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Halliburton Moves Headquarters to Dubai, UAE.
March 12, 2007 11:23 AM   Subscribe

Halliburton Moves Corporate Headquarters to Dubai, UAE. Oil services giant Halliburton, parent company of soon to be spun off KBR, and recipient of many no-bid government contracts, is moving its corporate headquarters to Dubai in the United Arab Emirates. Meanwhile, the US and the UAE are working on a free trade agreement. The UAE and China are the two largest exporters to Iran, and some speculate that the purpose of the move is to open up Iran as a legitimate market for Halliburton, because as a US firm its acknowledged trade with Iran is of questionable legality. Among the implications of this corporate move is that the US military will now be heavily dependent on a contractor that is a foreign company.
posted by Pastabagel (76 comments total) 2 users marked this as a favorite

 
The paranoid in me wonders if the Dubai port security deal that fell through was supposed to be part of this (or even led to this), but I can't quite get it to hang together. Anyone a little more tinfoil hatty want to have a go?
posted by Lentrohamsanin at 11:30 AM on March 12, 2007


...the US military will now be heavily dependent on a contractor that is a foreign company.

Can't wait to see if all the people who freaked out about the Dubai ports deal will now freak out about this.
posted by lalex at 11:30 AM on March 12, 2007


Among the implications of this corporate move is that the US military will now be heavily dependent on a contractor that is a foreign company.

Yeah, that's the odd part. maybe haliburton sees it's work with the US government coming to an end for some reason. I wonder what that reason could be...

The paranoid in me wonders if the Dubai port security deal

It was not a security deal it was an ownership deal. The security would have always been done by the same people, namely the U.S. Customs Dept. Which was why the opposition to the deal seemed so hypocritical on the part of many liberals. It seemed to be based on nothing other then insane anti-Arab racism. How could it possibly be worse for the ports to be owned by a UAE company then a UK company?
posted by delmoi at 11:36 AM on March 12, 2007 [1 favorite]


I certainly hope so, lalex. As they should.
posted by brundlefly at 11:36 AM on March 12, 2007


How could it possibly be worse for the ports to be owned by a UAE company then a UK company?

Truth be told, I didn't know it was owned by a UK company until the UAE thing broke. If I had, I would have objected.
posted by brundlefly at 11:38 AM on March 12, 2007 [1 favorite]


So they are moving to Dubai to avoid US laws. Seems like a lot of trouble, when they could just install a former CEO as Vice President (and real power behind the throne), who could then browbeat the rest of his party into ignoring their many sins. But I guess that would never happen.
posted by DU at 11:39 AM on March 12, 2007 [3 favorites]


Once they move outside US jurisdiction, we won't be able to enforce lawsuits against them for their criminal behavior. Seems win-win for Cheney and his corporate benefactors. Halliburton stock already rose on the news.
posted by Blazecock Pileon at 11:39 AM on March 12, 2007


It won't be a foreign company. It'll still be subject to US laws, it'll "just" have its CEO and headquarters in Dubai.
posted by lupus_yonderboy at 11:39 AM on March 12, 2007


Halliburton is a parasite looking for a new host after fully draining the current one. It's just part of the natural order of things.
posted by psmealey at 11:41 AM on March 12, 2007 [1 favorite]


Not that I don't think that a fair and open investigation wouldn't result in dozens of Halliburton executives and various unnamed politicians being sentenced to long jail sentences...
posted by lupus_yonderboy at 11:41 AM on March 12, 2007


Which was why the opposition to the deal seemed so hypocritical on the part of many liberals. It seemed to be based on nothing other then insane anti-Arab racism.

No, it was perfectly sane anti-Bushism. I doubt 1 in 10 liberals cared a fig about the issue other than as something to play up to get the most definitely anti-Arab racist right wing nutjobs to abandon the Pres. Which totally worked, thankyewverymuch.
posted by DU at 11:43 AM on March 12, 2007


Nah, won't happen, l_y, not as long as the powers-at-be are able to keep foisting off responsibility for their actions on others.
posted by Lynsey at 11:47 AM on March 12, 2007


DU's got the port issue dead on. It was a political maneuver that worked.
posted by melt away at 11:51 AM on March 12, 2007


Dubya to Paraguay, Cheney to Dubai in 2009.
Wonder do they have extradition treaties?

And if they do, how successful would one be trying to repatriate Dear Leader of Darth Cheney?
posted by nofundy at 12:10 PM on March 12, 2007


Long ago, I read something in a business-news pundit's column, where he claimed that the economy of the United States had risen so much during the 20th century because wealthy people liked to live there--it had a stable government, no external powers threatening to invade it (USSR notwithstanding), and relative safety, especially for their money.
He predicted that "when major corporations and their boards of directors start moving out of the US, for whatever reason, you will know the country is doomed." I wish I could remember where I saw that.
posted by metasonix at 12:20 PM on March 12, 2007


"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.

What? A corporation that does the majority of their business in a specific area of the world is actually moving to that area? How dare they make a smart business decision designed to reduce costs! It is sad when blind hate reduces someone's capacity for reason. Enough with these ridiculous speculations of Halliburton being the devil incarnate. Boring.
posted by markulus at 12:37 PM on March 12, 2007


A corporation that does the majority of their business in a specific area of the world is actually moving to that area?
posted by markulus at 3:37 PM EST on March 12


Halliburton already has an enormous presence in the UAE, Saudi Arabia, and everywhere else in the gulf. This is about moving the corporate control there. And they only do a "majority" of their business there because the US is conducting a war for which they are a major contractor. There is no reason to do this other than to engage in more trade with Iran.

And KBR, the HAL sub, is also one of those private security contractors/merc forces, though not as large as Blackwater. If KBR isn't spun off before the Dubai move, then a large military presence in Iraq will be a foreign company's mercenary army. The situation is unique and not the least bit bizarre.

Finally, I understand that it is not technically a foreign company, when the CEO and the HQ moves, the focus becomes on the local laws of the home country, not where the majority of the stockholders are.

I am hoping this move is simply about making the executives richer, and not anything more clandestine or disconcerting.
posted by Pastabagel at 1:00 PM on March 12, 2007


This doesn't get them out of obeying US laws. So long as they do business in the US, they are subject to US laws, regardless of the nominal location of their headquarters.
posted by mr_roboto at 1:15 PM on March 12, 2007


This doesn't get them out of obeying US laws. So long as they do business in the US, they are subject to US laws, regardless of the nominal location of their headquarters.

Halliburton's been illegally doing business with Iran and other prohibited nations for years. Why would they start obeying US law once their HQ moves outside its borders?

And I'm pretty sure Blazecockpileon's right. Local jurisdiction applies in civil cases. So a move to Dubai makes Halliburton virtually immune to American-based lawsuits.
posted by saulgoodman at 1:22 PM on March 12, 2007


Halliburton already has an enormous presence in the UAE, Saudi Arabia, and everywhere else in the gulf. This is about moving the corporate control there.

Not true. This is about being able to do business with Iran and other blacklisted companies.

Halliburton already does business with Iran. They sidestep the law by handling their Iranian accounts through a "susidiary" in the Caymans (never mind that when 60 minutes visited, the only thing at the "subsidiary" was one employee and a phone that rang at Halliburton headquarters.)

Welcome to the true America-haters. Profit is their god and country. If I ran the country, I'd have them delisted and cut loose. I'd also audit their Iraq activities with a thousand fine-toothed combs.
posted by Benny Andajetz at 1:22 PM on March 12, 2007


This is like when Johnny Sack moved to Jersey. It's like, you don't know exactly what the fuck they're up to but you know whatever it is, it's not good.
posted by The Straightener at 1:24 PM on March 12, 2007 [3 favorites]


Finally, I understand that it is not technically a foreign company, when the CEO and the HQ moves, the focus becomes on the local laws of the home country, not where the majority of the stockholders are.

You are totally and completely wrong. HAL is, and as far as I can tell, will remain incorporated in the United States, and specifically, in Delaware. It is subject to all applicable US and DE law. It must continue to comply with, e.g., it's corporate reporting requirements to the SEC and US restrictions on trade with countries like Iran. This is not like an inversion for tax purposes. Now, if HAL were reincorporating overseas, that would be a different situation.

And KBR, the HAL sub, is also one of those private security contractors/merc forces, though not as large as Blackwater.

KBR is not a Blackwater-equivalent. KBR provides engineering, construction, and staffing, but is not in the same category as the so-called "security contractors." HAL is in the process of spinning off KBR, and after that process is complete, HAL will basically go back to being an oilfield services company.

Local jurisdiction applies in civil cases. So a move to Dubai makes Halliburton virtually immune to American-based lawsuits.

No. See above.

Not true. This is about being able to do business with Iran and other blacklisted companies.

No. See above. Moving the CEO to UAE will have no impact on whether HAL is able to do business with Iran through subsidiaries.
posted by monju_bosatsu at 1:42 PM on March 12, 2007 [1 favorite]


No, it was perfectly sane anti-Bushism. I doubt 1 in 10 liberals cared a fig about the issue other than as something to play up to get the most definitely anti-Arab racist right wing nutjobs to abandon the Pres. Which totally worked, thankyewverymuch.
posted by DU at 11:43 AM PST on March 12 [+]

His own party took him to the woodshed over that one, DU, not the 'liberals'. We just enjoyed the fallout from another typical blunder from a dumbshit president that periodically gets something past his handlers when they're too overwhelmed and occupied spinning the usual list of mismanaged disasters.
posted by docpops at 2:07 PM on March 12, 2007 [1 favorite]


Every single one of our US govt. contracts with them should be cancelled immediately. They still owe us (really us, the taxpayers) millions and millions in false and overcharges.
posted by amberglow at 2:27 PM on March 12, 2007


So long as they do business in the US, they are subject to US laws, regardless of the nominal location of their headquarters.

The vast vast majority of their business with the US is outside of our borders--in other countries.
posted by amberglow at 2:28 PM on March 12, 2007


Typical.
posted by Smedleyman at 3:07 PM on March 12, 2007


Oh, good, I'm glad they got that out of the way.

Next Items on the Haliburton Agenda:

1.) Get Sharks With Laser Beams
2.) Rebuild The Death Star
posted by thivaia at 3:08 PM on March 12, 2007 [1 favorite]


Congress should go after corporations who stretch every tax law to their benefit even though they know they are evading their fair contribution to the system that allowed them to flourish. I propose they pass a bill called "The Either You're a Patriot or You're a Skeevy Fucking Weasel and Deserve To Die a Horrible Death Act".
posted by Benny Andajetz at 3:09 PM on March 12, 2007


The idea that a global or multinational company that has its nominal headquarters in the US is in some way an "American company" that will act as if it owes special allegiance to the US is laughable. Global companies are just that - global, and they do what they need to do in every jurisdiction that they operate. Not for the benefit of or to further American policy or interests, but to achieve corporate goals.

Companies operating in the US - wherever they are headquartered - have to abide by US laws. US law should not be applied extra-territorially unless the US allows others to do the same, for instance to make US companies abide by their laws. Not bloody likely.
posted by mikel at 3:21 PM on March 12, 2007


The idea that a global or multinational company that has its nominal headquarters in the US is in some way an "American company" that will act as if it owes special allegiance to the US is laughable.

That's the kind of ignorant happy horseshit that has given corporations the incredible power they have. They are incorporated here because, for the most part, they are treated fairly or better than fairly, here. The law is primarily on their side here. They benefit from incorporating here, and they owe back.

If they're not willing to support the system that supports them, then fucking kick them out. Let them incorporate somewhere else. Let them pay tariffs to export their products to their market here. In other words, fuck them. It's insane to love something that doesn't love you back.

Corporations are short term thinkers. If they really think they can find a more stable long term business base than here, we need to cut them loose and let (make) them find out the hard way.
posted by Benny Andajetz at 3:31 PM on March 12, 2007


maybe haliburton sees it's work with the US government coming to an end for some reason. I wonder what that reason could be...

They've stolen all they can. The USA is tapped-out, and now they're going to go steal from someone else.
posted by five fresh fish at 3:34 PM on March 12, 2007


Tax laws were made to be broken by companies, literally.
posted by bardic at 3:52 PM on March 12, 2007


I am so ignorant of what is really at issue here that my comment is unlikely to mean much, but I really don't like Halliburton.
posted by owhydididoit at 4:03 PM on March 12, 2007


What are the benefits of moving there?
I'd say:
--Tax (Dubai is a tax haven)
--lessened or none at all US Legal liability for malpractice or non-fulfillment of contracts
--no accountability to Govt. oversight of them or any contractees or subcompanies doing business here in the US or just with the US
--greater ability to do business with countries deemed "evil" or with UN or US sanctions on them
--Lax labor laws in Dubai, and less protection for workers employed by them, no matter where they work

any others?
posted by amberglow at 4:08 PM on March 12, 2007 [1 favorite]


and what does this mean, legally, and obligationwise and incorporationwise, etc?

On Sunday, Halliburton announced its chairman and CEO, Dave Lesar, had announced that he would be relocating to Dubai to open a "corporate headquarters office."
posted by amberglow at 4:16 PM on March 12, 2007


(and has Cheney bought property there yet?)
posted by amberglow at 4:20 PM on March 12, 2007


HAL is, and as far as I can tell, will remain incorporated in the United States, and specifically, in Delaware.

And you know this for a fact? Why would they?
posted by amberglow at 4:21 PM on March 12, 2007


It's not at all in their corporate interest or shareholder interest or profitability to remain incorporated/registered here. Other countries have far more beneficial tax codes, regulations, and protections than we do--Dubai certainly does, if you look at it from that perspective. They're not in business to be American, but to make money.
posted by amberglow at 4:24 PM on March 12, 2007


HAL is, and as far as I can tell, will remain incorporated in the United States, and specifically, in Delaware.

And you know this for a fact? Why would they?


Good question. Everything I've read said they would still be 'registered in the US'--which I took to mean registered with the SEC for trading on the stock exchange, not necessarily remaining incorporated under American law. I really don't know though.
posted by saulgoodman at 4:27 PM on March 12, 2007


HAL is, and as far as I can tell, will remain incorporated in the United States, and specifically, in Delaware.

Yes, I do. HAL announced it on Sunday. Also, their SEC filings make no mention of any reincorporation, although they do detail the spinoff of KBR.
posted by monju_bosatsu at 4:28 PM on March 12, 2007


See a discussion of the reincorporation and tax issue at Slate.
posted by monju_bosatsu at 4:31 PM on March 12, 2007


One of the reasons a lot of companies are moving their HQ's overseas (and abandoning the NY Stock exchange for London) is the Sarbanes-Oxley law.
posted by Steven C. Den Beste at 4:31 PM on March 12, 2007


I imagine its access to the US capital markets would be the principle reason for staying incorporated in Delaware. If they were to reincorporate in UAE, there would probably be a fair amount of cost and legal work associated with transferring (if it could) its SEC registration to the new entity, or re-registering shares as ADRs.

I think this is largely a symbolic move rather than a legal one, maybe it really is being done to better access to emerging markets, but like others, I only have the most pedestrian of understandings of what the implications are.

What I have no trouble understanding is that this does represent the absolute height of arrogance. Of all the suffering that has been visited upon tens of thousands of families as a result of this debacle in Iraq, as well as the long-term damage done to to US economy thanks to the borrowing orgy required to finance, Halliburton stands as the one of the few entities that is actually better for as a result of it. One would think that Halliburton would be more PR sensitive and lay low for a while, at least until the Bush administration ends, but obviously they don't give a shit.
posted by psmealey at 4:31 PM on March 12, 2007


*cough* no extradition *cough*
posted by squidfartz at 4:32 PM on March 12, 2007


And they only do a "majority" of their business there because the US is conducting a war for which they are a major contractor.

Really? I thought it was because they are an oil field services company and the middle east is home to a large portion of the world's oil fields. Silly me.
posted by b_thinky at 4:41 PM on March 12, 2007


They're taking Cheneys cyrogenically frozen remains with them and will attempt to rebuild him.
posted by Artw at 4:43 PM on March 12, 2007


Steven C. Den Beste writes "One of the reasons a lot of companies are moving their HQ's overseas (and abandoning the NY Stock exchange for London) is the Sarbanes-Oxley law."

Whoa, whoa.... Pretty major conflation, there, SCDB. Sarbanes-Oxley is a securities regulatory law; it applies to firms listed on US stock exchanges, regardless of the location of their headquarters. Moving a company's HQ overseas does not free that company from the requirement to comply with it: they would need to delist from the NYSE. Very few (if any) companies have actually abandoned the NYSE for London; however, London has seen a significant increase in IPOs, corresponding to a drop in IPOs in New York. It would be shocking for HAL to delist from the NYSE in favor of another public exchange. I guess I could see some sort of private-equity deal taking them off, though. Wouldn't it be awesome if the Carlyle Group bought Halliburton? That would be quite a day for the Daily Kos...
posted by mr_roboto at 4:48 PM on March 12, 2007


Really? I thought it was because they are an oil field services company and the middle east is home to a large portion of the world's oil fields. Silly me.

No, no, no. Too simple. Too straight forward. Too obvious. You have to look beyond the obvious, or you'll never realize that you're caught in the jaws of The Conspiracy™.
posted by Steven C. Den Beste at 4:49 PM on March 12, 2007




Dubai is going to become headquarters for all mega-corporations. The CEOs are going to demand it: Dubai has been built with them -- and their multimillion dollar salaries -- in mind.
posted by five fresh fish at 5:27 PM on March 12, 2007 [1 favorite]


(The solution, of course, is for shareholders to demand significant reductions in CEO pay. [snickers])
posted by five fresh fish at 5:30 PM on March 12, 2007 [1 favorite]


Lots here at MSNBC/FT: ...Halliburton's move would change its tax situation "significantly" even though the company would still be registered in the US.
Mr Sullivan said that by basing its chief executive in Dubai, Halliburton would be able to argue that a portion of its profits should be attributed to the no-tax jurisdiction. ...

posted by amberglow at 5:31 PM on March 12, 2007


(The solution, of course, is for shareholders to demand significant reductions in CEO pay. [snickers])

A better solution is to get protectionist about every single govt. contract.
posted by amberglow at 5:34 PM on March 12, 2007 [2 favorites]


I think Amberglow has it...
posted by Vindaloo at 6:15 PM on March 12, 2007


Even that won't solve all the problems by any means, but it'd be a good start (and speaking of problems--I.R.S. Letting Tax Lawyers Write Rules -- and they've already outsourced debt collection)

Regulating and stopping rampant outsourcing of essential government work--which Halliburton is doing in Iraq and elsewhere--as well as forcing those who want any government contracts to be fully invested/established/etc in this country along with requiring that they employ US citizens and legal aliens alone, and that they'll lose those contracts if they move abroad or subcontract abroad, or evade labor laws and wage laws and health and safety laws, etc. is desperately needed. They want to profit by doing business with the government (and with our money) -- so they should have to play by the rules.
posted by amberglow at 6:25 PM on March 12, 2007


It helps to be in neutral territory outside of the US when one supplies military equipment to both sides of a conflict (one side being the US).
posted by Brian B. at 6:36 PM on March 12, 2007


What military equipment does Halliburton provide to the other side of the conflict?
posted by Cyrano at 6:47 PM on March 12, 2007


What military equipment does Halliburton provide to the other side of the conflict?

What conflict?
posted by Brian B. at 7:15 PM on March 12, 2007


Halliburton sources revealed that the company sold Iran centrifuges and detonators to be used specifically for a nuclear reactor as well oil and natural gas drilling parts for well projects to Oriental Oil Kish.

I really don't know what to say.
posted by IronLizard at 7:26 PM on March 12, 2007


In that video about the rise of the military industrial complex that was making the rounds about a year ago, they mentioned that Halliburton (and other military contractors) had leveraged its political strength by having a factory in nearly every state. I wonder if being a foreign managed company will have any net effect whatsoever on the perceived American-job creation goodwill. I bet it wont.
posted by dobie at 7:48 PM on March 12, 2007




Haliburton is a for-profit entity. It's sole purpose for existing is to generate profit for its shareholders. In this regard it's no different from Coca-Cola, Apple, Comcast or any other for-profit company.

Haliburton's KBR division has defense contracts. KBR is the worst performing component of Haliburton which is why the company is spinning it off entirely. KBR actually decreases the value of the overall entity.

If you look at the charts you'll see HAL's price has actually dropped in the past year. And for Bush's entire first term, the stock was lower than it was when he took office. So this whole theory that Bush/Cheney came to office and started wars just to benefit HAL is just a bunch of bunk.
posted by b_thinky at 8:51 PM on March 12, 2007


b-thinky, your argument is fallacious based on the for-profit assumption of Halliburton and its ties to government war starters. It doesn't lend itself to the argument that they didn't start a war for profit, because KBR got all the easy contracts. It just means they have unexpected costs perhaps.
posted by Brian B. at 9:27 PM on March 12, 2007


Halliburton going to Dubai, Michael Jackson going to Dubai...

Coincidence? Or conspiracy? You be the judge!

Dubai has some amazing looking buildings these days. Maybe HAL just wanted some cheap spiffy real estate.
posted by drstein at 10:31 PM on March 12, 2007


Cheney served as chief executive of Halliburton until he stepped down to become George W. Bush's running mate in the 2000 presidential race. Today he still draws compensation of up to a million dollars a year from the company,

That's a really misleading statement. It implies Cheney is being rewarded by HAL when it's really just a deferred payment on past work. They owe him this money regardless of how much HAL profits or loses.
posted by b_thinky at 10:47 PM on March 12, 2007




That's a really misleading statement.

Saying that doesn't make it any less true. Deferred compensation or not, Cheney is getting paid by a major US government contractor while he is a sitting Vice President of the United States. If Cheney had any integrity at all, he would refuse payment until he is completely out of the public sector. But he doesn't have any integrity, nor does he care about how it looks.

What a great man, indeed.
posted by psmealey at 5:24 AM on March 13, 2007


File under "We Should Have Known It."

So Walter Reed is having serious problems taking care of wounded troops because of outsourcing.

IAP Worldwide turns out to be the contract holder.

Now as an exercise to the reader, guess who owns them?

Yup, Darth Cheney Inc.
posted by nofundy at 9:37 AM on March 13, 2007


We're sourcing them over there so we don't have to source them at home.
posted by WPW at 10:32 AM on March 13, 2007


Sky is falling, film at eleven. Has anyone considered it's financially very advantageous to base out of Dubai? Or that it's an incredibly beautiful place to live?
posted by avriette at 5:59 PM on March 13, 2007


Or that it's the only place to live when your income is a cool $25 million a year.

I mean come on, have you seen pictures of Dubai? Read about the incredible stuff they've got there? If you've got money to burn, it is the only sensible place to call home on this entire planet.
posted by five fresh fish at 7:07 PM on March 13, 2007


I like it that all the millionaires will be concentrated in one place--like a zoo.

(terrorists will like it too)
posted by amberglow at 1:24 PM on March 14, 2007


What terrorists? Al Queda certainly isn't going to attack its patrons, who live there.
posted by five fresh fish at 7:27 PM on March 14, 2007


Unless you meant the opposite, in which case you are right: having their patrons so close is something the terrorists will like quite a bit. Mo' face-time = mo' money.
posted by five fresh fish at 7:29 PM on March 14, 2007


It's not just Arab money that's moving there, as this post shows.
posted by amberglow at 7:32 PM on March 14, 2007


More importantly, it's multinational money that wants total control of the resources in the region, as opposed to the Arabs who live on top of those resources.
posted by amberglow at 10:38 AM on March 15, 2007


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