Company man

Dick Cheney presided over a company that did much more than set up separate
bathrooms for Americans and foreign nationals. It employed some of the most
stringent anti-worker policies to be found anywhere in corporate America.

by Seth Gitell

NEARLY ALL of the press attention on George W. Bush's vice presidential pick, Dick Cheney, has focused on Cheney's juicy $20 million stock-options deal from the Halliburton Company. But the press is missing the bigger -- and more significant -- story about Cheney's old company. Namely, that Halliburton, an international conglomerate with substantial interests in oil, construction, and engineering, represents the absolute worst of corporate America. Halliburton faces ongoing and unresolved complaints of racial discrimination, does not allow employees to file suits alleging discrimination in court, and is notoriously anti-union.

A bizarre complaint filed with the Equal Employment Opportunity Commission and publicized this month hints at the strained relationship between management and labor at Halliburton. A former employee charged she had been wrongly dismissed from the company when she complained that it maintained separate bathrooms for Westerners and host-country nationals at its foreign sites. The story triggered a number of late-night talk-show jokes. And a Cheney spokeswoman, denying knowledge of the practice, said nonetheless that Cheney would not tolerate "harassment at any organization he's headed or been a part of."

But as more such details about Halliburton trickle out, they will surely undercut the ability of the Bush-Cheney ticket to reach out to one of the groups it needs to win the election -- Reagan Democrats. Both parties have identified the vote of the independent-leaning, working- and middle-class voters in Midwestern swing states such as Pennsylvania, Ohio, and Illinois as the key to winning the election. Halliburton's notoriously anti-worker stance won't play well with this crowd. And other details of Halliburton's history will call into question George W. Bush's decision to name Cheney, who originally was hired by the Bush camp to screen potential vice-presidential candidates, as his running mate in the first place.

Certain facts about the $15 billion company -- one arm of which, Brown & Root, is the largest building contractor in Texas -- should have raised red flags when Cheney himself came under consideration. In 1995, for example, Halliburton was fined for having violated federal sanctions against trading with Libya.

"The difficulty is they never vetted the vetter," says conservative commentator Marshall Wittmann, a senior fellow at the non-partisan Hudson Institute. "All of these questions that are now arising are the result of the failure to vet the vice-presidential candidate."

CHENEY SUCCEEDED long-time chairman Thomas Cruikshank as Halliburton's CEO in 1995. It's been well documented that Cruikshank and Cheney bonded a few months before the transition during a fly-fishing trip in British Columbia. It was then, observers say, that Cruikshank pegged Cheney as the perfect successor. The oilman immediately saw the value of the former defense secretary's international contacts, which could be leveraged to garner more international business for the company.

Cheney agreed to take the job and inherited a well-established company with construction projects in America and abroad. Halliburton has built everything ranging from an ExxonMobil Chemical Company complex in Singapore to a tissue-paper factory in Louisiana to Houston's new baseball park, Enron Field. An August 1999 article in Texas Construction estimates that Halliburton's $7.9 billion in construction revenue in 1998 made up almost 40 percent of the total revenue brought in by 60 of the state's largest contractors.

But Cheney also inherited a company with long-standing labor problems. Brown & Root, Halliburton's construction division, has long drawn the ire of Texas labor leaders. "Brown and Root as an entity has never had a labor agreement. They have been one of the most anti-union, anti-worker corporations in the world", says Dale Wortham, president of the Harris County AFL-CIO in Houston.

Fifteen years ago, the Texas Building and Construction Trades Council studied Brown & Root to find out why it was so hard to organize. Among other things, the group found that Brown & Root consistently made low-ball bids for construction projects, thereby squeezing out union shops. It completed most of its work on the cheap with non-union labor -- some of it provided by foreign workers who were in the United States illegally. Thanks to those low bids, it wasn't unusual for Brown & Root to run into trouble bringing its projects in at or under budget. Critics also say the company cut corners where it shouldn't have in order to contain costs.

Texas labor officials point to the South Texas Nuclear Project as an example of the company's worst labor performance. In 1985, Brown & Root was removed from the construction of the power plant after utilities charged that the company wasn't doing a high-quality job. CBS reported, in 1979, that inspectors, looking into the quality of concrete installation, ceased inspecting construction on the project after receiving threats from workers on site. Brown & Root settled for $750 million with three Texas utilities after it was removed from the job.

"They got tossed off and we had to go in and finish it," recalls Gale Van Hoy, the executive secretary of the Texas labor council.

To be fair, the power-plant deal occurred long before Cheney took Halliburton's reigns. So did he take steps to change the company? Van Hoy, and other labor leaders, say he did not: "Dick Cheney didn't change anything. That company is still [labor's] enemy and will smash us and fight us if they can." By contrast, two of Halliburton's main competitors, in Texas and nationally, W.S. Bellows Corp. and Bechtel, both of which employ union workers, get high marks from labor leaders.

Take Halliburton's involvement with building Enron Field. In 1997, Brown & Root procured the contract to build Houston's $180 million baseball park by promising to bring the job in for a maximum of $229.5 million -- a provision that Brown & Root's union competitors could not meet. Still, labor officials expected to forge a project agreement with Brown & Root at union wages because the labor lobby had backed a stadium referendum that authorized the building of the park. The Harris County AFL-CIO Council in Houston hoped to get Brown & Root to hire apprentices and train a new generation of workers on the project. In addition, labor officials in Houston wanted Brown & Root to pay the prevailing wage -- a uniform wage set by labor -- for work on the new stadium. But Brown & Root rebuffed the unions and opted to use both union and non-union workers. The unions threatened to picket the project.

"They ended up dictating what the prevailing wage should be and they rejected our call on that," says Richard Shaw, the labor group's secretary-treasurer. In the end, 85 percent of the contractors and laborers hired to build Enron Field were union workers. But the 15 percent who weren't union workers did not receive full benefits. And unions still objected to the way the project was managed on the grounds that the company ran an open shop.

"To me it's unconscionable to oppose training people on public-works projects," says Shaw. "If you're going to use public dollars, we ought to get something out of it."

Labor officials argue that the public interest is better served when a multi-million dollar public initiative, such as a baseball stadium, is built with union workers. At least with union workers, Shaw and others say, safety standards are maintained and new workers receive training. Van Hoy maintains that if union workers had been in place for the whole project, the quality of work would have been better, several hundred more union workers would have done the job -- at union wages -- and more people would have gotten trained.

"This says that Cheney has absolutely no respect for working people, their right to organize, their right to be represented," says Hank Sheinkopf, a Democratic strategist. "This is a throw-back to the worst kind of labor conditions, which what you expect in Texas -- a right-to-work state."

MORE DISTURBING than the company's tangled history with labor, however, is Halliburton's use of mandatory individual agreements with workers that preclude the employees from bringing suit in federal court. This means that a worker who faces age or race discrimination at Halliburton cannot sue in state or federal court. The United States Supreme Court gave such agreements the green light in 1991. In a January 25 article in the New York Law Journal titled "Bypass Unions to Negotiate Individual Agreements to Arbitrate Statutory Discrimination Claims," Samuel Estreicher, a professor of labor law at New York University School of Law, identified Halliburton as a leader in this practice. Other companies that utilize such agreements include Philip Morris and International Paper.

In the abstract, such a provision may not seem like much. But consider the case of 32 African American workers at Halliburton who work at an oil refinery in Belle Chasse, Louisiana -- a case first covered by the New Orleans Times-Picayune.

Although company rules preclude the workers and their attorney, Reva Lupin, from discussing the case in detail, Charles Sanders, 31, a worker and an informal spokesman for the group, did agree to tell his story. While only 30 miles from New Orleans, Belle Chasse is still off the beaten path in the heart of the Louisiana bayou. At the refinery, laborers make $7.50 per hour. Workers in the machinist department make between $13.50 and $14.95 an hour. Supervisors and managers make more. Sanders says that during his three years at the company there has only been one African American manager and that most African Americans work as lowly-paid laborers -- despite the fact that African Americans make up about one third of the company's workforce.

After working as a laborer and doing temporary stints in the machinists department, Sanders says he wanted to find out how he could be transferred permanently to the better-paying department. "I asked them, `What kind of system is there . . . to make sure we have equal opportunity for all?'" Sanders recalls. Sanders eventually became a machinist, but when the next supervisory position opened up, it went to a white person -- even though an African American colleague of Sanders' with greater experience had competed for the job.

When Sanders and his colleagues complained, their direct supervisor listened to their complaints, but the workers did not feel that they were being taken seriously. Company rules obviously precluded the workers from filing suit in court. And internal company rules dictated that the only person they could complain to was their direct supervisor -- a man they felt did not take the complaint of racial discrimination seriously. "We have to go through the chain of command," says Sanders.

Things got ugly soon after word leaked that the African American workers believed there was discrimination in the promotions process. Sanders alleges that a co-worker scrawled "KKK" on his machinist tool box. Another scrawled "nigger" on a sign in the tool room. Meanwhile, white workers brandished the Confederate flag on their hard hats and tool boxes, Sanders charges. After each instance, Sanders and the other workers complained to higher management. On most occasions, nothing of substance was done. After one such incident, management circulated a memo stating that defacement of company facilities was grounds for termination, but no employees were fired after the memo was sent around.

Tensions intensified when the African-American workers got a lawyer and began the arbitration procedure. A white worker, who usually got lunch for the group, refused to take lunch orders for black workers. Things got so bad that Sanders and his co-workers actually called the Halliburton headquarters in Houston to complain. Still, nothing was done.

"We're concerned because during the time he was the CEO of Halliburton, several African-American employees complained about treatment at Halliburton. Why didn't he as CEO of Halliburton step in and try to solve this problem," asks Sanders. "If Dick Cheney can't solve our internal problems at Halliburton, how can he solve some of the problems we have in the country as vice president?"

Even if Cheney didn't know the precise facts of the Belle Chasse case, he nonetheless presided over a company that precluded people such as Sanders and his co-workers from suing in court. David Yamada, an associate professor of law at Suffolk University School of Law and an expert in labor law, says the Halliburton rules make it hard for the workers to change things. "It sounds like this is a place where the culture is really stacked against these workers," says Yamada.

WHAT MAKES these facts about Cheney and Halliburton so striking is that 2000 was supposed to be the year that Bush defined himself as a compassionate conservative and a "very different Republican candidate." Had Bush just taken the usual GOP play-book, all the allegations surrounding Cheney and his leadership of a company so hostile to workers would be non-starters. But this is the year the Republicans went out of their way to highlight African Americans and Latino involvement in the party at the convention in Philadelphia. This is the year Bush wanted to make a play for working voters -- and a year, as mentioned above, when swing voters in the Midwest matter.

Rui Teixeira, a senior fellow at the Century Foundation, says Halliburton's anti-labor record will hurt the Bush-Cheney ticket. Teixeira is the co-author of a new book, America's Forgotten Majority: Why the White Working Class Still Matters (Basic Books). Many of the voters Teixeira writes about live in those key Midwestern states, some of which have 60 to 70 percent of their voting populations made up of working-class whites.

"This a loser to Bush-Cheney, says Teixeira. Being identified with a big corporation that kicks workers around is not helpful with these voters. These are the same type of people that the Republicans desperately need to keep. "These people aren't typical liberals, but they tend to look at big corporations suspiciously."

For Democrats, the facts speak for themselves. "You've got one guy, Al Gore, who says he's for working people. You've got two other guys whose record says they hate working people," says Hank Sheinkopf, a Democratic strategist. Cheney defenders can point to Gore's own sticky oil mess too, his holdings in Occidental Petroleum, a company that has been criticized for displacing the indigenous U'wa People in Colombia. But, points out Sheinkopf, "The difference is that Cheney ran a company where anti-worker policies were put into place and kept into place because he wanted them in there to increase profits on the backs of the working people. This is not an accident. He was the boss. He was in charge."

The Hudson Institute's Wittmann adds that the new questions about Cheney at Halliburton only further draw a distinction between the Republican vice presidential candidate and his Democratic counterpart. "You can contrast this choice with the Lieberman choice, and that speaks volumes," says Wittmann. "The question is more in judgment and how you chose your candidates than the specifics of any of these situations. It does underscore Bush's failure to choose a vice-presidential candidate who could have made a difference the way Lieberman did for Gore."

For Bush, who is sticking by Cheney and is planning to increase his appearances with the former defense secretary, this latest news about Halliburton/Brown & Root is not good. It makes things harder when he needs them to be getting better. It should be noted that neither the Bush campaign nor Halliburton responded to telephone calls and emails requesting a response to this story. But ignoring the allegations won't make them go away.

Seth Gitell can be reached at sgitell[a]phx.com.