From: Sue Pleming, Reuters
Published October 26, 2004 12:00 AM

Whistle-Blower Asks for Halliburton Investigation

WASHINGTON — The Army Corps of Engineers' top contracting official has demanded an investigation into contracts given to Halliburton, citing improper action that favored Vice President Dick Cheney's old company.


According to documents made available Monday by congressional sources, Army Corps whistle-blower Bunny Greenhouse complained of repeated interference in billions of dollars of contracts given to Halliburton unit Kellogg Brown and Root (KBR) for work in Iraq and the Balkans.


"This interference was largely focused on multibillion-dollar contract issues pertaining to a Halliburton subsidiary Kellogg Brown and Root," said a letter faxed to Acting Army Secretary Les Brownlee by lawyers for Greenhouse.


"As set forth below, employees of the U.S. government have taken improper action that favored KBR's interests," the letter said.


An Army attorney said the matter was being referred to the Defense Department's inspector general and the Corps was asked not to act against Greenhouse until a sufficient record was available.


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The Corps said it supported the right of employees to use established procedures to ensure governmental actions complied with applicable laws but declined further comment.


The Pentagon inspector general's office said it could neither confirm nor deny the existence of any investigation.


A decision could take months or even years.


Fear of Losing Job


Greenhouse lawyer Michael Kohn said his client went public after the Corps tried to remove her from her post as principal assistant responsible for contracting and not because she wanted to influence next week's election by raising questions about Halliburton, which Cheney ran from 1995-2000.


Halliburton, which is already under investigation for overcharging for work in Iraq, has been a target of Democratic criticism ahead of the Nov. 2 election, with suggestions the Texas firm got special treatment because of Cheney.


A spokesman for Democratic Sen. Frank Lautenberg said the New Jersey senator would introduce a resolution after the election to create a special committee to look into the contracts given to KBR.


"When Halliburton is sitting in on the drafting of its no-bid contract, you know lines have been crossed," said Lautenberg, referred to complaints by Greenhouse that KBR officials were allowed to attend military planning meetings before it was awarded a sole-source Iraq contract.


Halliburton spokeswoman Wendy Hall said KBR did not have any information on what Greenhouse may or may not have said to Pentagon officials in 2003 when a no-bid contract worth up to $7 billion was given to KBR to rebuild Iraq's oil industry.


"On the larger issues, the old allegations have once again been recycled, this time one week before the election," said Hall.


Greenhouse said the Iraq oil contract given to KBR, which was later replaced by a competitively bid deal, as well as another to feed and house U.S. troops in the Balkans, put at risk the "integrity of the federal contracting program."


Kohn said KBR contracts were awarded despite his client's reservations, which she expressed in hand-written notes on official documents, a tactic her superiors asked her to stop.


In one case, he said Army Corps officials bypassed getting a signature from Greenhouse to grant a waiver for KBR to be relieved of its obligation to provide cost and pricing data for bringing fuel into Iraq.


That waiver was granted after a draft Army audit said KBR may have overcharged the military by at least $61 million to bring in fuel to Iraq to ease a shortage of refined oil products.


Source: Reuters


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