Few companies have generated as much controversy as the Halliburton Corp. and its KBR subsidiary. Due to its connections to the White House (Dick Cheney was the
Halliburton chief executive before becoming Vice President) and its ability to secure no-bid contracts within the reconstruction efforts following the U.S. invasion and occupation
of Iraq, Halliburton has been open to heavy and endless criticsm for much of the past five years. Recent news developments relating to both the White House and Iraq have put the
company back in the news. But do these stories give Halliburton a much-needed Good PR boost, or is the company stuck in a Bad PR swamp?
| The PR Focus | Good PR or Bad PR? |
|---|---|
| When Vice President Cheney's tax returns were made public last month, it was discovered he earned $211,465 from Halliburton in 2005. Why is
Cheney still receiving money from a company he left six years ago? It seems it is a part of a deferred compensation package devised when he left Halliburton to run for Vice President. The compensation package was structured for payments over a span of years (thus softening the tax ax that would otherwise slice him at a single payment). |
BAD PR: These continued payments contradict a September 2003 Cheney statement when he claimed: "I have no financial interest in Halliburton of
any kind and haven't had now for over three years." The 2005 payment was also higher than his annual Vice President's salary ($205,031). Such payments make for Bad PR but they are not illegal (the President and Vice President are the only federal officials excluded from prosecution under ethics laws on receiving payments of this nature). |
| The April 25 edition of the New York Times featured a page one article with the headline "Rebuilding of Iraqi Pipeline as Disaster Waiting to
Happen." The article detailed how Halliburton subsidiary KBR spent $75.7 million in a thoroughly unsuccessful effort to build the Al Fatah pipeline crossing (where 15 pipelines crossed the Tigris River to link Iraq's northern oil fields with its southern refineries and export terminals). The project was doomed because it was being built on unstable foundations. |
BAD PR: KBR received a $24.5 million no-bid contract at the start of the Iraqi invasion for the pipeline rebuilding, yet the Times reports the
company ignored its own geotechnical report warning not to begin work without conducting extensive underground tests (it was later discovered KBR was drilling on tectonic fault zones). The Times adds KBR initially refused to provide the U.S. Army with updates, and later the project stalled due to equipment shortages and security concerns. No oil is currently flowing at Al Fatah. |
| On April 7, the Senate Democratic Policy Committee held hearings on allegations that KBR exposed American military personnel to contaminated
water from Iraq's Euphrates River. Capt. Michelle Callahan, MD, a U.S. Army surgeon, told the committee that the contaminated water (which contained human fecal matter and carried coliform bacteria and e-coli) was also used for shaving, dental hygiene, laundry and even food preparation. |
BAD PR: An internal KBR corporate memo, obtained by the Committee, states: "No disinfection to non-potable water was occurring (at Camp Ar
Ramadi) for water designated for showering purposes. This caused an unknown population to be exposed to potentially harmful water for an undetermined amount of time." KBR and Halliburton executives refused to participate in the Committee hearings, nor would any Republican senator join this investigation. |