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Halliburton Accused of Accounting Irregularities
Last year, Halliburton lost billions of dollars of revenue with the U.S. Army discontinued a worldwide supply contract with the oil-and-defense-services company. Yet Halliburton continues to report massive profits. What gives? A new reported column by Bloomberg's Jonathan Weil proposes an answer: Halliburton may be cooking its books.
Through a Freedom of Information Act request, Weil got ahold of court papers filed by Halliburton's former director of technical accounting research and training, Anthony Menendez, who alleges that Halliburton reported "billions" of revenue from sales before the sales ever happened. For good measure, according to Menendez's court filings with an administrative-law judge for the Department of Labor in Louisiana, Halliburton retaliated against him after he went to the Security and Exchange Commission with his concerns last year.
Menendez described Halliburton's "bill and sale" practices like this:
"For example, the company recognizes revenue when the goods are parked in company warehouses, rather than delivered to the customer. Typically, these goods are not even assembled and ready for the customer. Furthermore, it is unknown as to when the goods will be ultimately assembled, tested, delivered to the customer and, finally, used by the company to perform the required oilfield services for the customer.''If true, that would violate generally accepted accounting principles. For companies to recognize revenue before delivery, ``the risks of ownership must have passed to the buyer,'' the SEC's staff wrote in a 2003 accounting bulletin. There also ``must be a fixed schedule for delivery of the goods,'' and the product ``must be complete and ready for shipment,'' among other things.
Charles Mulford, a Georgia Institute of Technology accounting professor, reviewed Menendez's complaint for Weil. "I'm not using the 'fraud' word yet," he tells TPMmuckraker, but Menendez's allegations about Halliburton's bill-and-sale practices are "not in accordance with generally accepted accounting procedures."
You can read Menendez's complaint in three parts (I, II, III).
Comments (9)
malcontent wrote on June 22, 2007 9:23 AM:No matter how you cut it, they've been stealing taxpayer money for years. I don't care if they're cooking their books to boost their stock price, their entire business is fraudulent anyway.
Dick Cheney's crowning achievement as CEO of Halliburton was engineering the acquisition of Dresser Industries. Dresser Industries happened to be the defense contractor George H.W. Bush worked for after Harvard Business School. It was also the repository of a significant portion of the Bush crime family's wealth.
At the time Dick Cheney orchastrated its' purchase, Dresser was saddled with 200,000 outstanding asbestos lawsuits which, had they come to fruition, would have effectively bankrupt the company, thus eradicating a substantial portion of the Bush family's wealth.
Cheney et al knew full well what they were doing when they made this purchase, and it goes a long way towards explaining the myriad no-bid contracts, the overbilling, and the downright fraud. It also helps to explain why the GOP was so adamant to pass legislation to transfer the risks associated with asbestos liability away from corporations and onto the government.
The World Trade Center was also a huge asbestos liability and realistically held very little value due to the overwhelming costs associated with the removal of said asbestos. It's funny how it all ties together, isn't it?
9/11 allowed the Bush junta to start its illegal war that in turn guarantees Halliburton the cash it needs to cover its portion of the liabilities. It also quickly solves the problem of cleaning up the asbestos in the WTC. It also enables the GOP to push through legislation effectively protecting Halliburton. Conveniently, it also consumed the lion's share of evidence the SEC had regarding ENRON, which was held in WTC7.
The criminal enterprise running our country must be stopped, even if it means taking the fight to their soft underbelly (you know what I mean). The Houston mafia must be stopped.
donviti wrote on June 22, 2007 10:48 AM:maybe these guys are a seperate entity like Cheney...that could explain this easily
theswan wrote on June 22, 2007 12:14 PM:This criminal enterprise goes on stealing our tax dollars and covering their tracks with smoke, asbestos particles, cooked books, and a hijacked DOJ, and more. They perpetrate the crime right before our eyes and skate on as if nothing has happened. And America cares not.
JNagarya wrote on June 23, 2007 1:09 AM:9/11 allowed the Bush junta to start its illegal war that in turn guarantees Halliburton the cash it needs to cover its portion of the liabilities. It also quickly solves the problem of cleaning up the asbestos in the WTC. It also enables the GOP to push through legislation effectively protecting Halliburton. Conveniently, it also consumed the lion's share of evidence the SEC had regarding ENRON, which was held in WTC7.
The criminal enterprise running our country must be stopped, even if it means taking the fight to their soft underbelly (you know what I mean). The Houston mafia must be stopped.
Posted by: malcontent
Date: June 22, 2007 9:23 AM
". . . the lion's share of evidence the SEC had regarding ENRON, which was held in WTC7."
ASccording to which "expert"? The conspirabunkers whose junk you swallow?
JNagarya wrote on June 23, 2007 1:13 AM:This criminal enterprise goes on stealing our tax dollars and covering their tracks with smoke, asbestos particles, cooked books, and a hijacked DOJ, and more. They perpetrate the crime right before our eyes and skate on as if nothing has happened. This criminal enterprise goes on stealing our tax dollars and covering their tracks with smoke, asbestos particles, cooked books, and a hijacked DOJ, and more. They perpetrate the crime right before our eyes and skate on as if nothing has happened. And America cares not.
Posted by: theswan
Date: June 22, 2007 12:14 PM
"And America cares not."
Bushit's polls are down to 23 per cent approval. Because America both knows and does care.
If you were trully of superior awareness than "America," then you'd be aware of those facts.
There's nothing less hip, more unhip, than the attitude, "I'm more hip than they."
Remote Exploit wrote on June 23, 2007 11:57 PM:Sounds to me like the Sarbanes-Oxley act should be consulted. Being noncompliant with GAAP is merely failure to adhere to a standard of practice. Running afoul of SOX (as it's lovingly called) has been known to make executives disappear.
BTW, *I* could write code to detect the text in the "prevent automated access" image on this site. Weak.
Irregularity issue wrote on September 27, 2007 6:04 AM:for the papers in interm. acct
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