Evan Ravitz
60 Minutes: Halliburton trading with the enemy!
Sun Jan 25 22:35:16 2004
64.140.158.48

-------- Original Message --------
Subject: 60 Minutes: Halliburton trading with the enemy!
Date: Sun, 25 Jan 2004 19:16:39 -0700 (MST)
From: Evan Daniel Ravitz
To: People@vote.org


I just saw this on 60 Minutes.

This is so despicably outrageous it's actually illegal, and NYC's
Comptroller William Thompson is going after them. Let's hope "them"
comes to include VP Cheney, a good start on the whole Bush league.

Please spread this far and wide. If enough people find out and start
talking about how their 401k's, pensions, etc. are invested in Iran,
Syria and other funders of terrorism, Halliburton is finished!

-Evan


http://www.cbsnews.com/stories/2004/01/22/60minutes/main595214.shtml

(CBS) Did it ever occur to you that when President Bush says, "Money
is the lifeblood of terrorist operations," he's talking about your
money -- and every other American's money?

Just about everyone with a 401(k) pension plan or mutual fund has
money invested in companies that are doing business in so-called rogue
states.

In other words, there are U.S. companies that are helping drive the
economies of countries like Iran, Syria and Libya that have sponsored
terrorists. Correspondent Lesley Stahl reports.
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"The revenue that is generated from the work that these companies are
doing, we believe, helps to underwrite and support terrorism, says
William Thompson, the New York City comptroller who oversees the $80
billion in pension funds for all city workers.

He says he wants everyone with a retirement or investment portfolio to
know what these companies are up to: We're going to increase the
public visibility on this issue until these companies change their
practices.

Hes actually identified specific companies that have invested in these
rogue countries, including Halliburton, Conoco-Phillips and General
Electric. And he points out that New York's pension funds own nearly a
billion dollars worth of stock in these three Fortune 500 companies,
which have operations in Iran and Syria.

What was Thompsons reaction when he found out about this? Anger that
there were companies that could be contributing to attacks on our
nation, he says. Youd think to yourself, well, why would they do that?
I didn't think they could. And more than anything it was, you thought,
that the law prevented them from doing this.
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In fact, U.S. law does ban virtually all commerce with the rogue
nations, but there's a loophole that G.E., Conoco-Phillips and
Halliburton have exploited: The law does not apply to any foreign or
offshore subsidiary so long as it is run by non-Americans.

These three companies, as far as we were concerned, appear to have
violated the spirit of the law, says Thompson. In the case of
Halliburton, as an example, they have an offshore subsidiary in the
Cayman Islands. That subsidiary is doing business with Iran.

That subsidiary, Halliburton Products and Services, Ltd., is wholly
owned by the U.S.-based Halliburton and is registered in a building in
the capital of the Cayman Islands a building owned by the local
Calidonian Bank. Halliburton and other companies set up in this
Caribbean Island, because of tax and secrecy laws that are corporate
friendly.

Halliburton is the company that Vice President Dick Cheney used to
run. He was CEO in 1995 to 2000, during which time Halliburton
Products and Services set up shop in Iran. Today, it sells about $40
million a year worth of oil field services to the Iranian Government.

In the case of Iran, Thompson says they earn most of their revenues
through their oil industry. So what is the connection between that oil
business and terrorism and weapons of mass destruction?

The Iranian Government is receiving dollars from it. And then turning
around and exporting terrorism around the world. It benefits
terrorism. At least that's our belief, says Thompson.
--------------------------------------------------------------------------------
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 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.

If you understood what most of these companies do, you would, they're
not doing any business in Cayman per se. They're doing business,
international business, says Walker. Would it make sense to have
somebody in Cayman pushing paper around? I don't know. And some people
do it. And some people don't. And it's mostly driven by whatever the
issues are with the head office.

Does that mean the head office is calling the shots? If it is, that
would be against the law, which says the subsidiary must be completely
independent of the U.S. company. But 60 Minutes attempts to ask
headquarters in Houston about this were rebuffed.
--------------------------------------------------------------------------------
In a letter to New York City Comptroller Thompson, Halliburton says
its Cayman Island subsidiary is actually run out of Dubai. 60 Minutes
went there and learned that it shares office space, phone and fax
lines with a division of its U.S.-based parent company -- which raises
more legal questions about its independence from Houston. But once
again, our inquiries went unanswered.

In its letter to Thompson, Halliburton insists it is complying with
all U.S. laws. But he and legal experts we consulted believe they are
dancing right along the edge of legality.

If the intent was to try and prevent United States-based companies
from doing business in these "rogue" nations, then it appears as if
they've gotten around what the law had intended, says Thompson, who
filed a shareholders resolution calling on the company to review and
justify its operations in Iran. Halliburton attempted to block the
shareholder resolution. They went to the SEC and asked for permission
not to put this before shareholders.

Did the SEC take it up and rule on it?

Oh, absolutely. The SEC ruled against Halliburton and said that it had
to be put in front of the shareholders, says Thompson, who plans to
file the resolution at the next shareholders meeting in April.

Hes also taking issue with GE and its electrical work in Iran, as well
as Conoco-Phillips' gas production business in Syria: If there are
nations that wind up increasing their resources because these
companies are doing business there, and we're attacked because of it,
it in fact undermines our entire country.
--------------------------------------------------------------------------------
Thompson says he decided to open the investigation in the first place
at the request of New York City's police and firemen, who were
outraged when they learned where their retirement money was going.

The members of the Fire Department and the Police Department, after
September 11th, given the fact that hundreds of them died in the World
Trade Center as a result of a terrorist attack, had greater
sensitivity than almost anybody, says Thompson. And they were the ones
who kind of took the lead on this.

But why do moral issues come into play when talking about pension
funds?
The way we've approached it isn't as on a moral basis, it is as
investors, says Thompson. And what is in the best long-term interests
of our pension funds because we hold stock in these companies.

What these companies are doing, he says, isn't just a question of
ethics - it's financially unsound, and bad for business.
--------------------------------------------------------------------------------
Roger Robinson, who runs a research firm in Washington that monitors
companies working in rogue states, agrees. He cites the case of
Talisman Energy, whose reputation was damaged when it did business
with the Islamic Republic of Sudan. The negative publicity led to
something Wall Street calls "The Sudan Discount of Talisman Stock."

In other words, the share value or stock price was depressed by some
20, 25 percent by some estimates, says Robinson, who believes that
Halliburton and GE could face the same risk.

Robinson has identified nearly 400 companies that are in most pension
portfolios that are doing business in terrorist-sponsoring states.
Well over 200, he says, are actually doing business in Iran; of that,
more than 60 are doing business in Libya.

He says the companies are funneling tens of billions of dollars worth
of capital, technology and know-how to the state-owned oil and gas
sectors of these two countries.

Does he ever say to himself that by revealing this information, hes
taking steps to hurt the company and hurt the pension fund?

I think that it could be looked at another way. We're certainly
alerting investors to a genuine new risk category in the markets,
every bit as legitimate as environmental risk was through Three Mile
Island, Exxon Valdez and superfund legislation, says Robinson. So
investors, we think, have a right to know. Remember, this is their
retirement dollars. They should have a sense of those who invest on
their behalf, are there genuine risks there?

With that question of risk in mind, state treasurers across the
country, like David Peterson of Arizona, are using Robinson's database
to investigate their pension portfolios.

I want to find out what projects they're doing and what is
specifically the dollars they're investing, where they're going, says
Peterson.

Taken together, state-run pension investments amount to something like
$7-trillion dollars.

Connecticut is working on it, adds Peterson. I know Pennsylvania,
their legislature passed unanimously that we need to screen, with the
approval of their pension system, for these risks.
--------------------------------------------------------------------------------
But some of the state treasurers are running into resistance from the
pension funds. In Peterson's case, the Arizona State Retirement System
refused to tell him anything about its holdings.

I have asked the pension system. We'd like to know what investments
you have, the scope of your investments, what companies you're
involved with. We had a legislator ask, says Peterson. We actually had
an intern from this office ask about what investments holdings do they
have in some of these companies. And they just didn't want to provide
it to us.

And Peterson believes that they really dont have grounds to refuse to
give him, as state treasurer, that information.

They've more just kind of tried to be evasive, and said that it's too
hard to get this information, he says.

This went on for months, but to our surprise, when we asked Arizona's
pension fund managers for a list of its holdings, they gave it to us
right away. And it confirmed what Peterson had suspected: that
Arizonans unwittingly own stock in companies like Halliburton, General
Electric and Conoco-Phillips.

There's about 11 to 14 companies that are on the S&P 500 that are
involved in some substantial projects with some of these countries,
says Peterson.
--------------------------------------------------------------------------------
Congress recently directed the Securities and Exchange Commission to
monitor companies operating in rogue nations.

But in New York, Comptroller Thompson isn't waiting. He says he's
going to expand his investigation to include Boeing and other
companies that do business in terrorist states.

Those countries depend on dollars from us to live, to do business
also, says Thompson. If we have, and if we put pressure on the
companies, and they can't do business there, and others become
embarrassed in doing business or buying oil there, well maybe we can
help to force these countries to change their practices.

Does he think this issue's going away?

This issue isn't going to go away any time soon, at all, says
Thompson.

Halliburton declined 60 Minutes' request for an interview, but in an
e-mail, the company indicated it has no intention of leaving Iran --
or addressing the questions we raised about the independence of its
subsidiary.

The company did suggest that Comptroller Thompson is playing politics
with pension funds, insisting there is no connection between its
operations in Iran and either terrorism or nuclear research.

As for General Electric and Conoco-Phillips, they say they are
breaking no laws, and like Halliburton, make no apologies for their
business dealings with states that sponsor terrorism.

MMIV, CBS Broadcasting Inc. All Rights Reserved.

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Evan Ravitz 303 440 6838 evan@Vote.org
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