Monday 1 November 2004

Expanding Halliburton probe confirms Bush administration is most corrupt in US history

On the eve of the 2004 presidential election, allegations about the corrupt relationship between the Bush administration and Halliburton Corp., the company formerly run by Vice President Richard Cheney, have taken center stage once again. Press reports Friday said that the FBI has expanded an ongoing investigation into contracts obtained by Halliburton’s subsidiary, Kellogg Brown & Root (KBR), in Iraq and Kuwait.

The FBI sought an interview with Bunnatine H. Greenhouse, a senior Army civil servant who objected to the KBR no-bid contract and complained that it represented preferential treatment. The Army gave KBR a secret $7 billion contract to restore Iraq’s oil fields just before Bush ordered the invasion of Iraq in March 2003.

Greenhouse is the chief contracting officer for the Army Corps of Engineers. In a letter to acting Army Secretary Les Brownlee on October 21, she said that Army officials had not justified the no-bid award by satisfying procedural requirements such as showing that KBR had “unique attributes” that no other contractor could match. She also charged that her repeated complaints were ignored, and that the Army allowed KBR officials to sit in on Pentagon meetings at which the awarding of contracts was discussed.

The letter charges that “employees of the U.S. government have taken improper action that favored KBR’s interests,” according to citations published in the press. Greenhouse said she “experienced repeated interference with her role” as chief monitor of Corps of Engineers contracts.

Greenhouse’s lawyer said that his client, who still works at the Pentagon, was seeking the protection of whistleblower provisions to block retaliatory actions such as demotion or firing. Greenhouse was threatened with demotion earlier this month.

Tensions within the Army Corps of Engineers apparently reached the breaking point on October 8, when the Corps gave Halliburton a one-year $165 million extension on a contract to provide food, fuel and other supplies for US forces stationed in the Balkans. According to an account in the Los Angeles Times, which obtained a copy of the contract document, Greenhouse wrote on the proposal, “I cannot approve this,” and made other written comments protesting the award. Greenhouse did not sign the final approval of the extension, as required. Instead, her assistant, Lt. Col. Norbert Doyle, signed it.

Greenhouse apparently felt that with so many investigations underway into KBR overcharging the US military or engaging in bribery and other corrupt practices, the Corps should not simply rubber-stamp an extension of the KBR contract in the Balkans, first awarded during the 1999 US assault on Serbia. The contract is being expanded to cover the entire continent of Europe, including newly established US bases in Romania, Bulgaria and Hungary.

The Halliburton subsidiary has been hit with a series of complaints of overcharging and otherwise mishandling its contracts as the principal supplier of food, fuel and other materiel to the US invasion and occupation force in Iraq. It also faces investigations by the Justice Department and the Securities and Exchange Commission over potentially illegal and corrupt dealings in Nigeria and Iran.

This is not the first time that top Pentagon officials appointed by George W. Bush have overruled career civil service professionals to award contracts to Vice President Cheney’s old firm. In the fall of 2002, an Army lawyer objected to the initial Iraq-related contract for KBR, $1.9 million to draw up a plan for operating the country’s oil infrastructure after a war. While tiny in relation to the huge oil field recovery and military supply contracts doled out later, this award was critical because it gave KBR an edge over any potential competitor. The Government Accountability Office later determined that the Army lawyer had been right.

Greenhouse herself objected at several points in the subsequent contracting process: when KBR placed a bid for the oil-field recovery contract whose specifications it had drawn up in the pre-war planning process; when the Army Corps of Engineers invited KBR officials to meetings where they were discussing the contract awards; and when the Pentagon proposed to make the “sole-source” no-bid contract for five years, longer than she believed necessary. Each time she was overruled.

Last December, after the first press reports about overcharging on KBR contracts to supply fuel to the military in Iraq, Army Corps contracting officer Mary Robertson found two alternative fuel suppliers who would offer a better price, but Halliburton refused to buy from them, insisting on continuing its exclusive relationship with the Kuwaiti-owned Altanmia. In a letter to KBR, Robertson protested, “Since the U.S. government is paying for these services, I will not succumb to the political pressure from the [Kuwaiti government] or the U.S. Embassy to go against my integrity and pay a higher price for fuel than necessary.”

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