Halliburton Makes Good It's Escape

[vandecamp]

Running for the border, Halliburton makes a definitely timely exit.
Claiming it will recieve no tax advantage for the move, the company will be making it's HQ in Dubai.

Strange denial considering first and foremost the obvious huge tax incentives for anyone basing a business in Dubai. Especially for a company that's made at least a $2.1 BILLION profit on it's no-bid monopoly contracting practices in Iraq and Afghanistan.

One of the first things I learned whilst working for those darlings, is that when you sign your contract, you never are actually employed by Halliburton/KBR. You are contracted by a Dubai based contractor contracted to the DOD/US Army, named Service Employees International. By being a non-US contractor, KBR avoids paying workman's comp, unemployment and avoids having to provide any legal labor protection whatsoever for employees that are actually not theirs. This makes it very hard for the US Dept. Of Labor to pursue any legal action against KBR/Halliburton.

Halliburton has recognized this to their full advantage and I assume will extend this loophole to any of their employees stupid enough to continue their employment over in the UAE.

Now to suggest that this move might be a possible pre-cursor to make it harder for any, say congressional action, down the road in the near future would, of course, just be silly speculation.

 

[Tennesseahawk]

From what I heard, Halliburton is still an American company. Thus, they have to pay taxes. However, I also heard that they could be doing it to avoid answering to the 2+ billion in overcharges. But it's a common agreement among financial gurus that an oil exploration company like Halliburton would do better to move their HQ closer to where they do business. We'll see what happens.

-Vampire Super Slooth Trucker!!!

 

[greg334]

Well I was waiting for someone to make this into a post here.

to tell you, they are still subject to our laws, they will still pay taxes in the US becuase of the numerous assets here and they will also be accountable for every contract to the US government as if they were still here. Their headquarters will be moving but not the US operations center or the other groups, just the head quarters. This is not the first company to do this and won't be the last and it don't make a bit of difference because if the congress wants to slow them down, then they can simply put back the miltary contractor requirments laws that restricted contracts to US only companies - which I think should be put back.

Also just to say some of these non-competitve contracts that have been awarded should be looked into (I also liked audting them to see) but also have to point out that many of the services that have been up for bid, no one else does (except the french and I would rather have an american company do the work).

 

[mcbride]

Edited to fit window

>Well I was waiting for someone to make this into a post
>here.
>
>to tell you, they are still subject to our laws, they will
>still pay taxes in the US becuase of the numerous assets
>here and they will also be accountable for every contract to
>the US government as if they were still here. Their
>headquarters will be moving but not the US operations center
>or the other groups, just the head quarters. This is not the
>first company to do this and won't be the last and it don't
>make a bit of difference because if the congress wants to
>slow them down, then they can simply put back the miltary
>contractor requirments laws that restricted contracts to US
>only companies - which I think should be put back.
>


By Wanfeng Zhou, MarketWatch
Last Update: 3:43 PM ET Mar 13, 2007

NEW YORK (MarketWatch) - What's good for Halliburton shareholders, may not be good for the U.S. economy and the dollar.

Haliburton, currently the largest military contractor in Iraq, said it will move its corporate headquarters from Houston to Dubai. The shift is part of a strategic plan to focus on expanding relations with state-owned oil companies, the company said.

The Dubai announcement, which comes at a time when Halliburton is under investigation by government agencies over allegations of improper business dealings, has drawn criticism from politicians including Senator Hillary Clinton. Critics are questioning whether the move is really an effort to avoid taxes and recent legal inquiries.

Some market strategists say, while the move would bring substantial benefits to Halliburton shareholders, it may prove hurtful for the U.S. economy and the dollar in the long term. "What is good for shareholders, may not be good for the economy," said Kathy Lien, chief strategist at DailyFX.com, in a note. "Whether or not Congress is able to block the deal is up in the air, but the economic and political consequences of their move could bring out old concerns that many traders and investors may have already forgotten about -- which include the twin deficits and protectionism." "Unfortunately it comes at a particularly bad time when the shakeups in the subprime lending sector are already turning many foreign investors away from the U.S. markets and the U.S. dollar," she said.

Low-tax regime
With many of the company's subsidiaries located outside of the U.S., Halliburton is notorious for using tax havens and in Dubai, they will be paying next to zero in corporate taxes for the most part, Lien said.

Many employees, who also live and work in one of their investment zones could be exempt from taxes as well, she said. "In a city that can be described as Las Vegas on steroids the Western lifestyle is not only available, but taken to the next level with luxuries such as an indoor ski complex," she said.

Democratic Sen. Byron Dorgan said he would call for a Senate investigation of Halliburton's move to Dubai. Sen. Clinton called the decision to move Halliburton's headquarters a "disgraceful" attempt at evasion.

Democratic Sen. Patrick Leahy said, "It's an example of corporate greed at its worst. This is an insult to the U.S. soldiers and taxpayers who paid the tab for their no-bid contracts and endured their overcharges for all these years."

"At the same time they'll be avoiding U.S. taxes, I'm sure they won't stop insisting on taking their profits in cold, hard U.S. cash."
Even though Halliburton's contribution to overall U.S. tax revenue is not significant, the potential tax advantages could encourage many other U.S. corporations to follow suit in the long-term. Such moves would hurt the domestic labor market, take away more tax revenue, and lead to a widening of the U.S. budget deficit, strategists said.


Source: http://tinyurl.com/2vmuap

-mcbride-
--What goes around comes around--

 

[vandecamp]

The tax advantages are a moot point, US company? HQ in Dubai? I see extradition problems. When some one says they are moving their headquarters, I will assume they mean the head of their ops.

On another hand, they move employees, of course they will enjoy tax free wages, so effing what, I enjoyed the same, until I went home. Everything is cool until you need help from the US Dept Of Labor.
Good luck with that when it happens.

Dubai does rock, anything, I mean ANYTHING, you have ever thought of doing, you can do in Dubai. Weather is perfect, you have never seen a place with more construction going on. There are more concrete production and construction crane companies in Dubai than anywhere else in the world. It is, unbelievable just to drive around and see what's going on.

Recreation, name it. Want to drive a Formula 1 race car around a world class course? You got it. Want to race a Lamborghini 4WD 500HP V12 off road vehicle through the sand dunes at 130 MPH? You got it. Want to cruise in a personal submersible in the Arabian sea? Want to ski downhill in fresh powder when it's 125 degrees farenheit out in the parking lot? Shopping? Gold and Diamond shopping capital of the world, I bought my wife a white gold and diamond ring that appraised at more than twice what I paid in the states. Diamonds of quality and clarity unmatched. I bought a Rolex Submariner at a third of what it cost in the states.

Fact of the matter is, Dubai is a VERY generous place to make your home when you are in The Biz.
I know this is kind of irrelevant, but Dubai Free Duty has a website where you can buy tickets for $1.Million USD lottery, I think they only sell 5000 tickets. They have car drawing tickets like Porsche 911 Carrera 4's, BMW 750 V12's, Ferrrari F50's, Lambo Muricellos, and last but not least brand spanking new Harleys, And those are only 2500 tickets at $25 apiece. I noticed these as I was going through Dubai Free Duty at the airport as I was passing through, and yeah, I bought tickets. Anyway, Dubai is a playground, but it is also a safe haven
for someone like Halliburton. Good luck extraditing.

 

[mcbride]

It may be of interest to note that Bush, who declares he is not in favor of U.S. companies setting up subsidiaries in tax havens, was in fact, a director of a major Texas oil company when it set one up.

In 1989, Harken Energy Corp. set up Harken Bahrain Oil Co. in the Cayman Islands to oversee a drilling contract with the government of Bahrain. When questioned about it by reporters, Bush spokesman Dan Bartlett said the president had no recollection of the matter.

Cheney was also instrumental in relocating subsidiaries in tax havens during his days as CEO of Halliburton Corp. An analysis done by the watchdog group Citizen Works of Halliburton's filings with the Securities and Exchange Commission showed that while Cheney was CEO of Halliburton between 1995 and 2000, the number of subsidiaries the company operated in tax havens rose from nine to 44.

http://www.publicintegrity.org/oil/report.aspx?aid

-mcbride-
--What goes around comes around--

 

[greg334]

It may interest you that many people do the same thing. The kennedy's for one, Soros for another.

The interesting thing about Soros is the fact that he is avioding millions in taxes by having his hedge fund which is alledgely used to fund things like Moveon.org. But what should be a bigger deal is the fact that many people seem to think that it is such a crime to move your company to another country, if there is so much concern, write your representitive to get a requirment for a military contractor to be US based.

 

[mcbride]

>>It may interest you that many people do the same thing

yup, your're right...there is no point in discussing this as this is not a pro-dem or pro-rep or a left/right issue to me. I think the selling out of the United States is wrong regardless of who is doing it.

Furthermore, Soros is not claiming he does NOT do otherwise...Bush and Cheney however do. This administration's mantra reads "do as I say, not as I do."

-mcbride-
--What goes around comes around--

 

[bryan]

Hi

Wonder if this has anything to do with the port deal gone bad.They didn't get away with selling the ports to Daubi so they will make up for it this way.

 

[greg334]

Yep it is wrong, we agree with that.