Join 3,558 readers in helping fund MetaFilter (Hide)


A little military-industrial complex conspiracy, anyone?
November 8, 2003 9:41 AM   Subscribe

It seems that Halliburton is one step closer to getting caps on the Asbestos claims against it. And so what? Well, this is for its units DII Industries and Kellogg, Brown, and Root. KBR might seem familiar because it's the subsidiary that won the 7 billion dollar no-bid Iraq contract for services. And again, so what? Well, the asbestos caps are part of a Chapter 11 bankruptcy filing. That's right....the SAME EXACT subsidiary that was just awarded a 7 billion dollar no-bid contract filed for bankruptcy in March.

Positively Machiavellian.
posted by taumeson (16 comments total)

 
...And they would've sold gasoline to themselves at inflated prices, too,
if it weren't for those pesky kids and their meddling dog!
posted by Smart Dalek at 10:10 AM on November 8, 2003


the bankruptcy filing would help put Halliburton's asbestos problems to rest

...as would an uncontested government contract worth billions.
posted by Civil_Disobedient at 10:15 AM on November 8, 2003


Geeze, the fun never stops.

Jane, get me off this crazy thing!
posted by LouReedsSon at 10:40 AM on November 8, 2003


I think we should just not have any companies win these contracts. But what do I know? I'm just a hairy moose.
posted by angry modem at 11:21 AM on November 8, 2003


In other news, ex-Diebold Chairman Robert W. Mahoney appointed to Chief of Election Integrity... developing.

/onion
posted by squirrel at 1:33 PM on November 8, 2003



posted by quonsar at 2:38 PM on November 8, 2003


broke one day, boom the next

i love the smell of commerce.
posted by clavdivs at 2:45 PM on November 8, 2003


Why does it seem to take such enormous amounts of debt to gain such enormous contracts?

Is the federal government being used nowadays to bail out failing gargantuan companies, or is it just me?
posted by Busithoth at 2:56 PM on November 8, 2003


Busithoth: It's not just you. The Federal government always bails out garagantuan companies. Especially when the Vice President does/doesn't/can't/wouldn't run that company. Anybody for Teapot Dome II?
posted by zaelic at 4:13 PM on November 8, 2003


Reality check. All Chapter 11 means is that the company can't pay its creditors, who refuse or can't contractually extend the debt. If the company is going down, it also is the start of the last minute looting of anything of value before changing your status to Chapter 7. Otherwise, it's like owing someone a fiver on Thursday before payday, he wants his money but you can't pay. So 11 makes him wait a day, even if he really wants that fiver.

In this case, the Chapter 11 avoidance of potential massive litigation from asbestos raises a couple of points.
First of all, is it really *right* to hold a company liable for selling a product that is only later discovered to be defective? And second, whereas "long-grain" asbestos is as dangerous as hell, the vast majority of asbestos is "short-grain", which is only fractionally as hazardous, and is still being studied.

Other than these two points, once again I would like to endorse Jesse Jackson's one good idea: the Corporate Death Penalty. But not just a feel good penalty, one with real teeth.

If executives or board members behave unethically in the name of their company, they should be banned from any position of trust and responsibility in any company, like being convicted felons, but just by being declared so by the SEC.

If board members are just hired proxy representatives of outside interests, like mutual funds, they *must* have a controller who is responsible for their votes and liable for the "death penalty." (Many of these clowns sit on several boards, but are wholly owned by their external bosses, owing few if any shares themselves.)

And *then* you can revoke the company's articles of incorporation and sell off its assets first to those injured by the actions of the company, and *then* to its creditors, and *then* to its investors.
posted by kablam at 4:54 PM on November 8, 2003


First of all, is it really *right* to hold a company liable for selling a product that is only later discovered to be defective?

Yes. And I agree with your corporate death penalty point.
posted by squirrel at 8:07 PM on November 8, 2003


OK, it's not that I really want to defend Halliburton here. No-bid contracts (in circumstances that go far beyond a short-term emergency), and vice-presidential ownership (blind trust be damned, it's only half-blind), are just too icky.

But the bankruptcy is agreed to by a supermajority (75%) of the litigants, and it ensures both debtor-in-protection financing for the units in question, as well as permitting the creation of a trust which will guarantee full and timely payment of the settlement money. That's basically been part of the agreement since last December, and the only question has been whether late claims should be permitted to balloon the amount of the settlement.

And a $7 billion contract is simply revenue, not profit. Also, note that the claims are against a company which was sold by Dresser two years before Halliburton acquired it.

I don't think we need a corporate death penalty, mainly because it makes little real world sense (just as fraudulent scammers pop up again and again with different names), though a corporate-director felony-equivalent might be a step in the right direction to preventing future Worldcoms. Felony neglect of fiduciary duty? But keeping people from ever running a company again raises sticky personal-liberty issues.
posted by dhartung at 10:49 PM on November 8, 2003


But keeping people from ever running a company again raises sticky personal-liberty issues.

Why? I could have my right to vote taken away for having a nickel bag.
posted by Ignatius J. Reilly at 12:58 AM on November 9, 2003


But keeping people from ever running a company again raises sticky personal-liberty issues.

Why? I could have my right to vote taken away for having a nickel bag.


yeah, fuck 'em. after they serve their prison time, let 'em get McJobs. you know, old chap: goose, gander, wot wot.
posted by quonsar at 1:57 AM on November 9, 2003


who the hell sells nickel bags anymore.
posted by clavdivs at 9:08 AM on November 9, 2003


who the hell sells nickel bags anymore?

That old guy in the park who's always talking about Revelations.
posted by Ignatius J. Reilly at 9:19 AM on November 9, 2003


« Older Anarchist Twelve Traditions of Alcoholic Anonymous...  |  Princeton University Eating Cl... Newer »


This thread has been archived and is closed to new comments