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Halliburton misses $600m Iraq contract

Halliburton, the company once headed by the US vice-president, Dick Cheney, has failed to make the shortlist for an American government contract to rebuild Iraq, it emerged today.
Halliburton misses $600m Iraq contract

Mark Tran
Monday March 31, 2003

Halliburton, the company once headed by the US vice-president, Dick Cheney, has failed to make the shortlist for an American government contract to rebuild Iraq, it emerged today.

Halliburton, an oil services company, was one of five companies invited by the US agency for international development (USAid) to bid for a $600m (381m) contract to rebuild Iraq's basic infrastructure.

Only US companies were invited to bid, to the fury of British industrialists and unions, who pointed out that British troops are fighting alongside American soldiers.

The five companies also had close ties to the Bush administration, sparking accusations that the White House was returning favours for generous political campaign contributions.

Allegations of unduly cozy ties between the Bush administration and corporate benefactors has dogged the White House, going back to the scandal over Enron, the failed energy company.

Last week, Richard Perle, a leading US hawk, stepped down as chairman of the Defence Policy Board, a Pentagon advisory panel. His move followed allegations of a conflict of interest given his relationship with Global Crossing - a telecommunications firm that had sought his help in winning government approval for a deal with an Asian firm.

As for Halliburton, USAid has confirmed a Newsweek report that the company is not on the shortlist of two companies to rebuild Iraq's infrastructure. What is not clear is whether Halliburton's bid was uncompetitive or whether it was withdrawn because of unfavourable publicity.

A UN official told Newsweek that the bad publicity for Halliburton made the deal more trouble than it was worth, as the company depends on a lot of oil-related business in the Arab world, which is overwhelmingly against the war in Iraq.

"That kind of political interest was not in their corporate interests," the UN official said. The five US companies invited to bid for the infrastructure deal were Halliburton, Bechtel, Fluor, Parsons and Louis Berger.

Under the war budget request that President George Bush sent to Congress last week, USAid will receive $2.4bn for humanitarian as well as reconstruction aid.

Aside from the construction project, the agency has been soliciting bids on helping to restore Iraq's public health service, administering its airports, printing textbooks and training teachers.

The scale of the work has astonished experts who have examined the plans.

"We are embarking on a very aggressive effort, both figuratively and literally, at nation-building - far, far bigger than anything we have seen since the Marshall Plan," said Steven Kelman, a professor of public management at Harvard's John F Kennedy School of Government.

Rebuilding Iraq's infrastructure after war and years of sanctions will be a mammoth task and companies are eager to win contracts in an industry suffering from the global economic slowdown.

Some analysts estimate that the final bill for rebuilding and improving Iraq would be roughly equivalent to the operating budget of a US state with a comparable population. Texas, with 22 million people, has a budget of $57bn.

As construction companies position themselves for lucrative contracts, the rebuilding of Iraq has already emerged as a politically contentious issue. Tony Blair is at odds with the Bush administration on wanting the UN to take the lead role in running and reconstructing the country once the war ends. But administration hawks argue that the spoils of war should go to American companies as the US is bearing the brunt of the war effort.

In a possible foretaste of what is to come, the US and Britain clashed on who should rebuild the Iraqi port of Umm Qasr. USAid awarded a $4.8m to rebuild Iraq's only deep water port, which is under British military control, to an American company, Stevedoring Services of America.

Britain argued in favour of returning the port to local control to win Iraqi confidence.
Hmmm... 31.Mar.2003 14:13


Published on Monday, March 31, 2003 by the Boston Globe
The Cheney Connection
by Ruben Navarrette Jr

DALLAS -- I KNOW the saying dictates that to the victor go the spoils. But there are serious questions emerging over the process by which US companies are hired to put out oil fires, build roads and bridges, restart oil production, and do whatever is necessary to ''reconstruct'' Iraq after allied forces deconstruct it. Some answers need to come from Vice President Dick Cheney, a major architect of the war with Iraq, according to many newspapers and columnists around the country. That's the same Dick Cheney who was, until 2 1/2 years ago, chief executive officer of Halliburton Co., a Houston-based oil field services firm that takes in nearly $20 billion annually.

It is a Halliburton subsidiary -- Kellogg, Brown & Root -- that landed on a short list of companies invited by the US Agency for International Development to bid on what could grow to be a $900 million contract to rebuild Iraq. That's the same Kellogg, Brown & Root that was recently awarded, by the Defense Department, the contract to put out fires at oil fields in Iraq.

Good work if you can get it. Oil-field firefighting firms fetch up to $50,000 per day, and it can take weeks to cap a single well. There's no telling how much work there will be in Iraq, but experience says there could be plenty.

In the first Gulf War, Iraqis torched more than 700 oil wells in Kuwait. About half the fires were extinguished by Halliburton.

There's that name again.

And just to prove what a small world it is, the man who was secretary of defense in 1991 was later himself awarded a choice position: CEO of Halliburton. His name: Dick Cheney.

The Halliburton gig, from 1995 to 2000, was a cash cow for Cheney. During his final 8 1/2 months on the job, he pulled down a salary of $806,332 and collected another $100,000 in benefits.

And, mind you, all this was occurring while he was directing George W. Bush's search for a running mate.

Not only did Halliburton not seem to mind that its CEO was moonlighting as a headhunter, it gave Cheney a $1.5 million bonus. But that was cookie jar money compared with what Cheney pocketed when Bush made him his running mate. Cheney then sold his stock options and pocketed another $22 million and change.

Now $22 million and change isn't just a golden handshake. It's a wet, sloppy kiss. And that brings us to the questions. Are the new contracts for Halliburton Cheney's idea of reciprocity? If not, why was the process done by invitation only and not opened to other bids? And why was all this done in relative quiet?

Moreover, why hasn't the vice president's office been more forthcoming in trying to clear up any confusion about any benefit that Halliburton might derive from having its former CEO now sitting to the right hand of the president? Why has Cheney's office typically referred inquiring reporters from The Washington Post to Halliburton, only to have Halliburton refer them back to the vice president?

And given that these are tax dollars we're talking about (lots of them), why isn't there more transparency in the whole process?

Americans may never learn the answers. After howls of protests from competing firms around the world that were aced out of the Iraqi reconstruction bidding process, the government has now shifted the responsibility for overseeing the oil-field contracts to the Army Corps of Engineers and stamped the matter ''classified.''

And why is that, exactly?

Here's the big question: Did the vice president of the United States use his influence to help make his wealthy friends at his old company wealthier?

No one knows. And it's mighty hard to find out when no one is talking and folks are giving reporters the run-around. That has to stop. Cheney should speak up and settle once and for all these questions about how his private sector experience may be affecting his public service.

Ruben Navarrette Jr. is a syndicated columnist.

Copyright 2003 Globe Newspaper Company