The Business of Sanctions

By Michael Weisskopf and Adam Zagorin

It looked like the kind of moment that opposition researchers spend their lives trying to unearth. Just as 13 Iranian Jews stood in the prisoner's dock of an Islamic court on espionage charges last June, Halliburton CEO Dick Cheney delivered a notably discordant message. At a meeting of the World Petroleum Congress, Cheney called for a quick end to U.S. economic sanctions against Iran, which was in the process of negotiating $8 billion in oil and gas contracts with his firm's foreign rivals. "We're kept out of there primarily by our own government," said Cheney. "I think that's a mistake."

It's rare for a corporate chieftain to earn a place on a national ticket. And Cheney's years as head of an industrial giant that extracts natural resources and operates in unstable and undemocratic places would seem an inviting target. Right after George W. Bush gave Cheney the vice-presidential nod, traditionally Democratic supporters ranging from environmentalists to labor unions to plaintiffs' lawyers were sharpening their knives. "Cheney's record at the company is not well known but will be scrutinized very closely," predicted former Congressman Lee Hamilton, a moderate Democrat. "Politically, this becomes a very important matter."

But it could prove difficult to exploit politically. For one thing, Cheney has won high marks for his stewardship at Dallas-based Halliburton, transforming it into the world's largest provider of oil-field services. He arrived in 1995 and boosted the fortunes of a company beset by low oil prices and slow growth, raising revenues to $15 billion. Cheney's high-level contacts in Washington and around the world helped bring in business. Under Cheney, the company's Brown & Root construction subsidiary has worked hand in hand with the Democratic Administration--as it had done before him with the Bush White House--acting as a virtual arm of the Federal Government to provide food and housing for U.S. military forces abroad in trouble spots ranging from Somalia to Bosnia.

Where Al Gore may have luck galvanizing opposition to Bush's choice is, of all places, in Cheney's unchecked faith in free trade. His opposition to U.S. sanctions against pariah states has raised hackles even among some G.O.P. stalwarts. Halliburton, for example, lobbied mightily to normalize trade with China, a position that put Cheney at odds with many conservative Christians and a sizable minority of Republicans who regard Beijing as a national-security threat. The powerful American Israel Public Affairs Committee disagrees with his views on U.S. investment in Iran. Says A.I.P.A.C. spokesman Ken Bricker: "Now is absolutely not the time to lift sanctions and appear to condone Tehran's totally unacceptable behavior." Many Cuban Americans oppose his idea for easing trade with Havana by setting up an enterprise zone on the U.S. naval base at Guantanamo--a position that goes well beyond anything Bush has proposed. Even so, Cheney knows that his stance plays well in corporate America. Telling Louisiana oilmen last fall that Gore's energy policy was "stupid," he said, "There's no better time to tell [our story] than campaign time."

--By Michael Weisskopf and Adam Zagorin