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  • From: Tvoivozhd <tvoivozd AT infionline.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: [Homestead] Halliburton, U.S. Ambassador $61,000,000 scandal
  • Date: Wed, 10 Nov 2004 19:05:52 -0800

<http://ap.tbo.com>

Nov 10, 2004


U.S. Ambassador Intervened in Halliburton Contract, Documents Show

By Larry Margasak
Associated Press Writer


WASHINGTON (AP) - The U.S. ambassador to Kuwait intervened last year to ensure that Halliburton, the oil services company once led by Vice President Dick Cheney, retained a Kuwaiti business as a subcontractor to deliver fuel to Iraq, documents released Wednesday show.

State Department documents appear to contradict the Bush administration's assertion that all decisions involving Halliburton's contracts were handled only by career contracting officers for the government.

The ambassador's effort was aimed at ensuring that the company favored by the Kuwaiti government remained part of the contract.

With Iraq experiencing a gasoline shortage after the U.S.-led invasion last year, U.S. officials gave Halliburton the job of obtaining fuel in Kuwait and delivering it to Iraq. The work became part of Halliburton's existing $2.5 billion no-bid work to restore Iraq's oil industry.

On May 4, 2003, Halliburton asked three Kuwaiti companies to bid. The next day, Halliburton, through its KBR subsidiary, placed its first order with Altanmia.

By that December, an Army Corps of Engineers contracting officer was pushing Halliburton to put the fuel delivery contract out for competitive bids.

That same month, U.S. Ambassador Richard Jones wrote that Halliburton officials had to "get off their butts and conclude deals" that would keep Altanmia as a subcontractor.

"Tell them we want a deal done with Altanmia within 24 hours and don't take any excuses," Jones wrote. The documents, turned over to a congressman by the State Department, do not disclose to whom Jones' message was directed.

Another memo, this one to Jones, said: "As KBR has been told repeatedly, Altanmia is the GOK's (Government of Kuwait's) sole source provider. The GOK has established Altanmia as a sop to the USG (United States Government) in order to allow sales from Altanmia to KBR."

A Halliburton spokeswoman, Wendy Hall, said that KBR "delivered fuel to Iraq at the best value, the best price, and the best terms and in ways completely consistent with government procurement policies. The original mission detailed by the Army Corps of Engineers was to find a fuel source in the region. The first fuel source found was in Kuwait."

State Department officials had no immediate comment on the memos. Jones is a career State Department employee.

The embassy intervention to retain Altanmia brought a strong protest from the career Army contracting official who was overseeing the work to deliver fuel to Iraq.

"My ethics will not allow me to direct KBR to go sole source to a contractor when I know there are other potential sources that can provide the fuel to the people in Iraq," Army Corps of Engineers contracting officer Mary Robertson wrote an official of KBR.

Robertson said the lack of competition would result in higher fuel prices being paid by U.S. taxpayers.

Robertson's Dec. 6, 2003, prediction of higher prices proved to be accurate. Five days later, a draft report by the Pentagon's audit agency disclosed that Halliburton and the Kuwaiti subcontractor had overcharged taxpayers $61 million for gasoline imports to Iraq in the initial months of the contract.

The Pentagon early this year replaced Halliburton and the Kuwaiti company. The work went to a Defense Department agency that supplies U.S. forces around the world.

Robertson's letter and a number of State Department documents were released by Rep. Henry Waxman of California, top Democrat on the House Government Reform Committee.

Halliburton's contracting was a major issue in the presidential campaign. Democrats charged that the administration showed favoritism toward Cheney's former company.

The Associated Press reported last month that the FBI had begun investigating whether the Pentagon improperly awarded no-bid contracts to Halliburton. The FBI was seeking an interview with Army contracting officer Bunnatine Greenhouse, who raised the same questions of fairness.

Waxman asked Rep. Tom Davis, R-Va., the committee chairman, to hold hearings on "the new evidence that senior administration officials applied political pressure to stifle competition and steer the lucrative fuel subcontract" to Altanmia.

Davis' spokesman, David Marin, said, "This committee's oversight of Iraqi contracting issues has been exhaustive, and it is ongoing. The minority's focus is entirely partisan. We're continuing to look at the recent State Department documents, and based on that review the chairman will decide what if any next steps are required."

The documents also show that the department got reports in June and August 2003 that Halliburton officials demanded kickbacks.

A department summary of an Aug. 4, 2003, noted, "Some of these charges are almost too flamboyant not to have at least a grain - however tiny - of truth to them."

Hall, the Halliburton spokeswoman, said, "It is important to the company that clients, suppliers and host countries know Halliburton's code of business conduct is expected to be followed in every country in which the company operates."

---

On the Net:

Halliburton: http://www.halliburton.com/

State Department: http://www.state.gov/

Democrats on the House Government Reform Committee: http://www.democrats.reform.house.gov/

AP-ES-11-10-04 1815EST

*This story can be found at:* http://ap.tbo.com/ap/breaking/MGBWY544E1E.html

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  • [Homestead] Halliburton, U.S. Ambassador $61,000,000 scandal, Tvoivozhd, 11/10/2004

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