Crony Capitalism Works, Damn it!

From The Guardian

Tuesday April 8, 2003 8:00 PM

WASHINGTON (AP) - Questioning whether Vice President Dick Cheney's former company has received favored treatment from the Pentagon, senior House Democrats asked Congress' investigative agency Tuesday to delve into contracts awarded Halliburton Co. over the past two years.

Halliburton's KBR subsidiary has a record of gouging the government in contracts awarded without competition, Reps. Henry Waxman of California and John Dingell of Michigan contended in a letter to the General Accounting Office.

Halliburton spokeswoman Wendy Hall said the lawmakers have ignored the exemplary record of the Houston-based firm that employed Cheney as chief executive officer from 1995 to 2000 and still pays him deferred compensation for his services during that period.

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http://www.guardian.co.uk/uslatest/story/0,1282,-2542859,00.html

Halliburton unit could make $7b

By Stephen Glain, Globe Staff, 4/11/2003

ASHINGTON -- A subsidiary of oil giant Halliburton Co., the company formerly chaired by Vice President Dick Cheney, won a contract that could run as high as $7 billion to put out oil-well fires in Iraq, according to a Pentagon official. The potential payout is 10 times what it cost to douse the inferno of burning Kuwaiti wells at the end of the Gulf War.

In a letter to Representative Henry A. Waxman, a US Army Corp of Engineers officer said the Halliburton subsidiary, Kellogg Brown & Root Services of Houston, was awarded the two-year contract to extinguish oil-well fires and to evaluate the state of Iraq's petroleum fields.

The contract was designed to cover a ''worst-case estimate'' of wartime damage and ''those services necessary to support the mission in the near term,'' wrote Lieutenant General Robert Flowers. Those services include assessments of how badly damaged the oil wells will be in the immediate aftermath of the war, Flowers wrote.

Wendy Hall, a spokeswoman for Kellogg Brown & Root, said the company would not necessarily receive the full $7 billion, much of which could go to smaller companies as subcontracting work. Hall said the company will work under the contract for an ''interim period, until the US Army Corps of Engineers procures additional contracts to provide a broad range of services required to support full execution'' of the project.

Hall said the company would not necessarily be tapped to provide the services requested beyond the interim period, which she said was impossible to quantify at this early date. Halliburton said it has been given orders for $50.3 million of work so far.

Among the many follow-up questions Waxman, a California Democrat, submitted in response to Flowers's letter was how long after hostilities end would the Army Corps expect to replace the Kellogg Brown & Root contract with contracts issued through competitive bids.

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