Mar 13, 2007

On Halliburton, Dubai, and Global Capital

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Skyline of the city of DubaiSkyline of the city of Dubai

News that Halliburton, the U.S. oilfield service conglomerate that is also the largest military contractor in Iraq, will move its corporate headquarters and its chief executive officer to Dubai in the United Arab Emirates certainly fired up the critics. Typical of the derisive comments were those by Senator Hillary Clinton.

"Does this mean they are going to quit paying taxes in America?" she asked. "They get a lot of government contracts, is this going to affect the investigations that are going on? Because we have a lot of evidence of misuse of government contracts and how they have cheated the American soldier and cheated the American taxpayer."

Halliburton CEO Dave Lesar, who leads the exodus to Dubai, explained the rationale behind the corporate decision.

“As we invest more heavily in our Eastern Hemisphere presence, we will continue to build upon our leading position in the North American gas-focused market through our excellent mix of technology, reservoir knowledge and an experienced workforce," he said. "Our talented Western Hemisphere leadership will continue to grow this area of our business. The Eastern Hemisphere is a market that is more heavily weighted toward oil exploration and production opportunities and growing our business here will bring more balance to Halliburton’s overall portfolio."

Despite the howls of protest from Democrats and America-firsters, Halliburton's move should come as no surprise in this era of hyper-capitalism. Corporations owe fealty only to one almighty concept: ever-growing profit margins.

If Senator Clinton were serious about the flight of corporate capital from the United States, she would push legislation to inhibit the practice. The Senator's comments are merely an opportunistic salvo directed in a backhanded fashion to Vice-President Dick Cheney, former CEO of Halliburton.

But that's politics.

The larger issue is the rise of multinationals like Halliburton, operating on a plane of existence above national structures. This, friends, is the future: boom cities like Dubai with exponential growth that appear almost overnight, offering free trade zones to salivating CEOs - at least until the next Dubai comes along.

Then the cycle repeats.

Until we decide that nations and - ultimately, human beings - are more important than multinational corporations, we will continue to see decisions like those of Dave Lesar and Halliburton. I suspect, though, that this era of hyper-capitalism has only just begun.

10 comments:

Anonymous said...

At least the Dems are talking about it, Mike. The Republicans sit back and profit while listening to Perot's GINAT SUCKING SOUND.

--JD

McCaskey said...

A cynic might suggest that Congress should subpeona any and all Halliburton records regarding their contractor work in Iraq and Afghanistan. Including Cheney and any White House correspondance to and from Halliburton and Cheneys' deferred payments, and do it now before Halliburton skips town.

Once they are out of the country, they won't be able to be investigated for activity some might suggest to be criminal and for defrauding the American taxpayer.

A cynic might of course suggest this is why they are leaving, (in addition to avoiding paying US taxes).

A cynic might suggest Halliburton and Cheney are below disgusting. They are evil incarnate.

Some days I can be very cynical.

historymike said...

JD:

Sorry, I'm not going to get all happy because Senators CLinton, Leahy, et al make a few speeches.

As far as I'm concerned, the Dems are just as guilty of enabling corporate irresponsibility as the GOP (think NAFTA).

Our leaders are beholden to the corporations, and until we banish corporate money from politics, our government will continue to be a tool of the multinationals.

BTW - it's "We the People," not "We the Limited Liability Corporations and Corporate Trust Entities."

Are priorities are so convoluted these days - it seems that we take better care of the multinationals than we do human beings.

historymike said...

McCaskey:

It's difficult to avoid cynicism these days. I have read some of the arguments that you mentioned, and there certainly are some ulterior benefits to a Dubai relocation, although admittedly Lesar said that Halliburton will remain a US corporation on paper.

Maggie Thurber said...

Dubai is one of the fastest growing areas in the world, I believe...

They're doing some really creative things with building islands (in an environmentally good way)...

I guess, absent any other issues like those mentioned by mccaskey, I understand why a corporation would want to move their headquarters there.

But I also heard that George Soros just bought 2 million shares of Halliburton...don't know what percentage that works out to, but I can't help but wonder if that has an impact on any of all this...

microdot said...

building islands in an environmentaly friendly way?
not if you read the analysis by environmental scientists and engineers who have written critiques of the project. of course, dubai would only release in their promotional pieces for the islands glowing pictures of the McMansions being built on the giant palm shaped peninsulas.
Dubais' port management companies have become a major conduit for activities that take place out side of the jurisdiction of normal international customs. I read an article from the Guardian Observer which tracked Afghani heroin distribution and showed how Dubais port manegment is used to circumvent customs and how easy it is for those inside the system to use it.
A lot of the money that the sunni arabs funnel to al qaeda goes through dubai.
I would be cynical enough to to say that Haliburton operates outside what we consider norms and moral business practices and has positioned itself to keep its finger in the Iranian oil development business with out messy American Government nosiness and out of the eyes of the press. They have had a continued business presence there through out the Iraq war and all the administrations posturing about Iran.
Reality these days is always more bizarre than your imagination.

Mark Czerniec said...

Multinational corporations are monsters of our own making. If they seek ever-escalating profits, they do so at the behest of their stockholders, many of whom are our neighbors, coworkers, family members, and selves, invested either directly or through fund portfolios and demanding only a high return.

It is as if we walk around talking about ethics and loyalty and the environment and community and health care and retirement benefits and human beings all day, then go out sleepwalking as robber barons all night to grab as much loot as possible, only to wake up and complain about the ruthless corporations the next day.

McCaskey said...

From Juan Cole's website today:


"In other news, Vice President Dick Cheney announced Wednesday that he would be moving the Vice President's offices to Dubai, as well. "I'm under way too much scrutiny to risk living in the Naval Observatory much longer," he told reporters at a press conference held in the Ski Dubai Indoor Resort. "Besides, most of my marching orders come from Halliburton, Exxon Mobil, and the local oil sheikhs, and think how much I'll save on long distance calls."

historymike said...

Maggie:

Soros, in my eyes, is an example of one of the worst forms of capitalist excess. He has made most of his money attacking national currencies, like his 1992 blitzkrieg against the British pound and his role in the 1997 atacks on Asian currencies like the Thai baht.

Some in the American center and the left worship him, especially for his 2004 efforts to unseat GWB, but he represents an elite financial class that produces nothing.

His hedge funds can destroy entire national currencies (and, ultimately economies) almost overnight.

Hooda Thunkit said...

This may seem simplistic but, why don't we legislate that we will only issue those large to U.S. companies/presences?

Halliburton may still leave, but they will have to keep some sort of business office here and pay those taxes here.