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Halliburton Settlement Leaves Unsettling Questions

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The Justice Department’s long-standing probe of corruption in connection with Halliburton’s Nigerian contracts—a matter of obvious and acute concern to Vice President Dick Cheney—was rushed to a final settlement just before the arrival of the new Obama team at Justice. Under the settlement Halliburton and its former subsidiary KBR are paying $579 million in fines. The New York Times opines today:

…there are a lot of unanswered questions about Halliburton’s practices in Iraq, with numerous complaints of overpricing and ineptitude. Its corporate conduct in the Nigerian scheme is hardly encouraging and should compel tighter scrutiny of its Iraq failures. Across a decade, KBR and Halliburton paid $180 million in bribes to Nigerian officials to secure $6 billion in contracts for building natural gas processing equipment. Under the settlement with federal authorities, Halliburton will pay most of the penalties, with KBR, its subsidiary during the bribery scheme, pleading guilty to hiring international bagmen to regularly grease Nigerian officials with million-dollar satchels of cash. A former KBR executive who deemed bribery a worthwhile cost of doing business now faces prison time.

That’s true. But put aside Iraq for a moment—there are no shortage of “unanswered questions” about the circumstances of this settlement. Consider the timing and circumstances. We start with a Justice Department which is now itself under strong suspicion of having been politically directed from the White House, with a special prosecutor already appointed and indictments now anticipated. In violation of normal procedures, Alberto Gonzales authorized Vice President Cheney and his staff to deal directly with Justice Department officials on matters of interest to them. We have every reason to ask whether this included the very Halliburton deal that the Bush team pushed through Justice before the new tenants arrived.

Why would Cheney care? For one thing, the corrupt dealings that are the focus of the deal occurred almost entirely between 1995–2000, while Dick Cheney was the CEO of Halliburton. For another, Halliburton tapped Cheney, who had no corporate managerial expertise, principally because of his expertise in government relations and because of his established track record in dealing not only with the U.S. government, but with governments around the world. The thought was that Cheney’s black book would help the company develop its rapidly expanding government contracts business. In other words, the multi-billion dollar Nigerian LNG deals were exactly the sort of thing that Cheney was expected to harvest for Halliburton. For a third, as my colleague Ken Silverstein notes, the man at the heart of the $160 million in corrupt payments, Jack Stanley, was hand-picked by Dick Cheney and had a direct report to him. Moreover, can you imagine a CEO under any circumstances simply not knowing about $160 million in grease payments made in connection with sensitive contract negotiations in Nigeria, a country long ranked at the bottom of Transparency International’s corruption lists?

Dick Cheney has long had very good reason to fear a prosecutor’s knock at the door. It might be his clear role in the outing of CIA agent Valerie Plame. It might be his authorship of the Bush Administration’s torture policy and his advocacy of warrantless surveillance of tens of millions of Americans. Or it might just be something quite mundane, namely, his role in securing a $2.2 billion contract to build a liquefied natural gas plant in Nigeria by making $160 million in corrupt payments to or for the benefit of government officials.

In any event, the Obama Administration are chumps if they sit back and accept the deal the Bush Justice Department concluded for the benefit of Dick Cheney. The whole matter needs to be reopened and examined independently. Let’s hope they consider Patrick Fitzgerald for the job.

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