This is a time when people’s confidence in the system of capitalism is being shaken. It all started with Enron, but then other giants like Global Crossings and WorldCom joined in. People see a pattern here.
Now questions are swirling around Halliburton. The Securities and Exchange Commission is investigating Halliburton for accounting fraud. Judicial Watch, a legal group that hounded former President Clinton, is suing Halliburton for overstating its revenue.
Seems Halliburton reported cost overruns as profits, an apparent no-no in the business world, since a customer can refuse to pay them. (Of course, with customers like the Pentagon, Halliburton and subsidiary Kellogg, Brown and Root, probably weren’t too concerned about this. After all, the U.S. military has never seen a cost overrun that it didn’t like, or pay.)
And, adding to the Halliburton jitters, the company is in court fighting over 200,000 asbestos claims. A recent verdict went against the company to the tune of $150 million.
Halliburton, like Enron, is a huge Texas-based monopoly corporation related to the oil and gas industry. Both companies used the infamous accounting firm, Arthur Andersen, when former Halliburton CEO Dick Cheney praised for their innovative skills.
Halliburton, like Enron, has high-powered executives in touch with the president. Hell, it has the vice president.
Earlier in the year, when rumors ran rampant that Halliburton was going bankrupt, Cedric Burgher, vice president of investor relations, told the press, “We’re not even close to being insolvent. We’re a healthy company.”
When the SEC announced its investigation, Burgher said, “We are very confident that we followed generally accepted accounting principals correctly.”
Then when The New York Times reported that two former executives of Dresser Industries, which merged with Halliburton in 1998, said they thought the company cooked the books to cover up large losses, Burgher disputed the claim, saying that the changes were related to an earlier policy change involving how customers were billed. (A policy change that occurred while Vice President Dick Cheney was the company’s CEO, and that was given the go-ahead by then-auditor Arthur Andersen, reports stated.)
Well, Cedric Burgher should be an expert by now. Because one more thing that Halliburton and Enron have in common is Burgher himself. Burgher was an executive at Enron Corporation from 1996 to 2001, including as vice president of investor relations. It’s a small world, isn’t it?
Halliburton is a case study in why capitalism cannot solve the crises it creates and why it is a systemic problem, not merely a matter of one or two bad apples. Halliburton, which operates in over 100 countries, has been part of the monopoly merger mania, one of the features that has brought on the crises.
The stock market is like a big gambling house. In this present stage, the stock market is really not based on creating anything of value, a key to any system of commodity exchange. It is based on speculation.
So you can just imagine? In the heady 1990s Halliburton must have seemed like a great investment, with its worldwide political and business contacts, getting contracts all over the world and knowing the Pentagon will always be there. And it had Lawrence Eagleburger, former Reagan advisor, sitting on its board to advise the company on the political situation in other countries – insider information, so to speak. Now the future of Halliburton is not so sure.
Lenin pointed out in Imperialism that state-monopoly capitalism is all about the state doing the bidding of these corporate interests. Halliburton’s 2001 annual report said, “Our customers have to find and replace the oil and gas they produce every year. They have to do it from increasingly remote and hostile locations, and they have to bring it to market at a cost that is commercially and politically acceptable.”
Well, it just so happens that right now what is considered politically acceptable is the war on terrorism. How convenient for Halliburton to have such an apparatus as the U.S. military at its service.
The author can be reached at Talbano@pww.org