Grand Jury=Halliburton=Iran=Cheney

By T. Christian Miller and Peter Wallsten Times Staff Writers

WASHINGTON ?- A Halliburton controversy erupted Tuesday, fueled by a grand jury investigation into whether the oil services giant violated federal sanctions by operating in Iran while Vice President Dick Cheney (news - web sites) 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 provided oil field services in Iran. The unit's operations in Iran included Cheney's stint as chief executive from 1995 to 2000, when he frequently urged the lifting of such sanctions.

Numerous U.S. companies operate in Iran, but under strict guidelines requiring that their subsidiaries have a foreign registry and no U.S. employees, and that they act independently of the parent company.


At issue is whether Halliburton's subsidiary met those criteria.


The Treasury Department (news - web sites) has been investigating the matter since 2001. But Halliburton disclosed in public financial filings this week that the department had forwarded the case to the U.S. 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.


Sen. Frank R. Lautenberg (D-N.J.), whose office has provided information on the case to the Treasury Department, said Tuesday 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 told reporters during a conference call arranged by the campaign of the presumed Democratic presidential nominee, Sen. John F. Kerry of Massachusetts.


Bush 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 characterized the latest criticisms of Halliburton as political.


"The Democrats have made clear that their all-purpose strategy, no matter the issue, whether it's healthcare or John Kerry (news - web sites)'s plans to raise taxes or John Kerry's votes against our men and women in uniform or John Kerry's proposals to cut the intelligence budget, will be met by one word: Halliburton," Schmidt said. "The Kerry campaign has become increasingly flailing in their attacks as there has been increasing focus on John Kerry's record."


Democrats have long criticized Cheney for his connections to Halliburton, hoping to link the vice president to the company's contracts for Iraq (news - web sites) reconstruction and its overbilling for services in that country. Cheney has denied any connection to the contracts.