Arms And The Man Who's Making A Killing On Killing In Iraq?
Sunday, February 29, 2004
HALLIBURTON'S IRAQ GRAVY TRAIN A former procurement specialist for the giant, White House-connected company charges that it failed to seek out competitive bids -- enriching itself and costing taxpayers tens of millions of dollars extra.
By Farhad Manjoo
"Halliburton Corp.'s latest image-rehabilitating television commercial begins with a narrator wistfully declaring, "When I joined Halliburton, I knew I was going to work on some big things." At Halliburton, the narrator explains, people are constantly trying to improve the lives of others. They fight oil-well fires, they bring supplies to stranded troops. "We built bridges, schools, all over the world." And that's not even the best part. "The biggest thing?" the narrator asks as the screen flashes to a group of smiling Halliburton employees dishing up hot meals to American GIs. "Serving our troops good ol' American food, so they'd feel just a little closer to home. Yeah."
"It's a nice image. But to Henry Bunting, a veteran procurement specialist who worked for Halliburton's subsidiary Kellogg Brown & Root in Kuwait last summer, this saccharine picture of Halliburton as a beneficent do-gooder doesn't ring true. According to Bunting, Halliburton's personnel in the Middle East weren't looking out for the government as much as they were looking out for the company. Bunting, who has recently been telling his story to congressional Democrats, says that Halliburton, which has been awarded billions of dollars of contracts for work in Iraq, routinely purchased the most expensive equipment and services on the government's tab. Because they knew taxpayers would always pick up the costs, Halliburton managers frowned on any attempts to save the military any money...." [more]
"A human being is by nature a wolf, British philosopher Thomas Hobbes wrote, and therefore the state should have an absolute monopoly over the use of violence. If not, society may be ripped apart in “a war of all against all.” That’s why Hobbes would turn in his grave if he knew that since the fall of the Berlin Wall, private companies are playing an increasing role in the enforcement of peace and security.
"According to Peter Singer, author of the book Corporate Warriors: The Rise of the Privatized Military Industry, there are some 90 companies worldwide offering military services and expertise to an overall security market worth upward of $100 billion. The reasons for this spectacular expansion are, on the one hand, the post-Cold War trimming of national armies (as a consequence of which there are some 7 million fewer soldiers under arms today than in 1989); and on the other, the fact that the world seems far less of a safe place, particularly after the Sept. 11, 2001, attacks.
"The post-Cold War gap between supply and demand has been quickly filled by private military companies, most of which are based in the US, England, South Africa, Russia and the Ukraine, where laid-off soldiers are abundant. The firms operate anywhere in the world to secure people and assets. Yet by far their most lucrative market today is Iraq. According to Singer, 10 percent of US soldiers in Iraq are civilians, which is ten times more than during the Gulf war of 1991. This makes the invasion of Iraq, and its aftermath, the most privatized conflict in the last 250 years...." [more]
By Warren P. Strobel and Jonathan S. Landay
Inquirer Washington Bureau
"WASHINGTON - The Iraqi National Congress, long championed by officials at the White House, Pentagon and on Capitol Hill, is facing a growing number of investigations into the inaccurate - and possibly bogus - intelligence it provided on Iraq. The investigations are also looking into whether some INC members may have tried to cash in on the fall of Saddam Hussein.
"Democrats in the House have asked the Defense Intelligence Agency to turn over raw intelligence supplied by the Iraqi exile group. They plan to review it for its accuracy and reliability, according to officials in the Bush administration and on Capitol Hill.
"The move follows a recent decision by the Senate intelligence committee to expand its probe of prewar intelligence on Hussein to include the Iraqi National Congress and other groups that played important roles in President Bush's decision to invade Iraq last March.
"Democrats on the House intelligence panel were angered by reports that the Defense Intelligence Agency is continuing to pay the Iraqi group $3 million to $4 million a year for information, despite findings that show most of the group's earlier information on Hussein's weapons of mass destruction and ties to terrorism was false.
"The continuing payments were first reported Feb. 22 by The Inquirer's Washington Bureau.
"The INC's leader, Ahmed Chalabi, has had powerful patrons in the offices of Vice President Cheney and Defense Secretary Donald H. Rumsfeld, as well as on both sides of the aisle in the Senate.
"But three senior administration officials said the mood in Washington toward Chalabi had turned sharply cooler as a result of the revelations about prewar intelligence supplied by Iraqi defectors made available by his group.
"In addition, several contracts for rebuilding Iraq that were won by firms with business or family ties to Chalabi are under intense scrutiny...." [more]
By DAVID IVANOVICH
Copyright 2004 Houston Chronicle Washington Bureau
"WASHINGTON — Two key Democratic lawmakers want Halliburton to turn over internal documents that reportedly identified significant deficiencies in the company's cost controls.
"Company officials would not say Friday whether they would agree to hand over the report to the lawmakers. Halliburton turned down a Houston Chronicle request for the documents Friday.
"A team of 80 company managers and auditors, known as the Tiger Team, concluded that the cost controls at Halliburton subsidiary KBR, formerly known as Kellogg Brown & Root, were antiquated and inadequate, the Wall Street Journal reported Friday.
"The team also characterized the company's procurement system as disorganized and plagued by weak internal controls.
"KBR President Randy Harl, in a prepared statement, said the company's "contracts in Iraq and our performance in a war zone are undergoing an unprecedented level of scrutiny."
""The Tiger Team was formed to ensure that all our operations fulfill the KBR promise to delivery quality results for our clients," Harl said. "That's what we are doing, even with the unprecedented barrage of inquiries, accusations and political innuendos."
"In a letter to Halliburton Chief Executive Dave Lesar, Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., asked the company to turn over a copy of the 18-page report by next Friday...." [more]
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Read Reps. Waxman and Dingell's latest letter here.
"A Halliburton Co. (HAL) unit, under fire for possible overcharges relating to work in Iraq, said a team of company managers and auditors found deficiencies in its cost-control system, Friday's Wall Street Journal reported.
"The unit, Kellogg Brown & Root, which has a contract for billions of dollars of Iraq-related work for the U.S. government, acknowledged that its cost controls are "antiquated" and inadequate, according to an internal report on its auditing procedures.
"The team's findings, contained in the 18-page internal document reviewed by The Wall Street Journal, call the company's procurement "disorganized" and marked by "weak internal controls."
"The memo amounts to a frank admission that Kellogg Brown & Root's critics are voicing valid concerns about the possibility of overcharges under the company's massive contract to supply U.S. troops. It also challenges KBR President and Chief Executive Randy Harl's claim, made last month, that the company had a "rigorous system of internal controls" for government contracts. The memo acknowledges that KBR's "paper-based, labor-intensive and bureaucratic" procurement system isn't suitable for a fast-response situation like Iraq.
"The memo's wording echoes concerns raised by the Pentagon's top accountant, Dov Zakheim, who recently said the Halliburton subsidiary has "got a rather antiquated accounting system."..." [more]
"We’re paying foreigners to die in Iraq, so we don’t have to.
"The U.S. is hunting mercenaries -- so we can put them to work. Some of the most dangerous jobs in Iraq, formerly carried out by American and British service people, have been handed over to soldiers of fortune.
"The continuing strain on coalition forces in Iraq, coupled with a desire to shift casualties from the "U.S. service people" column to the "We don't legally have to report some foreign guy getting blown up by a bomb" category, has led to a massive shifting of duties. Mercenaries, some provided by private military companies, some hired independently, are now guarding U.S. bases, manning checkpoints, providing security to travelers and driving unarmored trucks loaded with fuel, food, weapons, and other supplies.
"The use of commercial forces to bolster U.S. military action is nothing new. Increasingly over the last ten years, the U.S. has relied on private military companies to provide additional personnel when the Pentagon finds itself short. Hiring help is cheaper than maintaining a standing army -- even if it will cost the defense department an estimated $30 billion this year alone. In practice, however, the ethical ramifications of paying for war sometimes outweigh the economic benefits. Private soldiers aren't held to as many regulations, and their actions rarely end up in Defense department reports open to the prying eyes of FOIA. In Bosnia, for instance, the U.N. discovered that the private military personnel provided by a company called DynCorp, were buying and selling prostitutes on the side. One of their victims was a 12-year-old girl.
"The U.S. Department of State provides a short list of security companies operating in Iraq, just a small sample of the hundreds known to be carrying out operations. Most of these organizations, self-defined as "risk management agencies" are based in the U.S. or in the U.K., but some hail from India, Kuwait, and South Africa.
"India, which is not officially involved in the "Coalition of the Willing" is now trying to determine whether or not the U.S. violated international law when it attempted to recruit 500 Indian mercenaries in early January. South Africans, also not members of the coalition, have been surprised in recent months to learn that as many as 1,500 of their countrymen are fighting in Iraq. In fact, by some estimates, private soldiers outnumber British troops, making up the second largest fighting force behind the U.S...." [more]
OPEN SECRET Dick Cheney's dubious history and unprecedented role are hidden in plain view. Luckily, it's becoming an issue in the election.
By Robert Kuttner
"Dick Cheney is the most powerful Vice President in US history. Indeed, there is fair amount of circumstantial evidence that Cheney, and not Bush, is the real power at the White House, and Bush the figurehead.
"The true role of the shadowy Cheney is finally becoming an issue in the election, and it deserves to be. This week in the National Review, Byron York warned that Cheney was vulnerable to Democratic attacks. And he deserves to be. A recent piece in the New Yorker by Jane Mayer lays out, in devastating detail, how Cheney, while CEO of Halliburton, created the blueprint for the shifting of much of the military's support role from the armed services to private contractors. The leading contractor, of course, is Halliburton. When Cheney became Vice- President, Halliburton was perfectly positioned to make out like a bandit.
"Cheney, whose prior career was in politics, became a very rich man as Halliburton's chief executive, earning $45 million in just five years, with $18 million still available in stock options. Cheney also went to extraordinary lengths to keep secret the meetings of the Bush energy task force, which included primarily private companies positioned to profit from public decisions. The press treated all this as newsworthy for a time, but then backed off.
"What is significant about Mayer's New Yorker piece is that it was pieced together mainly from the public record. Cheney's dubious history and unprecedented role are mostly hidden in plain view, just like Bush's. The press needs only to decide that it's a story.
"Now, the Pentagon has belatedly opened a formal criminal investigation into Halliburton's grotesque overcharging of the Pentagon for oil delivered to Iraq. The oil was deliberately routed through a previously unknown intermediary in Kuwait, which charged Halliburton's subsidiary far above the going rate. The whole deal is fishy, because the oil business in Kuwait is closely controlled by the Kuwaiti government, which works closely with the Bush Administration.
"In December, Pentagon auditors concluded that Halliburton had overcharged the US government for the oil by $61 million. Nonetheless, the same US government has just awarded Halliburton another contract, worth $1.2 billion, to repair oilfields in sourthern Iraq. If the Pentagon's Defense Criminal Investigative Service does its job, it is hard to avoid a close examination of the role of Cheney.
"Though Bush is already on record that he wants to keep Cheney as his running mate this November, I would not be at all surprised if Cheney were dropped from the ticket.
"For one thing, Cheney could become a real liability.
"Secondly, if Bush continues to sink in the polls, there is already talk among Republican strategists of replacing Cheney with a tactical choice such as Homeland Security Secretary and former Pennsylvania Governor Tom Ridge, or former New York Mayor Rudy Giuliani...." [more]
"ORLANDO, Fla.—Science Applications International Corp. wants you to know it has built a tent so big that the company hopes to fit 2,500 vendors—including competing systems integrators -- inside.
"The tent, actually SAIC’s Public Safety Integration Center in McLean, Va., was dubbed “a permanent, use-based trade show” by its manager, Robert Desourdis Jr. Speaking at a homeland security conference sponsored by the American Quality Institute of Pittsburgh, Desourdis described progress the center has made since it opened in January 2003.
"To date, 350 federal and state officials have visited to see the various emergency response and homeland security systems demonstrations. Some 250 niche product vendors have explored, and 60 of them sent their products to be installed, Desourdis said. Products aren’t limited to IT, he added. One example is an Israeli-built air purifier that can be hand-cranked in a power outage.
"The idea of the center grew out of a plea from Steve Cooper, the chief information officer of the Homeland Security Department, Desourdis said. Cooper had told vendors the department wasn’t interested in being its own integrator of single function products, but instead wanted to buy finished solutions.
"“So we wanted to avoid the Home Depot or Lowes approach to security,” Desourdis said, referring to the giant houseware stores where people can buy everything from foundation blocks to faucets...." [more]
"• DynCorp, a Reston-based subsidiary of Computer Sciences Corp., won a contract worth up to $1.75 billion over a maximum of five years from the State Department to provide law enforcement agents and construction and coordination services on peacekeeping missions. The company said it expects to recruit up to 2,000 law enforcement agents and experts in the United States for tours lasting up to one year...."
"Chancellor Gerhard Schroeder will ask President George W. Bush to invite German companies to bid for the next $4.5 billion-worth of contracts in Iraq, said Karsten Voigt, his adviser on U.S. relations.
"Voigt said Schroeder, visiting the White House on Friday for the first time in two years, will lobby for companies including Siemens AG, Germany's largest engineering concern, and the builder Hochtief AG. The U.S. has excluded Germany, France and other nations that opposed the Iraq war from bidding on rebuilding work.
"``We have certain economic interests; Schroeder will assert these,'' Voigt said in an interview from the Foreign Ministry in Berlin. ``We trust that expertise alone will be the deciding factor. This is in the best interests of Iraqi reconstruction.''..." [more]
"WASHINGTON, Feb 25 (IPS) - U.S. President George W. Bush and Congress should join Pentagon and State Department probes into allegations that construction giant Halliburton overcharged the U.S. government for its work in Iraq, to ensure accountability of other military contractors, watchdog groups here say.
"Activists from the 'Campaign to Stop the War Profiteers', initiated by the North Carolina State-based Institute for Southern Studies and endorsed by 50 organisations across the United States, say adding the weight of the White House and Congress to the investigation could help guarantee that controversial contractors are accountable before the U.S. public.
"Activists say that dubious billing and procurement practices have raised questions about the quality of government oversight in Iraq and whether the Bush administration is sufficiently protecting the interests of U.S. taxpayers.
"From no-bid contracts with little supervision to manipulating gasoline prices, Halliburton, formerly run by Vice President Dick Cheney, has largely come to embody the secretive nature of awarding contracts in post-war Iraq and accusations of hefty war profiteering.
""The scope of the scandals surrounding Halliburton and other military contractors demands a full congressional inquiry into the politics surrounding contract decisions and the performance of corporations that have been given billions of taxpayer dollars," said Chris Kromm, co-director of the campaign, in a statement.
"The groups say that hundreds of millions of dollars are being wasted as a result of crooked conduct by contractors and sloppy government controls...." [more]
"Top-level lobbying by British ministers on a trip to Washington on behalf of UK companies trying to win work in Iraq has been rebuffed by White House officials.
The trade minister, Mike O'Brien, insisted at a reconstruction conference on Tuesday that his visit had been successful, but well-placed sources argue differently.
"Confidential papers seen by the Guardian show the US national security adviser, Condoleezza Rice, phoned Tony Blair's office to discuss the issue after she read a leak about the concerted lobbying in this newspaper on February 13.
"But Mr O'Brien and Tony Blair's trade envoy, Brian Wilson, were told clearly there could be no special efforts to help win deals for UK firms.
""The White House is sympathetic but officials there say they cannot intervene in a procurement process handled by the Pentagon," said a well-placed source.
"Briefing documents dated February 20 - before the trip to Washington - suggest Mr Blair might raise the issue directly with President George Bush if there is no progress. "Depending on the outcome of the minister's visit, he [Mr O'Brien] may want to recommend to the prime minister that he raise this directly with President Bush," according to documents marked "restricted". The British government has become embarrassed about domestic firms' failure to win a big slice of the Iraq reconstruction contracts. Billions of dollars worth has gone to American companies such as Halliburton, which used to be headed by US vice-president Dick Cheney.
"A new round of contracts come up early next month and the UK looks better placed, with stakes in 15 of the 17 bids being considered. But there is still acute nervousness.
"Mr O'Brien told a London gathering on rebuilding Iraq that 20 UK firms had already won deals, although he denied he had made the visit to Washington last week to plead Britain's case. The trip had been "to discuss transparency and a level playing field".
"But the documents prepared ahead of that meeting make clear the true reason for the mission by Mr O'Brien and Mr Wilson.
"Special guidance on how to handle media interest in the Washington trip argues: "The purpose of the visit is to lobby for UK contracts and if there [are] none offered, then the media would report on this negatively."
"Despite Mr O'Brien's comments that "we have secured quite a lot of contracts already", the briefing documents from the UK trade and investment unit of the Department of Trade and Industry admit the question of how successful UK firms are in Iraq is "impossible to answer" because details are not available.
"The Guardian revealed two weeks ago that Mr O'Brien and Mr Wilson were planning a trip to the US to lobby for more UK contracts, and the article triggered a flurry of action in Washington.
"The latest set of confidential documents reveal that "Condoleezza Rice telephoned Nigel Sheinwald [Mr Blair's special foreign affairs envoy] on February 13 to ask about the Guardian article that day".
"Last night Mr Wilson insisted the US trip was not aimed at avoiding political embarrassment but an attempt to ensure Britain benefited commercially from the "biggest construction programme in history"."
"WASHINGTON — The State Department's Inspector General has been asked to investigate officials at the U.S. Embassy in Kuwait regarding Halliburton Co.'s assignment to truck fuel into Iraq, lawmakers revealed Tuesday.
"In the ever-widening probe into Halliburton's fuel purchases, the department's investigators have been asked to learn whether embassy staffers passed along incorrect information that may have cost taxpayers millions of dollars.
"Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., are challenging the assumption that Kuwaiti law somehow barred Halliburton from obtaining the kind of pricing data necessary to get truly competitive bids from would-be fuel suppliers.
"This restriction, allegedly confirmed by the embassy and accepted wholeheartedly by the U.S. Army Corps of Engineers, has been used to justify purchases of high-priced fuel from a single Kuwaiti supplier by Halliburton's KBR, formally known as Kellogg Brown & Root.
""We have learned ... that this underlying premise appears to be false," the lawmakers wrote in a letter to Defense Department Inspector General Joseph Schmitz.
""Several independent sources have told us that Kuwaiti law does not prohibit the submission of certified cost and pricing data for fuel products."
"Congressional staff members could not say whether State Department investigators launched their own embassy staff probe.
"Spokesmen from the State Department inspector general's office and the Army Corps of Engineers declined to comment on the letter...." [more]
"They have had enough of repeated one-sided attacks from the Democratic presidential candidates, and they are fighting back.
"Battered by accusations focusing mostly on its contracts in Iraq -- worth $8 billion and climbing -- the politically connected Halliburton company has gone on a charm offensive. Television ads are running in Houston and Washington, and the company's chief executive, Dave Lesar, is telling journalists, as he told the Globe editorial board in a phone interview yesterday, that Halliburton gets a lot of this kind of work "because we're really good at it." But Halliburton's core business is oil field services, and much of its work in Iraq is nation building.
"Congress and the Bush administration should redouble their efforts to probe specific allegations, including gross overcharging, as well as the entire procurement process. If the worst that can be said is that Halliburton received enormous noncompetitive contracts because it was the only qualified company, that is alarming enough and needs to be addressed. Dwight Eisenhower, who warned against the military-industrial complex, would wince.
"The specific charges are troubling. Halliburton has already reimbursed the government $6.3 million and admitted that two employees, since fired, took kickbacks from a Kuwaiti subcontractor.
"Charges that Halliburton vastly inflated the number of meals it was serving to armed forces in Iraq and Kuwait are being investigated by the Pentagon, which has suspended payment of $36 million. The company has also agreed not to bill an additional $140 million until the issue is cleared up.
"Another accusation is that a Halliburton subsidiary overcharged the United States $61 million for bringing fuel from Kuwait into Iraq immediately after the war -- some of it at prices substantially higher than American consumers pay. Lesar said yesterday the amount was a fair price and questioned reports that the Pentagon was beginning a criminal investigation into this deal. But other probes are moving forward, as they should. Former Halliburton employees have said the company "routinely overcharged" for its work in Iraq, two congressmen said last week.
"The Justice Department is also looking into an accusation that another Halliburton subsidiary was part of a group that paid $180 million in bribes to Nigerian officials to win a contract there starting in 1995 when Vice President Dick Cheney was Halliburton's CEO. Lesar said yesterday that whatever happened in Nigeria was commenced by an independent company that was later bought by Halliburton.
"Halliburton, which has made at least $655,333 in political contributions since 1999, 94.7 percent to Republicans, according to the Center for Responsive Politics, has political clout. Close scrutiny of its actions will determine whether its charm offensive is successful, or deserves to be."
"MAKHUL, Iraq - Iraq's northern oil export pipeline is still coming under attack, officials said Monday, as sabotage hit infrastructure further south, raising fresh fears about the vulnerability of the country's oil industry.
"Almost a year after the Iraq war, the country's U.S.-led authority does not feel confident enough yet to try to restart the pipeline from Iraq's Kirkuk oilfields.
"We are making some progress. There is no date set yet," Rob McKee, the authority's oil chief, told Reuters.
""The fact is that there are some wonderful oilfields in the north. It is important to figure out a way to export the northern crude."
"Oil infrastructure sabotage has been rare in Iraq's mostly Muslim Shi'ite south, but Iraq's main internal pipeline was on fire Monday after coming under attack a few days ago near the Shi'ite holy city of Kerbala.
"One option U.S. and Iraqi oil officials were considering was to use the line, known as the strategic pipeline and currently out of commission, to pump Kirkuk crude south for export from the Gulf.
"But a guard in the region said an explosive device ripped through a section of that link about a week ago. A Reuters photographer saw smoke still rising Monday from the reversible line west of Kerbala...." [more]
By Joshua Chaffin and Demetri Sevastopulo in Washington
"US embassy officials in Kuwait could be drawn into a criminal investigation into Halliburton's fuel imports into Iraq.
"The Pentagon has asked the State Department's inspector-general to review actions of embassy staff there as part of an investigation into whether Halliburton overcharged the government for fuel it hauled from Kuwait to Iraq, according to a letter released by Democratic members of Congress on Tuesday.
"The State Department inspector-general declined to comment on Tuesday. But the request raises new questions about what role diplomats played in Halliburton's selection of Altanmia Commercial Marketing, a Kuwaiti supplier, and subsequent investigation of the arrangement.
"Halliburton, an oilfield services company formerly headed by vice-president Dick Cheney, has been at the centre of a series of scandals on its work in postwar Iraq.
"The Pentagon's inspector-general said on Monday it was opening a criminal inquiry after auditors determined the company's Kellogg Brown & Root division might have passed on $61m (?48m, £32m) in excess charges from Altanmia to the US government. Halliburton has consistently denied any wrongdoing, saying it supplied the fuel at the best price and value.
"In December the US Army Corps of Engineers, which was overseeing the contract, appeared to exonerate KBR by granting a waiver allowing the company to continue using Altanmia despite the Kuwaiti company's reluctance to provide information that would justify its prices.
"The waiver, which emerged as Pentagon auditors were scrutinising the contracts, was granted on the grounds that Altanmia was prohibited by Kuwaiti law from disclosing such information. But Henry Waxman and John Dingell, the two senior Democrats on the House government reform committee, said on Tuesday that this appeared to be a "false premise".
""Several independent sources have told us that Kuwaiti law does not prohibit the submission of certified cost and pricing data for fuel products," they wrote in a letter to the Pentagon's inspector-general, urging a review of the waiver.
"According to the letter, US embassy staff in Kuwait acted as "intermediaries" between the Kuwaitis and the Corps of Engineers, and were responsible for passing on unverified claims about the country's legal statutes.... [more]
"The SA government's high profile anti-mercenarism policy seemed more confused this week after revelations that the South African security company used to guard oil wells in Iraq is a protege of Washington's front man for the presidency, Ahmed Chalabi.
"The company, Erinys, was set up by a group of South Africans including apartheid-era foreign affairs head Sean Cleary and won a $39.5m two-year contract last year to guard Iraqi oil. It operates offshore from the UK and has not sought SA approval to work in Iraq but it appears to fit the profile for prosecution (SouthScan v18/18; 18/21; 19/03).
"Now, as more and more unemployed former SA military and police personnel head for Iraq and fat pay packets, the government is trying to clamp down, but its rationale for extending a law primarily aimed at African conflicts appears confused.
"Added to that it may be heading for a domestic and diplomatic embarrassment - the US company involved in training the SA police, intelligence and prosecution services may be seeking part of the Erinys action, further legitimizing its operations. Kroll Associates, active in SA since 1998 and with strong CIA links (SouthScan v11/13), is negotiating with Erinys and its pro-Chalabi backing company, Nour, to take over the Iraq operation, according to a report in the US-based Newsday magazine this week...." [more]
"NEW YORK, Feb 24 (Reuters) - Halliburton Co. (nyse: HAL - news - people), the oil services company, on Tuesday said it has not been notified of a further development in a probe by the Pentagon's Inspector General's office.
"On Monday, the Pentagon said it had opened a criminal investigation of fraud allegations against one of its units. The Pentagon said its criminal investigation of Halliburton's Kellogg Brown and Root subsidiary includes whether it overpriced for fuel delivered to Iraq.
"The Houston-based company said KBR, the U.S. military's biggest contractor in Iraq, delivered fuel to Iraq at the best value, price and terms."
"WASHINGTON (CNN) -- The Pentagon's investigation into allegations a Halliburton subsidiary may have overcharged for gasoline delivered to Iraq last year is now a criminal probe, the Pentagon said Monday.
""The Defense Criminal Investigative Service, the criminal investigative arm of the Inspector General's office, is investigating allegations of fraud on the part of Kellogg Brown and Root (KBR), including the potential overpricing of fuel delivered to Baghdad by a KBR subcontractor," a Pentagon statement said.
"Last December, the Pentagon's Defense Contract Audit Agency found Halliburton may have overcharged as much as $61 million on its no-bid government contract for fuel brought into Iraq from Kuwait.
"The Pentagon auditors -- noting that fuel from Turkey was cheaper by more than $1 a gallon -- questioned whether KBR adequately shopped around for the best price.
"In January the case was referred to the Inspector General of the Defense Contract Audit Agency, which referred it to the DoD Inspector General, which has turned the probe over to criminal investigators...." [more]
"The chief executive of the Halliburton Company, Dave Lesar, never imagined that he would be the star of his own television commercial. But there he is, on the airwaves in Washington and Houston, assuring viewers that his company has billions of dollars in contracts to rebuild Iraq and feed American troops "because of what we know, not who we know."
"The unnamed "who" is, of course, Vice President Dick Cheney, Halliburton's chief executive from 1995 to 2000. Mr. Cheney's ties to the huge oil services, engineering and reconstruction company have become a favorite Democratic attack line in the 2004 campaign.
""He did give Halliburton a higher profile," Mr. Lesar said in a telephone interview last week from his company's base in Houston. "I would never in my wildest dreams have thought we would have the profile we have today, but I think that is just part of the political process we're in."
"The advertising, Mr. Lesar added, will continue until the end of the presidential campaign "because I don't believe we're going to disappear as a political story."
"But at a time when President Bush's own campaign commercials have yet to start, the Halliburton spots — two are on the air so far — have created an awkward situation for the White House, which has not fallen over itself to embrace them. Mr. Cheney's office had no comment, and neither did the Bush campaign. But one Republican official close to the administration said the company was clearly thinking of itself, not the president's re-election...." [more]
"The mammoth defense firm once headed by Vice President Dick Cheney has suspended outstanding food bills of $174.5 million until it can resolve an embarrassing dispute with the Pentagon.
"According to military officials, Halliburton invoiced the government for four million phantom meals that were never served to U.S. troops in Kuwait.
"A Halliburton subsidiary, KBR, has the contract to feed all American service personnel in the war zone. Soldiers eat lots of food, and Halliburton has been making lots of money.
"Too much money, according to the Army.
"Earlier this month, Halliburton agreed to repay the U.S. government about $27.4 million that it had overbilled for meals at five military bases in Iraq and Kuwait.
"Auditors are currently reviewing the records at 53 other dining installations operated by KBR. The company says it has done nothing wrong, and 'is a good steward of taxpayers' dollars.''
"Back when Halliburton was given such a large and lucrative role in U.S.-occupied Iraq -- it also got the contract to repair and refit the oil fields -- the Bush administration denied that it was handing out favors to the Texas-based conglomerate.
"Americans were assured that the selection of Halliburton had nothing to do with the Cheney connection, a line which nobody with an IQ over 75 believed.
"Not surprisingly, the decision is now backfiring. First came allegations that the firm was overcharging for gasoline being shipped to Iraq, a matter now under investigation by the Pentagon inspector general.
"Then, in January, the company admitted that two of its employees had pocketed enormous bribes from a Kuwaiti subcontractor servicing U.S. troops. Halliburton promptly coughed up a $6.3 million reimbursement check.
"Americans aren't naive about war. They know it's a highly expensive enterprise, and a profitable one for defense contractors. Still, there will be little public tolerance for findings of price-gouging and overbilling by an outfit with ties to the vice president, who is nearly as invisible as Halliburton's troop meals.
"Connecting the dots
"As the war in Iraq grows increasingly unpopular, the company's windfall looks increasingly obscene. Democrats are already urging voters to connect the dots:
"• In 2000, Cheney agrees to leave Halliburton and become George W. Bush's running mate.
"• Halliburton says goodbye to Cheney with a stupefying retirement package worth more than $20 million.
"• When Bush decides to invade Iraq, Cheney's old company gets the biggest chunk of the business.
"The White House wants us to believe it's all coincidence, and maybe it is. Maybe someday I'll win the Daytona 500, too. In a golf cart.
"The war has been a spectacular boon for Halliburton, which last year raked in $3.4 billion for its work in Iraq -- about 20 percent of the company's total revenue, according to Bloomberg News.
"Wall Street investors are jolly, as well. The price of Halliburton stock has shot up about 61 percent since the invasion...." [more]
"Halliburton's troubles mount with every day. The Houston-based construction and oil field services conglomerate is dogged by disputed billings for work in Iraq, allegations of bribes paid in Nigeria and a Senate inquiry into a subsidiary's work in terrorist-sponsoring Iran.
"However, the growing pantheon of Halliburton's ills can be summed up in two words: Dick Cheney.
"Cheney headed Halliburton between service as defense secretary under the first President Bush and as vice president under the second. Because of its connection with Cheney and the billions of dollars it bills U.S. taxpayers for work in Iraq and around the globe, Halliburton is subject to intense scrutiny. The news media, opponents of George W. Bush's administration and government investigators are all looking into Halliburton's dealings to see if the company has done something wrong.
"Halliburton recently informed the Securities and Exchange Commission and investors that its connection to Cheney had become "a risk factor" that could adversely affect its business.
"Halliburton's troubles with Cheney began long before the company was awarded no-bid emergency contracts to repair Iraqi oil fields. As Halliburton's CEO, Cheney orchestrated the company's merger with Dresser Industries. Unknown at the time, the acquisition brought with it more than $4 billion in asbestos-related liabilities.
"Years later, U.S. and French authorities are investigating allegations that, while Cheney was in charge, a consortium involving Halliburton paid $180 million in bribes to Nigerian officials.
"The company's current chairman, David Lesar, recently told the Chronicle's editorial board that during his tenure Cheney helped the company to grow. Ironically, Lesar said, Cheney viewed the government as a difficult customer and was leery of bidding on government contracts.
"However, Cheney has long been a strong and influential proponent of privatizing government services, particularly the military logistics performed by Halliburton subsidiary KBR. Lesar said earnings from work in Iraq provide a small portion of Halliburton's profits, but help the bottom line when the oil and gas business cycle turns down.
"The public relations damage Halliburton suffers because of its past association with Cheney is aggravated by Cheney's bent for secrecy and refusal to reveal which energy company executives he met with when crafting the administration's policy on energy. Halliburton, which is still paying deferred compensation to Cheney, has become a code word for administration cronyism...." [more]
DYING OF NEGLECT: THE STATE OF IRAQ'S CHILDREN'S HOSPITALS The wards are filthy, the sanitation shocking, the infections lethal. Sewage drips from the roof above cots of premature babies. This is the state of Baghdad's top children's hospital, 10 months after the fall of Saddam, reveals Justin Huggler
"In Iraq's hospitals, children are dying because of shockingly poor sanitation and a shortage of medical equipment. In Baghdad's premier children's hospital, Al-Iskan, sewage drips from the roof of the premature babies' ward, leaking from waste pipes above.
"In the leukaemia ward, the lavatories overflow at times, spreading filthy water across the floor that carries potentially lethal infection.
"Rubbish is piled on the stairs and in the corridors: old broken bits of machinery, discarded toilet cisterns, babies' cots filled with mountains of unwanted paperwork. The fire escape is blocked with discarded razor wire.
"Nearby lie blankets still black with the blood of Iraqi soldiers wounded during the war - for months, they must have been fetid breeding grounds for disease.
"This is the reality of life in Iraq under American occupation. Ten months after the fall of Saddam, the invasion that was supposed to have transformed the lives of ordinary Iraqis has done little for the children in Al-Iskan Hospital.
"Of the billions of dollars the US is spending in Iraq, little seems to have found its way to Al-Iskan. In a country that sits on top of the second largest proven oil reserves in the world, children are dying in hospital beds because of a shortage of such basic equipment as oxygen cylinders.
"The hospital is so short-staffed that the children's mothers have to do the work of nurses: there simply aren't enough nurses to go around. There is no hospital smell at Al-Iskan, because there is no disinfectant. We found a cleaner washing the floor, sprinkling meagre drops of water from a bucket as he went. Wasn't there any disinfectant, we asked. Not even soap, he answered.
""We have our own epidemic of diarrhoea in the hospital every two to three weeks," says Dr Ali Egab, a harried young doctor who stops to give advice to nurses as he shows us from ward to ward. "In December there was a serious epidemic of bronchitis in Baghdad," says Dr Egab. "The hospital was so crowded we had three children in each bed. We had to put some of the children on the floor."
"With the overcrowding, cross-infection is a serious problem. "We cannot keep different types of cases apart. All sorts of infections are put together. And often, a patient arrives with a chest infection and ends up getting a stomach infection as well," says Dr Egab.
"This sort of secondary infection is the leading cause of death in many of Iraq's hospitals. According to hospital statistics, the rate of secondary infections in Iraq is a shocking 80 per cent.
"And yet half of Al-Iskan hospital is a building site. Entire wards that could alleviate the overcrowding are empty shells, with puddles of rancid water gathering on the floor A programme of renovation was abandoned at the time of the American invasion, and nothing has been done since.
"Al-Iskan used to be called Saddam Hussein Central Children's Hospital. It was supposed to be the premier children's hospital for all of Iraq, but the staff say it was never any better than it is now.
"The Americans inherited an Iraqi health system in a nightmarish state, the product of a combination of years of crippling sanctions imposed by the West, and criminal neglect by the Saddam regime.
"But the Americans have had 10 months to improve things, and at Al-Iskan children are still dying because of the dire conditions...." [more]
"In its effort to relieve overstretched U.S. troops in Iraq, the Bush administration has hired a private security company staffed with former henchmen of South Africa’s apartheid regime.
"The reliance on apartheid enforcers was highlighted by an attack in Iraq last month that killed one South African security officer and wounded another who worked for the subsidiary of a firm called Erinys International. Both men once served in South African paramilitary units dedicated to the violent repression of apartheid opponents.
François Strydom, who was killed in the January 28 bombing of a hotel in Baghdad, was a former member of the Koevoet, a notoriously brutal counterinsurgency arm of the South African military that operated in Namibia during the neighboring state’s fight for independence in the 1980s. His colleague Deon Gouws, who was injured in the attack, is a former officer of the Vlakplaas, a secret police unit in South Africa.
"“It is just a horrible thought that such people are working for the Americans in Iraq,” said Richard Goldstone, a recently retired justice of the Constitutional Court of South Africa and former chief prosecutor of the United Nations International Criminal Tribunals for the former Yugoslavia and Rwanda.
"The Coalition Provisional Authority in Iraq and the Pentagon did not return requests for comment.
"In Iraq, the U.S. government has tapped into the ever-growing pool of private security companies to provide a variety of defense services, including protecting oil sites and training Iraqi forces. Observers worry that a reliance on these companies and the resulting lack of accountability is a recipe for further problems in a volatile region.
"Erinys Iraq, the subsidiary of the largely unknown security company called Erinys International, was awarded a two-year contract worth $80 million last August to protect 140 Iraqi oil installations and train some 6,500 Iraqi guards. It then subcontracted some of its security duties to a U.S. private security firm called SAS International.
"The contract raised eyebrows in the industry because Erinys beat out better-known competitors. While the coalition authority has not released information on the tender, some of its officials were quoted as saying the bidding was fair.
Neither the authority nor Erinys responded to e–mail queries regarding the tender and ultimate contract.
"In addition to fueling criticism over the lack of transparency of the bidding process in Iraq, the contract has also ignited political infighting in Baghdad between two key U.S. allies. The leader of the Iraqi National Accord, an exile group with close links to the CIA, has accused one of his main rivals of orchestrating the deal for his own purposes. Iyad Allawi told the Financial Times last December that Ahmed Chalabi, the leader of the Pentagon-backed Iraqi National Congress, had engineered the Erinys contract in order to set up a private militia that would end up undermining central authority over the vital oil sector.
"Private security companies, including Erinys International, have served as a magnet for poorly paid and highly skilled South African security officers, according to a recent United Nations report and articles in the South African press. Headquartered in London with offices in Johannesburg and Dubai, Erinys International reportedly was established in the summer of 2002 by former British and South African security officials. Its Erinys Iraq subsidiary reportedly was set up last May in the wake of the U.S.-led invasion, when the oil infrastructure had become a prime target for looters.
Gouws, a former Pretoria police officer who then worked for the notorious Vlakplaas unit, was declared medically unfit and discharged from the police in December 1996 after a decade of service. That year, Gouws submitted an amnesty application to the Truth and Reconciliation Commission, a body set up after the apartheid to investigate past atrocities. According to records of the commission, Gouws and a colleague were granted amnesty in May 1999 for admitting their involvement in the 1986 murder of regional minister and opposition leader Piet Ntuli...." [more]
"Vice-President Dick Cheney is well known for his discretion, but his official White House biography, as posted on his Web site, may exceed even his own stringent standards. It traces the sixty-three years from his birth, in Lincoln, Nebraska, in 1941, through college and graduate school, and describes his increasingly powerful jobs in Washington. Yet one chapter of Cheney’s life is missing. The record notes that he has been a “businessman” but fails to mention the five extraordinarily lucrative years that he spent, immediately before becoming Vice-President, as chief executive of Halliburton, the world’s largest oil-and-gas-services company. The conglomerate, which is based in Houston, is now the biggest private contractor for American forces in Iraq; it has received contracts worth some eleven billion dollars for its work there.
"Cheney earned forty-four million dollars during his tenure at Halliburton. Although he has said that he “severed all my ties with the company,” he continues to collect deferred compensation worth approximately a hundred and fifty thousand dollars a year, and he retains stock options worth more than eighteen million dollars. He has announced that he will donate proceeds from the stock options to charity.
"Such actions have not quelled criticism. Halliburton has become a favorite target for Democrats, who use it as shorthand for a host of doubts about conflicts of interest, undue corporate influence, and hidden motives behind Bush Administration policy—in particular, its reasons for going to war in Iraq. Like Dow Chemical during the Vietnam War, or Enron three years ago, Halliburton has evolved into a symbol useful in rallying the opposition. On the night that John Kerry won the Iowa caucuses, he took a ritual swipe at the Administration’s “open hand” for Halliburton.
"For months, Cheney and Halliburton have insisted that he had no part in the government’s decision about the Iraq contracts. Cheney has stuck by a statement he made last September on “Meet the Press”: “I have absolutely no influence of, involvement of, knowledge of in any way, shape, or form of contracts led by the Corps of Engineers or anybody else in the federal government.” He has declined to discuss Halliburton in depth, and, despite a number of recent media appearances meant to soften his public image, he turned down several requests for an interview on the subject. Cheney’s spokesman, Kevin Kellems, responded to questions by e-mail.
"Representative Henry Waxman, a liberal Democrat from California and the ranking minority member of the House Committee on Government Reform, has argued aggressively that the Bush Administration has left many questions about Halliburton unanswered. Last year, for example, a secret task force in the Bush Administration picked Halliburton to receive a noncompetitive contract for up to seven billion dollars to rebuild Iraq’s oil operations. According to the Times, the decision was authorized at the “highest levels of the Administration.” In an interview, Waxman asked, “Whose decision was it? Was it made outside the regular channels of the procurement process? We know that Halliburton got very special treatment. What we don’t know is why.”..." [more]
* * *
Thanks to Kevin Haydenfor tipping us to the New Yorker article!
"The Bush administration treats Halliburton, the global oil services company, as an ally in the war on terrorism. But it is becoming increasingly clear that this private ally is largely unaccountable, uncontrolled and possibly downright predatory in some of its behavior. Investigators for the Pentagon and elsewhere are looking into questionable accounting practices and dubious payments in Kuwait and Nigeria.
"Halliburton, once headed by Vice President Dick Cheney, is a $16 billion firm with subsidiaries in gas processing, chemical production and construction of prisons, stadiums and highways.
"A substantial part of its size, growth and wealth over the years has depended on governments. With the wars in Afghanistan and then Iraq, Halliburton benefited from government contracts that were virtual set-asides to do everything from repairing oil fields to building and running the bases to serving meals and washing dishes.
"But the Department of Defense has had to fight for $61 million in overpayments for fuel and dispute charges for millions of dollars in meals. Two Halliburton employees were caught in a $6 million kickback scheme. This is an ungainly partnership, with brave troops risking their lives and greedy executives profiteering.
"Halliburton's conduct has become a campaign issue, as well it should.
"But more profound questions ought to be asked about the role of Halliburton and other private war contractors: Is it wise to privatize war to such an extent, feeding a machine whose profits, increasingly, depend on war?"
By Knut Royce
WASHINGTON BUREAU; Tom Frank contributed to this article from Baghdad.
"Washington - U.S. authorities in Iraq have awarded more than $400 million in contracts to a start-up company that has extensive family and, according to court documents, business ties to Ahmed Chalabi, the Pentagon favorite on the Iraqi Governing Council.
"The most recent contract, for $327 million to supply equipment for the Iraqi Armed Forces, was awarded last month and drew an immediate challenge from a losing contester, who said the winning bid was so low that it questions the "credibility" of that bid.
"But it is an $80-million contract, awarded by the Coalition Provisional Authority last summer to provide security for Iraq's vital oil infrastructure, that has become a controversial lightning rod within the Iraqi Provisional Government and the security industry.
"Soon after this security contract was issued, the company started recruiting many of its guards from the ranks of Chalabi's former militia, the Iraqi Free Forces, raising allegations from other Iraqi officials that he was creating a private army.
"Chalabi, 59, scion of one of Iraq's most politically powerful and wealthy families until the monarchy was toppled in 1958, had been living in exile in London when the U.S. invaded Iraq. The chief architect of the umbrella organization for the resistance, the Iraqi National Congress, Chalabi is viewed by many Iraqis as America's hand-picked choice to rule Iraq.
"A key beneficiary of both the oil security contract and last week's Iraq army procurement contract is Nour USA Ltd., which was incorporated in the United States last May. The security contract technically was awarded to Erinys Iraq, a security company also newly formed after the invasion, but bankrolled at its inception by Nour. A Nour's founder was a Chalabi friend and business associate, Abul Huda Farouki. Within days of the award last August, Nour became a joint venture partner with Erinys and the contract was amended to include Nour.
"An industry source familiar with some of the internal affairs of both companies said Chalabi received a $2-million fee for helping arrange the contract. Chalabi, in a brief interview with Newsday, denied that claim, as did a top company official. Chalabi also denied that he has had anything to do with the security firm...." [more]
"More than 500 business people packed a ballroom Tuesday at the Hyatt Regency O'Hare seeking a sliver of the $33 billion earmarked for rebuilding Iraq.
"Although it poses a wealth of safety and logistical problems, the opening of the Iraqi market is viewed by many entrepreneurs as salvation from several years of unsteady economic conditions in America.
"Jane Pate, vice president at Ament Inc. in Cedar Rapids, Iowa, said business at her 37-employee engineering firm sagged as government-funded road and bridge projects stalled because of budget shortfalls. She marveled at the estimated half-trillion dollars that eventually may flow into the Iraqi rebuilding effort.
""That's a lot," said Pate, leaning forward slightly as if revealing a secret. "It's almost mind-boggling."
"From engineering outfits to security firms to a business that resells used computers, those in attendance sought to solve the puzzle of how to land subcontracts with giants like Halliburton Co., Bechtel Corp. and other government contractors.
""It doesn't look like it's very straightforward," said Manu Shah, president of Shah Engineering Inc. in Chicago...." [more]
"HALLIBURTON, US Vice President Dick Cheney's old company, battling against perceptions that it is too close to the White House, has hired a law firm previously used by the Bush family to conduct an investigation into allegations of illegal payments on Cheney's watch.
"Halliburton has appointed Baker Botts to conduct the investigation into $180m (?95m) in illegal payments between 1995 and 2002 in connection with the construction of a $4.9bn gas plant in Nigeria. Cheney was Halliburton's chief executive at the time.
"The Baker of the law firm's name is James Baker, former-Secretary of State under George Bush Senior. The firm's lawyer, James Doty, also acted for George W Bush when he bought a stake in the Texas Rangers basketball team in the 1980s...." [more]
"WASHINGTON, Feb. 16 — Seeking to defuse a growing election-year issue, the Halliburton Company said Monday that it had stopped billing the Pentagon for the cost of feeding American troops in Iraq and Kuwait until a dispute over the number of meals served is resolved.
"The Houston-based company said in a statement that its Kellogg Brown & Root subsidiary was withholding bills totaling $174.5 million for meal planning, food purchase and meal preparation costs incurred by subcontractors.
"The company said it would also defer further billing to the Defense Department for meal costs until the Army and Kellogg Brown & Root resolved their differences. The company has not disclosed the amount of its weekly or monthly bills to the Pentagon for meal costs.
"Halliburton's actions on Monday come two weeks after the company agreed to repay the government for overcharges estimated at $27.4 million for meals served to American troops at five military bases in Iraq and Kuwait last year. Pentagon auditors are also reviewing the 53 remaining dining facilities in Kuwait and Iraq operated by Kellogg Brown & Root...." [more]
"KUWAIT CITY - Kuwaiti lawmakers voted unanimously Monday to hold a parliamentary investigation into charges that a Kuwaiti supplier to a subsidiary of Houston-based Halliburton overcharged for fuel deliveries to Iraq after the U.S.-led war toppled Saddam Hussein.
"The vote, passing without dissent in the 50-member parliament, came shortly after Kuwait's energy minister, Sheik Ahmed Fahd Al Ahmed Al Sabah, told parliament he would support such a probe.
""I approve of the investigative panel if it will be a means to uncover the truth for the Kuwaiti people and the Kuwaiti parliament," Sheik Ahmed told parliament. He earlier also had ordered the nation's top prosecutor to investigate the matter.
"However, Sheik Ahmed added that contracts involving state-owned Kuwait Petroleum Corp. and the Kuwaiti supplier, Altanmia Marketing Co., were proper. The U.S. Army had asked for Altanmia specifically, he said.
"If the parliamentary panel or the prosecutor find any wrongdoing, Sheik Ahmed said the law will be applied "even to me." As energy minister, Sheik Ahmed has ultimate responsibility for state-owned KPG. He has not, however, been implicated in any way with the profiteering allegations...." [more]
"TIKRIT, Iraq (AP) -- Spc. Thomas Daniels' one-year stint in Iraq as an Army engineer is almost over. But the 24-year-old is already making plans to return -- without a gun and, he hopes, with a lot a more money.
"Daniels has applied online for construction work with Washington's military contractor in Iraq -- Kellogg, Brown & Root -- eyeing a job he says will pay more than twice his current salary of around $1,700 a month.
""That's where I am going. It's where I need to be," said Daniels, from Wilmington, Del. "I know I can't stay in the Army. It doesn't pay enough."
"Daniels is one of many soldiers at this military base being lured back to Iraq when their term of service ends -- not by reenlisting but by taking up private work with companies contracted by the Pentagon.
"To an extent unprecedented in previous conflicts, the United States has outsourced much of the logistical and operational support for its occupation of Iraq to private companies in order to ease the burden on its stretched armed forces.
"KBR -- whose corporate parent, Halliburton, was formerly headed by Vice President Dick Cheney -- is the biggest private employer in Iraq, with some 15,000 workers in the country and neighboring Kuwait. That work force is more than the 11,000 troops deployed by Britain, the largest U.S. coalition partner.
"Besides higher pay, soldiers, reservists and retired officers are attracted by perks like tax-free salaries, better living conditions and regular home leaves -- a major draw for soldiers as one-year deployments become the norm.
"Alongside jobs in cafeterias, construction, engineering and communications, demand is high for armed security guards. Iraq is awash with ex-soldiers from around the world working for private security firms.
"Former British, American and Nepali soldiers guard U.S. engineers, visiting VIPs and State Department workers, and escort trucks and convoys traveling the country. They are authorized to carry pistols and automatic weapons.
""It's a great opportunity ... to make your money and run," said Ellis Monk, a former Army Ranger from Huntsville, Ala., who works for one of the leading security firms, DynCorp.
"Contractors for U.S. companies also operate missile defense batteries, pilot unmanned aerial vehicles and analyze intelligence data.
"At the base in Tikrit, civilian contractors in work boots and baseball caps cruise the well-manicured streets in Ford trucks and live and work in neat bungalows.
"More menial jobs on the base are increasingly filled with workers from low-wage countries, or Iraqis. Indians and Bangladeshis serve up the chow here in Tikrit as elsewhere in Iraq.
"KBR workers say soldiers regularly approach them to ask about the possibilities of joining the company.
"The KBR Web site lists thousands of vacancies. KBR regional spokeswoman Melissa Norcross said more jobs were likely as the company takes over more tasks from the military...." [more]
"A former Halliburton Co. employee said yesterday that his supervisors in Kuwait encouraged him not to talk to Pentagon auditors reviewing the company's contracting work and that he "sanitized" files before turning them over to the auditors.
"Henry Bunting, who worked as a field buyer for the Halliburton subsidiary Kellogg Brown & Root Inc. for a few months before he quit in August, told a Democratic Party panel that the directive from his supervisors was part of a larger corporate culture in which he witnessed "problematic business practices," including failing to seek competitive bids for goods.
"Bunting, who said he made 80 to 150 purchases a day and was paid at the rate of about $112,000 a year, said he never talked to auditors but removed hand-written notes and other documents from files to "clean" them up. "This didn't misrepresent what took place," he said, adding that essential information was not deleted or changed.
"Bunting spoke at a forum of the Senate Democratic Policy Committee on Iraq reconstruction contracts, in which lawmakers claimed Halliburton has been war-profiteering under a broad contract KBR has to provide logistical support to the military. "The fact is large contracts have been awarded by the Pentagon without the benefit of a competitive, transparent process, and the result for me has been a steady stream of reports of waste and abuse," said Sen. Byron L. Dorgan (D-N.D.), the chairman of the committee, an arm of the Democratic leadership...." [more]
"WASHINGTON, Feb. 13 — As the accusations and investigations of the Halliburton Company's federal contracts in Iraq expand in size and number, Democrats say they will use the company's ties to the Bush administration as a campaign issue, and Halliburton is responding with television advertisements implying that it is being unfairly singled out.
""We are serving our troops because of what we know, not who we know," declares the 30-second spot, which is running in Washington, Houston and several other cities.
"A company filing with the Securities and Exchange Commission late last month declared that Halliburton's Iraq contracts "will likely be subject to intense scrutiny" in the months ahead, in large part because "the vice president of the United States" is "a former chief executive officer."
""We expect that this focus and these allegations will continue and possibly intensify as the 2004 elections draw near," it adds with understandable prescience.
"In recent days, several prominent Democrats have made a point of attacking the White House over Halliburton's contracting troubles, issues that in normal times would hardly rise to the level of prominent national debate.
""At a time when Halliburton is defrauding the federal government and facing serious allegations of bribery, we look forward to taking this debate to George Bush," Senator John Kerry's campaign said in a statement late last week.
"And Senator Barbara Boxer, Democrat of California, sent a letter to Defense Secretary Donald H. Rumsfeld on Friday demanding that he "immediately begin suspension or disbarment proceedings against the Halliburton Company" because of its contracting problems. The Senate minority leader, Tom Daschle, has made a similar request.
"Bill Carrick, who was the media strategist for the presidential campaign of Representative Richard A. Gephardt of Missouri, said he believed that Halliburton's problems had the power to remain a durable campaign issue because "in a lot of people's minds, it's a surrogate for the larger feeling that the Bush administration is too close to the oil business, and Cheney has in some ways become an elusive figure."..." [more]
WASHINGTON — Highlighting their campaign against a chief Defense Department contractor, Democratic lawmakers say two former Halliburton employees have evidence the company routinely wasted U.S. taxpayers' money.
While one ex-employee asked that his name not be disclosed, a second, Henry Bunting, agreed to testify Friday before the Senate Democratic Policy Committee - an organization of Democratic senators.
Two of the most persistent Halliburton critics wrote Pentagon auditors on Thursday specifying the allegations of wasteful practices. Reps. Henry Waxman, D-Calif., and John Dingell, D-Mich., said 90 percent of the company's global support contract - worth $3.7 billion so far - is for work in Iraq.
Halliburton, run by Vice President Dick Cheney before his 2000 vice presidential campaign, has consistently denied overcharges.
Bunting was a field buyer who filled requisitions from Halliburton employees by locating vendors. The second ex-employee was a procurement supervisor who did similar work.
According to Waxman and Dingell, Bunting and the unidentified whistleblower contend:
--Top Halliburton officials frequently told employees that high prices charged by vendors were not a problem because the U.S. government would reimburse the costs and then pay the company an additional fee.
-Higher than necessary prices were paid for ordinary vehicles, leased for $7,500 a month, and for furniture and cellular telephone service.
-Halliburton tried to keep as many purchase orders as possible below $2,500 so its buyers could avoid the requirement to solicit quotes from more than one vendor.
-Supervisers provided buyers with a list of preferred Kuwaiti vendors, including companies that charged excessive prices. Buyers were not encouraged to identify alternative vendors.
"LONDON (Reuters) - Trade minister Mike O'Brien is to lobby President George W. Bush's administration next week over Iraqi reconstruction work for UK companies, amid media reports British companies are being passed over.
"O'Brien will be accompanied by former minister Brian Wilson, who now acts as Prime Minister Tony Blair's special representative for trade and reconstruction in Iraq. "They will be pressing the case for British firms in the reconstruction work in Iraq," a government official said.
"The Guardian published on Friday what it said were leaked documents indicating frustration within Blair's government about the way contracts have been handed out.
"Firms had hoped Britain's role as the United States' main ally in the war would ensure them work. But few have won high-profile primary contracts so far.
""All ministers in the government who are in frequent touch with their U.S. opposite numbers (need) to ensure that the U.S. administration are in no doubt about the political importance we attach to UK firms being seen to contribute actively to the reconstruction process," the paper quoted O'Brien as saying in one document...." [more]
"WASHINGTON, Feb 12 (Reuters) - Two ex-Halliburton (nyse: HAL - news - people) employees told Democratic lawmakers that Vice President Dick Cheney's old energy company "routinely overcharged" for work it did for the U.S. military, the congressmen said on Thursday.
"The Texas oil services giant, which is being examined by the military for possibly overcharging for services, has consistently denied allegations of overbilling.
"Halliburton did not immediately respond to the allegations made by the two former employees or questions over why they had left the company.
"The two ex-employees, who contacted U.S. Rep. Henry Waxman, a California Democrat who has been critical of Halliburton, worked for the Texas firm's procurement office in Kuwait. Waxman's office said the two quit for personal reasons.
"Waxman and another Democrat, Rep. John Dingell of Michigan, wrote about the "whistle-blowers" in a letter to the Defense Contract Audit Agency, which is already looking into whether one of the company's subsidiaries overcharged for fuel it took into Iraq and for meals served to U.S. troops in the region.
"Examples of wasteful spending given by the ex-employees ranged from leasing ordinary vehicles for $7,500 a month to seeking embroidered towels at a cost of $7.50 a piece when ordinary ones would have cost about a third of the price.
""What is most disturbing about these allegations from the whistle-blowers is the regular and routine nature of the overcharging," the lawmakers wrote in the letter to DCAA Director William Reed.
"Halliburton unit Kellogg Brown and Root has a logistics contract with the U.S. military that has so far received more than $3.7 billion in business, most in Iraq. It also has contracts worth nearly $4 billion to rebuild Iraq's oil industry...." [more]
"WASHINGTON -- Two former Halliburton Co. employees are accusing the Houston firm of routinely overcharging American taxpayers for work performed under a military contract, two Democratic lawmakers say.
"Halliburton, which as a government contractor is supposed to keep a lid on costs, selected embroidered towels when ordinary ones would have cost a third as much and leased cars, trucks SUVS and vans for up $7,500 a month, the would-be whistleblowers said.
"Indeed, the motto at Halliburton was "Don't worry about price. It's cost plus," one of the ex-workers told lawmakers.
"That's a reference to a type of government contract in which a company like Halliburton would be reimbursed for the cost of providing a service, plus receive an additional percentage as profit.
"One of the former employees, identified only as Henry Bunting, is scheduled to testify Friday before a panel of Senate Democrats.
"These latest allegations were made public today by Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., both frequent Halliburton critics, in a letter to William Reed, director of the Defense Contract Audit Agency.
"If the former employees' "accounts are accurate, the company is systematically overcharging the taxpayer on hundreds of routine requisitions every day. While the dollar amounts involved in any single procurement may be small, the cumulative cost to the taxpayer could be enormous," the lawmakers wrote...." [more]
"Halliburton moved into the ranks of top Pentagon contractors last year, climbing to seventh from 37th in fiscal 2002, according to the annual Pentagon ranking released yesterday. It had $3.9 billion in sales to the agency last year, up from $500 million the previous year. The company reported $2.2 billion in revenue from Iraq-related work during the fourth quarter. Halliburton and its KBR unit have been fighting allegations that it has overbilled for its work and that it received contracts because of its relationship with Vice President Cheney, who served as the company's chief executive until 2000. Lockheed Martin, Boeing and Northrop Grumman remained the top three Pentagon contractors with $21.9 billion, $17.3 billion and $11.1 billion in sales, respectively...."
"WASHINGTON (Reuters) - The Treasury is looking into whether Halliburton, the oil services firm once run by Vice President Dick Cheney, broke any U.S. laws in its business dealings with Iran via a foreign subsidiary.
"In a filing this week with the Securities and Exchange Commission, Texas-based Halliburton said it had received a letter from the Treasury Department's Office of Foreign Assets Control (OFAC) asking for more information about business dealings with Iran, which is forbidden under federal law.
""We are making further investigations based on questions raised in the most recent (Treasury) letter," said Halliburton in the Feb. 9 filing, without providing any further details.
"Neither the Treasury Department nor Halliburton were immediately available to comment on the issue.
"Halliburton, which was run by Cheney between 1995-2000, is being investigated for a range of other business dealings by several U.S. government departments.
"The company has countered negative publicity with a string of television ads defending its work in Iraq and blames the controversies and media spotlight on the 2004 U.S. presidential campaign.
"In the latest SEC filing, the company said it had a Cayman Islands subsidiary with operations in Iran and other European subsidiaries that made goods destined for Iran and Libya, two countries under U.S. trade embargo.
"Halliburton said it had responded to similar inquiries in mid-2001 from the Treasury with respect to compliance with Iranian Transaction Regulations.
""Our 2001 written response to OFAC stated that we believed that we were in full compliance with applicable sanction regulations," the company said.
"The Treasury Department's inquiries come at a time when Halliburton's business dealings are under intense scrutiny by a range of government departments...." [more]
"Vice-President Dick Cheney "has been both an architect and a beneficiary of the increasingly close relationship between the Department of Defense and an élite group of private military contractors—a relationship that has allowed companies such as Halliburton to profit enormously," Jane Mayer writes in "Contract Sport," in the 79th Anniversary Issue of The New Yorker. Mayer reveals that in a top-secret document dated February 3, 2001, a high-level official of the National Security Council directed the N.S.C. staff to coöperate fully with Cheney's newly formed Energy Task Force as it considered the "melding" of what she calls "two seemingly unrelated areas of policy," which the document describes as a "review of operational policies toward rogue states" and "actions regarding the capture of new and existing oil and gas fields." Mark Medish, a senior official at the N.S.C. under President Clinton, tells Mayer, "If this little group was discussing geostrategic plans for oil, it puts the issue of war in the context of the captains of the oil industry sitting down with Cheney and laying grand, global plans." Halliburton, the energy company that Cheney was the C.E.O. of for five years, has received contracts worth some eleven billion dollars for work in Iraq, Mayer reports. Now it has come under scrutiny for overcharging the government for fuel it imported from Kuwait into Iraq. Halliburton has denied any criminal wrongdoing, blaming the high costs on an obscure Kuwaiti firm, Altanmia Commercial Marketing, which it subcontracted to purchase and deliver the fuel. Halliburton has claimed that Kuwaiti officials pressured the company to hire Altanmia, but, Mayer reports, "a previously undisclosed letter, dated May 4, 2003, and sent from an American contracting officer to Kuwait's oil minister, plainly describes the decision to use Altanmia as Halliburton's own 'recommendation.' " One Kuwaiti source tells Mayer that the prices were "absurd" and the arrangement "highly irregular." Sam Gardiner, a retired Air Force colonel who has taught at the National War College, says that the procurement process in Iraq has become a "patronage system." One businessman with close ties to the Bush Administration tells Mayer, "Anything that has to do with Iraq policy, Cheney's the man to see. He's running it, the way that L.B.J. ran the space program." The businessman offered an example: Jack Kemp, the former congressman and Cabinet official, had Cheney over for dinner last summer, along with two sons of the President of the United Arab Emirates. "It was just social," Kemp says. "We're old friends." Kemp says he is working on two business ventures in Iraq; General Tommy Franks will serve on the advisory board of one of them. While Tom Korologos, a Republican lobbyist who has served as a counsellor to L. Paul Bremer in Iraq, calls talk of political influence over the process "bullshit," the businessman explains the situation this way: "It's like Russia. This is how corruption is done these days. It's not about bribes. You just help your friends to get access. Cheney doesn't call the Defense Department and tell them, 'Pick Halliburton.' It's just having dinner with the right people.""
"Washington - Halliburton, the Houston oil services company that has built a worldwide business around supporting U.S. troops in battle, is now facing a battle of its own.
"While the $13-billion firm once headed by Vice President Dick Cheney tends to drilling and repairing equipment in oil fields and providing services to soldiers in Kuwait, Iraq, Afghanistan and Kosovo, it faces a withering number of investigations. Areas of inquiry range from its accounting practices to suspect payments involving officials in Iran, Nigeria and Kuwait, to overcharging the Defense Department for gasoline in Kuwait and Army mess halls in Iraq.
""They aren't getting scrutiny. They're getting grief," said Daniel Goure, defense analyst for the Lexington Institute in Alexandria, Va.
"In part, the investigations reflect the breadth of Halliburton's interests and activities. Through more than 150 subsidiaries, the firm manages nearly 100,000 workers at more than 400 projects in 100 countries. At least 70 percent of its annual $13-billion business is conducted overseas.
"But it's the $9 billion in Iraq-related work that has intensified the glare of the public spotlight on Halliburton. Workers there are repairing oil fields in southern Iraq, building and maintaining bases, washing dishes and serving 50 million meals to troops in the Gulf region.
""This is a classic, global, heavily mechanized and highly mobile company. You are not going to be able to conduct a modern war without them," Goure said. At the same time, he continued, "No one but Halliburton could do what they did."
"Pentagon auditors have already forced Halliburton to refund $61 million for deliveries of gasoline from Kuwait to Iraq. Halliburton has said the higher price was justified by the danger fuel convoys faced and the need to stem Iraqi anger over shortages. However, Kuwait's energy minister has asked his nation's top prosecutor to investigate the allegations...." [more]
"WASHINGTON – Faced with price-gouging allegations involving Vice President Dick Cheney's former company, the Army Corps of Engineers now acknowledges it alone awarded Halliburton new business in Iraq after initially suggesting experts from other U.S. agencies played an important role.
"The Army Corps of Engineers told The Associated Press that the Corps – not an evaluation team cited on its Internet site – chose Halliburton for a contract worth up to $1.2 billion. The Corps is refusing to release records showing on what merits it made the decision.
"Two of the evaluation team members, the Air Force and the Small Business Administration, said they were not even part of the group and shouldn't have been listed at all.
"The Jan. 17 Halliburton award, to restore the oil industry in southern Iraq, was controversial from the start. A Pentagon draft audit report the previous month said the company may have overcharged taxpayers up to $61 million in its importation of oil to Iraq.
"The Corps said it considered Halliburton's past performance in Iraq, but added, "We cannot discuss or release any of the conclusions, as that is part of the evaluation process not releasable" under federal contracting rules.
"The Corps also said it wouldn't discuss the draft audit because the final version could change significantly.
"Cheney's office says he severed relations with Halliburton when he ran for vice president in 2000. Halliburton said its KBR subsidiary, also known as Kellogg, Brown & Root, delivered fuel to Iraq at the best possible price and has denied any wrongdoing.
"Kuwait's energy minister has asked his nation's top prosecutor to investigate allegations of overcharging and profiteering in the fuel contract between the state-owned Kuwait Petroleum Corp. and the Kuwaiti supplier of KBR...." [more]
"WASHINGTON, Feb 9 (Reuters) - Iraq's ambassador-designate to the United States on Monday urged the U.S.-led authority in her country to give more U.S.-funded contracts to local firms, saying that would improve security as well as boost jobs.
"Speaking at an Iraqi reconstruction conference in Washington, envoy Rend Rahim Francke said she wanted to see more Iraqis get work rebuilding their own country rather than foreign firms.
"By handing out most contracts to foreign companies, the bulk of which are American, Rahim said the United States was alienating Iraqis.
""Alienation within the country is a dangerous feeling and can lead to revolution. We must be careful about that," said Rahim, the Iraqi Governing Council's top diplomat and an Iraqi-American.
"Unemployment in Iraq is conservatively estimated to be more than 50 percent and Rahim said that was contributing to the violence in Iraq where U.S. troops and contractors come under daily attack.
"Jobs for Iraqis will create stability and peace in Iraq instead of terrorism. This correlation is absolutely certain," she added."..." [more]
"Kuwait City -- Kuwait's energy minister has asked the nation's top prosecutor to investigate allegations of overcharging and profiteering in an Iraq fuel contract between the state-owned Kuwait Petroleum Corp. and the Kuwaiti supplier of a Halliburton subsidiary.
""Press reports and talk on the street, some of which have cast suspicion on the honesty and integrity of others, have pushed me to refer this contract to the prosecutor-general for investigation," the minister, Sheik Ahmed Fahd Al Ahmed Al Sabah, told the official Kuwait News Agency.
"He said the measure would give the judiciary the chance to "have the last word in the matter" because Kuwait wants to deal with the allegations "with full transparency" and put an end to rumors.
"Auditors of the U.S. Department of Defense have found that Kellogg Brown & Root, a Halliburton subsidiary, may have overcharged by $61 million for deliveries of gasoline from Kuwait to Iraq from May through September. Their investigation is in progress.
"KBR's Kuwaiti supplier, the Altanmia Marketing Co., was found to have charged more than twice what suppliers in Turkey did.
"Both Halliburton, Vice President Dick Cheney's former company, and the Army Corp of Engineers, which oversaw the fuel contract, said the higher price was justified by the danger faced by fuel convoys and the need to head off Iraqi anger over gasoline shortages...." [more]
"Small businesses interested in subcontracting work on Iraqi reconstruction projects can get more information on bidding and contracts available at a summit Feb. 17 at the Hyatt Regency O'Hare Hotel.
"Executives from seven prime contractors, which have rebuilding contracts worth several billion dollars, will talk with small-business officials at the event. There will also be presentations from the Coalition Provisional Authority, the U.S. Army Corps of Engineers and the U.S. Agency for International Development.
"Prime contractors that will have representatives at the event include Bechtel, Halliburton KBR, Parsons Corp., Washington Group International, Perini Corp., and Ch2m Hill Cos.
""This opens up a whole new market to a large number of our businesses," said Pat Rea, regional administrator for the Small Business Administration, in a news release.
"The conference, which is being organized by New Fields Exhibitions Inc., costs $150 for those who register by Tuesday or $185 after that date...." [more]
"Eleven months after the US-led invasion of Iraq, the electricity supply in the country's two largest cities — Baghdad and Basra — has still not been fully restored. By contrast, it took Saddam Hussein's Baathist regime only three months to restore the electricity supply after the 1991 Gulf War had left the country's electrical power stations in ruins.
"Today, each district in Baghdad is without electricity for up to 10 hours a day. In Basra, electricity is on for about 12 hours each day in three-hour stretches. Outside of the cities it is much worse — in many rural towns and villages, the power is off for longer periods than it is on, making it impossible to refrigerate food and heat homes.
"Lack of reliable electricity supply means that most factories are closed — as a result, 60-70% of the Iraqi work force are unemployed.
"Ziad Hathal, an Iraqi who owns several businesses in Baghdad and the United Arab Emirates, told the Dubai-based Al Jazeera television network on February 3: “I had to buy a generator for each factory I own in Iraq, but that did not help. Generators need gasoline, and gasoline is rare in Iraq. The price of gasoline went up from 3000 Iraqi dinars per litre [prior to the US invasion] to 130,000 Iraqi dinars per litre.”
"On January 7, the California-based Bechtel engineering and construction corporation was awarded a US$1.8 billion contract to fix Iraq's electric power stations and water infrastructure. This came on top of nearly $1.5 billion paid by the US government to Bechtel last year to restore Iraq's electricity and water services, and rebuild roads, bridges and schools....
"“There are actually many obstacles” to the restoration of electricity supplies, Iraqi nuclear scientist Imam Khaduri told Al Jazeera. “First of all, Iraqi power plants are German, Russian, and French made, but the US are insisting on assigning technicians from Bechtel to assess Iraq's electrical power stations. Second, they are insisting on buying equipment from Bechtel, while the main stations in Iraq are not made in the USA.”..." [more]