>Question: given that a lot of big government contractors (c.f. Ross
>Perot's "self-made" success) made their fortunes by greasing
>connections, are there specific reasons why KBR (if they can be
>described as even having an identity separate from Halliburton--can
>they?) is worse than e.g. Bechtel? I assume Nomi Prins goes into
>this in her forthcoming work...
Nomi writes:
>The main reasons Halliburton could be considered worse than Bechtel (or
>evil in general) are:
>- Cheney's dual corporate role and seniority in Bush administrations
>I&II
>- Halliburton is a publicly traded company that has both fraudulently
>and consistently inflated earnings and inflated government contract
>costs. They are thus responsible for both duping investors and general
>taxpayers.
>
>Related bits paraphrased from my book:
>
>1) In the five years prior to Cheney's arrival at Halliburton, Brown and
>Root received about $100 million in loans and guarantees from the
>Export-Import Bank and the Overseas Private Investment Corporation
>(OPIC). After Cheney came on board, Kellogg Brown & Root's cut from the
>government increased to $1.5 billion.
>
>2) When Cheney joined Halliburton, the company did less than $300
>million a year of business with the defense department, 98 percent of
>which went to Kellogg Brown & Root. During his reign, that figure
>increased by 60 percent.
>
>3) While at Halliburton, Cheney was skilled at accumulating accounting
>irregularities, amounting to a 7 percent inflation of after-tax profits.
>The SEC finally opened an investigation into those practices in July
>2002, but no guilt was found and no fine levied. The investigation
>continues.
>
>4) In December 1998, Cheney elected to defer 1999 compensation for five
>years of fixed installments plus interest, thereby remaining linked to
>Halliburton throughout his first term as vice president.
>
>5) Since Cheney joined the White House, the backlog of Halliburton's
>government generated revenue went up 40 percent.
>
>6) To date, from contract related over-charging, Halliburton has paid a
>total of $8.3 million in fines (including $2 million for maintenance
>contract overcharges in 2002 and $6.3 million for kick-backs to two
>workers in Kuwait.) They have not disclosed any details for how the $3.6
>billion they've so far received for Iraq related projects has been
>spent. There are impending investigations, but no fines so far for $243
>million of overcharges (including on gasoline and general bribery)
>related to Iraq.