Follow, if you will, this twisted tale of special legislative relief, tailored, it would seem, for the benefit of one specific company - a company already under fire for unsevered ties to the Vice President and preferential treatment in no-bid contracts in Iraq.
Update 1: Halliburton to end request for asbestos stay
Halliburton Co. said on Monday (Sept. 29) it would cease trying to extend a bankruptcy TRO blocking more than 200,000 asbestos injury claims, and said it will make a prepackaged Chapter 11 bankruptcy filing in November. Once filed, the bankruptcy plan automatically blocks any further asbestos claims, even if the court's stay has expired. Halliburton estimates the cash portion at $3.05 billion, or 9.8 percent higher than previous forecasts. Combined with the value of 59.5 million common shares to be contributed the total cost of the settlement exceeds $4.5 billion.
UPDATE 2: September 30, 2003 Insurers Oppose passage of S. 1125 In a letter to Majority Leader Frist insurers admit that almost all costs of S.1125 will be borne by the Insurance Companies - not defendants like Halliburton:
The Senate Judiciary Committee approved the Fairness in Asbestos Injury Resolution Act (S.1125), by a vote of 10-8-1, with Senator Kyl abstaining. As the legislative process and debate move to the full Senate, we want to express our immense disappointment with the current state of S.1125, and to explain why we must now vigorously oppose this bill.
UPDATE 3: September 30, 2003 The Asbestos Alliance website is offered by "asbestos defendant companies", "trade associations", and "insurers" and made to appear as if it is an asbestos victims support site. Tactics include efforts to get asbestos victims to ask their Senators and Congressional Representatives to support the legislation. Using the appellation "non-profit organization" this site obscures the fact that it's membership is entirely composed of "for BIG profit" companies and their "for profit" insurers:
The Asbestos Alliance is a non-profit organization comprised of asbestos defendant companies, trade associations, insurers and others seeking congressional legislation to solve America's asbestos litigation crisis.
Where does the government of the United States end and the corporation known as Halliburton begin? Corporations have always exerted great financial influence in Washington in the form of contributions to candidates, and corporate interest lobbies have supported legislation that benefits their membership. But the current legislation known as S.1125 smacks of something quite different. It seems to be especially beneficial to one particular corporation: HALLIBURTON.
First, take a look at S.1125.IS (you must type S.1125.IS in the "bill number" window):
Under Section 403 at the end of the bill you will find the following language:
SEC. 403. EFFECT ON OTHER LAWS AND EXISTING CLAIMS.
(a) EFFECT ON FEDERAL AND STATE LAW- The provisions of this Act shall supersede any and all Federal and State laws insofar as they may relate to any asbestos claim filed under this Act.
(b) SUPERSEDING PROVISIONS-
(1) IN GENERAL- Any agreement, understanding, or undertaking by any person or affiliated group assigned to Tiers II through VI with respect to the treatment of any asbestos claim filed before the date of enactment of this Act that requires future performance by any party shall be superseded in its entirety by this Act.
(2) NO FORCE OR EFFECT- Any such agreement, understanding, or undertaking by any such person or affiliated group shall be of no force or effect, and no person shall have any rights or claims with respect to any of the foregoing.
(c) EXCLUSIVE REMEDY- The remedies provided under this Act shall be the exclusive remedy for any asbestos claim under any Federal or State law.
This means that this legislation, sponsored by Senator Rick Santorum, will RETROACTIVELY supersede all settlements previously made between Halliburton and the 200,000 claimants Halliburton has agreed to compensate with an amount between $2.775 billion and $4.3 billion:
Halliburton Reaches Agreement To Achieve Global Settlement of Asbestos Claims
* Plan covers all present and future asbestos claims, fully and permanently resolving all personal injury asbestos liability.
* Plan provides that Halliburton will retain 100% ownership of DII, KBR and all other subsidiaries.
* Plan preserves rights of customers, employees, vendors and financial creditors -existing contracts and obligations will be honored and creditors will be paid in full under terms of their agreements.
* Up to $2.775 billion in cash, 59.5 million Halliburton shares and notes with a net present value expected to be less than $100 million . . . . [Ed. note: Present value of Halliburton shares is $24.03 Sept. 29, 2003 market open.]
If S.1125 passes as-is, Halliburton's obligation to pay this $4 billion would disappear. Instead, the corporation would be bound by the provisions of S.1125. Here is what Halliburton has to say about that:
Halliburton spokeswoman Wendy Hall said if the legislation passes before the company's settlement is finalized, Halliburton's asbestos claims would move to the national fund. The company says it doesn't know if it would save money that way. [Ed. note: Emphasis added.]
Halliburton "doesn't know if it would save money that way" like we don't know if the Pope is Catholic.
Under this legislation, the top contributors to the fund, or Tier 1 contributors, are bound to pay a percentage based on 2002 "earnings," as reported to the SEC. Under Section 203 (b), corporations are to pay 1.5005 percent of the debtor's 2002 revenues in years 1 through 5 and declining percentages of that amount for the next 27 years. It does not matter if the "settlement is finalized" or not. The legislation supersedes any financial settlement.
So let's take a look at Halliburton's 2002 revenues to see what 1.5005 percent will be:
Revenues in 2002 were reported at $12.57 billion of (mainly taxpayer) dollars, so 1.5005% is $188,642,860 a year for the first five years, or $943,241,300 overall, which is just under one-quarter of the $2.775 billion in cash and 59.5 million shares (value $1,431,570,000) proposed under the previous settlement agreement.
NOTE: If S.1125 passes expect the stock price to return to pre-asbestos claim levels of $45 per share or more. Any increase in the price of the stock will personally benefit Cheney. Although he has pledged any dividend income on his stock options in Halliburton to charity (reducing his tax burden?) he has not relinquished ownership thus benefiting from the gain in equity.
After the first five years, the yearly obligation drops to $169 million a year for three years, with declining amounts for the years that follow. So Halliburton is looking at, at a minimum, a $3 billion advantage through this legislation over the next five years. And to top it off, Halliburton is substantially insured - so effectively, in fact, that the company may pay nothing after collecting the insurance. At 1.5% and falling for 27 years, the "loss" will be made up in insurance and 1.5% price increases.
Just think how the 51 Republican senators who have indicated their approval of the legislation are salivating at the prospect of a major contributor having billions of extra dollars to spread around in campaign contributions.
Given that Halliburton stock fell from a high of $45 per share prior to the asbestos problem that caused it to plummet to $8.50; it would be reasonable to expect the stock to regain that loss and more on the passage of S. 1125. If that happens Vice Presiden Richard Cheney stands to double the value of his stock options along with all of the shareholders of Halliburton stock.
This gain in equity is only part of the shift in financial power that fuels the campaigns of candidates for elective office. Trial lawyers who support Democrats will suffer significant financial loss while Republicans that benefit from 100% of the Halliburton political contributions will benefit from significant financial gain.
For the background and history of Halliburton and S.1125 Asbestos Legislation go here.
Great Reading at Open Source Politics
Jeff Alworth’s Cheney Lied
Susie Madrak’s Self-defense for VotersGeorge Will’s context by John Williams Jeremy Puma’s Republican’s are just mean
The Pot Calling the Kettle Pious by Earl Dunovant Colin Powell is Done by Kenneth Quinnell Civility Dawn’s on Bush by Kevin Hayden
Robert Novak is a coward - The CIA's Patriotic Math - A Matter of Trust - I Have A Little List
all are about The Valerie Plame Affair
More good progressive blogs that deserve your attention:
Notes on the Atrocities - The Right Christians-- Suburban Guerrilla -- US Democratic Veteran -- Shock and Awe -- Prometheus 6 -- The People's Republic of Seabrook -- Lean Left -- Body and Soul -- SouthKnoxBubba -- Seeing the Forest -- The Incomparable Mad Kane -- blah blah blah 3 -- Rum inate This -- Democratic Underground -- The Lefty Directory -- Bart Cop -- The Smirking Chimp -- Busy Busy Busy -- Scoobie Davis
LIBERAL LINK-A-THON: moving progressive blogs up through the blogosphere Half the Sins of Mankind -- Sadly No ! -- rantavation -- The Mad Prophet Blog -- Mouse Musings -- A Rational Animal -- The Funny Farm -- Arms and the Man -- The Modulator -- WTF is it Now -- Out toLunch -- Nitpicker -- To the Barricades -- Folkbum’s Rambles and Rants please consider these fine progressive bloggers for your blogrolls and links.
The Troglodytes that elected Schwartzengroper are the concern of Maru the Crankpot at WTF is it Now
Da Gropenguvnor is gonna need a lota luck sez Jack at The People's Republic of Seabrook
A Rational Animal has Herr Rumsfeld left out of the Loop
High on the list of Halliburton information sources: is Arms and the Man
NPR interviews AEI NeoCon by rantavation
Arnold's Ode is up at the The Incomparable Mad Kane
GOPZILLA is the subject over at the Democratic Underground
Ruminate This move by GWB "lowering expectations" in leaky DC.
LIBERAL LINKS UPDATE on the Recall (mostly):
FantasticPlanet has a great link to the Gropenguvnor's Japanese TeeVee ads. (Quicktime movies) heheheheheh.
The Modulator links to some Recall Positives.
There are signs of the Apocalypse in California according to The Peoples Republic of Seabrook
SouthKnoxBubba has his own take on the new Super Hero of California, and
Kevin at Lean Left offers more notes on the Wierd Election in the Golden State.
Go wish The Funny Farm a happy first birthday of blogging - you also get to see Tom via digital photography.
It's pathetic over at SouthKnoxBubba
The Democratic Veteran hopes that Gray Davis has a nice retirement, and the SteroidFuhrer has a wake-up call that the job involved more than just showing up...like he does for movies.
The Cheeseweasle adds err subtracts err crunches the numbers for Ahnuld, and leads us to George Wills Conservative Travesty
The Cosmic Iguana hits on potential Gropenator lawsuit number one - this one from the UK and Thars gold in them thar wars.
Emphasis Added covers winner take all aspects of the Recall
From the Swamp has Greg's take on the Recall
The Gutless Pacifist gives us Conan the Governor and Comics for Swartzengroper
The Liberal Oasis has Four Lessons from the Recall but they do not mention the one(s) just below.
Mark A. R. Kleiman has a short take on the Recall results
Plucky Punk's Happy Land thinks Californians my be fleeing to Santa Fe to escape the Terminator
Meanwhile Nurse Ratched's Happy Valley Asylum Notebook has patients from California lining up for immigration status to Canada
Kenneth Quinnell of T Rex has Right Wing Zombies classified (Like the Rush Limbaughmicus) at Open Source Politics
The Blowtorch Monkey Armada's Palmer Hass has his first post up at Open Source Politics
Stephen at To the Barr icades turns 50: I am fashionably late in wishing him a happy 'it's not ALL downhill from here' day. We welcome Chris Grubner of American Dissent to OSP and agree that Republicans are out of their Gorditas
Natalie Davis at All Facts and Opinions is right _ we should be outraged until they Free Tommy Chong
I wonder if the Limbo Mumbo Jumbo druggie has looked into getting one of these yet _ read about the whizzinator at The People's Republic of Seabrook
Nurse Ratched over at the Happy Valley Asylum is gonna wash the foul mouthed administrations mouth out with soap. Meanwhile The Mad Prophet Blog's C. Bryan Lavinge explains his long absence. Does Ahnuld need practice? asks the Modulator Will computer woes stifle The Funny Farm? stay tuned for clues.
Speedkill has moved to a very nice new address. Update and blogroll progressive bloggers.