Waxman: Secret Contract allows Halliburton to produce Oil in Iraq

posted by ewing2001 on Tuesday May 06, @04:42PM

Secret Contract allows Halliburton to produce and distribute Oil in Iraq

UPDATED:CBS, CNN, NPR, Reuters picks up Halliburton-Story (May 7, 2003)

US Media tries to downplay the role of Representative Henry Waxman, who also said that "Halliburton's dealings with countries cited by Washington as state sponsors of terrorism, or members of the so-called "axis of evil", date back to the 1980s" On April 30th, 2003, Waxman wrote a letter to Donald Rumsfeld "about Halliburton's ties to countries that sponsor terrorism": House.Gov (PDF)

Financial Times, May 7 2003

Halliburton, the US construction and engineering company, is permitted to produce and distribute oil in Iraq under a contract it was secretly awarded by the US government in March, according to a Congressman who has been a vocal critic of the way the Bush administration has handled the business side of the war in Iraq, Joshua Chaffin in Washington writes.

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Any such conditions would appear to exceed the level of involvement in the country's politically sensitive oil sector that the company and the US government previously said had been agreed. Henry Waxman, the Democratic Congressman for California, said the information was disclosed in a letter from the US Army Corp of Engineers. Halliburton and the Corp, which granted the contract, have said repeatedly that its terms simply allowed Halliburton to extinguish oil well fires in Iraq and provide other emergency repairs. "These new disclosures are significant and they seem at odds with the administration's repeated assurances that Iraqi oil belongs to the Iraqi people," Mr Waxman stated in a letter to the Corp yesterday. Halliburton said that the newly formed Iraqi oil ministry was pumping and distributing oil, and that it was merely "assisting".

"...This is not the first buck that Cheney's former company has made off military conflict and likely won't be the last. KBR currently has thousands of military support personnel on the ground in Kuwait and Turkey as part of a multi-year contract worth close to a billion dollars. The engineering subsidiary was also one of a select few firms invited to bid on an initial $900 million USAID contract for rebuilding post-war Iraq. Though it didn't get that job, Halliburton says it is still in the running for subcontracts and there will likely be plenty more opportunities. After all, the American Academy of Sciences estimates the rebuilding Iraq will cost between $30 and $105 billion dollars. At a recent investor conference call, Halliburton reported a 30% increase in year-over-year revenues, to $1.6 billion, for KBR.

Cheney, who served as CEO from 1995 to 2000, continues to receive as much as $1 million a year in deferred compensation as Halliburton executives enjoy a seat at the table during Administration discussions over how to handle post-war oil production in Iraq.

The Cheney-Halliburton story is the classic military-industrial revolving door tale. As Secretary of Defense under Bush I, Cheney paid Brown and Root services (now Kellogg Brown and Root) $3.9 million to report on how private companies could help the U.S. Army as Cheney cut hundreds of thousands of Army jobs. Then Brown and Root won a five-year contract to provide logistics for the U.S. Army Corp of Engineers all over the globe. In 1995, Cheney became CEO and Halliburton jumped from 73rd to 18th on the Pentagon's list of top contractors, benefiting from at least $3.8 billion in federal contracts and taxpayer-insured loans, according to the Center for Public Integrity.

But the Halliburton story is more than just a simple revolving door tale. Even without the Cheney conflicts of interest, serious doubts remain about whether a company with a record like Halliburton's should even be eligible to receive government contracts in the first place. This, after all, is a company that has been accused of cost overruns, tax avoidance, and cooking the books and has a history of doing business in countries like Iraq, Iran and Libya.

Cost overruns: In September 2000, the General Accounting Office (GAO) found that the U.S. Army had not taken appropriate steps to limit the $2.2 billion costs Kellogg Brown and Root charged for logistical and engineering support in the Balkans. According to the report, Army officials "frequently have simply accepted the level of services the contractor provided without questioning whether they could be provided more efficiently or less frequently at lower cost."

Questionable Accounting: The SEC recently formalized an investigation into whether Halliburton artificially inflated revenue by $234 million over four years. Halliburton switched to a more aggressive accounting method in 1998 under Cheney.

Access to Evil -- business dealings in Iraq, Iran, and Libya: News reports suggest that Pentagon is currently using the Iran-Libya Sanctions Act (ILSA) to draw up a blacklist of non-US companies that have done business in Iran. Yet, Halliburton has conducted Business in Iran through subsidiaries. When Cheney was CEO of Halliburton, he inquired about an ILSA waiver to pursue oil field developments in Iran. In 1997, Halliburton subsidiary Halliburton Energy Services paid $15,000 to settle Department of Commerce allegations that the company had broken anti-boycott provisions of the U.S. Export Administration Act for an Iran-related transaction. Halliburton recently agreed to evaluate its operations in Iran, after the Securities and Exchange Commission rebuffed the company's request to dismiss a New York City police and fire pension funds shareholder proposal for the company to examine its role in Iran.

Also forgotten is that story about how Cheney's Halliburton did business with Saddam. According to the Washington Post, "Halliburton held stakes in two firms that signed contracts to sell more than $73 million in oil production equipment and spare parts to Iraq while Cheney was chairman and chief executive officer."

Halliburton has also done business in Azerbaijan, Burma, Indonesia, Libya and Nigeria. As Dick Cheney once said, "The good Lord didn't see fit to put oil and gas only where there are democratic regimes friendly to the United States."

Tax Havens: Under Cheney's tenure, the number of Halliburton subsidiaries in offshore tax havens increased from 9 to 44. Meanwhile, Halliburton went from paying $302 million in company taxes in 1998 to getting an $85 million tax refund in 1999.

All told, the IRS loses about $70 billion a year in offshore tax sheltering by corporations and wealthy individuals - almost enough to cover the $75 billion Bush has asked for to cover the first six months of war..."

Halliburton's Contract with the "axis of evil"

Halliburton's Cuba Contract

from "911Skeptics Unite-the encyclopedia"

Halliburton-Cuba contract

===================

In July 2002, Commondream reprinted a Reuters report, that former Dick Cheney's company Halliburton awarded a contract with Guantanamo Bay to build cells (David J. Lesar, Halliburton).

Another political side twist, ignored by the mainstream media, was the report, that KRB used 400 illegal flippinos for that:

"...It took only two weeks to "clear" the workers after a "discreet and thorough screening" by the Federal Bureau of Investigation and its counterpart, the National Bureau of Investigation, according to sources at the Department of Foreign Affairs (DFA). The 400 workers left on March 22 for Los Angeles on a plane chartered by the Brown and Root International on their way to Guantanamo, DFA sources said..." http://www.inq7.net/nat/2002/mar/28/nat_4-1.htm

More disturbingly, the fact was ignored, that this contract was already an upgrade of an older contract from 2000:

"Halliburton Co. has been awarded a $9.7 million contract to build an additional 204-cell detention camp at the U.S. naval base at Guantanamo Bay, Cuba to hold additional suspected al Qaeda and Taliban prisoners, the Pentagon said on Friday." http://www.commondreams.org/headlines02/0727-02.htm

The full contract:

Contract was filed in February 2001, but awarded in June 2000

"Brown & Root Services, a division of Kellogg Brown & Root, Arlington, Va., was awarded today a $16,000,000 task order under a previously awarded cost reimbursement, indefinite-delivery and indefinite-quantity construction contract for construction of a 408-unit detention camp at the Radio Range area of U.S. Naval Station, Guantanamo Bay, Cuba. Units will be of modular steel construction. Each unit measures 6 feet 8 inches by 8 feet and includes a bed, a toilet, and a hand basin with running water. "

(N62470-00-D-0005) http://www.defenselink.mil/news/Feb2002/c02262002_ct088-02.html

The CSIS meeting clearing contracts with Cuba in July 2001:

WASHINGTON, July 05, 2001 — CSIS will host a discussion on U.S. sanctions policy featuring Rep. Howard Berman (D-Calif.) at 9:00 a.m. on Tuesday, July 10, in 2255 Rayburn House Office Building.

....The panelists will review the first five years of ILSA, assess the impact of its August reauthorization, and explore the broader sanctions debate, which is intensifying following recent efforts to relax the trade embargo on Cuba..." http://www.csis.org/press/ma_2001_0710.htm

The original contract, where Cuba is not mentioned yet, but hidden as one of many "worldwide locations":

Note the same Contract Number No.N62470-00-D-0005 :

"..Work will be performed at worldwide locations, to be determined, when task orders are awarded. Work is expected to be complete by June 2001.."

http://www.defenselink.mil/news/Jun2000/c06292000_ct373-00.html

United States Department of Defense Contract

FOR RELEASE AT (5 p.m. ET June 29, 2000 NAVY

Brown & Root Services, Houston, Texas, is being awarded a maximum estimated $75,000,000 cost-plus-award-fee, indefinite-quantity/indefinite-delivery order contract with a guaranteed minimum of $100,000 for emergency construction capabilities. The total contract amount is not to exceed $300,000,000 (base year plus four option years).

Work will be performed at worldwide locations, to be determined, when task orders are awarded. Work is expected to be complete by June 2001. Contract funds will expire at the end of the current fiscal year. This contract was competitively procured with 44 proposals solicited and three offers received. The Naval Facilities Engineering Command, Atlantic Division, Norfolk, Va., is the contracting activity (N62470-00-D-0005).

(N62470-00-D-0005) from 2000 Mirrored at:

http://www.lebensaspekte.de/groundzero/hallicontract_june 29_2000.html

(-> Kellog Root and Brown)

CBS picks up the Waxman-letter story

Lawmaker Decries Halliburton's Iraq Deal

By LARRY MARGASAK

The Associated Press

Wednesday, May 7, 2003; 11:47 AM

WASHINGTON - Halliburton Co.'s emergency, no-bid contract to work on Iraq's oil wells must be fully disclosed, a Democratic lawmaker says, pointing to the Army's admission that the company has a far more lucrative role than originally believed.

Prior descriptions said Vice President Dick Cheney's former company would fight oil fires. The contract also lets the company operate the oil fields for a time and distribute the petroleum, Rep. Henry Waxman, D-Calif., said Tuesday. Waxman cited information he received from the U.S. Army Corps of Engineers, which awarded the contract.

Cheney's office has said repeatedly that the vice president has no role in Halliburton's operations or its government contracts.

http://www.washingtonpost.com

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