Files (pdf): Halliburton Resolution

Denying a request by the Halliburton Company, the staff of the U.S. Securities and Exchange Commission has refused to state that the SEC will take no action against Halliburton if the company omits a New York City Pension fund proposal from its 2003 proxy materials, according to New York City Comptroller William C. Thompson. Jr. Prompted by heightened concerns about corporate ties to states sponsoring terrorist activity, Comptroller Thompson filed the resolution that calls for a review of Halliburton's connection to Iran.

The resolution, which was submitted by the Comptroller on behalf of the New York City Police and Fire Department Pension Funds, calls for a Halliburton shareholder vote to establish a Board of Directors' committee to review the corporation's offshore operations.

"The decision by the SEC to stop Halliburton from blocking our proposal demonstrates the legitimacy of our fiduciary concern," said Thompson. "A loss of consumer confidence could result from the continuation of Halliburton's operations in Iran. This could have a negative impact on shareholder value. As responsible shareholders, this is an issue that we must take seriously."

Halliburton opened an office in Iran under the name Halliburton Products and Services Ltd., its Cayman Islands subsidiary, in February 2000.

The resolution requests the following statement be put before shareholders in connection with a vote at Halliburton's annual meeting on May 21: "According to the U.S. State Department, the Iranian government has actively supported and funded terrorist operations against innocent civilians outside its own borders. These activities led to the imposition of government sanctions that provide that virtually all trade and investment activity with Iran by U.S. corporations is prohibited."

The Halliburton resolution was sponsored by the two pension funds, which have more than $18 million in holdings in Halliburton. In total, the city's five pension funds have invested more than $23 million in the corporation.

Similar resolutions - also sponsored by New York City Police and Fire Department Pension Funds - were also filed last Fall with ConocoPhillips and the General Electric Company. General Electric conducts business operations with the Iranian government through its Canadian subsidiary, General Electric Hydro. ConocoPhillips has operations in Iran and Syria through its UK subsidiary, Conoco, Ltd.

The two funds have more than $31 million in holdings in ConocoPhillips, and $205 million in General Electric. The city's five pension funds have invested more than $124 million in ConocoPhillips, and $951 million in General Electric.

Although talks have been scheduled between the funds and ConocoPhillips, the company has also requested that the SEC block the funds' resolution for this year's proxy season. General Electric has decided not to challenge the resolution and will include it in their proxy at this year's shareholder's meeting.

The SEC did request that the Funds make two minor factual corrections to their Halliburton proposal. Those changes have already been made, and forwarded to the SEC.

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