Sunday, March 11, 2007

Halliburton To Move To Dubai

Via Raw Story, although other news outlets (e.g. the WSJ) are picking up on it too.
Manama- The Houston, Texas-based multinational oilfield services Halliburton Energy Services plans to move its corporate office to Dubai, it was revealed Sunday. Halliburtons chairman, president, and chief executive officer David J. Lesar revealed the plans in Manama on the sidelines of the opening of the 15th Society of Petroleum Engineers Middle East Oil & Gas Show and Conference (MEOS 2007).

Lesar said the move would help the company focus on the Middle East, as he would lead efforts to increase Halliburton business in the Eastern Hemisphere.
That should come in handy if they wanted to, say, walk around US sanctions on US-based businesses doing business with Iran.

But I'm wondering about a couple of things....

I presume Halliburton will pay its taxes in Dubai after the move - that is to say, no taxes at all.

Will there be an outcry about a Dubai-based company carrying out so many essential services for the US military (on the US taxpayers dollar) on the basis that security might be compromised?

Update ABC News says Chuck Schumer smells blood in the water on this one.
Energy analyst Roger Read says if the company formally incorporates itself in the U.A.E., the banking mecca of the Middle East, company profits will soar.

"You'd probably be looking at a tax savings of several hundred million [dollars]. … It's a win for the shareholders," Read said.

Outrage over that possibility had Halliburton scrambling Sunday to explain it had no plans to incorporate abroad. Still, Democrats are suspicious.

"For one of the largest contractors with the United States government to move its headquarters overseas? [It] just doesn't look good, doesn't sound good, doesn't smell good," said Sen. Chuck Schumer, D-N.Y.

The move may raise serious national security questions too, as happened last year with the canceled port security contract with another U.A.E.-based company, Dubai Ports World. Congressional outrage scuttled that deal; Halliburton will now have some explaining to do to avoid similar scrutiny.

"Obviously a company that has its headquarters overseas should be given a little more scrutiny than an American company," Schumer said. "No question about it."

Halliburton is already being investigated by different government agencies for various allegations of improper business dealings, and it is in the cross hairs of Democrats in Congress for alleged overbilling.

At a House Oversight and Government Reform Committee hearing last month, chairman Henry Waxman, D-Calif., noted that a government audit had indicated that Halliburton was responsible for "$2.7 billion in suspect billings."
Can anyone point out to me another company that has the corporate headquarters and the CEO's main nation of residence as different from the nation in which it is incorporated? Does anyone actually believe Halliburton's protestations of innocence?

Think Progress reports that Patrick Leahy (D-VT) certainly doesn't believe the belated spin. Leahy told ABC News it was “an insult to the U.S. soldiers and taxpayers.” Think Progress has the video. It also says Waxman is moving to hold a hearing on the matter to “understand the ramifications for the U.S. taxpayer and national security.”

This could turn out to be a hot-button issue. As one lobbyist pointed out today, "If there’s a huge tax shift, then it’s taking money from U.S. taxpayers while they’re taking no-bid contracts.” That's not going to go down well with an electorate already fed up with Republican cronyism, corruption and corporate giveaways.

Michelle Malkin's beloved Protest Warriors will have a longer bus ride to go defend Halliburtons "honor" too.

No comments: