Senators Question Halliburton Executive About Dealings in Iran
A Halliburton executive, facing withering criticism from Democratic lawmakers during a Senate hearing on Monday about the company’s business dealings in Iran, insisted that the firm had not broken any laws.
The official, Sherry Williams, a Halliburton vice president and corporate secretary, said the company had consulted several law firms in 1995 after sanctions were imposed on Iran. Officials of the company, which recently announced it was moving its chief executive from Houston to Dubai and establishing a corporate headquarters there, determined that it was legal for independent foreign subsidiaries of United States companies to do business there, she said.
“We have followed U.S. law,” she said. “We will continue to follow U.S. law.”
Although the three Democratic senators on hand repeatedly suggested broader concerns than strict legality should have prompted the company to halt its business in Iran, Ms. Williams expressed no regret for the firm’s work there.
From 1995 to 2000, Vice President Dick Cheney was Halliburton’s chairman; at the time he spoke out against sanctions on Iran.
Halliburton announced recently that it had completed its outstanding contracts in Iran and was leaving the country, fulfilling a promise it made in 2005 to wrap up its work there.
Senator Frank R. Lautenberg, a New Jersey Democrat who has helped lead the investigation into the company’s work in Iran, said Halliburton effectively financed terrorism by doing business there.
“Companies that help terrorist states generate revenues that are helping fund terrorist operations,” he said. “It’s that simple.”
Senator Byron L. Dorgan, chairman of the Senate subcommittee that convened the hearing, was similarly blunt.
“Was there any discussion about whether from a values standpoint doing business through a foreign subsidiary with a prohibited country like Iran was in fact helping the terrorists?” he asked Ms. Williams.
Ms. Williams said she was “not a part of those discussions.” She cited an array of factors driving the decision to leave Iran, including the difficulty of working in the country and diminishing business there.
Senator Sherrod Brown, an Ohio Democrat, said he was incredulous that the reasons did not include “anything to do with patriotism or anything to do with the values that I think our country holds dear.”
In 2004, the Department of Justice began an investigation of the company’s work in Iran, which Ms. Williams said she believed was continuing.
Federal law generally prohibits United States companies from doing business with countries, like Iran, that are on a State Department list as sponsors of terrorism. But a gap in the law when it comes to Iran allows foreign subsidiaries of American corporations to do business there as long as they operate independently.
Halliburton’s work in Iran was carried out under the name of a subsidiary registered in the Cayman Islands with headquarters in Dubai: Halliburton Products and Services Limited.
Mr. Lautenberg has introduced legislation to close the loophole for foreign subsidiaries. Meanwhile, Mr. Brown and Mr. Dorgan have introduced a bill to prohibit the awarding of government contracts to any company doing business with state sponsors of terrorism.
The senators pressed Ms. Williams about whether Halliburton’s subsidiary in Iran was truly independent of the parent company, citing a “60 Minutes” report in 2004 that found the Cayman Islands address for the subsidiary was little more than a mail drop and that in Dubai it shared office space, phone and fax lines with a division of Halliburton.
But Ms. Williams said the Cayman Islands registration was “perfectly appropriate under the law.” She noted that Halliburton itself was registered in Delaware, even though it has no offices there.
As for the Dubai office, she said that work for the subsidiary actually took place at a different location. Even the telephone number for the subsidiary listed in the phone book “is actually incorrect,” she said. She described the address visited by “60 Minutes” as a “registration office” that the subsidiary used when it was changing its names at one point.
But Mr. Lautenberg produced documents from an Iranian oil subsidiary that were addressed to the Halliburton subsidiary at the same address in Dubai, which he said cast doubt on her statements.
William C. Thompson Jr., the New York City comptroller who runs several city pension funds that invest in Halliburton, has pressed vigorously in the past few years for the company and others to stop doing business in Iran.
“Unfortunately, it’s become clear over a period of years that while things may be legal, it doesn’t mean that they are ethical,” he said at the hearing. “And I believe that unless you close the loophole, companies will continue to attempt to do business in backdoor fashions.”
A Halliburton executive, facing withering criticism from Democratic lawmakers during a Senate hearing on Monday about the company’s business dealings in Iran, insisted that the firm had not broken any laws.
The official, Sherry Williams, a Halliburton vice president and corporate secretary, said the company had consulted several law firms in 1995 after sanctions were imposed on Iran. Officials of the company, which recently announced it was moving its chief executive from Houston to Dubai and establishing a corporate headquarters there, determined that it was legal for independent foreign subsidiaries of United States companies to do business there, she said.
“We have followed U.S. law,” she said. “We will continue to follow U.S. law.”
Although the three Democratic senators on hand repeatedly suggested broader concerns than strict legality should have prompted the company to halt its business in Iran, Ms. Williams expressed no regret for the firm’s work there.
From 1995 to 2000, Vice President Dick Cheney was Halliburton’s chairman; at the time he spoke out against sanctions on Iran.
Halliburton announced recently that it had completed its outstanding contracts in Iran and was leaving the country, fulfilling a promise it made in 2005 to wrap up its work there.
Senator Frank R. Lautenberg, a New Jersey Democrat who has helped lead the investigation into the company’s work in Iran, said Halliburton effectively financed terrorism by doing business there.
“Companies that help terrorist states generate revenues that are helping fund terrorist operations,” he said. “It’s that simple.”
Senator Byron L. Dorgan, chairman of the Senate subcommittee that convened the hearing, was similarly blunt.
“Was there any discussion about whether from a values standpoint doing business through a foreign subsidiary with a prohibited country like Iran was in fact helping the terrorists?” he asked Ms. Williams.
Ms. Williams said she was “not a part of those discussions.” She cited an array of factors driving the decision to leave Iran, including the difficulty of working in the country and diminishing business there.
Senator Sherrod Brown, an Ohio Democrat, said he was incredulous that the reasons did not include “anything to do with patriotism or anything to do with the values that I think our country holds dear.”
In 2004, the Department of Justice began an investigation of the company’s work in Iran, which Ms. Williams said she believed was continuing.
Federal law generally prohibits United States companies from doing business with countries, like Iran, that are on a State Department list as sponsors of terrorism. But a gap in the law when it comes to Iran allows foreign subsidiaries of American corporations to do business there as long as they operate independently.
Halliburton’s work in Iran was carried out under the name of a subsidiary registered in the Cayman Islands with headquarters in Dubai: Halliburton Products and Services Limited.
Mr. Lautenberg has introduced legislation to close the loophole for foreign subsidiaries. Meanwhile, Mr. Brown and Mr. Dorgan have introduced a bill to prohibit the awarding of government contracts to any company doing business with state sponsors of terrorism.
The senators pressed Ms. Williams about whether Halliburton’s subsidiary in Iran was truly independent of the parent company, citing a “60 Minutes” report in 2004 that found the Cayman Islands address for the subsidiary was little more than a mail drop and that in Dubai it shared office space, phone and fax lines with a division of Halliburton.
But Ms. Williams said the Cayman Islands registration was “perfectly appropriate under the law.” She noted that Halliburton itself was registered in Delaware, even though it has no offices there.
As for the Dubai office, she said that work for the subsidiary actually took place at a different location. Even the telephone number for the subsidiary listed in the phone book “is actually incorrect,” she said. She described the address visited by “60 Minutes” as a “registration office” that the subsidiary used when it was changing its names at one point.
But Mr. Lautenberg produced documents from an Iranian oil subsidiary that were addressed to the Halliburton subsidiary at the same address in Dubai, which he said cast doubt on her statements.
William C. Thompson Jr., the New York City comptroller who runs several city pension funds that invest in Halliburton, has pressed vigorously in the past few years for the company and others to stop doing business in Iran.
“Unfortunately, it’s become clear over a period of years that while things may be legal, it doesn’t mean that they are ethical,” he said at the hearing. “And I believe that unless you close the loophole, companies will continue to attempt to do business in backdoor fashions.”
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