Romney, Cheney in Deep with Iran Investments
In a high profile effort to bolster his credibility on national security, 2008 Republican White House hopeful Mitt Romney last week called on New York to divest its pension fund of any holdings in firms doing with business with Iran. But as it turns out, it is Mitt Romney's former employer with the ties to Tehran. And as you'd expect, Dick Cheney's Halliburton is in deep as well.
Following the lead of former Israeli Prime Minister Benjamin Netanyahu, Romney began his grandstanding on Iranian disinvestment by targeting the Democratic-controlled states of New York and Massachusetts. On February 22, Romney sent letters to New York Governor Eliot Spitzer, Senators Chuck Schumer and Hillary Clinton as well as state comptroller Thomas P. DiNapoli urging a policy of "strategic disinvestment from companies linked to the Iranian regime." Romney's theatrics continued:
"With your new responsibilities overseeing one of America's largest pension funds, you have a unique opportunity to lead an effort to isolate Iran as it pursues nuclear armament. I request that you immediately launch a policy of strategic disinvestment from companies linked to the Iranian regime. Screening pension investments and divesting from companies providing financial support to the Iranian regime or linked to Iran's weapons programs and terrorist activities could have a powerful impact. New investments should be scrutinized as long as Iran's regime continues its current, dangerous course."
As it turns out, scrutiny begins at home. As the AP detailed, Romney's former employer and the company he founded have recent links to recent Iranian business deals:
Romney joined Boston-based Bain & Co., a management consulting firm, in 1978 and worked there until 1984. He was CEO of Bain Capital, a venture capital firm, from 1984 to 1999, despite a two-year return as Bain & Co.'s chief executive officer from 1991 to 1992.
Bain & Co. Italy, described in company literature as "the Italian branch of Bain & Co.," received a $2.3 million contract from the National Iranian Oil Co., in September 2004. Its task was to develop a master plan so NIOC -- the state oil company of Iran -- could become one of the world's top oil companies, according to Iranian and U.S. news accounts of the deal.
Bain Capital, the venture capital firm that Romney started and made him a multimillionaire, teamed up with the Haier Group, a Chinese appliance maker that has a factory in Iran, in an unsuccessful 2005 buyout effort.
This is not the first time his former corporate home has proven to be the bane (pun intended) of Mitt Romney's political existence. During his failed 1994 Senate race and successful 2002 gubernatorial run, Romney was labeled a corporate raider after revelations that a company Bain purchased in Indiana moved quickly to shed hundreds of workers and drop health care for many more.
But this time, Romney is playing dumb -- and blind. The former Massachusetts governor claims his investments are in Boston-managed blind trust beyond his control. And more importantly, Romney's declared that his new-found distrust of the Ahmadinejad regime in Tehran only applies going forward:
"This is something for now-forward. I wouldn't begin to say that people who, in the past, have been doing business with Iran, are subject to the same scrutiny as that which is going on from a prospective basis."
Whether the Bill Frist defense of the "blind trust that can see" will work for Mitt Romney on Iran remains to be seen. Vice President Dick Cheney for one seems to have mastered it.
In 2004, the CBS newsmagazine 60 Minutes detailed the Iranian business dealings of Cheney's former company, Halliburton. Despite the prohibitions signed into law by President Clinton with his 1995 executive order and the Iran and Libya Sanctions Act of 1996, Halliburton continued to reap the profits of business with Iran through its non-U.S. subsidiaries. While U.S. law bans virtually all commerce with the rogue nations, Halliburton was able to jump through its major loophole: the rules do not apply to any foreign or offshore subsidiary so long as it is run by non-Americans. As CBS documented:
That subsidiary, Halliburton Products and Services, Ltd., is wholly owned by the U.S.-based Halliburton and is registered in a building in the capital of the Cayman Islands -- a building owned by the local Calidonian Bank. Halliburton and other companies set up in this Caribbean Island, because of tax and secrecy laws that are corporate friendly.
Halliburton is the company that Vice President Dick Cheney used to run. He was CEO from 1995 to 2000, during which time Halliburton Products and Services set up shop in Iran. Today, it sells about $40 million a year worth of oil field services to the Iranian government.
In the wake of the January 2004 60 Minutes piece, the company moved quickly to declare that "Halliburton's business in Iran is clearly permissible under applicable laws and regulations" and cited its October 2003 disclosures to the New York City police and fire pension funds. Despite those assurances, Dick Cheney's old firm was subpoenaed by a U.S grand jury in June 2004. In early 2005, Halliburton announced that it would end its business activities there when it fulfills its ongoing contracts, including a $35 million gas drilling project it had just won the previous month.
Though he does not benefit directly from the Iran contracts of Halliburton's foreign-based subsidiaries, Cheney continues to have financial ties to his former firm. Despite Cheney's assurances that "I've severed all my ties with the company, gotten rid of all my financial interest," a 2003 report by the Congressional Research Service found that the Vice President retained 433,000 shares of Halliburton. In addition, Cheney received $162,392 and $205,298 in deferred payments in 2001 and 2002, respectively.
Given the stakes, it's no wonder Dick Cheney had a born-again experience on Iranian sanctions when he entered the Bush administration. While Vice President, Cheney in 2002 denounced Iran as "the world's leading exporter of terror." But during his tenure as Halliburton CEO in the 1990's, Cheney strenuously argued against Clinton's sanctions regime and expanded Halliburton's business with Tehran. But in 1998, he complained that U.S. firms were "cut out of the action." And back in 1996, Cheney railed against the Clinton prohibitions on Iranian trade and financial activity for American firms:
"We seem to be sanction-happy as a government. The problem is that the good Lord didn't see fit to always put oil and gas resources where there are democratic governments."
When it comes to disinvestment in Iran, Republicans like Mitt Romney and Dick Cheney shouldn't, to paraphrase then-candidate George W Bush, "take the high horse and then claim the low road." The task of decrying those who unwittingly provide aid and comfort to the Iranian regime is best left to those who are sincere about it, such as Oregon Senator Ron Wyden. In 2005, Wyden in reaction to the Halliburton's cozy relationship proposed a bill to require the Treasury Department to publicly list both foreign firms doing business with Iran's energy interests as well as any U.S entities holding more than a $100,000 stake in them. And just last month, Wyden introduced the "Stop Arming Iran Act" to ensure that surplus parts and components from retired American F14 fighter jets are not auctioned off to arms dealers serving the government in Tehran.
But with campaign 2008 already underway, it is pretenders like Mitt Romney who have the microphone. His message: do as I say, not as I do.