Arms And The Man
Who's Making A Killing On Killing In Iraq?

Monday, March 31, 2003  


Click on today’s title for current Boots & Coots stock price!
Click here for a snapshot of how the stock has traded before today!

The Pause is over. If it ever existed.

Today, oilfield firefighting Boots & Coots will face yet another moment of truth. Not in the Iraqi oilfields – but on the Spindletop of a jittery wartime Wall Street.

What's more, it looks like the New York Times may have gotten suckered into priming WEL’s pump -- and might have unwittingly set someone up for a gusher.

War fever has been igniting volatile Boots & Coots stock. Frantic speculators are hitting this site all over again, thanks to an improbable set of circumstances that may have led to the gulling of our nation’s paper of record.

In fact, for the purposes of this story, the Times' business desk might as well have sleepwalked from Friday evening until the Sunday bulldog edition hit the streets.

After the stock market closed on Friday, a surprise decision by the board of Boots & Coots suddenly resolved a mysterious loan that "a shadowy group of Texas oilmen" had threatened to use to take the company away from the stockholders!

And the stock price high-jumped in “after hours trading.”

Hold the presses? Dream on.

The Sunday national edition I’m holding in my hands right now – the same one countless thousands of everyday Janes and Joes scour for stock market information – features a story that smudges the line between fact and fancy. In a piece about the looming risk to Boots & Coots from creditors – specifically, the shadowy group that threatened to take the company away from the shareholders – here’s the money quote: “…the company will not provide further details until the board makes a decision, Mr. Winchester said.” [Emphasis added.]

Mr. Jerry Winchester, a former long-time Halliburton man and the interim CEO, apparently didn’t bother to tell the Times that the board was just about to make that decision. And the Times doesn't seem to have bothered to ask.

So the Sunday paper, knowingly or no, glossed over the decision the board announced Friday afternoon.

It doesn’t look good.

To the untrained eye, the big plays surrounding Boots & Coots International Well Control in recent weeks bear the appearance of stock price manipulation – of inside information being exploited – and of unsuspecting American investors being taken for Mr. Toad’s Wild Ride.

And it apparently hasn't stopped. If you’re an everyday American wanting to invest in the market – and you have the misfortune of clutching the Sunday New York Times Business Section just a tad too tightly – well, you might just wake up today, Monday, with a whole load of nonsense in your head about Boots and Coots.

Caveat emptor?

That’s just not good enough for the paper of record.

* * *

When deconstructing reporter J. Alex Tarquinio’s story, “Fighting Oil Fires, and Creditors,” some of the errors of fact and omission seem alarming.

Take, for example, the first sentence:

“The war in Iraq might just determine the fate of a little-known Houston company, Boots & Coots International Well Control, which put out about a third of the oil-well fires set in Kuwait in 1991 and earned perhaps as much as $100 million in the process.”

What’s the problem? Well, it’s not the $100 million. Why quibble with a company’s alleged income, or the alleged fraction of well fires it extinguished, when the company didn’t even exist in 1991! That’s right: “Boots & Coots International Well Control” wasn’t formed until 1997 – when Boots & Coots teamed up with International Well Control. Hence the name. It's the only stand-alone publicly traded oil well firefighting company, created by a reverse triangular merger that summer.

This is not a minor error. One of the chief advantages of such a merger is to allow a brand new, hand-picked board of directors to elect their very own chairman – and CEO – without any pesky stockholders to answer to. (Correct me if I'm wrong, readers, on any of this stuff!.)

Who did these directors – mostly the same guys who voted on Friday night – elect? Who was their specially chosen, reverse-triangulated chairman of the board and CEO – who ran the company up until resigning abruptly a few months ago?

Never mind. The New York Times didn’t bother to provide the information. Too bad, because this man – Larry Ramming – has made his business career about the very thing the story aimed to shed light on: debt and credit. In fact, I can't find any indication that Mr. Ramming was ever a hellfighter himself. He's a businessman, right?

You want to talk about Boots & Coots' debt, you should see The Man. He might have had a good quote or two.

What about his successor? That’s Jed DiPaolo, a man who had enjoyed his promotion to Sr. VP of Halliburton under Dick Cheney right up until the good ol’ board at Boots & Coots suddenly elected him chairman. He might have given up a quotable response -- especially since the board elected his replacement on or about the very day that the risky loan was signed with that shadowy group of Texas oilmen.

And as this blog has shown, a whole lot of shadowy stuff is linked to this company’s origins.

But forget about that stuff.

Forget about original company exec Reed Slatkin, the admitted fraudster who allegedly ran the biggest Ponzi scheme in history: His stock “warrants” had nothing to do with the story about the company’s creditors.

As background to a story about creditors, The Times decided you don't really need to know that -- in 1997 -- doing business with Reed Slatkin might have seemed very smart to someone like Dick Cheney, who was angling for "total well control on a global basis": Slatkin, one of the founding partners of Earthlink, was enjoying the ride of his financial life as that dial-up internet company exploded to become the number two provider in the country. What cash-flush businessman was a hotter prospect in 1997 than Reed Slatkin?

It wasn’t until a year or so ago that Slatkin began to be unmasked. And there’s still a lot of money missing. Tens of millions, if not hundreds of millions, of dollars.

For a story about creditors, this context didn't seem relevant to The Times: What seemed like an asset in 1997 could now be considered a very hot political liability. Slatkin is allegedly a fraud of epic dimension. Dick Cheney’s company arguably should have had the snap to uncover, with a spot of due diligence, what Slatkin has admitted: "that his investment empire was a scam from its beginning in 1986."

Why would Dick Cheney want his company doing any kind of business with Reed Slatkin -- when lots of wheezing companies could have been used for the hocus pocus of that reverse triangular merger? Oh, yeah. Reed Slatkin had a different shine in 1997, animatronic Indian theme park or no.

And would anyone care to cover that up, crime or no crime -- to, say, scrub an EDGAR index, or make a call to Yahoo to downplay the volume of a certain hyperactive penny stock?

But forget about that, or any conceivable role that may have had in motivating this shadowy business. It's not the crime, it's not the cover-up. It's the creditors, remember?

That’s some serious forgetting.

Why should a New York Times reporter, when writing an article about a company’s creditors, seem to forget the company’s original CEO and chairman of the board, and the obscure circumstances surrounding his ouster? After all, Larry Ramming (see bio) had been “actively involved in mortgage banking and the packaging and resale of mortgage notes, consumer loans and other debt instruments for over fifteen years” before Boots & Coots IWC was even formed. He knows a little something about creditors. In fact, Ramming brought the company back from near insolvency to a profitable 2001 mere months before he was unceremoniously replaced -- by the same guys who anointed him chairman and CEO to begin with.

Should a writer forget to mention that the company has three times used the story that it's "refocusing its efforts on maximizing opportunities in its well control and risk management divisions” to deal with its credit crunch, in a feast-or-famine business?

Even little ol’ Axcess Business News made room in the copy for that much background about “creditors.” Not the Times.

Likewise, the Times didn’t provide this context: that from 1995-2000 Dick Cheney was the Halliburton CEO responsible for its contractual “alliance for total well control” with Boots & Coots. Or that this “alliance” marked a bold new direction for Halliburton – and that it was announced only days after Cheney was named CEO. In fact, during Dick Cheney’s tenure at Halliburton, the "alliance" tied up more and more of the limited talent pool of hellfighters with contracts. Cheney’s Halliburton touted that alliance for “total well control on a global basis” in one of the very first press releases the company issued under his leadership.

Forget all that. The New York Times deemed it sufficient to say the companies had an “agreement to subcontract oilwell firefighting.”

How's this for sufficient? Mr. Tarquinio cited three primary sources for his supposedly up-to-the-minute quotes about the shadowy creditor situation -- and all three have a financial stake in the company.

Take note of Mr. Tarquinio’s “buyer beware”: When quoting “Michael E. Shonstrom, the president of Shonstrom Research Associates, an institutional analysis firm in Denver,” the article uses dashes to set off the phrase “said Mr. Shonstrom – who owns warrants in Boots & Coots--...”

That’s it.


For all you readers out there who may be a tad less sophisticated than Mr. Tarquinio, this kind of a warrant isn’t what a sheriff uses to go after bad guys. It’s a virtual claim check for stock in the company.

In other words, Mr. Shonstrom has a financial stake in the company he’s analyzing. Did you catch that little caveat, fellows? That's all the warning small investors -- Americans of modest means without insider information or access to "institutional analysis" -- deserve, decided the Times.

A bigger warning could have pointed out the bias in the sum of this article’s sources: Every spoken quote in this story was uttered by insiders with money to make and bills to pay and good reason to believe that Boots & Coots' fortunes are intertwined with theirs.

Balance? The New York Times didn’t deem it necessary to quote skeptical -- or even disinterested -- outsiders.

Didn’t want to upset the applecart?

* * *

So here's the big picture:

In this article about “Fighting Oil Fires, and Creditors,” the background information was largely accurate – but suspiciously incomplete. (Use that modest Axcess article as a baseline.)

Other key information – about the state of the board’s business with that shadowy group of Texas oilmen – was stale, at best. Recall that this very loan was one of the company’s biggest wild cards: The creditors’ identities are shielded by Panamanian law, and the uncertainty about their peremptory claims of default has dogged the stock for weeks, if not months. The board suddenly settled it on Friday, after the market closed.

The paper might as well have hurled itself into the bottom of the catbox by ignoring that kind of update.

Other writing in the piece – about the company’s origins and business “in Kuwait in 1991” – was inaccurate.
Further, there was room in the article to mention the John Wayne movie, “Hellfighters,” but not a word about the company’s founding CEO and chairman of the board – an expert in “creditors” who was replaced under unusual circumstances.

And the quotes were all from insiders with a financial stake in spinning the company's problems.

Nothing at all was written about the fact that the company was formed during an "alliance" with Halliburton, overseen by CEO Dick Cheney. Or that the strategy -- cultivated by Cheney's Halliburton -- for "total well control" banked on catastrophic oil field fires -- exactly like the ones hawks have long forecast for Iraq.

Want more? Well, there's no mention that Coots is rumored to be dead, and Boots – long since retired – is on the record saying, “It just hurts my feelings every time I hear people talk about it, because it, it’s my name.”

The last three grafs were moony grace notes: Mr. Danny Clayton, the “operations manager” whose recent insider trades might raise eyebrows, speculates on the money to be made per burning oil well. Mr. Shonstrom opines that the stock “could rise as high as $5.” The “guys at Boots & Coots,” he gushes, “are a little more gun-slingy than the other guys.”

Cowboy movies and moonbeams is what it sounds like to me. We’re left to wonder: Who’s in cahoots with Boots & Coots?

Thank you, Times, for this mackerel by moonlight. It shines.

And it stinks.

Now go out and make your stock plays, small investors. Let your conscience -- and the Sunday New York Times Business Section -- be your guide.

* * *

PS - 7:50 a.m. Pacific - Hope you caught this morning's small correction!


Did I forget to say caveat emptor?

* * *

Thank you Atrios -- and Eric Alterman -- for linking to this blog!

posted by Major Barbara | 12:28 AM

Sunday, March 30, 2003  

Now someone has gone and told Fortune, too:

Will Halliburton Clean Up?
The company that Dick Cheney once ran stands to make millions rebuilding Iraq.

posted by Major Barbara | 6:43 PM

Newsweek gets a clue:

Cheney’s Halliburton ties come under increasing scrutiny
By Keith Naughton and Michael Hirsh
April 7 issue — The stock market may be suffering, but Operation Iraqi Freedom has sure been good for business at Halliburton, the Houston oil-services company famous for its former CEO, Dick Cheney. THE VICE PRESIDENT hasn’t entirely severed his financial ties to the big defense contractor. Even while Halliburton is scoring Army contracts that could top $2 billion, Cheney is still receiving annual compensation from the company he led from 1995 to August 2000, NEWSWEEK has learned...." [Emphasis mine.]

All right, guys. Who told them?!

(For background, try this. It's the kind of reporting you just don't see in America anymore -- before it's fishwrap.)

* * *

Observer: US arms trader to run Iraq
Exclusive: Ex-general who will lead reconstruction heads firm behind Patriot missiles

"...Garner's business background is causing serious concerns at the United Nations and among aid agencies, who are already opposed to US administration of Iraq if it comes outside UN authority, and who say appointment of an American linked to the arms trade is the 'worst case scenario' for running the country after the war. ..." [Emphasis mine.]

(We'll see how fresh this story is when it hits our shores.)

posted by Major Barbara | 10:38 AM

AP: U.S. Steps Up Reinforcements, Supplies
"...Warplanes have dropped some 6,000 precision-guided munitions, Pentagon officials said, and 675 Tomahawk cruise missiles have been launched from the air and sea - just seven missing their targets because of apparent mechanical malfunctions.

"Tomahawk launches from the eastern Mediterranean Sea and the Red Sea were temporarily suspended because some missiles fell into Turkey and Saudi Arabia on their way to Iraq...."

675 Tomahawks @ $600,000 apiece? Or is it $1.4 million?

Only Raytheon knows for sure. Scroll down to follow the money in "Smart Bombing."

* * *

The Army Times is dropping hints about that whole Iraqui-cell-phone-can-of-peas Rep. Issa opened so unceremoniously the other day. In an article about Iraqui ultralights, a reader noticed something to puzzle over -- tucked away in the story's lengthy last graf:

"There was a second hint Saturday that U.S. forces may have underestimated Iraq’s technological capability. Journalists traveling with units in the field were told to stop using a certain brand of satellite telephone. The command is worried that, in some fashion it would not explain, the Iraqis might use signals from those phones to gather intelligence about American operations. The command did not order all phones shut down, just those using the Thuraya satellite. That system is based in the United Arab Emirates and is Arab owned. Other satellite phones, including those in the Iridium system, were not subject to a shut down order. Iridium is an American-owned system."

Thanks for following up, pineappletown. We should keep an eye on Iridium, eh?

posted by Major Barbara | 4:39 AM

Saturday, March 29, 2003  

Someone give a heads up to the NYTimes. The shadows are affecting their vision.

This story from the Sunday paper missed the Friday news entirely:

Fighting Oil Fires, and Creditors

"...The board of Boots & Coots is considering the Checkpoint proposal, and the company will not provide further details until the board makes a decision, Mr. Winchester said...." [Emphasis mine.]

Boots & Coots' board made their "decision" about that mysterious loan on Friday.

This is a real pants-down error for a paper of record. After all, that's what the story is about.

So... when things like this happen, who's responsible? Newspaper fact checkers -- or execs of publicly-owned companies who dissemble or delay to keep shareholders in the dark?

Scroll down to "Surprise!" for more.

posted by Major Barbara | 10:12 PM


While there's a "pause," let's reflect on these smart bombs cruising into Iraq. And Kuwait. And Turkey and Saudi Arabia.

And while we're at it, let's share a word about government databases that aren't always so smart -- or honest -- either.

How many Tomahawk cruise missiles have been used in the last week or so?

They all have to be re-supplied -- at $600,000 a pop. And they all had to be stockpiled before the war began.

$600,000, by the way, is just the replacement cost. That doesn't include the price of the Tomahawk's development, which makes the real cost to taxpayers more than twice as much. Still, as a raw example, that's a good guess how much Raytheon would get to resupply that missile that flew off course and damaged a Kuwaiti shopping center. If it were a Tomahawk, of course. Smart bombs aren't supposed to target shopping centers. And thanks to the fog of war, news accounts differ in their forensics.

(This is, after all, just an example. Who knows? It might have been a Scud. Or a Silkworm. Or a Patriot. At least this missile didn't kill anyone.)

But right or wrong, Raytheon has it covered. There's no danger that the Tomahawk program will be abandoned. Just check the stats at the FEC. When I tried to run their soft money numbers, the FEC computer squirreled up and gave me a total no one in their right mind would believe: Total Soft Money: 119600.00.

Believe that? Don't. Databases aren't always reliable when they're lighting up the shadows. (Scroll down to "Getting Married" for more examples.)

Fortunately, just a couple of days ago, I got an e-mail from a very helpful anonymous source, culled from a more candid computer:

"* Raytheon, the third largest federal contractor, gave $475,675 during the 2002 cycle, or 2.84% of its government contracts.

A list of the 100 largest federal contractors is available from the Federal Procurement Data System. Specifically, go to the 2001 report, which is the most recent. It's available [here]. See section 1J, "Top 100 Federal Contractors." The largest military contractors are available [here], section B4."

More to come on this subject. Contracts are getting bigger -- fast.

Just remember that Raytheon allegedly kicked back "2.84% of its government contracts." Mostly to the GOP.

Some might call that a tithe. Others might not be as charitable in their description.

Just a reminder during this alleged pause: The Pentagon said U.S. forces have fired more than 675 Tomahawks during the war.

Let me know if you have helpful information.

posted by Major Barbara | 4:13 PM


NYTimes: Bechtel Top Contender in Bidding Over Iraq


"WASHINGTON, March 28 — Bechtel has emerged as one of the top two contenders for the major contract to reconstruct Iraq, people involved in the bidding said.

Officials with the Agency for International Development said today that a final decision had been delayed until next week, because "outstanding issues are holding this up," a spokeswoman for the agency, Ellen Yount, said...."

* * *

Houston Chronicle: Houston company won't get contract
Halliburton off list for rebuilding Iraq

"...While it will not serve as the prime contractor, Halliburton could still do significant work as a subcontractor. USAID officials have said about half the value of the contract will filter down to other companies.

The companies reportedly invited in February to bid on for the contract were Bechtel Group, Fluor Corp., Louis Berger Group, Washington Group International and Parsons Group. Parsons Group is said to be allied with Halliburton...."

* * *

A quick trip to the FEC, and a search under "Bechtel" rendered this quick assessment of the political grease it takes to play the game:

"Total Soft Money: 926200.00"

Without a comma, that's not easy to read.... but it's within harking distance of a million bucks.

And that's not all, folks.

posted by Major Barbara | 6:14 AM

Friday, March 28, 2003  


In the best interests of their shareholders, Boots & Coots withheld the following press release until after the stock market closed for the weekend:

Boots & Coots Announces Payment of Checkpoint Business, Inc. Note
Friday March 28, 7:23 pm ET

HOUSTON, March 28 /PRNewswire-FirstCall/ -- "Boots & Coots International Well Control, Inc. (Amex: WEL - News) announced today that its Board of Directors decided against the restructuring proposal from Checkpoint Business, Inc. ("Checkpoint"). This proposal would have involved a voluntary Chapter 11 bankruptcy filing by Boots & Coots and the cancellation of Boots & Coots' common equity as part of the bankruptcy process. Additionally, Boots & Coots announced that it had paid in full its principal balance and interest outstanding under its Loan Agreement with Checkpoint...."

Why is this significant? "A shadowy group of Texas oilmen" had been threatening to take over the company -- just when feast-or-famine Boots & Coots was getting ready for the limelight!

For background, read The Devil's Disciple?, and You Never Can Tell.

Dick Cheney's Halliburton long fostered an "alliance" with debt-ridden Boots & Coots. With some manner of assistance from Arthur Andersen.

Read on for more...

* * *

Financial Times: Cheney's former company loses in bid race
By Sheila McNulty in Houston and Joshua Chaffin in Washington
Published: March 29 2003 4:00 | Last Updated: March 29 2003 4:00
Halliburton, the US engineering group, was ousted yesterday from the bidding process to become key contractor for the rebuilding of Iraq, easing pressure on the US government over close ties to US companies invited to bid.
While all of the large engineering and construction companies involved have close political ties, none is as politically embedded as Texas-based Halliburton. Dick Cheney, US vice-president, is Halliburton's former chief executive.
Halliburton declined to comment on its rejection. A source close to the process said the two finalists were Bechtel and Parsons...." [Emphasis added.]

If it's Bechtel, expect to hear a lot more about power hijinx at the Bohemian Grove.

posted by Major Barbara | 5:51 PM

And then there were two:
Reuters: Report: Halliburton Out of Iraq Deal Race AID administrator Andrew Natsios said this week that only two companies were still in the competition. He said he did not know which they were because of the arrangements for contracts of this nature.

Guesses anyone?

(My money's on Bechtel. But Louis Berger might be a more effective beard.)

posted by Major Barbara | 4:26 PM

MSNBC: Halliburton Out of the Running
The construction firm once run by Dick Cheney won’t get a big Iraq contract

CBS MarketWatch: Halliburton won't lead Iraq rebuild

Financial Times: Pentagon to blacklist companies investing in Iran

posted by Major Barbara | 3:14 PM

Rubin: Conflicts of interest on war and business hurt U.S. image
"When it comes to the Iraq war, images matter as much as guns.
President Bush has tried to frame this war as a moral crusade against evil. But many people in the Middle East, in Europe and even in America think this is a war to "grab" Iraqi oil and line the pockets of White House cronies. This is a gross oversimplification.
Yet the administration seems determined to convince cynics their worst fantasies are real...."

Toronto Star: Well-fire fighter shut out in Iraq
Safety Boss passed over despite acclaimed work in Kuwait
American contractor hires only U.S.-based firms to help

AP: Rep. Issa wants to give Qualcomm leg up in postwar Iraq
Associated Press
WASHINGTON - First the fries. Now the phones.
In another congressional swipe at Europeans who are not U.S. allies in Iraq, San Diego-area Rep. Darrell Issa is trying to prevent the Pentagon from using the European-based GSM cell phone technology in postwar Iraq.
One beneficiary of Issa's legislation, should it become law, would be San-Diego based Qualcomm Inc., which has developed the competing CDMA technology...."
(tip from pineappletown)

* * *

San Diego area Republican Darrell Issa has some very good reasons for his preemptive bid for business in Iraq for Qualcomm -- and most of them start with the letter $. According to the FEC, Qualcomm has spread around $282,500.00 in "total soft money" while Issa has raked in $163,600 in "Non-Federal Receipts 'Exempt From Limits.'" One possible conduit from Qualcomm to Issa? National Republican Congressional Committee Contributions. Other Republican funds also gave to Issa.

But the Congressman may be more altruistic than that. Qualcomm's soft money contributions have been shared between Republicans and Democrats. And Qualcomm's CEO, Dr. Irwin Mark Jacobs, and its president, Anthony Thornley, have contributed mostly to Democrats.

Money is money, eh? Especially since FEC documents apparently show car alarm-magnate Issa is still over $9 million in debt from his failed Senate campaign(s).

If anyone else is following the money, let me know.

posted by Major Barbara | 5:11 AM

Thursday, March 27, 2003  

NYTimes: Pentagon Adviser Is Stepping Down
WASHINGTON, March 27 — Richard N. Perle resigned today as chairman of an influential Pentagon advisory board in the wake of disclosures that his business dealings included a recent meeting with a Saudi arms dealer and a contract to advise a communications company that is seeking permission from the Defense Department to be sold to Chinese investors....

In a brief phone conversation this afternoon before the Pentagon's announcement, Mr. Perle sounded angry. Asked whether he had resigned, he replied: "Let me just tell you something. If I had, you'd be the last person in the world I'd want to talk to." He then slammed down the phone...."

Times: Bush adviser quits in conflict over profit from war

"...[Mr Perle] was also accused by John Conyers, a Democrat congressman, of having participated in a conference that discussed investment opportunities in postwar Iraq and of having received share options from a company doing business with the US military. Mr Conyers said: “I would submit that it is a conflict of interest for a high-ranking government official to be proffering advice on how to profit from the war....” "

posted by Major Barbara | 7:31 PM

Former Pentagon official Richard Perle resigns as key Rumsfeld adviser

Key Rumsfeld Adviser Resigns His Post

"...Perle became embroiled in a recent controversy stemming from a New Yorker magazine article that said he had lunch in January with controversial Saudi-born businessman Adnan Khashoggi and a Saudi industrialist.

The industrialist, Harb Saleh Zuhair, was interested in investing in a venture capital firm, Trireme Partners, of which Perle is a managing partner. Nothing ever came of the lunch in Marseilles; no investment was made. But the New Yorker story, written by Seymour M. Hersh, suggested that Perle, a longtime critic of the Saudi regime, was inappropriately mixing business and politics.

Perle called the report preposterous and "monstrous."

Perle, 61, was so strongly opposed to nuclear arms control agreements with the former Soviet Union during his days in the Reagan administration that he became known as "the Prince of Darkness.""

posted by Major Barbara | 3:21 PM

IHT: U.S. Rejects Criticism on Awarding of Iraq Contracts
International Herald Tribune

WASHINGTON, March 27 — An American official has strongly rejected European complaints that the United States was unfairly awarding contracts for the reconstruction of Iraq to American companies. The overriding United States objective, he said today, was to provide the quickest possible relief to the Iraqi people.

The official, Alan Larson, an under secretary of state, said he was "surprised" by suggestions from European companies and officials that the United States was unfairly guarding the spoils of a highly controversial war by awarding the first big reconstruction contracts to American companies...."

posted by Major Barbara | 2:00 PM

Reuters: BP, Boots & Coots involved with war plans-report
NEW YORK, March 27 (Reuters) - BP Plc, Boots & Coots International Well Control Inc. and other companies involved in the energy business have played a larger role in military planning for the war in Iraq than previously known, the Wall Street Journal reported on Thursday....

posted by Major Barbara | 10:02 AM

Josh Marshall: Practice to Deceive
Chaos in the Middle East is not the Bush hawks' nightmare scenario--it's their plan...

posted by Major Barbara | 6:46 AM

Wednesday, March 26, 2003  

Reuters: Lawmaker seeks details of Halliburton's Iraq deal

WASHINGTON, March 26 (Reuters) - A lawmaker wrote to the U.S. military on Wednesday asking why it had awarded a government contract to extinguish oil well fires in Iraq to a subsidiary of Halliburton Co. (nyse: HAL - news - people).

In a letter to the U.S. Army Corps of Engineers, Rep. Henry Waxman, a California Democrat, sought details of the wartime contract, and inquired why the administration had not allowed other companies to bid on it."...

posted by Major Barbara | 6:27 PM

Birnbaum in Fortune: Iraq Rebuilding Contracts: What's at Stake?

Sydney Morning Herald: Anger over US army's multi-million dollar deal to fight oil fires

March 27 2003, 9:55 AM

"The US army came under fire today for granting an Iraqi oilwell firefighting contract to a subsidiary of Halliburton Co, once run by Vice President Dick Cheney, without a bidding process.

Henry Waxman, the senior Democrat in the House of Representatives' government reform committee, demanded an explanation in a letter to Army Corps of Engineers Lieutenant General Robert Flowers.

"I am writing to inquire why the administration entered into a contract potentially worth tens of millions of dollars to a subsidiary of Halliburton without any competition or even notice to Congress," he said....

posted by Major Barbara | 3:31 PM

CNNMoney: Halliburton gets a head start
Help wanted: Firm once headed by Cheney was gearing up to rebuild Iraq before war started.

Houston Business Journal: Boots & Coots firefighters expected to take on Iraqi wells

Financial Times: Halliburton's links sharpen bids dispute
By Joshua Chaffin in Washington
Published: March 26 2003 20:00 | Last Updated: March 26 2003 20:00

"As the US government begins awarding potentially lucrative contracts this week to rebuild Iraq, the controversy surrounding the process is engulfing one bidder more than the rest: Halliburton.

Foreign companies and governments complaining that they have been shut out of the process have pointed to the close political ties of the large US engineering and construction companies that have been invited to bid...."

posted by Major Barbara | 1:57 PM


What does hellfighting Boots & Coots IWC have in common with U.S. Liquids -- a waste management company clouded by insider trading charges?

1) A broken "letter of intent" with alleged fraudster Reed Slatkin and former partner Mark Leibovit's Havenwood Ventures.

2) Arthur Andersen.

(Why is number 2 no great suprise?)

Read the installments below to try to help connect the dots between a broken engagement and a troublesome marriage. It was a profitable little triangle where the bride was a failed animatronic theme park "development company" -- and the suitors were both up-and-coming Texas oil bidnesses.

Who both happened to use Arthur Andersen.

posted by Major Barbara | 12:22 PM

Before the matrimonial vows of a reverse triangular merger created Boots & Coots International Well Control in 1997, the bride in the marriage -- Havenwood Ventures -- had only recently been engaged to someone else.

Her intended: U.S. Liquids, an up-and-comer in the waste management business.

Waste management?

Now there may very well be less to these transactions than meets the eye, but the parties involved are pretty interesting. And the fact that a marriage such as this was called off at the last minute makes it even more interesting.

Especially since a fat consulting fee changed hands -- despite the ruined marriage.

And some of the parties involved have been indicted for insider trading.

The facts: In spring of 1997, Havenwood's president, Mark Leibovit, signed a "letter of intent" to merge his languishing company with U.S. Liquids.

But that summer, Havenwood merged with International Well Control to form Boots & Coots IWC, Inc. instead.

And U.S. Liquids soon acquired other companies in "pooling-of-interests transactions."

So both parties went on to other deals -- but U.S. Liquids still gave Mark Leibovit a nice consulting fee (USL, 10-Q, 11/15/99).

The process seems altogether deliberate.

And Mark Leibovit -- along with Reed Slatkin -- almost certainly made money on the "reverse triangular merger" that created Boots & Coots IWC, Inc. They were shareholders, after all, in Havenwood, so they were entitled to compensation.

One other thing: Within a year of all this, U.S. Liquids insiders -- "without admitting or denying the allegations against them" -- agreed to be "enjoined" and to pay more than $2.5 million to settle insider trading allegations.

And just last month:

Justice Department alleges fraud in trading
Waste firm charges hit execs, investors

Judging from this, Mark Leibovit was doing business with a pretty questionable group of Texas oilmen. So, it appears, was Arthur Andersen.

Why was Dick Cheney's vaunted "alliance" for "total well control" doing business with these characters?

Why was this company devoted to animatronic Indians suddenly in such demand? Is it a coincidence that both prospective deals for Havenwood involved Texas oilmen with companies based in the Houston area?

We're left to wonder who did the matchmaking in these mergers, and for what reasons.

If you know anything, let me know.

posted by Major Barbara | 10:00 AM

Reed Slatkin: admitted fraud, minister of Scientology, alleged Ponzi-schemer....

Hundreds of millions of dollars are missing.

Why was Slatkin in business with "allies" of Dick Cheney's Halliburton back in 1997?

"In pleading guilty to fraud last year, Slatkin described his investment empire as a scam from its start in 1986."

Over the years, lots of people were taken in. Most lost money. Some -- like Greta Van Susteren, Cheryl Tiegs and Peter Coyote -- allegedly made money, but are being targeted in the courts by victims of the scams. That, as I understand it, is the nature of a Ponzi scheme: A few investors make money off of the hidden losses of many more.

(Let's be clear about this: Dick Cheney's ties to Reed Slatkin are suspect because of the fraud, not the Scientology. Slatkin's religious affiliation probably helped him victimize many unsuspecting Scientologists.)

So if, as Slatkin admitted, he'd been in the fraud business since 1986, why was Dick Cheney's "ally," International Well Control, doing business with him in 1997?

Of all the many flat-lining companies available for a "reverse triangular merger," why choose Havenwood Ventures -- with which Reed Slatkin had been affiliated since at least 1992?

And why has the EDGAR index of the SEC database apparently been scrubbed to conceal Reed Slatkin and Mark Leibovit's association with Havenwood Ventures and Boots & Coots IWC, Inc.?

This last question is particularly troubling. Small investors rely on EDGAR -- but there's clearly something wrong with the indexing -- and it's awfully suspicious.

Remember: Scott Cohn's expose on Boots & Coots -- the article that initially piqued this blogger's interest -- doesn't even mention Reed Slatkin.

(If a reporter working on deadline -- say, someone like Scott Cohn -- relied on EDGAR indexing when researching his story, Reed Slatkin's participation in Havenwood would have been obscured. Without an accurate index, only a full, time-consuming reading of many SEC documents would have uncovered the connection.)

Would some of you please test this out? Log onto EDGAR and do a few searches on the "People" index. Let me know if you can find Reed Slatkin (or Mark & Alice Leibovit) linked to Havenwood Ventures or Boots & Coots IWC on any SEC index. (Those are the only three executives named on Havenwood's 1996 annual report.)

There may be no crime -- but this certainly suggests a cover-up.

* * *

For those of you who scoff at the mention of an electronic "cover-up," you may find this article from last week interesting:

'Boots, Coots, What's That?' Asks Yahoo!Mar 21, 2003 ( via COMTEX) -- (FinancialWire) ...

Boots and Coots has been the "phenom" stock on the Street this week, trading over 127 million shares today, making it by far the most active among NYSE, Nasdaq and American Stock Exchange listed companies, but you wouldn't know by looking among the "volume leaders" at Yahoo! (NASDAQ: YHOO) Finance, the number one financial site. The company has been the subject of an expose by Dow Jones (NYSE: DJ) Reporter Carol Remond, the subject of commentary on CNBC, a General Electric unit (NYSE: GE), and, of course, a household word among owners of 127 million shares Wednesday alone, but unless users of Yahoo! Finance were specifically looking up its ticker symbol, they wouldn't know it exists.

A spokesperson at the Amex said its feed was open to the Yahoo site suppliers from, but could not speculate why Yahoo's users were not aware that Boots and Coots, which has been in play due to the war in Iraq and the company's traditional leadership in oil well fighting, was the most active stock on one of the three major U.S. exchanges over the past few days.

Spokespersons for Yahoo! Finance exchanged phone calls with FinancialWire Tuesday but had not explained the anamoly by press deadline. Yahoo! Finance has been known to have content rules that its trader-and-investor users are not always aware exist, but the cause for this odd omission is not yet apparent....

Let me know what you find.

posted by Major Barbara | 8:37 AM

Former Havenwood Ventures (now Boots & Coots IWC, Inc.) exec Reed Slatkin is back in the news:

Victims of Scam Target Church
Investors defrauded by Reed Slatkin hope to recover funds from Scientology groups....

[More on Slatkin and former business partner Mark Leibovit's connection to Dick Cheney's Halliburton later.]

LATimes editorial: Cronyism and Rebuilding...

Arianna: Ask Not What Your Country Can Do for You, Ask ... How Much Exactly?

posted by Major Barbara | 7:05 AM

Tuesday, March 25, 2003  

Boots & Coots Nets Iraq Oil Fire Contract....

Oil fires mean profits to WEL longs
Boots & Coots investors gush about its prospects....

Iraq rebuilding contracts awarded
Halliburton, Stevedoring Services of America get government contracts for early relief work....

The US army said it gave the main Iraqi oil well firefighting contract to a unit of Halliburton Co., a firm once run by Vice President Dick Cheney (news - web sites), without any bidding....

posted by Major Barbara | 3:21 PM

Halliburton Unit Gets Army Pact for Iraq Oil Fires

Tuesday March 25, 9:39 am ET

HOUSTON (Dow Jones)--Halliburton Co.'s Kellogg, Brown & Root engineering and construction has been awarded an Army Corps of Engineers contract to extinguish oil well fires in Iraq, the company announced Monday evening.
In a press release Monday, Kellogg, Brown & Root said the company will operate under a contingency plan the company drew up at the request of the Department of Defense earlier this year.

Defense Department spokesman Lt. Col. David Lapan said in March that the plan was commissioned under an existing services contract with Kellogg, Brown & Root.

Firefighting company Boots and Coots International Well Control Inc. left to battle fires in Iraq over the weekend as part of an alliance with Halliburton. Superior Energy Services Inc.'s Wild Well Control unit also has an alliance with Halliburton, but a company spokesman couldn't be reached Monday to comment on the company's Iraq plans....

-By Roy R. Reynolds, Dow Jones Newswires; 713-547-9208;

posted by Major Barbara | 8:39 AM

Monday, March 24, 2003  


KUWAIT CITY - Fighting around the southern Iraq oil fields that U.S.-led forces had previously thought were secure has driven out civilian firefighters trying to put out the oil well blazes, the top firefighter said Monday. "It's not nearly as safe as they said it was," said Brian Krause, vice president and senior blowout specialist for Houston-based Boots and Coots. "We're kind of sitting ducks out there."....

Boots & Coots may be all alone working in Iraq, but other companies could get a call if Saddam Hussein's government were to torch large numbers of Kirkuk wells....

While recent news coverage has speculated on the post-war reconstruction gravy train that corporations like Halliburton stand to gain from, this latest information indicates that Halliburton is already profiting from war time contracts worth hundreds of millions of dollars....

Halliburton has agreed to an investigation of its operations in Iran to assure it isn't indirectly supporting terrorism, the company said Friday. In return, the New York City comptroller is withdrawing a proposal from Houston-based Halliburton's 2003 proxy asking for a shareholder vote on the question of reviewing the oil-field service company's business in Iran....

When it comes to making money from a war in Iraq, few can match the firepower of the company once headed by Vice President Dick Cheney....

Richard Perle's Conflict....

The origins of the current war are, in fact, rooted in a series of policy pronouncements by these and other conservative intellectuals that date from the early 1990's, after the end of the cold war and the inconclusive end of the gulf war in 1991, which left Mr. Hussein in power.... In 1992, then-Secretary of Defense Cheney's aides — including Mr. Wolfowitz, Mr. Libby and Zalmay Khalilzad, the administration's envoy on Iraq — prepared a document known as the Defense Planning Guidance, which argued that the United States should be prepared to use force to prevent the spread of nuclear weapons....

The question is heartless but must be answered: who will profit from rebuilding Iraq?...

Texas oil industry set to profit from Iraq war....

posted by Major Barbara | 7:01 AM

Sunday, March 23, 2003  

[This site has maintained a respectful silence during the first phase of the war. We mourn, but now continue.]


From bust to boom and back again.

Now that the invasion of Iraq is well under way, panicky penny stock speculators may catch on to what institutional investors seem to have known all along: playing Boots & Coots may be too risky for smart money.

You'll recall that Boots & Coots was set to make a big splash last week, but for a mysterious loan that threatened to sink the company at its most promising hour. Sure enough, the price climbed rapidly as war fever set in -- and showed the kind of volatility one might anticipate under the circumstances. The price really started to tank when CNN bravely trumpeted to small investors Beware The Hellfighter Stock. Kudos to CNN for running that little caveat -- on Thursday -- long after many people had made good faith investing decisions on some very spotty disclosure.

Smart investors, like Austin W. Marxe and David Greenhouse of those big "Special Situations Funds," got out of Boots & Coots some time ago. In fact, it seems that most of the institutional investors were selling, not buying, in the run-up to the war.

And, lo and behold, the oil wells so far haven't ignited by the dozen. Boots and Coots isn't headed straight for boomtown after all.


Now we can put it in perspective: Small cap Boots and Coots was never the "big time" for this operation. That's for some other folks. However essential, hellfighting is just one piece of the puzzle.

The Big Picture is much more complex. Just ask Richard Perle, who recently gave out some sage advice via Goldman Sachs about profiting from future wars.

We none of us know where this is headed. We can only dig for the truth. Later, when more rebuilding contracts are made public, we hope to ferret out more information.

But for now, we'll keep looking into the strange origins of Boots & Coots -- because some things that were assets then seem like liabilities now.

Next: Why didn't Havenwood Ventures follow through with its "letter of intent" to merge with U.S. Liquids -- an up-and-coming player in the oilfield "waste management" business -- and instead merge with International Well Control?

Hey! Isn't Tony Soprano in "waste management"?

And aren't those U.S. Liquids guys in some kind of insider trading trouble?

posted by Major Barbara | 6:45 AM

Monday, March 17, 2003  

Click on today's title for current Boots & Coots stock price!

Click here for a snapshot of how the stock has traded before today!

It's "the moment of truth." The invasion of Iraq could begin at any time. Bombs may drop. Oil wells may erupt in "hellfire."

And Arthur Andersen is no longer doing the books for Boots & Coots.

But wait! What about that secret group of oilmen who are using a company registered in Panama to try to take Boots & Coots away from its shareholders?

Frenzied stock speculators are scurrying for information about the only stand-alone publicly traded oil well firefighting company: Boots & Coots IWC, Inc.

I know this because they're hitting this site with Google! searches like checkpoint+business+inc. (Go ahead and try it some time.) I followed one of the searches to Don Penny's Hot Tips bulletin board, which reflects the desperate thirst for information about the company Checkpoint Business, Inc. "i continue to watch this site for news and developments on war play stocks," posts an investor dubbed "wargames."

Remember Checkpoint? The "shadowy group of Texas oilmen" who might wrest control of the company? They're the cause of heaps of uncertainty right now.

In fact, it's a good bet that, but for that added uncertainty, the stock price of Boots & Coots -- a feast-or-famine services company that's likely on the brink of some very brisk business -- would be higher than it is right now. These guys only really make money fighting hellfires.

And lots of people are absolutely certain we're going to have a run on them soon.

But so much uncertainty! Recall that these shadowy oilmen loaned a million bucks to the company back in December -- and the company's in default -- and all of a sudden there's talk of bankruptcy -- and a takeover by this mysterious company that was incorporated in Panama! Gamblers on penny stocks want to know: Buy or sell?!

Never mind the panicky speculators. What about the poor shareholders? Information is perilously thin.

So what is the CEO of Boots & Coots -- a former long-time Halliburton man -- doing to help achieve a degree of helpful transparency for concerned stockholders?

"You know, I think we can comment when we can," says President Jerry Winchester. "I think we're going to do what we can with respect to the disclosure, and when we can comment, we'll say what we can."

Is that stonewalling, stockholders? Not to worry. There's a shareholder protection plan already in place!

More wary small investors may want to know a bit more about the company anyway. Many small investors rely on EDGAR for documents that inform their business decisions.

What to make of this document? The one filed four days later, on August 13, 2002, is about replacing accountant Arthur Andersen. Now that's certainly of interest to shareholders. But the preceding form doesn't tell much about what the problem with Arthur Andersen really was. In fact, the document makes it seem as if there was no problem at all.

There's at least one interesting bit of information that has been shrouded in the EDGAR index: alleged fraudster Reed Slatkin's name. Try scouring this list of names of all the people (supposedly) listed on Havenwood Ventures (now Boots & Coots) index maintained by EDGAR. Go ahead and scour. You'll find all the players except Reed Slatkin and Mark & Alice Leibovit.

What's interesting about that? Those three names are the only names listed on Havenwood's 1996 annual report to the SEC, the last before it became Boots & Coots. Those three people were Havenwood -- but interested parties relying on EDGAR's index might not be able to find that out. And alleged Ponzi-fraudster Reed Slatkin's name ought to be posted like the warning on a pack of cigarettes. Shouldn't it?

Especially when there are interesting insider trades being made. Analyzing these transactions is beyond me, but some things stand out: current Chairman of the Board K. Kirk Krist has sure unloaded a lot of stock in the last couple of years; hellfighter Danny Ray Clayton has made a number of moves in just the last few weeks.

A clump of three insider trades cry out just because of the names of the companies. On December 3 -- the very day before the fateful loan documents were signed with that secretive Panamanian company -- three entities which seem somehow related appear to have dumped stock: Special Situations FD III, Special Situations SITS PR EQFDLP and Special Situations CAY FDLP.

Talk about special situations: CAY? Cayman Islands? (Remember "The Firm"?)

Just to make the similarities in the companies more striking, two of them had exactly the same amount of Boots stock: 162,790 shares were "awarded" on June 9, 1998 to two Special Situations companies. On December 3, 2002, identical sums were withdrawn from two of those accounts. The value of the sales, combined with the third: $98,000.

That's chickenfeed to some, but one heck of a holding for others. For Special Situations -- which holds millions of shares of different companies -- it's beer money.

"Could a small group of businessmen swoop in at a company's most promising moment and take it away from its shareholders?"

Penny stock guru Don Penny has been digging for leads about Checkpoint. He may not have been able to crack the secret Panamanian incorporation laws, but he's located their representatives: "The resident agent is 'Patton, Moreno & Asvat'."

So take that information and run with it, shareholders!

After all, it's the moment of truth. Boots & Coots' most promising moment.

posted by Major Barbara | 12:32 AM

Sunday, March 16, 2003  

MISALLIANCE: The Dianetics of Dick Cheney

What does hellfighting have to do with animatronic Indians and a loopy would-be theme park in the Sedona, Arizona desert?

And what does Dick Cheney have in common with Reed Slatkin, the minister of Scientology accused of running one of the biggest Ponzi schemes in history?

[No need for tinfoil hats. Follow the links to public records and -- believe it or not!]

A lot.

In fact, that's part of the very foundation of the company allied with Dick Cheney's Halliburton to fight oilfield fires.

Yes, this is weird. But there's no denying it. It's all spelled out in this SEC filing. And it's one of the more bizarre SEC papers you might stumble across.

July 29, 1997: Dick Cheney's Halliburton seemed to be on board with expanding its "alliance" for "total well control," because International Well Control sewed up more of the limited talent pool of oilfield firefighters (mostly former Red Adair men) with new partnerships. Cornering the market? Not really -- but a big new umbrella company, publicly held, was formed to bring several companies together -- led by Boots & Coots and International Well Control. In fact, that was the name of the new company: Boots & Coots International Well Control, Inc.

But the SEC 8-K filed a couple of weeks later seems just plain weird.

"ITEM 1. CHANGES IN CONTROL OF THE REGISTRANT... Boots & Coots International Well Control, Inc. (the "Registrant") was incorporated in Delaware in April 1988 as Havenwood Ventures, Inc."

Havenwood Ventures?

Havenwood intended "to develop a theme attraction in Sedona, Arizona, the Sedona Spirit Theater." After raising nearly half a million dollars in their initial public offering, and sinking a good chunk of change into desert land, a decision wasmade in about 1992 to "discontinue development of the Theater as a result of its inability to attract financing." Investors weren't flocking to the animatronic Indians idea. The company had "no assets", no "revenues," "no backlog," and "made no expenditures" (1996 SEC report).

What to do? A merger, of course!

"THE MERGER. The Registrant acquired IWC Services in a transaction structured as a "reverse triangular merger" (the "Merger") between Havenwood Acquisition Corporation, a Texas corporation ("Newco"), which was a wholly owned subsidiary of the Registrant formed for the sole purpose of consummating the Merger, and IWC Services."

Huh? A "reverse triangular merger"?

Might as well just say abracadabra!

Presto-changeo: Havenwood Ventures, Inc. became Boots & Coots International Well Control, Inc. At the end of fiscal 1996, Havenwood reported all of $1358 in assets. The Company's 1997 report showed assets worth around $86 million. (And the changeover happened after the end of fiscal 1997. I'm still puzzling over that one.)

And scientologists?

At least one: Reed Slatkin, a bankrupt "minister" of Scientology and alleged fraud, "acquired 20% of a company called Havenwood Ventures Inc. that planned to build a theme park and theater in Sedona, Ariz., public records show. The project, tentatively named the Sedona Spirit Theater, was to feature live actors interacting with animatronic American Indians. The theater apparently never was built."

Slatkin is listed prominently as a "vice president and director" in the 1996 annual report to the SEC.

The president of Havenwood was Mark Leibovit, an investment guru known for his "Volume Reversal methodology" and his occasional TV appearances. (Leibovit and his wife are listed on SEC documents for Havenwood; to be fair, there is no evidence that they are Scientologists.) Leibovit partnered up with Reed Slatkin on at least one other venture, Lizardhead Partners, with which they intended "to buy and sell stock."

You may now reasonably ask: Did Dick Cheney know this stuff?

Well, he should have. After all, he was CEO when Halliburton got in bed with International Well Control -- and he was still in the big chair, "allied" with IWC when they did their magic incantation and transformed Havenwood Ventures into Boots & Coots IWC, Inc. Due dilligence should have turned all this up in a blink. So the question, of course, is: Why?

Why did Dick Cheney's Halliburton have anything at all to do with this weird business move? Couldn't another umbrella company be formed to bring together IWC, Boots & Coots and the other various companies involved?

If they wanted to form a publicly traded company, why do it with a shell company which once set its sights on American Indian animatronics?

And why does "a shadowy group of Texas oilmen" want to change it from public to private now?

What else is waiting to be discovered?

If anyone has answers, please let me know.

posted by Major Barbara | 7:22 AM

Saturday, March 15, 2003  

The Devil's Disciple?

So who are these Chairmen of the Board of Boots & Coots IWC, past and present, who watched as their board of directors signed off on a short-term, million-dollar loan from a "shadowy group of Texas oilmen"?

(Isn't that the way it works? Doesn't the board of directors have to take responsibility for a bold move like this to protect investors?)

Their struggling little company now potentially faces the gangplank of Texas bankruptcy court -- at the very moment that it stands to reap an incredible bonanza.

"Interim" chairman past is Jed DiPaolo: He's the guy who was replaced just after/before/during (?) the time when these risky loan documents were signed. Is it a coincidence that he was "senior vice president - global business development" at Halliburton under Dick Cheney? After all, Cheney's the guy who touted his "total solution for well control on a global basis" the moment he came on board at Halliburton a couple of years before.

DiPaolo's replacement, you may have noticed, was announced in the very same press release that touted a "restructuring" at the company -- involving that vexing million dollar loan.

DiPaolo came to troubled Boots & Coots on an interim basis in June, 2002. He won his promotion at Halliburton to senior vice president under Dick Cheney himself a few years before. Interim? It took less than six months for him to work on the "restructuring" that somehow didn't connect with the open door that put this public company at risk of being taken over by a very private Panamanian corporation.

It looks to me -- and my understanding, of course, is pretty thin -- like someone put up the whole house as collateral, metaphorically speaking, for a little home equity loan. With a loan shark. Just at the moment when the value of that home was skyrocketing.

And they somehow failed to heed the fine print: the stuff about having less than sixty days to repay, or somesuch, or you lose the whole blinking house. Someone correct me if that isn't a reasonable image: The metaphorical loan shark holding the note on this Boots & Coots house "stands to win control of a company with a $30-million market cap for less than $1 million down." The devil, it seems, is in the details.

Or perhaps in the devil's disciple.

Said the press release announcing his replacement:

"'On behalf of the Board of Directors and the Company, I would like to thank Jed DiPaolo for serving as interim Chairman and as a Director. Mr. DiPaolo has played a key role in the restructuring efforts. We have spent a great deal of energy creating the infrastructure that will enable us to proceed with our business plan. I look forward to the challenges ahead and am honored to assume this leadership position.'" [Emphasis mine.]

The man responsible for that quote is K. Kirk Krist, DiPaolo's replacement. Less than sixty days after that press release was issued, the company was allegedly in some kind of "default" on the loan.

So what does that say about the "business plan"?

Mission accomplished?

posted by Major Barbara | 9:12 AM

Friday, March 14, 2003  

Questions, questions....

Here's a good summary of what's been happening of late to Boots & Coots International Well Control.

The mystery, of course, is the real identity of Checkpoint Business, Inc. -- the people who hold a $1 million note in sway over the struggling company:

"January 31, 2003
Boots & Coots International Well Control, Inc. announced that it has received a Notice of Default under the Agreement, Note and other Loan Documents executed December 4, 2002, with its new lender, Checkpoint Business, Inc., wherein Checkpoint alleges the occurrence of several alleged defaults under the Agreement."

Checkpoint Business, Inc. was incorporated by "a shadowy group of Texas oil men." According to Scott Cohn, "it's incorporated in Panama, so it's impossible to find out who's behind the company."

But according to Cohn, the $1 million loan from Checkpoint was only made in December, 2002 -- less than sixty days before the company charged "several alleged defaults under the Agreement."


What kind of an executive gives up control of a company with a $30 million cap for a measly sixty day, million dollar note?

Here's a hint, also courtesy MSN:

"December 06, 2002
Boots & Coots International Well Control, Inc. announced that the Board of Directors has elected K. Kirk Krist as Chairman of the Board. Mr. Krist will be assuming the role of Chairman from Jed DiPaolo, who accepted the position on an interim basis in June of this year."

Loan documents signed December 4? A new chairman announced December 6? "Several alleged defaults" by January 31?

Who are these Chairmen of the Board, K. Kirk Krist and Jed DiPaolo?

And how did their board of directors let this happen -- just when the company stands to profit as never before?

We clearly need someone to explain this all for us before the questions do us in.

posted by Major Barbara | 10:10 PM

This "history" of Boots & Coots International Well Control drops some clues: "Boots & Coots International Well Control, Inc. (the "Company") was incorporated in Delaware in April 1988, remaining largely inactive until entering into a business combination with IWC Services, Inc., a Texas corporation ("IWC Services") on July 29, 1997. In the transaction, the stockholders of IWC Services became the holders of approximately 93% of the outstanding shares of common stock of the Company and the management of IWC Services assumed management of the Company. IWC Services is a global-response oil and gas well control service company that specializes in responding to and controlling oil and gas well emergencies, including blowouts and well fires. In addition, IWC Services provides snubbing and other non-critical well control services. IWC Services was organized in June 1995 by six former key employees of the Red Adair Company." [Emphasis mine.]

Why so emphatic?

Check the date: June 1995. Only a few months later, this little startup company would sign a blockbuster nuptial deal with Cheney at Halliburton.

How did it get ready for the "big time" so fast?

And why is a shadowy group of oil men trying to take control of the company now?

posted by Major Barbara | 9:06 PM

Not that long ago, it looked as if a number of companies were in play for Iraq's oil infrastructure business. According to Forbes, "The Pentagon is said to have started talking to oilfield firefighting firms such as Cudd Pressure Control, a unit of RPC (nyse: RES - news - people ); Boots and Coots International (amex: WEL - news - people ); Wild Well Control, a unit of Superior Energy Services (nyse: SPN - news - people ); and Canada's privately held Safety Boss, among others. Halliburton (nyse: HAL - news - people ) would also likely play a big support role in any firefighting operations, as it has expertise in setting up support infrastructure, such as electrical power and sewage, in remote locations."

Anyone want to guess who actually got a contract?

posted by Major Barbara | 8:55 PM

Way back in 1998, National Defense Magazine had an article about the Joint Service Pollution Prevention Conference in San Antonio, Texas. Guess who "offers a family of systems to contain spilled or waste oils. Among its products are oil containment booms, boom reels, boom accessories, boom storage containers, oil skimmers, response equipment packages, sorbents, dispersant sprayer units, dispersant agents, temporary storage units, responder support services, accredited training and certification, and waste oil recovery services"? If you said Boots & Coots, go to the head of the class.

Wasn't it smart of IWC to gobble up Boots, Coots and ABASCO in such short order?

posted by Major Barbara | 8:42 PM

Scroll down for more on the mystery: Who's trying to secretly take over the oilfield firefighting company that Dick Cheney cozied up to at Halliburton?

E-mail is already coming in, pointing us towards a couple of stories on background:

Canada's National Post reports that one of the biggest oilfield firefighting firms around is feeling squeezed out of the potential action. Seems no one's been beating a path to their door in anticipation of an Iraqui conflagration. Could it be because they're not in cahoots with Boots and Coots?

Mother Jones noted this of Kellog Brown and Root Services, a division of Halliburton, and their recent support services deal with the Army's Logistics Augmentation Program : "The unusual manner in which the contract was awarded is another cause for concern, budget watchdogs claim.The companies bidding for the contract were asked to submit support proposals for a theoretical scenario. When the proposals were reviewed, Army officials concede, cost was not the deciding factor...

"The more money [Brown and Root] spend, the more profitable the contract is," says Professor Steve Schooner, a contract expert from George Washington University. "Nobody in their right mind would enter into a contract that basically says: 'Come up with creative ways to spend my money and the more you spend the happier I'll be.'"

The Beeb quotes former Saudi Arabian Petroleum Minister Sheikh Kaki Yamani, who claims "Seven years or so ago, he saw a letter addressed to ex-President Clinton by a group of politicians advising him to attack Iraq, occupy the country and operate the oilfields. Those who signed the letter are now in power - including Vice-President Richard Cheney, Secretary of Defense Donald Rumsfeld, his deputy Paul Wolfowitz and Deputy Secretary of State Richard Armitage."

posted by Major Barbara | 7:46 PM

Now this is where it gets intriguing.

This week, Scott Cohn at CNBC reported that "a shadowy group of Texas oilmen... have a plan to take [Boots & Coots IWC] away from the shareholders."

A shadowy group of Texas oilmen? Where have we heard that before?

Oh, yeah.... Dick Stevenson and Jeff Gerth at the New York Times reported that some shadowy and
secretive somebody bought a lot of George W. Bush's Harken stock at just the precise moment he needed to sell it.

That's the way a lot of business gets done in Texas -- in the shadows.

So who's out to take over Boots & Coots IWC at the very moment they're poised to make a killing?

And who's helping them do it? Cohn's article makes it pretty clear that somehow, in some way, this takeover may have been aided and abetted by company insiders.

Does someone stand to gain something if this public company goes private?

The shadows are growing longer.

posted by Major Barbara | 8:49 AM

So a wild guess -- that Dick Cheney might have had anything at all to do with Red Adair -- led very quickly to the discovery that set this in motion:

The first business deal Halliburton announced after Dick Cheney was named CEO was to form an "alliance" with top oilfield firefighters -- the ones who put out the well fires in Kuwait.

Halliburton's "Alliance" Press Release

Cheney ascended to CEO of Halliburton in October, 1995. The press deal announcing the new business venture with International Well Control -- a company started up by guys who used to work for Red Adair -- was dated October 27.

Three significant points:

1) The "alliance" was intended to give Halliburton "a total solution for well control on a global basis." It was the first time that Halliburton had moved to sew up oilfield firefighters with contracts -- i.e., the first time the company had so prepared to exploit a possible conflagration (in, say, Iraq).

2) The deal, signalling a whole new direction at Halliburton, probably didn't happen overnight. Cheney must have brought some nascent version of the deal with him to the company, in a bid to better equip Halliburton for that "total solution."

3) While CEO of Halliburton, Cheney began actively advocating invading Iraq -- at least as early as 1997.

Starting to connect the dots?

Cheney's deal helped assure Halliburton the first position in Iraqi oil fields after a war: fighting the fires. By sewing up the "newly formed company comprised of the renowned firefighters of the Red Adair Company," Cheney began cornering the market on the talent that put out the Kuwait fires. Once the alliance was in place, Halliburton would be positioned to service the ruined wells of post-invasion Iraq, no matter who wound up owning the oil. Firefighting services gave Halliburton unique leverage in profiting from flaming Iraqi oil fields. They'd be first on the scene, if and when an invasion was mounted, with complete control of the situation.

The spoils of war are very different in these post-modern times.

They come in the form of government contracts -- and the best ones have limited review -- and blank checks attached.

posted by Major Barbara | 5:39 AM

Thursday, March 13, 2003  

How This Blog Came To Be

A few weeks ago, Bart of Bartcop announced that he had taunted a dittohead into "debating" on IRC. So I downloaded the software and showed up at the appointed time for the chat. The dittohead, of course, flaked out.

But while I was chatting with Bart and the regulars, an idle question formed itself in my mind: Who exactly stands to make money if Saddam sets his oilfields ablaze? Could it conceivably be... Halliburton?

As we all know now, that's exactly the case. But I was putting the pieces together for myself for the first time. As I chatted, I googled, putting together Red Adair... and International Well Control... and Dick Cheney... and...

I'm still putting the pieces together.

Can you help? E-mail me with clues for the clueless!

This blog is going to feature the bits and pieces that pop up in the news and blogosphere about war profiteering. I'm interested in all the fat cats who have positioned themselves to make a killing off of killing Iraqis. Please help me unearth all you can find about how right-wingers, neo-cons and Bush-ites have bet the farm on going to war.

Some day I might even begin to understand a little about
Adnan Khashoggi.

In the meantime, I'll start where I started that night with the Bartcop regulars: Dick Cheney, Halliburton and a sweet little honeymoon deal to corner the market on oilfield firefighters....

posted by Major Barbara | 8:28 PM