Halliburton Opens Tehran Office While Cheney Still CEO, Completing $40 Million Annual Iran Business Through Cayman Islands Subsidiary Designed to Circumvent U.S. Sanctions

In February 2000, Halliburton’s offshore subsidiary Halliburton Products and Services opened an office in Tehran, Iran, while Dick Cheney remained CEO of the parent company, completing a systematic sanctions evasion structure that generated approximately $40 million annually in oil field services contracts with the Iranian government despite President Clinton’s 1995 executive order barring U.S. investment in Iran’s energy sector. The subsidiary was registered in the Cayman Islands with headquarters in Dubai—a corporate structure designed to claim “independence” from the Houston-based parent company while enabling Halliburton to profit from sanctioned business. A 2004 60 Minutes investigation revealed the fraud underlying this independence claim: the Dubai subsidiary shared office space, phone lines, and fax numbers with divisions of the Houston company, demonstrating that Halliburton Products and Services functioned as an integrated component of Cheney’s corporate operations rather than the independent foreign entity that legal circumvention required.

Cheney had publicly opposed Iran sanctions since becoming Halliburton CEO in October 1995, telling an energy industry conference in 1996 that sanctions represented “the greatest threat to Halliburton and other American oil-related companies trying to expand overseas.” This statement revealed systematic intent to evade U.S. sanctions rather than comply with them, with Halliburton’s Iran business demonstrating that corporate opposition to sanctions would be implemented through offshore subsidiary structures regardless of legal prohibitions. The company faced a $15,000 fine in 1997 for improper equipment shipments to Iran while Cheney led the company, documenting that violations were occurring before the Tehran office formalized operations. By the time the Tehran office opened in February 2000, Halliburton had established a systematic Iran business generating $40 million annually through contracts including a $226 million drilling rig provided to the Iranian National Oil Company.

The Cayman Islands subsidiary structure represented regulatory arbitrage designed to claim legal compliance while systematically violating sanctions: Halliburton argued that U.S. sanctions did not cover “independent foreign subsidiaries,” despite the subsidiaries being wholly owned by Halliburton, managed from Houston, sharing infrastructure with U.S. divisions, and returning profits to American shareholders. The Cayman Islands office was “little more than a mail drop” according to investigators, with no substantial operations or personnel—existing solely to provide the legal appearance of foreign incorporation while actual operations ran through Dubai and were controlled from Houston. The subsidiary employed foreign nationals rather than American citizens, creating another layer of claimed independence despite integrated management structures and profit flows. This systematic evasion demonstrated how multinational corporations could use offshore structures and corporate form manipulation to claim compliance with U.S. sanctions while conducting the prohibited business through barely disguised subsidiaries.

The Tehran office opening in February 2000 occurred six months before Cheney resigned as Halliburton CEO in August 2000 to become George W. Bush’s running mate, demonstrating that Cheney approved and oversaw the formalization of systematic sanctions evasion operations even as he prepared to seek the second-highest office in the U.S. government. As Vice President, Cheney would lead the Bush administration’s aggressive stance toward Iran, advocating for military threats and enhanced sanctions while maintaining financial ties to Halliburton through deferred compensation and stock options that would benefit from the Iran business he had established as CEO. The conflict of interest was profound: Cheney received $398,548 annually in deferred compensation from Halliburton while serving as Vice President, with these payments funded partly by profits from the Iran operations he had created through sanctions evasion, while simultaneously advocating for policies toward Iran as a government official.

The systematic sanctions evasion through offshore subsidiaries established a template that Halliburton would employ repeatedly: when U.S. law prohibited profitable business, create offshore structures claiming independence while maintaining integrated operations and profit flows. This pattern would extend to Halliburton’s Iraq dealings, where the company held stakes in firms that signed more than $73 million in oil production equipment contracts with Saddam Hussein’s regime while Cheney was CEO—using similar subsidiary structures to claim legal compliance while conducting prohibited business. The offshore subsidiary model demonstrated how multinational corporations could systematically evade sanctions that smaller companies could not circumvent, with the regulatory arbitrage benefits increasing proportionally with corporate size and sophistication. Halliburton’s ability to maintain $40 million annually in Iran business despite categorical sanctions revealed that U.S. sanctions enforcement was effectively voluntary for corporations with sufficient legal resources and willingness to use offshore structures.

When Cheney became Vice President in January 2001, he brought systematic sanctions evasion expertise to the highest levels of government while maintaining financial ties to the company that profited from those evasions. The Iran office he had approved as CEO continued operating and generating profits that flowed to the shareholders of the company paying him deferred compensation, creating ongoing financial conflicts as Cheney shaped Iran policy in the Bush administration. The systematic nature of the evasion—deliberate subsidiary structures, integrated operations disguised as independent entities, public opposition to sanctions combined with systematic violations—demonstrated that this was corporate policy approved at the CEO level rather than rogue operations. Cheney’s transition from CEO who evaded Iran sanctions to Vice President who advocated Iran military threats represented the apotheosis of corporate-government integration, where expertise in evading U.S. law became qualification for enforcing it.