Halliburton – Costly Connections?
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Code : GOV0004
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Region : USA |
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Introduction: Halliburton, one of the world’s largest providers of oil and gas exploration services, was mired in controversies. The Vice President of USA, Richard Cheney (a.k.a. Dick Cheney), was a former chairman and CEO of this firm. The firm was awarded a no-bid contract of $7 billion1 for bringing fuel into Iraq fromthe most optimal routes, and providing food and other amenities to the American troops in the region. It was widely believed that this contract was awarded to the company due to its connection with the Vice President.2 It was said that the company was a beneficiary of the Bush Administration’s favoritism and that the company overcharged the military in Iraq for everything from gasoline to meals.3 However, Halliburton defended saying that they got the contracts because they were the “biggest and the best” in the business and not because of their contacts (Annexure I). Amidst speculation about investors’ reaction, Halliburton announced inMarch 2004 that a formal audit by the Pentagon about its procurement procedures in Iraq and Kuwait could hurt company’s liquidity if they are asked to make refunds or withhold billing. |
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