Follow if you will this twisted tale of special legislative relief tailored it would seem for the benefit of one specific company. A company already under fire for unsevered ties to the Vice President and preferential treatment in no-bid contracts in IRAQ.
Where does the Government of the United States end and the Corporation known as Halliburton begin? Corporations have always exerted great financial influence in Washington in the form of contributions to candidates and corporate interest lobbys have supported legislation that benefits their membership. But the current legislation known as S.1125 smacks of something quite different. It seems to be specifically beneficial to one particular corporation: HALLIBURTON.
First take a look at S.1125.IS (you must type S.1125.IS in the Bill Number Window)
Under Section 403 at the end of the bill you will find the following language:
SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS.
(a) EFFECT ON FEDERAL AND STATE LAW- The provisions of this Act shall supersede any and all Federal and State laws insofar as they may relate to any asbestos claim filed under this Act.
(b) SUPERSEDING PROVISIONS-
(1) IN GENERAL- Any agreement, understanding, or undertaking by any person or affiliated group assigned to Tiers II through VI with respect to the treatment of any asbestos claim filed before the date of enactment of this Act that requires future performance by any party shall be superseded in its entirety by this Act.
(2) NO FORCE OR EFFECT- Any such agreement, understanding, or undertaking by any such person or affiliated group shall be of no force or effect, and no person shall have any rights or claims with respect to any of the foregoing.
(c) EXCLUSIVE REMEDY- The remedies provided under this Act shall be the exclusive remedy for any asbestos claim under any Federal or State law.
This means that this Senator Rick Santorum sponsored legislation will RETROACTIVELY superseed all settlements previously made between Halliburton and the 200,000 claimants Halliburton has agreed to compensate with an amount between 2.775 and 4 Billion Dollars:
Halliburton Reaches Agreement To Achieve Global Settlement of Asbestos ClaimsIf the S.1125 passes as is Halliburton's obligation to pay this 4 Billion dollars would disappear. Instead the corporation would be bound by the provisions of S.1125. Here is what Halliburton had to say about that:
Plan covers all present and future asbestos claims, fully and permanently resolving all personal injury asbestos liability.
Plan provides that Halliburton will retain 100% ownership of DII, KBR and all other subsidiaries.
Plan preserves rights of customers, employees, vendors and financial creditors -existing contracts and obligations will be honored and creditors will be paid in full under terms of their agreements.
Up to $2.775 billion in cash, 59.5 million Halliburton shares and notes with a net present value expected to be less than $100 million. (present value of Halliburton shares is $24.03 Sept. 29, 2003 market open)
Halliburton spokeswoman Wendy Hall said if the legislation passes before the company's settlement is finalized, Halliburton's asbestos claims would move to the national fund. The company says it doesn't know if it would save money that way."Halliburton doesn't know if it would save money that way" like we don't know if the Pope is a Catholic. Under this legislation the top contributors to the fund or Tier 1 contributors are bound to pay a percentage based on 2002 "Earnings" as reported to the SEC. Under Section 203 subsection (b) Corporations are to pay 1.5005 percent of the debtor's 2002 revenues in years 1 through 5 and declinging percentages of that amount for the next 27 years. It does not matter if the "settlement is finalized" or not. The legislation superseeds any financial settlement.
So let's take a look at Halliburtons 2002 Revenues to see what the 1.5005 percent will be:
Revenues in 2002 reported at 12,572Billion of mainly taxpayer dollars so 1.5005% is $188,642,860 for the first 5 years or $943,241,300 which is substantially less than the 2.775 Billion in cash and 59.5 million shares (value 1,431,570,000) proposed under the settlement agreement. After the first 5 years the yearly obligation drops to 169million a year for 3 years with declining amounts for the years that follow. So Halliburton is looking at at least a 3 Billion dollar advantage through this legislation over the next 5 years and to top it off Halliburton is substantially insured so effectively the company may pay nothing after collecting the insurance. At 1.5% and falling for 27 years the "loss" will be made up in insurance and 1.5% price increases. Just think how the 51 Republican Senators who have indicated approval of the legislation are salivating at the prospect of a major contributor having billions of extra dollars to spread around in campaign contributions.
Get the backup history here