 billion.

So the company has grown since Cheney became CEO?

Oh, they've grown immensely. They do two things: They work in the oil business and in the military business. So it makes sense that they would pick a former secretary of defense to be their CEO. When he was secretary of defense, one of the things Cheney did was scale down defense spending and ax a lot of people. Under Cheney, employment in the armed forces went from 2.2 million to 1.7 million. Well, that might sound good to some people but what really happened was the military started outsourcing a lot of the tasks that the military used to do themselves -- things like construction.

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What Halliburton is doing now, and this has been the trend around the world as more and more countries outsource, is large-scale construction projects on behalf of the United States military. Companies like Halliburton essentially enabled the Army to use the private sector to go anywhere in the world within 15 days. In 1993, they implemented this in Somalia. Halliburton got a contract to supply $100 million of logistical support to the army -- everything from supplying toilets to supplying fresh fruit to translators. Within hours of the U.S. task force arriving in Somalia, they became the largest employer in all of Africa. Since then, they've gotten similar contracts in Haiti in 1994, Bosnia in 1995 and Albania in 1999.

How does an oil services company get into the construction business?

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They've always been in the business of construction and supplying services. Now, they've come up with this grand scheme to build floating, mobile bases for the U.S. Army. The only thing that's similar to them are oil rigs, which they have plenty of experience with.

So they depend on government contracts for income?

In part, yes. They also have large contracts with the oil companies themselves. After the Gulf War, Brown & Root [the construction arm of Halliburton] got a contract to rebuild a lot of the infrastructure in Kuwait. I think the money for that deal was part of an aid package. In Haiti and Somalia, their contracts were considered direct logistical support for the U.S. Army, and it came directly out of their budget. But it is true that they are funded in large part by U.S. taxpayer dollars, yes.

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So why would a former secretary of defense go to work for an oil services company?

It makes sense. Just like journalists hire the people who know the business of writing, companies in the oil business hire people who are familiar with how government and government bureaucracy works, and how to land those lucrative government contracts. What I have a problem with, and what Cheney's move between the defense department and Halliburton illustrates, is the close relationship between business and government in making money at the expense of the environment and all of these kinds of things.

I think Cheney's decision to go to Halliburton was a major conflict of interest. If your job is working for the U.S. government, for the taxpayer, and what you're doing is defending the country's interests, and then you leave and cash in on those contacts to make money for a private company which receives US taxpayer dollars, it's disingenuous. What Cheney did was get the process rolling with privatization in the [military], and then he went on to profit off of it. Just more than a month ago, he cashed in $5.1 million worth of stock.

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So do you think that Bush's selection of Cheney will shine the spotlight on big oil this election season?

Oh, the Gore campaign has already done it. They've issued press releases saying Bush is in bed with the oil industry and things like this. But Al Gore isn't any better. He has a lot of links to Occidental Petroleum. There's really no difference between Gore and Bush. Gore led the Senate in calling for the Gulf War, which Cheney's future employer profited off of. When you look at it, the government and the oil industry work together all the time, and it's not really a partisan issue. I'm not a conspiracy theorist at all, but this is the business of how multinational business, the military and government work. They're one and the same. It's about making profit. It's about power.


Anthony York

Anthony York is Salon's Washington correspondent.

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