Pentagon Investigates Halliburton's Iraq Contracts

[bigpoppanils]

Pentagon Investigates Halliburton's Iraq Contracts

Friday, December 12, 2003 12:44 AM ET Printer-friendly version

The Pentagon has launched a sweeping investigation of Halliburton Co. (HAL, news) activities in Iraq and found evidence of "substantial overcharging" in $1.2 billion of fuel sales by the company once run by Vice President Dick Cheney, Friday's Wall Street Journal reported.

An audit of fuel costs, which still isn't complete, found that the company may have overcharged by as much as $61 million for gasoline in Iraq, a claim that Halliburton denies.

Auditors aren't claiming that Halliburton directly profited from the alleged fuel overcharging, but say evidence shows the company's Kellogg Brown & Root subsidiary paid a supplier excessive prices for gasoline in Kuwait, which in turn pushed up the price KBR ultimately charged. The Army Corps of Engineers indicated the suppliers were Kuwaiti companies, according to congressional investigators.

Beyond the fuel probe, investigators at the Defense Contract Audit Agency are examining all aspects of financial controls and subcontracting arrangements by KBR in Iraq. Defense officials describe the effort as a broad international audit of the company's two Iraq contracts, one of which was awarded without competition.

The agency has assigned more than 20 auditors to examine Halliburton's Iraq activities, 10 of whom are stationed in the company's hometown of Houston and the rest either in Kuwait or Iraq. KBR, Halliburton's engineering and construction unit, first came under fire this summer in Congress for charging high rates to bring gasoline into Iraq from Kuwait.

The larger audit is sure to become politically explosive because of Halliburton's past ties to Mr. Cheney and allegations by the administration's critics that the company won its lucrative contracts in Iraq through political favoritism. KBR's contracts in Iraq are currently valued at $5 billion.

Pentagon officials and auditors said they had significant concerns that in pushing to deliver everything from fuel to new barracks and food for tens of thousands of troops, Halliburton's own financial controls in Iraq may have fallen far short.

Halliburton officials said KBR would be cleared of any wrongdoing once the audit agency's questions are answered. "It is not fact that KBR has overcharged. KBR has acted in full accordance with its fiduciary and contractual responsibilities under the contract," said Halliburton Chief Executive Dave Lesar in a statement. "We expect and want continuing reviews and audits that detail our work in Iraq. We welcome a thorough review of any and all of our government contracts," he said.

Wall Street Journal Staff Reporters Neil King Jr. in Washington and Susan Warren in Dallas contributed to this report.

Dow Jones Newswires

12-12-03 0044ET

Copyright 2003 Dow Jones & Company, Inc. All Rights Reserved.

http://www.quicken.com/investments/news_center/story/?story=NewsStory/dowJones/20031212/ON200312120044000023.var&column=P0DFP

[jamiroguy1]

Kellog, Brown, & Root (Haliburton) over charging by 1.2 billion??? This is a bombshell!! I knew they were charging more for gas but jesus!! That's 1.2 billion stollen from tax payers. That includes even you, Igloo!

[marksimons]

this company is in it up to its neck, dodgy as fuck, with the vice president on the payroll.

and people still think things are a-okay...

links to all articles on this page:

http://www.independent-media.tv/item.cfm?fmedia_id=3617&fcategory_desc=Dick%20Cheney%20and%20Halliburton

Independent Media TV ? It?s hard to imagine a company being more controversial than Halliburton in recent years. Enron obviously has been a very controversial company, but while Enron?s criminal behavior has been all over the television news, Halliburton?s criminal and controversial activity has flown under the radar of TV headlines, and therefore escaped serious public scrutiny. If you haven?t been following the Halliburton situation closely, I would imagine that you are in for quite a shock as I list them here.

Before outlining all the criminal, and controversial behavior, it?s important to mention that Vice President Dick Cheney was CEO of Halliburton from 1995-2000.

Tax Evasion

While Cheney was CEO of Halliburton, the number of Halliburton subsidiaries registered in tax-friendly locations went from 9 in 1995 to 44 in 1999. And guess what? Halliburton?s federal taxes plummeted from $302 million in 1998 to less than zero, an $85 million rebate in 1999. ? Source ? Tallahassee Democrat, August 6, 2002

Illegal Business Practices - Corporate Corruption

Remember that Cheney was CEO in the LATE 90?s. Although, the AP forgot to mention that in this article - ''A jury has awarded $70 million to a Houston man who claimed that Halliburton and another oil company cheated him out of the chance to develop an oil field in Kazakhstan in the late 1990s.'' ? Source ? Associated Press, October 25, 2003

Illegal Trade

In a letter to Donald Rumsfeld, Rep. Henry Waxman (D-Calif) said, "Halliburton Co. subsidiaries and joint ventures had done business in Iran, Iraq and Libya, in spite of U.S. sanctions against those countries." ? Source - San Francisco Chronicle, May 1, 2003

Illegal Arms Trade ? Selling Warheads

?An attorney for the head of a New Mexico anti-terrorism training firm is asking why prosecutors have zealously pursued his client for allegedly stockpiling warheads but ignored the company from they purchased the weapons. The attorney for High Energy Access Tool's president David Hudak, says Halliburton Corporation solicited Hudak to purchase about 2,400 warheads. Bob Gorence says the company offered the warheads as demolition charges and not as the government-owned military items that are illegal to posses.? ? Source - Associated Press, April 28, 2003

Bribing Officials, Part I

According to the United States Securities and Exchange Commission report filed by Halliburton, one of Halliburton?s subsidiaries paid a Nigerian official $2.4 million dollars in return for tax breaks. ? Source - The Guardian, May 9,2003

Bribing Officials, Part II

The Halliburton subsidiary of Kellogg, Brown, and Root, and a French engineering firm, are being investigated by the French financial crimes squad for the payment of up to $200,000,000 in under the counter ?commissions? (read: kick back, or bribe) for a contract in Nigeria. ? Source - The Guardian, in London, Oct. 11, 2003

Illegally Price Gouging the Government, Part I

Under Cheney's watch, Halliburton was fined $2 million for consistently over billing the Pentagon. - Source ? Tallahassee Democrat, August 6, 2002

Illegally Price Gouging the Government, Part II?

According to Rep. Henry Waxman (D-Calif), ?Halliburton billed the government an average price of $1.59 per gallon (3.7 litres), excluding the company's fee of 2%-7%,?

?He (Waxman) said the average wholesale cost of gasoline during that period in the Middle East was about 71 cents a gallon, a figure an oil industry source told Reuters was accurate. That meant Halliburton was charging more than 90 cents a gallon to transport fuel into Iraq from Kuwait.?

?When we checked with independent experts to see if this fee was reasonable, they were stunned,? said Waxman, adding a reasonable transport cost would be 10 to 25 cents per gallon, especially as the US military was providing security. ? Source - Reuters, October 16, 2003

Illegally Price Gouging the Government, Part III?

?As of Oct. 19, Halliburton had imported 61.3 million gallons of gasoline from Kuwait into Iraq, and the company was paid $162.5 million for an average price of $2.65 a gallon, Rep. Henry Waxman (D-Calif) and Rep. John Dingell (D) wrote.?? - Source - Yahoo, October 30, 2003

Government Favors for Halliburton, Part I

During Cheney?s watch Halliburton received $1.5 billion in government financing and loan guarantees. - Source ? Tallahassee Democrat, August 6, 2002

Immunity from Polluting Drinking Water ? Government Favors, Part II

As part of the new Energy Bill, there is a provision that, if it becomes law, ?the EPA would be helpless even if the technique pumped pollutants into drinking-water wells.? The provision, favored by Senate Republicans, has already passed the Republican controlled House. This provision specifically names the process, ?hydraulic fracturing?, that will be immune from regulation from the Environmental Protection Agency. ? Source - Denver Post, Sept. 14, 2003

Lying about a Nuclear Threat

There are many examples of this, but the most blatant is when he said that, ?Iraq has reconstituted it?s Nuclear program?, then we found that that claim was based on documents he knew to be forged. These forged documents claimed Iraq attempted to purchase yellow-cake uranium from Nigeria. Cheney ask the CIA to send someone over to Nigeria. The CIA sent Ex-Ambassador Wilson over, and he found that the documents were fake, and reported this back to Cheney's office. This is the same Wilson whose wife was outed by senior Bush officials, after he told his story to the news. She was a covert CIA agent. Revealing her identify as a CIA agent could have risked the lives of many of her contacts. ? Source ? MSNBC, ABC, CBS, FOX

Conflict of Interest ? Lying about Financial Ties

On NBC?s ?Meet the Press?, Sept. 14, 2003, Cheney stated that he has ?no financial interest in Halliburton of any kind and haven?t had now for over three years.? He also said he had ?severed all my ties with the company, gotten rid of all my financial interests.? ? That is a bold-faced lie. In reality, ?Cheney received deferred compensation of $147,579 in 2001 and $162,392 in 2002, with payments scheduled to continue for three more years.? ? Cheney also has ?433,333 stock options? valued at more than $10,500,000.00 (433,333 stock options * Today?s Stock Price). ? Source - MSNBC, Sept. 26, 2003

The No-Bid Contract, Government Favors, Part III

Prior to the war, a Halliburton subsidiary was secretly awarded a two-year, no bid contract worth up to $7,000,000,000. It was originally communicated that the contract was to put out oil well fires and to handle other unspecified duties. As it turns out, those unspecified duties also give Halliburton control of oil wells, and much more. ? Source - Chicago Tribune, May 8, 2003

More Lying

The stated reason why Halliburton received the no-bid contract is because the Bush Administration needed to keep it secret for 'National Security' reasons, and because of their unique resources to handle the problems, but - ''Bob Grace is president of GSM Consulting, a small company in Amarillo, Texas, that has fought oil well fires all over the world. Grace worked for the Kuwait government after the first Gulf War and was in charge of firefighting strategy for the huge Bergan Oil Field, which had more than 300 fires.? GSM Consulting was not given an opportunity nor a no-bid contract. ? Source - CBS, Sept. 21, 2003

Losing an Abestos Lawsuit

In 2002, Halliburton agreed to a $4,000,000,000 cash-and-stock deal to settle 200,000 asbestos lawsuits. ? Source - Reuters, Sept. 2, 2003

Government Favors, Part IV

?Senators are considering a measure that would create a $108 billion fund to pay workers exposed to asbestos, a cancer- causing insulation and fireproofing material. A study by lawyers for asbestos victims estimated the measure would save Halliburton and 10 other companies $15 billion, leading to concerns the company is delaying settlement talks in hopes the bill passes.? ? Source - Pittsburgh Tribune-Review, July 23, 2003

Corporate Corruption ? Filing Bankruptcy to avoid taking responsibility for your actions.

If Government favors won?t work to avoid paying the asbestos lawsuit, then try filing for BANKRUPTCY. ?The oilfield services company said it is now in a position to make a prepackaged Chapter 11 bankruptcy filing in November for its subsidiaries -- DII Industries, Kellogg Brown, & Root and others involved in asbestos litigation. Once filed, the bankruptcy plan automatically blocks any further asbestos claims, even if the court's stay has expired.? ? Source - Reuters, Sept. 29, 2003

Even though they are making billions ? ''Halliburton?yesterday reported soaring revenues from its contracts to help rebuild Iraq...The company said sales in the third quarter were 39% higher at $4.1 billion'' ? Source - The Guardian, London, October 10, 2003

Paying Halliburton instead of buying food for the Iraqi poor

''Rep. Henry Waxman (D-Calif) and and Rep. John Dingell (D) also said last week that the UN oil-for-food program was being used to pay Halliburton, in possible violation of a UN Security Council resolution.'' ? Source - AFP ? October 27th, 2003 and the US Army Corp of Engineers

Tax Breaks for the Energy Industry (Including Halliburton), Government Favors V

?Congressional negotiators are weighing House and Senate proposals to include dozens of tax breaks for (energy) industries in pending energy legislation, even though they could add as much as $19 billion to the federal budget deficit in the next decade.?? ? Source - Washington Post, September 9,2003

Government Favors VI ? Blanket Immunity for oil companies doing business in Iraq

If that wasn?t enough, on May 22nd, 2003, Bush issued Executive Order 13303, that specifically gives immunity to oil companies in Iraq.

?It also declared a national emergency as the justification for sweeping aside all federal statues, including the Alien Tort Claims Act, and appears to provide immunity against contractual disputes, discrimination suits, violations of labor practices, international treaties, environmental disasters and human rights violations. Even more, it doesn't limit immunity to the production of oil, but also protects individuals, companies and corporations involved in selling and marketing the oil as well.? ? Source ? San Francisco Chronicle, August 8, 2003

Government Favors VII ? Free Trade in the Middle East (i.e. No tariffs, taxes)

Now Mr. Bush, we wouldn?t want billion dollar companies paying any taxes would we? ? ?In a similar address in May, Bush highlighted the importance of promoting democracy and called for the establishment of a Middle East free trade zone.? ? Source - Jerusalem Post, November 7, 2003

Conclusion

There is more, but I have to end this article at some point. Now I ask you, how is it that this isn?t one of the biggest stories of the year, and all over every TV news show in the country? How is Dick Cheney still in office as Vice President? I'll let you answer those questions, but contrast everything you just read to Clinton saying, ?I did not have sexual relations with that woman?.

Please register to vote.

[pattbateman]

i really have no idea but how does the VP get money from their is he collecting retirement or what????cause if thats the case its gettin outta control mentioning his name in the mix with the company. but for real i have no idea

[bigpoppanils]

Originally posted by jamiroguy1

Kellog, Brown, & Root (Haliburton) over charging by 1.2 billion???

no no no

the total value of the contract is $1.2 billion.

the contraversy is over a suspected overcharging of $61 million relating to fuel sales.

[marksimons]

see bateman, it's corrupt all the way to the top... here's the story in a nutshell:

On NBC's Meet the Press program last Sunday, Cheney, who was Halliburton's CEO from 1995 to 2000, said he had severed all ties with the Houston-based company.

"I have no financial interest in Halliburton of any kind and haven't had now for over three years," he said.

Cathie Martin, a Cheney spokeswoman, confirmed that the vice president has been receiving the deferred compensation payments from Halliburton, but she disputed that his statements on Meet the Press had been misleading.

Cheney had already earned the salary that was now being paid, Martin said, adding that once he became a nominee for vice president, he purchased an insurance policy to guarantee that the deferred salary would be paid to him whether or not Halliburton survived as a company.

"So he has no financial interest in the company," she said.

But Sen. Lautenberg said that Cheney's financial disclosure filings with the Office of Government Ethics listed $205,298 in deferred salary payments made to him by Halliburton in 2001 and another $162,393 in 2002. The filings indicated that he was scheduled to receive more payments in 2003, 2004, and 2005.

"In 2001 and 2002, Vice President Cheney was paid almost as much in salary from Halliburton as he made as vice president," Lautenberg said. The U.S. vice president's salary is $198,600 annually.

The financial disclosure forms also said that Cheney continued to hold 433,333 unexercised Halliburton stock options, with exercise prices below the company's current stock market price. Cheney's spokeswoman said he had placed these options in a charitable trust and no longer had control over them.

On Meet the Press, Cheney also said he had no involvement in the awarding of government contracts to Halliburton.

"As vice president, 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 said.

In March, Halliburton was granted, without competition, a contract by the Army Corps of Engineers (ACE) to repair and restore Iraq's oil fields. ACE says the cost of this contract to taxpayers is about $1 billion.

But under a second military support contract, Halliburton's Kellogg Brown & Root unit has racked up more than $1 billion in expenses in Iraq, according to the U.S. Army Field Support Command.

http://www.rense.com/general41/profit.htm

[pattbateman]

whats wrong with collecting what is yours your retirement????they should not bring his name in with them overcharging if thats what they were doing

[marksimons]

erm, what's wrong is DENYING recieving any payment, then getting payment, from a company that is getting preferential treatment in a WAR which YOU called for and are apparently not profiteering off.

that's the problem.

you think clinton could get away with any financial ties like this?!

this looks very much like cheney is directly getting money for stuff to do with the war in iraq, making sure that haliburton gets a piece of the action...

[pattbateman]

what the fuck does erm mean????

[marksimons]

it's onomatapeic, say it, it's just like er or um. but err, different.

[mr mahs]

Originally posted by marksimons

see bateman, it's corrupt all the way to the top... here's the story in a nutshell:

On NBC's Meet the Press program last Sunday, Cheney, who was Halliburton's CEO from 1995 to 2000, said he had severed all ties with the Houston-based company.

"I have no financial interest in Halliburton of any kind and haven't had now for over three years," he said.

Cathie Martin, a Cheney spokeswoman, confirmed that the vice president has been receiving the deferred compensation payments from Halliburton, but she disputed that his statements on Meet the Press had been misleading.

Cheney had already earned the salary that was now being paid, Martin said, adding that once he became a nominee for vice president, he purchased an insurance policy to guarantee that the deferred salary would be paid to him whether or not Halliburton survived as a company.

"So he has no financial interest in the company," she said.

But Sen. Lautenberg said that Cheney's financial disclosure filings with the Office of Government Ethics listed $205,298 in deferred salary payments made to him by Halliburton in 2001 and another $162,393 in 2002. The filings indicated that he was scheduled to receive more payments in 2003, 2004, and 2005.

"In 2001 and 2002, Vice President Cheney was paid almost as much in salary from Halliburton as he made as vice president," Lautenberg said. The U.S. vice president's salary is $198,600 annually.

The financial disclosure forms also said that Cheney continued to hold 433,333 unexercised Halliburton stock options, with exercise prices below the company's current stock market price. Cheney's spokeswoman said he had placed these options in a charitable trust and no longer had control over them.

On Meet the Press, Cheney also said he had no involvement in the awarding of government contracts to Halliburton.

"As vice president, 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 said.

In March, Halliburton was granted, without competition, a contract by the Army Corps of Engineers (ACE) to repair and restore Iraq's oil fields. ACE says the cost of this contract to taxpayers is about $1 billion.

But under a second military support contract, Halliburton's Kellogg Brown & Root unit has racked up more than $1 billion in expenses in Iraq, according to the U.S. Army Field Support Command.

http://www.rense.com/general41/profit.htm

So let me get this straight because he was garunteed a SET salary, no matter how the company performed he has financial ties to the company..

Now if the arrangement was stock options where his take would appreciate in value if the companies revenue/profits increased then I can see the correlation but this accusation makes zero business sense, his salary remains the same if Halliburton folds or triples in size, see the point???

Now before people start getting their tie-die shirts in a bunch hear me out... Do I think Cheney had something to do with the awarding of contracts to Halliburton? YES partially, that's the way business works you go with the one you know and trust..

I think the statment from the company explains the extra charge to deliver fuel in a WAR ZONE....

[jamiroguy1]

Originally posted by bigpoppanils

no no no

the total value of the contract is $1.2 billion.

the contraversy is over a suspected overcharging of $61 million relating to fuel sales.

ok.. THat's more like it.. what I heard origninally.

[mr mahs]

Originally posted by jamiroguy1

ok.. THat's more like it.. what I heard origninally.

Yeah but you got a hard on when you heard the 120 billion figure..

What is your answer to my rational business explanation for the business ties of Cheney??

I seriously think you hippies rolled up your economics/finace books and smoked them in college...

[jamiroguy1]

Originally posted by mr mahs

Yeah but you got a hard on when you heard the 120 billion figure..

What is your answer to my rational business explanation for the business ties of Cheney??

I seriously think you hippies rolled up your economics/finace books and smoked them in college...

First of all.. I'm not a hippie. I probably make more than you and dress nicer then you'll ever dress if we are looking at what a traditional hippie is.

Second of all the contract was 1.2 billion not 120 billion. Big difference. Kinda like my IQ and yours. I'd score a 138. You'd score 1.38 Get it?

Regarding your "rational business explanation for the business ties of Cheney" What the hell does that mean. Are you retarded?

[mr mahs]

Originally posted by jamiroguy1

First of all.. I'm not a hippie. I probably make more than you and dress nicer then you'll ever dress if we are looking at what a traditional hippie is.

Second of all the contract was 1.2 billion not 120 billion. Big difference. Kinda like my IQ and yours. I'd score a 138. You'd score 1.38 Get it?

Regarding your "rational business explanation for the business ties of Cheney" What the hell does that mean. Are you retarded?

I meant 1.2m typo....

*****"I probably make more than you and dress nicer then you'll ever dress"**********

I think this might be the ghey-est thing I've ever tread on this board.

Now with the attire and salary assumption...

Don't assume jerkoff, you might get embarassed....

What industry are you in???

[jamiroguy1]

Originally posted by mr mahs

What industry are you in???

I'm in the industry of fucking your mother. lol

[mr mahs]

Originally posted by jamiroguy1

I'm in the industry of fucking your mother. lol

Ahh un-employed..

Fashion would have been my first guess...

[igloo]

Originally posted by jamiroguy1

Second of all the contract was 1.2 billion not 120 billion. Big difference. Kinda like my IQ and yours. I'd score a 138. You'd score 1.38 Get it?

:laugh:

jamirodick.....I must admit. You make me laugh. Your stupidity is very funny.

IQ of 138 :laugh:

You are as dumb as a stump, but at least you have confidence.

Keep the spirit kid, and I will support you when you run for President of the Imbecile Brigade.

[jamiroguy1]

Originally posted by igloo

:laugh:

jamirodick.....I must admit. You make me laugh. Your stupidity is very funny.

IQ of 138 :laugh:

You are as dumb as a stump, but at least you have confidence.

Keep the spirit kid, and I will support you when you run for President of the Imbecile Brigade.

Well as much as your are a jackass.. I must admit your are an ammusing fuck as well.

[kramadas]

I thought he had stock options in the company.

Regardless of his "financial ties" he still has friends in that company. Also, I wonder if they make any campaign contributions - this is a real question, not rhetorical.

[mr mahs]

Originally posted by igloo

:laugh:

jamirodick.....I must admit. You make me laugh. Your stupidity is very funny.

IQ of 138 :laugh:

You are as dumb as a stump, but at least you have confidence.

Keep the spirit kid, and I will support you when you run for President of the Imbecile Brigade.

Bro, this kid is retarded...

Cheney is garunteed 200k whether company triples in size or folds, it's part of his retiremnt. Cheney doesn't own a boat load of OPTIONS that would appreciate in value, if profits rose from the Iraqi war..... His tretiremnet package was negotiated before the war....

Igloo I know you see right through this smear campaign...

[mr mahs]

Originally posted by raver_mania

I thought he had stock options in the company.

Regardless of his "financial ties" he still has friends in that company. Also, I wonder if they make any campaign contributions - this is a real question, not rhetorical.

ding ding ding....

We have a winner...

[igloo]

Originally posted by mr mahs

Bro, this kid is retarded...

Cheney is garunteed 200k whether company triples in size or folds, it's part of his retiremnt. Cheney doesn't own a boat load of OPTIONS that would appreciate in value, if profits rose from the Iraqi war..... His tretiremnet package was negotiated before the war....

Igloo I know you see right through this smear campaign...

Of course I do. Typical of the left and their endless campaign of bringing people down, or chasing conspiracy theories, or being critical without alternatives.

And I was not laughing with jamirodick, I was laughing at him.

[mr mahs]

Originally posted by igloo

.

And I was not laughing with jamirodick, I was laughing at him.

I know..

[jamiroguy1]

Originally posted by igloo

And I was not laughing with jamirodick, I was laughing at him.

That's funny most people laugh at your penis size.