By: David G. Johnson Halliburton issued a press release on 1/16/04 that stated that its subsidiary Kellogg Brown & Root (KBR) was awarded a contract to continue its operations for the Restore Iraqi Oil (RIO) program in the southern section of Iraq. On the day before their announcement, Rep. Henry Waxman, the Ranking Minority Member of the Committee on Government Reform in the House of Representatives, said that they have been informed been by the Pentagon's inspector general's staff that a pricing issue involving bringing fuel into Iraq from Kuwait was now with the Defense Criminal Investigative Services at the Pentagon. "Of course, we believe the award of this contract validates the decision of the Army Corps of Engineers last year. We were chosen because we were the best qualified with a proven track record of the ability to perform."
As further evidence of their innocence the have a reprint of an article from the Wall Street Journal whose title claims that they have been 'Cleared' over the 'Flap Over Fuel Pricing in Iraq'. Wait a second, why have they been 'cleared' before they were investigated by Defense Criminal Investigative Services you might ask? A thorough reading of the article posted on their website might be a good place to start investigating this apparent 'cart before the horse' issue. In a previously undisclosed Dec. 19 ruling, the commander of the Corps, Lt. Gen. Robert Flowers, cleared Halliburton's Kellogg Brown & Root subsidiary of the need to provide "any cost and pricing data" pertaining to a no-bid contract to deliver millions of gallons of gasoline from Kuwait to Iraq.
The sentence seems to 'clear' them from having to provide any data rather than vindicate them of any wrong doing. Perhaps another telling statement from the article is how the memo that fostered the Corps action to clear Halliburton came about: The decision, which Halliburton itself requested, came after Halliburton's pricing of gasoline sold to the U.S. government exploded into public controversy last month when Defense Department auditors alleged that Kellogg Brown & Root, known as KBR, was significantly overcharging.
Perhaps another clue for a 'Sherlock Holmes' type would be the timing of memo, you might want to note that phrase 'previously undisclosed Dec. 19 ruling', the article was published on January 6, 2004. Again, according to the article reprint on their website: Gen. Flowers signed the waiver nine days after officials at the Defense Contract Audit Agency, which keeps tabs on defense contractors, accused KBR of refusing to turn over internal documents that show the company was aware of accounting problems related to the alleged overcharging.
Unsurprisingly, Gen. Flowers played one of the standard foreign affairs trump cards regarding his decision: Gen. Flowers then ruled that "it is in the best interest of the United States Government" to waive KBR's requirement to provide cost-and-pricing information on the Altanmia contract.
The article even quotes the Ranking Minority Member of the Committee on Government Reform in the House of Representatives as stating: Democratic Rep. Henry Waxman of California, a relentless critic of Halliburton's work in Iraq, called the Flowers ruling "incomprehensible" and said "it appears the administration is deliberately sabotaging the government's ability to audit Halliburton."
Immediately, the critics claim that Waxman's charge was 'politically motivated'. But that claim shouldn't be made before first examining his (and others) fight to get to the bottom of this affair. The critics first claim that there is no connection between the Vice president and his former company, then when some allegations are raised they claim that the allegations are 'politically motivated'. How can they be politically motivated if there is no political connection? Which is it, 'are they with us' or 'against us', the president might ask? The president has gone on the record as saying that if they are found to have overcharged that they would have to pay the money back. Indeed, it may be quite difficult to prove that allegation after they received their 'get out jail free' ruling relieving them of the obligation to provide "any cost and pricing data". You may note that in the president's statement, "If there's an overcharge, like we think there is, we expect that the money be repaid" that there wasn't any wording implying other consequences for overcharging. Maybe you might wonder who is checking the monthly credit card bills at the white house. Maybe it's OK to slip in an extra charge here and there just to see if they are really looking? Well enough for the evidence that comes from Halliburton, now let's have a look at the evidence on the other side of the fence, Rep. Henry Waxman and John Dingell (with guest appearances from Joseph Lieberman). Their charges date back to September of 2003 when they sent a letter to the Office of Management and Budget citing their concerns about a requested additional $2.1 Billion dollars in oil reconstruction funds for Iraq. They followed up with another letter in October 2003, in which they continued their request for an explanation. Furthermore, they stated the OMB had not yet responded to their 'simple inquiry'. The six page letter (along with the other letters) is well worth the effort of reading because they are 'chock full of allegations' and evidence. Unfortunately, I did not find any reference to any elected official in the document other than the fact that it was the 'Bush Administration' requesting an additional $2.1 billion dollars. There are no references to the 'Cheney Connection'. However, there a lot of references that include the U.S. Army corps of Engineers, Congressional Research Service documents, Oil industry experts and even Gen. Flowers himself. Most certainly the charge that their allegations are 'politically motivated' should be answered with the question 'Did you read them?" followed by 'Show me where!' while you shake the documents in the air. (Senator Byrd taught me that one) Perhaps they will start to question their patriotism next? The bottom line of the whole affair really shouldn't be whether Halliburton is guilty of overcharging, and that they are coming back for a second helping. The bottom line should be the undisputed fact that the American Taxpayer is paying between $1.62 to$1.70 per gallon of gas that is then sold in Iraq for between 4 to 15 cents per gallon. I know people that drive quite along ways to save a few cents per gallon, it's too bad that the road to Iraq is so long and so rough. The other fact that they need to know is that we pay as much or more in taxes on our gasoline than Iraq pays in total for their gasoline, thanks to the way our tax dollars are being spent in Iraq. Perhaps we should post this article on gas pumps across America so that people have something to think about while they wait for the next 'ding'. I wonder if that would be considered 'politically motivated'?
Date: Friday, January 16, 2004 - 11:04 PM Printer Friendly  Email to a Friend 
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