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Halliburton's Dubai move sparks US political ire Justin Cole / AFP | March 12, 2007 WASHINGTON - Halliburton's decision to move its base from Texas to Dubai sparked a political firestorm Monday as Senator Halliburton, headed by "Does this mean they are going to quit paying taxes in America?" asked Clinton, a US presidential candidate. "They get a lot of government contracts, is this going to affect the investigations that are going on? Because we have a lot of evidence of misuse of government contracts and how they have cheated the American soldier and cheated the American taxpayer," Clinton, speaking in New York, said of Halliburton. The firm and its former KBR subsidiary, which is being spun off, have endured several contracting controversies and investigations since Halliburton was awarded a no-bid 2.4 billion dollar contract to supply the US military on the eve of the US-led invasion of KBR agreed last year to pay the US government eight million dollars to settle fraud claims related to an Army supply contract. Halliburton's Nigerian operations have also come under US government scrutiny in recent years. "It's an example of corporate greed at its worst," said Democratic Senator Patrick Leahy (news, bio, voting record), chairman of the Senate Judiciary Committee. "At the same time they'll be avoiding US taxes, I'm sure they won't stop insisting on taking their profits in cold hard US cash," Leahy charged. Halliburton spokeswoman Melissa Norcross said, however, that Halliburton would still remain incorporated in the United States and that there would be no layoffs as a result of its move. "As such, we anticipate absolutely no tax benefits from this decision," Norcross said. Halliburton's chief executive, Dave Lesar, will move his office from Houston, Texas, to Dubai, but Norcross said other top officers would remain situated in Houston. Halliburton said it was relocating to Dubai for business reasons and that Lesar would oversee a ramped-up effort to win regional oil services contracts and related business. Democratic Senator Byron Dorgan (news, bio, voting record) said he would seek a congressional review of Halliburton's announcement. "I want to know, is Halliburton trying to run away from bad publicity on their contracts? Or are they trying to set up a corporate presence in Dubai so that they can avoid the restrictions that currently exist on doing business with prohibited countries like Karen Lightfoot, a spokeswoman for Democratic Congressman Henry Waxman (news, bio, voting record), said the lawmaker might seek a hearing in the House of Representatives. "This is a surprising development. I want to understand the ramifications for the US taxpayer and national security," Waxman, the chairman of the House Oversight and Government Reform Committee, said. Halliburton said that over 38 percent of its 13 billion dollar oil-field services revenue was generated from the eastern hemisphere. It also said its move to the United Arab Emirates was the next step in a strategic plan unveiled in 2006 to boost its business with national oil companies in and around the Gulf. Houston mayor Bill White was supportive of Halliburton's move. "The mayor says he understands the nature of the decision," said Frank Michel, a spokesman for White. "He doesn't think it will negatively impact Houston or our status as an international energy center." Halliburton's move is likely to bolster the image of Dubai as an up-and-coming business capital. The city is undergoing a construction bonanza, especially of luxurious tourist hotels. The UAE's rulers are vying to develop Dubai as a corporate, tourism and financial hub lying between Europe and Asia. The kingdom neighbors oil-rich Saudi Arabia to its west and Oman to its east, while its northern coastline nestles the Gulf across a stretch of water from Iran. However, its move may also spur critics of US regulation who say corporate reform laws of recent years have become too onerous and are harming the US' business environment. Halliburton's stock closed up 17 cents at 32.19 dollars. It operates in 70 countries and has over 45,000 employees.
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