Additional information about the RIGHT MOB's questionable behavior.
More Harken Energy Corporation Documents
From, The Center for Public Integrity
The New York Daily News reported on July 30 that Harken Energy Corporation
set up a Cayman Islands subsidiary, the Harken Bahrain Energy Company, on
Sept. 1, 1989, in connection with the company's $25 million contract to drill for oil
off the coast of Bahrain, an island nation in the Persian Gulf.
The Cayman Islands are a well-known offshore tax haven for both individuals
and corporations. The Internal Revenue Service alleged, for example, that
Halliburton Company used a Cayman Islands subsidiary, Halliburton Global
Limited, to avoid payment of $38 million in taxes owed in 1990 and 1991. Vice
President Dick Cheney became Halliburton's CEO in 1995; during his tenure, the
company fought the IRS's findings in United States Tax Court. The Center for
Public Integrity reported on Halliburton's tax court case in our 2001 book, The
Cheating of America.
The White House confirmed that Harken had set up the subsidiary, but argued
that it provided no tax advantages. The Washington Post reported that
administration aides said that Harken Bahrain Oil was formed primarily to limit
the parent company's legal liability that would result from an accident stemming
from the company's Bahrain operation. The Post added that, "Bush had opposed
the deal and Harken never struck oil or made money, the White House said."
The Center has obtained a computer record from the Cayman Islands showing
the date of incorporation of Harken Bahrain Oil Company. Among the documents
we obtained from the Securities and Exchange Commission under the Freedom
of Information Act, we found the minutes of the Sept. 13, 1989 board meeting,
held two weeks after the subsidiary was set up. The minutes make no mention
of the subsidiary or the Bahrain deal.
The minutes of the Dec. 6, 1989 board meeting, however, show that after a
presentation from Monte Swetnam, president of the Harken Exploration
Company and the company's point man on the Bahrain deal. "Mr. Swetnam
reviewed and discussed the background of the Bahrain transaction with the
Board including the discussions and negotiations conducted in Bahrain on his
several trips there. Mr. Swetnam further discussed with the Board the potential
benefits which the Company could realize from this opportunity. The Board
discussed and reviewed the matters raised by Mr. Swetnam concerning this
foreign opportunity and after which discussion, the Board unanimously approved
HEX's [Harken Exploration Company] proceeding towards finalization of a formal
agreement with the State of Bahrain…"
George W. Bush, then a director of Harken, attended the meeting. There is no
indication that he did not vote to approve the Bahrain deal.
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