I’ve been websearching but so far to no avail. I came across some comments about Halliburton that I find hard to believe. While they don’t deny preferential contracts, they conclude that the profit margin of the Iraq contracts look very small.
This is from an article in the NYT:
"The rebuilding of Iraq’s oil industry has been characterized in the months since by increasing costs and scant public explanation. An examination of what has grown into a multibillion-dollar contract to restore Iraq’s oil infrastructure shows no evidence of profiteering by Halliburton, the Houston-based oil services company, but it does demonstrate a struggle between price controls and the uncertainties of war, with price controls frequently losing. …
So far this year, Halliburton’s profits from Iraq have been minimal. The company’s latest report to the Securities and Exchange Commission shows $1.3 billion in revenues from work in Iraq and $46 million in pretax profits for the first nine months of 2003. But its profit may grow once the Pentagon completes a formal evaluation of the work. If the government is satisfied, Halliburton is entitled to a performance fee of up to 5 percent of the contract’s entire value, which could mean additional payments of $100 million or more. …"
And this is a quote from Steven Kelman, a former Clinton administration official:
“Many people are also under the impression that contractors take the government to the cleaners. In fact, government keeps a watchful eye on contractor profits – and government work has low profit margins compared with the commercial work the same companies perform. Look at the annual reports of information technology companies with extensive government and nongovernment business, such as EDS Corp. or Computer Sciences Corp. You will see that margins for their government customers are regularly below those for commercial ones. As for the much-maligned Halliburton, a few days ago the company disclosed, as part of its third-quarter earnings report, operating income from its Iraq contracts of $34 million on revenue of $900 million – a return on sales of 3.7 percent, hardly the stuff of plunder.”
If this information is true, I can’t believe why Halliburton is such a big deal to the Democrats except for the stereotype of a “big, evil oil corporation.” (Again, the issue of preferential contracts aside.) Does anyone have any info that contradicts these figures or puts them in a more constructive context?
The profit margins reported to the SEC are usually reduced because of off shore accounts for multi national corporations. Corporations are not required to report money or operating income produced from operations in other countries. Halliburton is such a big target for democrats because Cheney was the CEO and supposedly only Halliburton can perfrom some of the tasks in Iraq, i.e. meal service, fuel trucking, etc. Halliburton and Iraq are a huge scam to the American people.
Also, I believe that Haliburton is one of only a handful of companies that can actually do what they’re doing. I remember hearing a French company might be able to, but they’re French.
I wonder if they have to publish the breakdown on profits and losses for the various operating divisions within the company. Probably not. For all we know they could be running at 25% profit on the Iraq contracts, and shifting costs and write offs to other areas to show an overall weak profit on paper. The CEO and other execs will still get their bonus, no harm no foul right?
As for your other question, let’s see if I have this about right:
Cheney is CEO of Halliburton;
Cheney becomes vice president of US; Cheney lobbies hard for invasion of Iraq;
Halliburton somehow is “the only company in the world” that can provide the services needed in Iraq, and is awarded a no-bid contract.
No, I don’t see an issue there either.
You continue to make the assumption that anyone who opposes bushleague or his corrupt administration has to be a “liberal” or a democrat. Bushleague has managed to allientate more than enough moderate republicans like myself to have a real problem this fall. You and Buffy/Wetwipe probably won’t recognize that until sometime in January, though.
You wanna talk about corporate welfare? How about Halliburton getting $600m for fight oil well fires that never happened. There were roughly 12 oil well fires this time around that were actually put out by a Kuwaiti firm. Of course, Halliburton kept the $660m! Gimme a break. Are they scamming the government on thier chow hall contract? Well, considering that I’ve read 3 reports of spoiled and/or tainted food and at least one report of a food inspector being sent back to the U.S. because she wouldn’t keep her mouth shut about the state of KBR’s chow halls in Iraq. You tell me. If you got $30m to run chow halls and you were serving spoiled/rotten food----do you think that could be a scam? The stories about how Halliburton’s KBR subsidiary is running their slice of the pie over thier make me (as a former Marine) wanna puke.
Yes Buffy, it’s true. I’d vote for McCain in a heartbeat. I’ve been a registered Republican all my adult life, which is probably more years than you have total. I’m socially fairly moderate and fiscally pretty conservative, even Libertarian on many issues. So having a jackass for president who thinks Pat Robertson should be the pope and spends like a drunken sailor is a real bummer for me.
I guess I just missed the part of the Party contract that says I must “love, honor and obey” any dipshit who calls himself a Republican president, no matter how stupid and corrupt he turns out to be. Sorry, I’ll go back and read that part again.
From NPR:" Iraq has become an important profit center – contracts there netted the company (Halliburton) $900 million for the quarter, 15 percent of its operating budget. The Iraq contracts are cost-plus: the government reimburses the company for its costs, then adds on a profit of 2 percent to 7 percent. Critics say this creates a perverse incentive: the more you spend, the more you make. The Pentagon says this type of flexible contract is necessary in a war zone."
From the Washington Post: “Halliburton Co., under fire for alleged overcharges on its government contracts in Iraq, reported yesterday that it made an $85 million profit on $3.6 billion in revenue from Iraq work last year.”
Something doesn’t add up…
According to the Pentagon it gives an extra 2% over whatever the company REPORTS as it’s profit margin - so a typical margin, as the Gvmt itself reports is 7%, tack on 2%, figure in 3.6 billion in reported revenue = helluva lot more than $85 million.
Not to mention the issue of rise in Halliburton stock, of which Cheney owns 433,333 in options.
“Despite the burning issues, Halliburton’s share price in 2002 surged nearly 50 percent ? ranking it among the Top 10 performers in the Standard & Poor’s 500 index.” (Houston Business Journal)
Also, try doing a search on Halliburton bribes to Nigerian tax officials (the case now involving Cheney before the Supreme Court).
Okay then. HUGE conflict of interest! All that money for NO BID contracts for a company that obviously prefers cutting corners to actually fulfilling its end of the contract. By the way, the fact that Cheney was their CEO has nothing whatsoever to do with the government’s preference for doing business with them. HAHAHAHA. That’s some funny shit. Beach-front property in Nebraska anyone?
When it says, " Iraq…netted the company (Halliburton) $900 million for the quarter," that refers to REVENUE, not profit.
When describing the system, it says “then adds on a profit of 2 percent to 7 percent,” we have to rememeber that the reported profit was 3 point something. So even if they add 2% on top of that, it’s not going to be significant.
I also read the Washington Post article. 85 million profit on 3.6 billion revenue is not as much as they currently report, an amount that is still very small. Maybe their costs decrease as the operation goes on.
So Brian, you actually believe Halliburton is honest in reporting 3% profit?
Well then you must check into that beachfront Wyoming property Cheney is selling (I hear his stock portfolio is really hurting).
This from a company that has admitted to bribing Nigerian tax officials to the tune of $2 million, has had to settle suits regarding asbestos, and have been under investigation by the SEC for fraudulent securities transactions (during Cheney’s tenure)
“Brown and Root has been also been investigated for over billing the government in its domestic operations. In February 2002, Brown and Root paid out $2 million to settle a suit with the Justice Department that alleged the company defrauded the government during the mid-1990s closure of Fort Ord in Monterey, California.” (from Corpwatch.org).
Further: “Whether you characterize it as fraud or sharp business practices, the bottom line is the same: the government was not getting what it paid for,” says Michael Hirst, of the United States Attorney’s Office in Sacramento, who litigated the suit on behalf of the government. “We alleged that they exploited the contracting process and increased their profits at the governments expense.”
Just another cheating corporation led by a amoral CEO who then became a lying vice president.
Now you know why the Democrats make such a fuss over Halliburton. It’s very easy to spread loads of false accusations and crap about the company and people actually believe it. People want to believe that corporations are screwing them over, so the Dems make up lies about it and associate the Republicans with the company. And most people, as evidenced by this thread, don’t have enough basic business and economic knowledge to tell the truth from lies.
Is Halliburton perfect? Of course not. I’m sure they have their share of idiots on the pay roll, but they certainly aren’t the embodiment of evil you’re led to believe. (I think that’s Enron.)
Why is it that nobody complains about Bill Clinton hiring Halliburton to handle things in Bosnia? I don’t think Halliburton even HAD a contract back then.
As for Halliburton’s stock price soaring? It’s still lower than where it was before 9-11. (See the pink dotted line in the picture. You probably can’t see the whole picture, but you can probably download it.) And at $30.68 it’s not exactly astronomical; it’s still 33% below its high.
Kuri, I didn’t say I believed Halliburton was honest or not in reporting its profits. I’d like to see evidence on whether substantial cash has been shunted. Still, like the Clinton man said, there may just be an intrinsically small profit margin for these kinds of contracts. I just don’t rush to judgement on innuendo and stereotypes. I try to look for facts. You know, those are the things that sometimes become inconvenient to a worldview.
I don’t deny for a second that the Dems have blown some of the stories about Hallibuton out of proportion (hello politics!), but the fact that they have repeatedly been investigated and FINED by the DOJ can’t be disputed. The reason it keeps happening is because a $3m fine is nothing compared to a $1.5b contract. Business as usual…
