Dick Cheney’s Nigerian nightmare
Investigators in three countries are probing an alleged $180 million bribe involving Halliburton. How long can the veep keep this tale of international sleaze from dominating the news?
Issue Date: February 27 - March 4, 2004
THESE ARE PERILOUS times for Halliburton, the Houston-based energy-services-and-engineering giant once headed by Vice-President Dick Cheney. The beneficiary of lucrative contracts to provide support services to the US military and to rebuild much of the Iraqi economy, Halliburton — whose 2003 revenues exceeded $16 billion — has been accused of corruption, cronyism, and profiteering. "At a time when Halliburton is defrauding the federal government and facing serious allegations of bribery, we look forward to taking this debate to George Bush," said Massachusetts senator John Kerry, the front-runner for the Democratic presidential nomination, in a statement issued by his campaign earlier this month.
Yet amid embarrassing headlines that accuse Halliburton of taking kickbacks from a Kuwaiti contractor and of overcharging the US government for such necessities as gasoline for military vehicles and meals for the troops, a darker, more ominous story is beginning to emerge. It is a story from a different time and place — 1995 through 2002, in Nigeria. It is a story of alleged corruption on a scale that far exceeds anything with which the company may be involved in Iraq. And because it largely coincides with the period when Cheney was Halliburton’s chief executive officer (1995-2000), it could have far-reaching implications for George W. Bush’s re-election campaign, and beyond.
The story defies easy summary. In essence, an international consortium of four companies, including Halliburton’s Kellogg Brown & Root subsidiary, is suspected of having paid a $180 million bribe to the former government of Nigeria in order to build a liquefied-natural-gas plant in that country valued at $4 billion to $6 billion. The other companies are from France, Italy, and Japan. The alleged bribe has been under investigation since last year by Renaud van Ruymbeke, a French judge with a reputation for probity and independence. Van Ruymbeke has gone so far as to suggest that he may summon Cheney to France to be questioned about what, if anything, he knew about the payments — and possibly even to face legal charges. Recently, the Nigerian government, the US Justice Department, and the Securities and Exchange Commission opened their own inquiries into the Nigerian matter. And Halliburton has retained a lawyer with close ties to the Bush administration to conduct an internal investigation.
"It’s potentially a very serious case," says Charlie Cray, director of the Washington-based Center for Corporate Policy. "Certainly $180 million is a lot of money. It’s not clear to what extent Cheney would have been involved, if at all, at this point. In other words, his fingerprints may not be on it.... On the other hand, it happened on his watch."
The Nigerian affair hasn’t exactly been a secret. You won’t be reading about it in Project Censored’s annual round-up of "the news that didn’t make the news." It has, after all, been reported in some detail on the front page of the Wall Street Journal, on Newsweek’s Web site, and on NPR’s All Things Considered. Dan Rather even gave it a quick, context-free mention recently on The CBS Evening News.
For the most part, though, Nigeria has been mentioned as an aside — if at all — in stories on Halliburton’s mounting scandals in Iraq. On February 14, for instance, in an inside-the-paper story headlined HALLIBURTON LIKELY TO BE A CAMPAIGN ISSUE THIS FALL, the New York Times brushed off Nigeria in the 19th of 22 paragraphs. On February 10, the Washington Post published a story headlined CHENEY, A LITTLE TARNISHED — again, inside the paper. The only reference to Nigeria in the 970-word article was this: "It emerged last week that the Justice Department is investigating whether a Halliburton venture made improper payments in Nigeria when Cheney led the parent company in the 1990s."
Moreover, even when the Halliburton-Nigeria connection is reported, it is rarely suggested that Cheney himself may have been responsible — if not for personally approving the alleged bribe (which seems unlikely), then at the very least for presiding over a culture of sleaze. It’s true that on February 10, the Boston Globe published an editorial asking some pointed questions. "If such payments were made and Cheney approved them, he could be guilty of violating the US Foreign Corrupt Practices Act," the editorial said. "If the payments were made and he did not know about them, he could not have been a hands-on leader of his conglomerate. The nation, in any case, deserves answers before it votes in November if, as President Bush has indicated, he retains Cheney as his running mate."
But unfortunately, the Globe has been the exception rather than the rule. More typical is Newsweek’s report, posted on the magazine’s Web site on February 4, which cautiously notes: "There is no evidence that Cheney was aware of the payments in question and an aide said today the vice president has not been contacted about the probe. Still, the inquiry by the Justice Department’s fraud section — which prosecutes federal anti-bribery law violations — is likely to bring new public attention to the vice president’s past at the giant oil-services firm."
New attention, indeed. On February 6, the London Guardian reported on the role of Jeffrey Tesler, a British lawyer who has been accused of acting as an intermediary in the $180 million deal. The investigation, the Guardian reported in the first paragraph, "could lead to the indictment of Dick Cheney, the US vice-president." And here is the lead of a December 20 dispatch from Agence France-Presse: "A French prosecutor is examining whether to prosecute US Vice President Dick Cheney over alleged complicity in the abuse of corporate assets dating from the time he was head of the services company Halliburton, the French newspaper Le Figaro said Saturday."
At the daily White House press briefing on January 23, President Bush’s press secretary, Scott McClellan, was asked about an Associated Press story reporting that Cheney might be in some legal jeopardy. "So the question is," McClellan was asked, "if the French want to extradite the vice-president to stand trial in France, will the president allow for that extradition?"
McClellan: "Didn’t I just talk about people using this for election-year advantage? John, go ahead."
Q: "No, wait. This is an AP report about a —"
McClellan: "Sorry, John."
Q: "— criminal investigation of —"
McClellan: "John — and we have — I have heard your political commentary about it, and I think we will move on."
REGARDLESS OF whether Halliburton was involved in bribing the former Nigerian government, the fact that Dick Cheney would choose to do business with that corrupt regime is itself significant. During much of the 1990s, Nigeria, an oil-and-gas-rich nation on Africa’s west coast, was under the thumb of Sani Abacha, a brutal military dictator. Most notoriously, the Abacha regime threw thousands of political opponents into prison, and executed nine environmental activists, including the playwright Ken Saro-Wiwa.
That a future vice-president would be heavily involved in business dealings with the Abacha regime should have attracted some attention in 2000, when Cheney was chosen — chose himself, some might say — as George W. Bush’s running mate. After all, in 1996, Carol Moseley Braun, then a US senator from Illinois, was strongly criticized for paying a visit to Nigeria following the death of Abacha’s son. At the time, as recounted in an assessment by Slate, Moseley Braun claimed she was a friend of Abacha’s wife, Maryam. The trip, which also involved charges of financial impropriety on the part of her then-fiancé and campaign manager, Kgosie Matthews, played a role in her defeat when she ran for re-election in 1998. The charges were recycled during her abortive 2004 presidential campaign (see "Hitting with Her Best Shot," News and Features, December 12). In a round-up of current and former presidential candidates on its Web site, the Republican National Committee breathlessly asserts: "Moseley-Braun Made A Secret Trip To Nigeria And Opposed Economic Sanctions Against The Country, Despite Urging From Human Rights And Environmental Activists."
Needless to say, Cheney’s own dealings with Nigeria’s Abacha government were far more extensive than Moseley Braun’s. Yet she is out of politics, and he is just one stent-assisted heartbeat from the presidency. It says much about the different standards to which the media hold Democrats and Republicans. Because Democrats claim to favor human rights and democratic reform, they are lambasted whenever evidence of hypocrisy appears. Because Republicans make no such pretense, they are given a free pass.
Like most Republicans, Cheney pays fulsome lip service to the private sector. But his alliance with Halliburton had more to do with the firm’s desire for political influence than it did with the glories of the free market. According to a recent article in Newsday by James Toedtman, Halliburton’s politicking goes back to the late 1930s, when Kellogg Brown & Root founders George and Herman Brown would send envelopes full of cash to Congressman Lyndon Johnson, who used the money to help his pals with re-election campaigns. "Payback," Toedtman wrote, "came with the awarding of a 1941 Navy contract to Brown & Root for construction of sub-chasers and destroyers, even though the firm had never built a ship."
By the 1990s, the firm that had grown into Halliburton had learned the art of political subtlety. In the New Yorker earlier this month, Jane Mayer reported that Cheney, after serving as the first President Bush’s secretary of defense, had considered running for president. He ultimately decided not to take the plunge — and was hired by Halliburton after a fly-fishing trip in New Brunswick with a group of corporate executives. According to Mayer’s account, Cheney was not hired for his business acumen. "He had virtually no business experience," she wrote, "but he had valuable relationships with very powerful people" — such as Prince Bandar, the Saudi ambassador to the United States. Cheney’s years at Halliburton made him very, very wealthy, bringing him $44 million during his five years at the top.
Halliburton continues to enrich him. Last September, in an appearance on NBC’s Meet the Press, he told host Tim Russert that "since I left Halliburton to become George Bush’s vice-president, I’ve severed all my ties with the company, gotten rid of all my financial interests. I have no financial interest in Halliburton of any kind and haven’t had now for over three years." That was, as a number of observers have pointed out, a bald-faced lie. Mayer reported that Halliburton pays Cheney "deferred compensation" that amounts to $150,000 per year. He continues to hold $18 million in stock options as well, although he has said he will donate any money he makes from those options to charity.
All these elements — a regime that was among the world’s most corrupt; a corporation that had long traded on political connections; and a former US government official looking to cash in — came together in the deal to build a liquefied-natural-gas plant in Nigeria. But the landscape began to shift in 1998, when Sani Abacha dropped dead of a heart attack. Abacha’s replacement, President Olusegun Obasanjo, was democratically elected in 1999. And though Nigeria remains notoriously corrupt (the second-most-corrupt government in the world, according to a monitoring agency known as Transparency International), Obasanjo has taken some halting steps toward changing his country’s reputation. The Baltimore Sun reported last week that the government even plans to crack down on those endless e-mail scams that arrive in your inbox.
This week, the Nigerian House of Representatives is scheduled to begin investigating the matter of the alleged $180 million bribe. "No doubt Nigeria has over the years lost a lot of money through these types of deals, especially in the oil industry," Chudi Ofodile, the official who’s heading the investigation, told Africa News. "If we are serious about the fight against corruption, we should beam our searchlights on these areas."
The illumination from those searchlights could shine all the way to 1600 Pennsylvania Avenue.
ON FEBRUARY 16, Corporate Crime Reporter, a Washington-based newsletter, published an exclusive: Halliburton had hired a lawyer named James Doty to conduct an internal investigation of the Nigerian affair. Doty — who represented George W. Bush when he bought a piece of the Texas Rangers — is a prominent member of the firm Baker Botts, whose best-known partner is James Baker, a long-time associate of Bushes I and II. Doty was general counsel to the Securities and Exchange Commission when Bush II was being investigated for insider trading; Doty recused himself, and the case was eventually dropped.
Russell Mokhiber, the editor of Corporate Crime Reporter, says he intends to keep investigating. This April, for instance, he plans to travel to Paris to attend an international conference on business corruption. Among the expected attendees is Judge van Ruymbeke, who’s heading the French part of the Nigeria investigation. "I want to go over there and talk to the guy and interview him and see what his intentions are," Mokhiber told me.
The risks for Cheney — both legally and in potentially toxic public relations — couldn’t be greater. Mokhiber says Cheney could conceivably be charged under French law with "wasting assets of the corporation." Charlie Cray, of the Center for Corporate Policy, says Halliburton shareholders could even demand that Cheney’s deferred compensation be held in abeyance until the vice-president reveals what, if anything, he knew about the Nigeria affair.
So why have the American media reported so little about this so far? And why have the reports that have appeared played down the hazards that Cheney may face? Brant Houston, executive director of Investigative Reporters and Editors, says there are three factors at work: the media’s distaste for complicated international stories, which has grown over the past decade as many foreign bureaus have been shut down; an understandable reluctance to trumpet the findings of foreign news organizations without independent verification; and concern that coverage of such a story would be seen as politically driven.
"All that being said, I think this is a story that will get very solid, legitimate coverage, since Halliburton will stay in the news because of its ongoing work in Iraq," said Houston in response to an e-mail query. He added that "slowly but surely, US journalism is getting better at realizing the importance of international stories and is getting better at covering them, with or without the necessary resources."
Obviously the investigation into whether Halliburton bribed Nigerian officials has not yet turned up anything definitive. Already, Cheney’s and Halliburton’s defenders have suggested that Judge van Ruymbeke is retaliating against the United States for excluding France from reconstruction contracts in Iraq, or for a US investigation of dubious French business dealings regarding a failed American insurance company in the 1990s. Nevertheless, this is a potentially enormous story stretching across three continents, involving explosive charges of corruption against the backdrop of the presidential election.
Perhaps leading media organizations such as the New York Times, the Washington Post, and the Wall Street Journal have already committed the resources to pulling the pieces together and telling as much of this story as they can. Let’s hope so. Given the stakes, it ranks with the war in Iraq and the struggle against terrorism in importance.
www.bostonphoenix.com/boston/news_features/other_stories/multipage/documents/03633500.asp