WASHINGTON -- Another Halliburton controversy erupted yesterday, this time fueled by a grand jury investigation into whether the oil services giant violated federal sanctions by illegally operating in Iran while Vice President Dick Cheney was running the company.
The investigation centers on Halliburton Products and Services Ltd., a subsidiary registered in the Cayman Islands and headquartered in Dubai that provides oil field services in Iran. The unit's operations in Iran included Cheney's stint as CEO from 1995 to 2000, when he frequently urged the lifting of such sanctions.
Current law forbids US companies from doing business with countries considered by the US government to be sponsors of terror. The list includes Iran, North Korea, Cuba and Sudan. However, numerous US companies operate indirectly in Iran under strict guidelines requiring that their subsidiaries have a foreign registry and no US employees, and act independently of the parent company. At issue is whether Halliburton's subsidiary met those criteria.
The Treasury Department has been investigating the matter since 2001. But Halliburton disclosed in public financial filings this week that the Treasury Department, which had been investigating the matter since 2001, had forwarded the case to the US attorney in Houston for further investigation. The company said a federal grand jury had subpoenaed documents on its Iranian operations.
The Treasury Department refers such complaints only after finding evidence of ''serious and willful violations" of the sanctions law, a government official said.
Senator Frank Lautenberg, Democrat of New Jersey, whose office has provided information on the case to the Treasury Department, said yesterday that Halliburton Products and Services was a ''sham" that existed only to circumvent the sanctions.
''It's unconscionable that an American company would skirt the law to help Iran generate revenues," Lautenberg said during a conference call arranged by the campaign of Democratic presidential candidate John F. Kerry.
President Bush's campaign spokesman, Steve Schmidt, called the allegations against Cheney baseless and accused Democrats of trying to use Halliburton as a distraction. Cheney's office and the White House called the latest criticisms of Halliburton political.