Download copy of the Halliburton Shareholder Proposal (pdf)

Download copy of Comptroller’s Dec. 8th letter to Halliburton (pdf)

Download copy of Comptroller’s Dec. 5th letter to Halliburton(pdf)

Download copy of Halliburton’s report (pdf)

New York City Comptroller William C. Thompson, Jr. today criticized the Halliburton Company for failing to comply with an agreement to provide the city pension funds with a report detailing the "potential financial and reputational risks" of its operations in Iran. The Comptroller - on behalf of the New York City Police and Fire Department Pension Funds - has submitted a renewed shareholder proposal calling on the company to more thoroughly review those operations.

Under an agreement reached with the Comptroller in March, Halliburton promised to designate a committee of its Board of Directors to review its operations in Iran and then submit a report on those risks. As a result of that agreement, Thompson withdrew a proposal to allow shareholders to urge the company to conduct the review. However, contrary to that agreement, Halliburton's report failed to address the concerns specified in the pension funds' proposal.

In addition to refiling the shareholder proposal, Thompson has written Halliburton to express his serious concerns about its failure to comply with its promise.

"This agreement represented a contract between Halliburton and my office, and Halliburton has breached that contract," Thompson said in a statement. "Halliburton must act to honor its commitment and produce a full and complete report on the reputational risks of doing business with Iran."

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Halliburton's proposal followed reports that Halliburton had opened an office in Iran under the name Halliburton Products and Services Ltd., its Cayman Islands subsidiary, in February 2000. The proposal called on shareholders to vote to establish a Board of Directors' committee to review Halliburton's operations with reference to "potential financial and reputational risks" from doing business in Iran. The statement in support of the proposal noted that: ""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."

"If we are trying to eradicate terrorism, we must ensure that companies in our portfolio are not using off-shore subsidiaries to legally evade United States sanctions against terrorist-sponsoring states," Thompson said. "This is an issue of paramount importance."

"We believe their use of off-shore and United Kingdom subsidiaries to establish operations with countries that sponsor terrorism violates the spirit, if not the letter, of the law," he added. "These actions also expose the companies to the prospect of negative publicity, public protests, and a loss of consumer confidence, all of which can have a negative impact on shareholder value."

Halliburton asked the Securities and Exchange Commission (SEC) to refrain from sanctioning the company if Halliburton omitted the proposal from its 2003 proxy materials. The SEC, however, declined to issue a letter stating that it would not take action against the company. Halliburton then agreed with the Comptroller that, in return for the pension funds' withdrawing the proposal, it would designate a committee to review its operations and submit a report that would be limited to non-proprietary information.

Although that report was submitted in October, Thompson said it did not address key concerns of the pension funds, as Halliburton had promised. In his letter to Halliburton, Thompson noted that "the risks to Halliburton's reputation from doing business with Iran, a nation the U.S. State Department designated as a 'sponsor of terrorism,' have continued. For example, international inspectors confirmed that Iran had been engaged in undisclosed nuclear research.

But the October 21 report omits any reference to the reputational risks to Halliburton posed by its subsidiaries doing business with such a nation. It discusses only financial and technical risks, a clear breach of Halliburton's promise to the Fire and Police Pension Funds."

The Police and Fire Department Pension Funds have about $31.4 million in holdings in Halliburton. In total, the city's five pension funds had invested more than $149 million in the corporation.

Besides Thompson, trustees on the New York City Fire Department Pension Fund are: Mayor Michael Bloomberg; Nicholas Scoppetta, Chair, New York City Fire Commissioner; Martha Stark, Commissioner, New York City Finance Department; Stephen Cassidy, President, James Slevin, and Kevin McAdams, Treasurer, and Robert Straub, Bronx Trustee-Uniformed Firefighter's Assoc. of Greater New York; Peter Gorman, President / Captains Rep.Uniformed Fire Officers Assoc.; Arthur Parrinello, Chief's Rep., and Stephen Carbone, Lieutenant's Rep., Uniformed Fire Officers Assoc.; and, Joseph Gagliardi, Marine Engineers Assoc.

In addition to Thompson, trustees on the New York City Police Pension Fund are: Mayor Bloomberg; Commissioner Stark; Raymond Kelly, Chair, New York City Police Commissioner; Patrick Lynch, Police Benevolent Association; Mubarak Abdul-Jabar and Scott Williamson, Chair of the Board of Trustees, Police Benevolent Association; Thomas Scotto, Detectives Endowment Association; Edwin Mullins, Sergeants Benevolent Association; Anthony Garvey, Lieutenants Benevolent Association; and John Driscoll, Captains Endowment Association.

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