October
2000
For
Dick Cheney, Oil & Politics Do Mix
By Project Underground
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Having ensured the continued flow of cheap oil
from the Persian Gulf by waging a war with Iraq, former Secretary
of
Defense Dick Cheney turned his attention to the corporate world after
his boss, President George Bush’s ouster from office in 1992. In
1993 he joined the American Enterprise Institute in Washington as a
senior fellow. In October of 1995 he became president and chief executive
officer of the Halliburton Company in Dallas, Texas. He also serves
on the boards of Procter & Gamble, Union Pacific and Electronic
Data Systems Corp., and serves on several committees that determine
compensation packages for executives of various companies.
Halliburton Co. is the leader amongst the world’s diversified energy
services companies. Oil & Gas Journal’s list of top energy
companies in the world ranks Halliburton 24th by market value at $18.2
billion. In 1999, its consolidated revenues were $14.9 billion and
it
had a workforce of about 100,000 in more than 120 countries. It provides
equipment and other services to oil and natural gas companies for exploration
and production.
Cheney has stepped down as CEO of Halliburton having teamed up with
George W. Bush as the Republican party’s vice presidential hopeful
in the upcoming 2000 elections.
Track Record
Under Cheney’s leadership, Halliburton has been accused of
involvement in human rights violations, most notably an incident reported
by the group Environmental Rights Action (ERA) which occurred in September
of 1997 when 18 of Nigeria’s Mobile Police (MOPOL) officers on
the orders of Halliburton (contracting for Chevron Oil Co.) shot and
killed unarmed protester Gidikumo Sule at the Opuama flow station in
the city of Warri.
Cheney’s record on environmental issues is dismal too: as a House
Representative from Wyoming from 1978 to 1989, he co-sponsored a measure
to open up the Arctic National Wildlife Refuge in Alaska to oil drilling
and voted against the Clean Water Act which required industries to publicly
release their records on toxic emissions. The Sierra Club, quoting from
1997 Environmental Protection Agency data, has pointed out that Halliburton’s
facility in Duncan, Oklahoma was in the top 20 percent of the dirtiest
in the U.S.
Brown & Root–Murphy LLC, a joint venture equally owned by Halliburton’s
Brown & Root Energy Services business unit, are involved in a controversial
pipeline construction, the so-called Bolivia–Brazil Gas Pipeline
Project (see sidebar). Brazilian environmental groups, along with the
Defense of Pantanal Association and the Brazilian Institute of Cultural
Heritage, have expressed concern over the project; and trade unions
in both countries have expressed anger over the private sector role
in the project. In addition, several environmental groups from the
U.S.
have asked why the project is proceeding without allowing communities
to respond to the company proposals.
Cheney is also a member of a group called COMPASS (Committee to Preserve
American Security and Sovereignty) that is affiliated with the conservative
George C. Marshall Institute. In 1998, COMPASS members—including
Cheney—wrote to President Clinton to protest the Kyoto climate
change treaty, concluding with the zinger that Kyoto appeared to be
"nothing more than a ‘feel good’ public relations ploy."
Background
Cheney once drew parallels between his role as CEO of Halliburton and
his role as defense secretary. Addressing the Gulf Coast Association
of Geological Societies convention in Corpus Christi, Texas in 1998,
he observed: "In the oil and gas business, I deal with many of
the same people." With a $45.5 million stake, he is Halliburton’s
biggest individual stockholder. This past June, cashing in on the high
price of oil, Cheney began exercising his stock options and sold 100,000
shares of stock for an estimated $5.1 million. Then again in August,
he sold off another 660,000 shares—worth $35 million—raking
in a $18.5 million profit. In September, Cheney stated that if the
Republican
ticket is elected he will forfeit his additional 233,000 shares, worth
$3.7 million. Halliburton has also been active on the political front,
donating almost $200,000 to the 2000 Republican campaign.
Cheney is on record as favoring higher prices in oil and has complained
that he should not be required "to give away all my assets" in
order to return to public life. According to an examination of regulatory
filings, as CEO Cheney raked in $1.28 million in salary and $640,914
in other compensation last year. Add to this the roughly $20 million
in stock options that Cheney has been cashing in on, the compensatory
amounts rocket up to dizzying heights. Comparing this to the $181,400
salary of the U.S. vice president raises interesting questions.
Cheney’s motivations are clearly guided by his stated philosophy.
In October 1999, speaking at the Louisiana Gulf Coast Oil Exposition,
he said that members of the oil business could help the industry to
become more effective by becoming active in the political arena and
helping elect the right people to office. He also noted that the oil
industry needed to do a better job of telling its story to the public,
such as the importance of the oil and gas industry, and the task of
finding, producing, refining and distributing energy at a bargain price.
He therefore brings to the Bush campaign and possible presidency an
agenda of helping increase the oil industry’s public profile and
bridging the remaining divide between politics and oil money. Cheney
is clearly forward-looking and the maximization of oil profits is a
stated goal of his. He was quoted in "Corpus Christi online"
proclaiming: "By the year 2010 the oil and gas industry will have
to provide 43 million barrels per day to meet demand…There will
indeed be plenty of work in the years ahead…As long as we are good
as we are—and reducing costs." His cost reduction strategy
is exemplified in the fact that, under his leadership, he organized
a merger between Dresser Industries Inc. and Halliburton that resulted
in a 7,000 employee cutback worldwide.
Given his track record, should Cheney become vice president, it is safe
to assume that he will work hard to foster even closer ties between
the oil industry and U.S. politics. As we have seen, Cheney has been
awarded a $20 million golden parachute in appreciation of his five years
of service as CEO of Halliburton. Is this a generous retirement package
or not-so inadvertent campaign contribution?
Project Underground is a vehicle for the environmental, human
rights and indigenous rights movements to carry out focused campaigns
against abusive extractive resource activity from mining and oil industries.
Visit www.moles.org
or call (510) 705-8981 for more information. Reprinted from their website
with kind permission.
The Bolivia-Brazil Pipeline Project
At a cost of $2 billion, the Bolivia-Brazil pipeline
is one of the single largest private-sector investments in Latin America.
The pipeline will total some 3,000 kilometers in length. The main portion
of the pipeline, stretching from Santa Cruz to Puerto Suarez, is already
complete, traversing the Pantanal wetlands of Bolivia and Brazil. Construction
is headed for the Chaco and other subtropical forests of Bolivia and
for threatened Brazilian Atlantic forests in the states of Santa Catarina
and São Paulo.
In 1997, the World Bank and the Inter-American Development Bank approved
$550 million in loans to Petrobas, the principal owner of the Brazilian
portion of the pipeline. On the Bolivian side, Shell and Enron Corporations
own nearly 80 percent of the pipeline.
According to environmental groups, accountability measures to control
the environmental and social impacts of the pipeline construction have
not been established. Indigenous populations and pristine ecosystems
will be heavily affected, and reports are already indicating negative
impacts. When construction began in 1998, approximately 1,000 construction
workers overwhelmed the community of El Carmen, Bolivia. The pipeline
was built within 600 meters of the local school, and was accompanied
by illegal logging, the construction of new access roads into the forest
and misconduct by construction workers, including alleged sexual abuse
of local women.—Compiled from the website of Amazon Watch, see
amazonwatch.org.
