Cheney's corporate past

Critics charge that the would-be VP ran a racist, oppressive company

by Seth Gitell

NEARLY ALL THE press coverage of George W. Bush's vice-presidential pick has focused on Dick Cheney's juicy $20 million stock-option deal from the Halliburton Company. But the press is missing the bigger -- and more significant -- story about Cheney's old company: Halliburton, an international conglomerate with substantial interests in oil, construction, and engineering, represents the absolute worst of corporate America. The company faces ongoing and unresolved complaints of racial discrimination; it does not allow employees to file discrimination suits ; and it is notoriously anti-union.

A bizarre complaint filed with the Equal Employment Opportunity Commission and publicized this month hints at the strained relationship between management and labor at Halliburton. A former employee charged that she had been wrongly dismissed from the company when she complained that it maintained separate bathrooms for Westerners and host-country nationals at its foreign sites. The story triggered a number of jokes on late-night talk shows. A Cheney spokeswoman, denying the candidate's knowledge of the practice, said that Cheney would not tolerate "harassment at any organization he's headed or been a part of."

But as more such details about Halliburton trickle out, they will surely undercut the ability of the Bush-Cheney ticket to reach out to one of the groups it needs to win the election: Reagan Democrats. Both parties have identified independent working- and middle-class voters in Midwestern swing states such as Pennsylvania, Ohio, and Illinois as the key to winning the presidential election. And Halliburton's notoriously anti-worker stance won't play well with this crowd.

Details of Halliburton's history also raise questions about George W. Bush's decision to name Cheney as his running mate in the first place. Several facts about the $15 billion company -- one arm of which, Brown & Root, is the largest contractor in Texas -- should raise red flags about the selection of Cheney. For example, Halliburton was fined in 1995 for violating federal trade sanctions against Libya.

"The difficulty is, they never vetted the vetter," says conservative commentator Marshall Wittmann, a senior fellow at the nonpartisan Hudson Institute, referring to the Bush camp's decision to name Cheney as the vice-presidential candidate after Cheney had been retained to screen potential candidates. "All of these questions that are now arising are the result of the failure to vet the vice-presidential candidate."

CHENEY SUCCEEDED long-time Halliburton chairman Thomas Cruikshank as CEO in 1995. It's been well documented that Cruikshank and Cheney bonded a few months before the transition during a fly-fishing trip in British Columbia. It was then, observers say, that Cruikshank pegged Cheney as the perfect successor: the veteran oil man immediately saw the value of the former defense secretary's international contacts, which promised to be a powerful tool in drawing more international business.

Cheney agreed to take the job and inherited a well-established company with construction work under way both in the US and abroad. Halliburton's projects range from an ExxonMobil Chemical Company complex in Singapore to a tissue-paper factory in Louisiana to Houston's new baseball park, Enron Field. An August 1999 article in Texas Construction estimates that Halliburton's $7.9 billion in construction revenue in 1998 made up almost 40 percent of the total income brought in by the state's 60 largest contractors.

But Cheney also inherited a company with festering labor problems. Halliburton's construction arm, Brown & Root, has long drawn the ire of Texas labor leaders. "Brown & Root as an entity has never had a labor agreement," says Dale Wortham, president of the Harris County AFL-CIO in Houston. "They have been one of the most anti-union, anti-worker corporations in the world." By contrast, both W.S. Bellows and Bechtel -- two of Halliburton's main contracting competitors -- employ union workers and get high marks from labor leaders.

Fifteen years ago, the Texas Building and Construction Trades Council studied Brown & Root to find out why it was so hard to organize. The group found, among other things, that Brown & Root consistently lowballed its bids for construction projects, thereby squeezing out union shops. It completed most of its work on the cheap with non-union labor -- some of it provided by foreign workers who were in the United States illegally. Having made such low bids, Brown & Root not infrequently ran into trouble bringing the projects in under budget. Critics also say the company cut corners where it shouldn't have in order to contain costs.

Texas labor officials point to the South Texas Nuclear Project as an example of the company's worst practices. In 1985, Brown & Root was removed from the power-plant construction project after utilities charged that the company wasn't doing a quality job. CBS reported in 1979 that inspectors examining the quality of concrete installation ceased inspecting the project after receiving threats from workers on the site. Brown & Root settled for $750 million with three Texas utilities after it was removed from the job. "They got tossed off and we had to go in and finish it," recalls Gale Van Hoy, the executive secretary of the Texas labor council.

To be fair, the power-plant deal occurred long before Cheney took the reins of Halliburton. But did he take steps to change the company? Van Hoy and other labor leaders say he didn't: "Dick Cheney didn't change anything. That company is still [labor's] enemy and will smash us and fight us if it can."

Take the company's involvement in the building of Enron Field. In 1997, Brown & Root procured the contract to build Houston's $180 million baseball park by promising to complete the job for a maximum of $229.5 million -- a bid that Brown & Root's union competitors could not match. Still, labor officials expected to forge a project agreement with Brown & Root at union wages because the labor lobby had backed the stadium referendum that authorized the building of the park. The Harris County AFL-CIO Council hoped to get Brown & Root to hire apprentices and train a new generation of workers on the project. In addition, labor officials in Houston wanted Brown & Root to pay the prevailing wage -- a uniform wage set by labor -- for work on the new stadium. But Brown & Root rebuffed the unions and opted to use both union and non-union workers. The unions threatened to picket the project.

"They ended up dictating what the prevailing wage should be and they rejected our call on that," says Richard Shaw, the labor group's secretary-treasurer. In the end, 85 percent of the contractors and laborers hired to build Enron Field were union workers. But the 15 percent who weren't did not receive full benefits. And unions objected to the way the project was managed on the grounds that the company used an "open shop" with non-union workers.

"To me it's unconscionable to oppose training people on public-works projects," says Shaw. "If you're going to use public dollars, [the public] ought to get something out of it."

Labor officials argue that the public interest is better served when a multimillion-dollar public initiative, such as a baseball stadium, is built with union workers. At least with union workers, Shaw and others say, safety standards are maintained and new workers receive training. Van Hoy maintains that if union workers had been in place throughout the entire project, the quality of work would have been better (the stadium's retractable roof, for instance, occasionally fails to keep rain out), several hundred more union workers would have done the job (at union wages), and more people would have gotten trained.

"This says that Cheney has absolutely no respect for working people, their right to organize, their right to be represented," says Hank Sheinkopf, a Democratic strategist. "This is a throwback to the worst kind of labor conditions, which is what you expect in Texas -- a right-to-work state."

MORE DISTURBING than the company's tangled history with labor, however, is Halliburton's use of mandatory individual-worker agreements that preclude employees from bringing suit in state or federal court. This means that a worker who faces age or racial discrimination at Halliburton cannot sue. The United States Supreme Court gave such agreements the green light in 1991. In a January 25 article in the New York Law Journal titled "Bypass Unions to Negotiate Individual Agreements to Arbitrate Statutory Discrimination Claims," Samuel Estreicher, a professor of labor law at New York University School of Law, identified Halliburton as a leader in this practice. Other companies that use such agreements include Philip Morris and International Paper.

In the abstract, such a provision may not seem like much. But consider the case of 32 African-Americans working for Halliburton at an oil refinery in Belle Chasse, Louisiana -- a case first reported by the New Orleans Times-Picayune.

Although company rules preclude the workers and their attorney, Reva Lupin, from discussing the case in detail, Charles Sanders, 31, a worker and informal spokesman for the group, did agree to tell his story. Belle Chasse is off the beaten path in the heart of the Louisiana bayou, 30 miles from New Orleans. At the refinery, laborers make $7.50 per hour. Workers in the machinist department make between $13.50 and $14.95 per hour. Supervisors and managers make more. Sanders says that during his three years at the company there has been only one African-American manager, despite the fact that African-Americans make up about one-third of the company's work force -- and that most African-Americans work as low-paid laborers.

After working as a laborer and spending temporary stints in the machinists' department, Sanders says, he wanted to find out how he could be permanently transferred to the better-paying division. "I asked them, `What kind of system is there . . . to make sure we have equal opportunity for all?' " he recalls. Sanders eventually became a machinist, but when the next supervisory position opened up, it went to a white person -- even though one of Sanders's African-American colleagues with greater experience had competed for the job.

When Sanders and his colleagues complained, their direct supervisor listened to their complaints, but the workers did not feel that they were being taken seriously. Company rules dictated that this supervisor was the only person they could complain to. "We had to go through the chain of command," says Sanders.

Things got ugly soon after word leaked that the African-American workers believed there was discrimination in the promotions process. Sanders alleges that a co-worker scrawled "KKK" on his machinist toolbox. Another scrawled the epithet "nigger" on a sign in the tool room. Meanwhile, white workers brandished Confederate flags on their hard hats and toolboxes, Sanders charges. After each instance Sanders and the other workers complained to higher management. On most occasions, nothing of substance was done. After one such incident, management circulated a memo stating that defacement of company facilities was grounds for termination, but no employees were fired on that basis.

Tensions intensified when the African-American workers got a lawyer and began the arbitration procedure. A white worker, who usually picked up lunch for the group, refused to take lunch orders for black workers. Things got so bad that Sanders and his co-workers called the Halliburton headquarters in Houston to complain. Still, nothing was done.

"We're concerned because during the time he was the CEO of Halliburton, several African-American employees complained about treatment at Halliburton," says Sanders. "Why didn't he as CEO of Halliburton step in and try to solve this problem? If Dick Cheney can't solve our internal problems at Halliburton, how can he solve some of the problems we have in the country as vice-president?"

Halliburton did not return the Phoenix's phone calls or e- mail messages seeking comment. A company spokesperson did confirm the arbitration, but declined to comment on it, according to the New Orleans Times-Picayune. "Mr. Cheney had no personal involvement in the situation down in Belle Chasse," spokesperson Cindy Viktorin told the paper.

But even if Cheney did not know the precise facts of the Belle Chasse case, he still presided over a company that prevents people like Sanders and his co-workers from suing in court. David Yamada, an associate professor at Suffolk University School of Law and an expert in labor law, says the Halliburton rules make it hard for the workers to change things. "It sounds like this is a place where the culture is really stacked against these workers," says Yamada. "Usually, if you've got some patterns of discriminatory treatment and evidence of lower-wage jobs and procedures that are weighted toward the employers, that's a tailor-made situation for maintaining or exacerbating discrimination."

WHAT MAKES these facts about Cheney and Halliburton so striking is that 2000 was supposed to be the year that Bush defined himself as a compassionate conservative and a "very different Republican candidate." Had Bush simply followed the usual GOP playbook, all the allegations surrounding Cheney and his leadership of a company so hostile to workers would be nonstarters. But is this the year the Republicans went out of their way at the convention in Philadelphia to highlight African-American and Latino involvement in the party. This is the year Bush wanted to make a play for working voters -- and this is a year when swing voters in the Midwest matter.

Rui Teixeira, a senior fellow at the Century Foundation and the co-author America's Forgotten Majority: Why the White Working Class Still Matters (Basic Books), says Halliburton's anti-labor record may hurt the Bush-Cheney ticket. Many of the voters Teixeira writes about live in the key Midwestern states that Bush needs to win the election -- in some, such workers make up 60 to 70 percent of the voting population. "This a loser for Bush-Cheney," says Teixeira. "Being identified with a big corporation that kicks workers around is not helpful with these voters. These are the same type of people that the Republicans desperately need to keep. These people aren't typical liberals, but they tend to look at big corporations suspiciously."

For Democrats, the facts speak for themselves. "You've got one guy, Al Gore, who says he's for working people," says Hank Sheinkopf. "You've got two other guys whose record says they hate working people." Cheney's defenders can say that Gore has his own sticky oil mess related to his holdings in Occidental Petroleum, a company that has been criticized for displacing the indigenous U'wa People in Colombia. But, Sheinkopf points out, "the difference is that Cheney ran a company where anti-worker policies were put into place and kept in place because he wanted them there to increase profits on the backs of the working people. This is not an accident. He was the boss. He was in charge."

Wittmann, of the Hudson Institute, adds that the new questions about Cheney at Halliburton only sharpen a distinction between the Republican vice-presidential candidate and his Democratic counterpart. "You can contrast this choice with the Lieberman choice, and that speaks volumes," says Wittmann. "The question is more in judgment and how you chose your candidates than the specifics of any of these situations. It does underscore Bush's failure to choose a vice-presidential candidate who could have made a difference the way Lieberman did for Gore."

For Bush, who is standing by Cheney and plans to increase his appearances with the former defense secretary, this latest news about Halliburton and Brown & Root is not good. It makes things harder when he needs them to be getting easier. The Bush campaign, like Halliburton, did not respond to telephone calls and e-mails requesting a response to this story. But ignoring the allegations won't make them go away.

Seth Gitell can be reached at sgitell[a]phx.com.