By Roxana Tiron - 09/21/05 12:00 AM EDT
Almost one year after the House Government Reform Committee launched an investigation into the Pentagon’s contracts with Halliburton Corp. in Iraq, the panel still hasn’t received all the documents it requested from the Department of Defense (DoD).
In the wake of a subpoena threat earlier this summer, the Pentagon started turning over documents related to Halliburton’s disputed billing under a $2.5 billion contract for Iraqi oil-site repairs and fuel imports.
The Pentagon handed over 900 pages of e-mails; however, many of those mentioned attachments and residual documents, which the committee has yet to receive.
“They ran out of will,” a GOP aide said. “We are trying to figure out why they stopped producing those documents. They went off the air.”
Another subpoena is not out of the question, the aide said.
Halliburton, and its subsidiary kellogg, Brown & Root, received the contract for oil-site repairs and fuel imports in 2003 without competition. The company is a major recipient of Development Fund for Iraq money. The fund is the successor of the United Nations Oil-for-Food Program. Almost $20 billion, mainly from Iraqi oil reserves, was gathered in the DFI. A U.N. Security Council resolution stipulates that the fund has to be spent in a transparent manner.
But ranking Government Reform Committee member Henry Waxman (D-Calif.) and Christopher Shays (R-Conn.), the committee’s vice chairman and chairman of the National Security, Emerging Threats and International Relations Subcommittee, objected to heavy censoring of internal Defense Department audits provided to a U.N. board charged with monitoring the program. Halliburton allegedly was allowed to edit the report before it was sent to the United Nations.
The audits found more than $200 million in questioned charges that Halliburton had passed to the government out of the $1.6 billion in Development Fund money that went to Halliburton.
At the time, Pentagon officials said the documents were redacted to protect the company’s proprietary information. Now, after the Pentagon has provided most of the documents, the committee is still trying to get the full background of the documentation that was redacted.
“We are burning the phone lines every week,” the GOP aide said.
Meanwhile, the Pentagon said it is still cooperating with Congress.
“DoD always cooperates and remains responsive to Congress,” said Lt. Col. Roseann Lynch, a Pentagon spokeswoman. “Any requested documents not produced are still under legal review. DoD must honor any privileges associated with legal advice and legal documents.”
The Government Reform Committee cannot draw any conclusions on the investigation yet, but the insight that the documents provided confirmed the need to be “transparent” and produce proper accounting to the United Nations.
“It never quite penetrated the DoD that they made the commitment [in Iraq] to the world,” said the aide.
But the goals of the committee in terms of this investigation appear to be split. The GOP aide said the investigation is driven by the Democrats’ “fixation” on Halliburton, while Republicans’ interest is more “institutional” because it focuses on the amount of money that would potentially need to be returned to the fund.
Kellogg, Brown & Root (KBR) has received a large share of the logistics contracts there. KBR is a subsidiary of Halliburton, where Vice President Cheney worked for several years before moving to the White House.
“The Democrats have been doing that investigation with some help from the majority,” Waxman told The Hill, adding that it appears that hundreds of millions of dollars have been wasted through “improper payment.”
To add insult to injury, the Army in July gave KBR a $4.97 billion one-year contract to provide logistics support for U.S. troops in Iraq, a move that came in the midst of criticism aimed at Halliburton and the government’s contracting practices. Additionally, Halliburton had already earned $9.1 billion from logistics work in Iraq.
In the past year, Halliburton stock has more than doubled. It went up from $31.40 to $66.44, according to Morningstar.com.
KBR has been accused of using political connections in its efforts to secure the two largest post-war contracts, Restore Iraqi Oil and Logcap.
Since Halliburton and its subsidiary KBR have been attracting criticism both on the Hill two years ago and in the public eye, the company hired Michael Barrett, a consultant who helps prepare witnesses under investigation by Congress. Barrett was chief counsel for the oversight subcommittee of the House Committee on Energy and Commerce for 10 years.
While the Government Reform Committee is temporarily stalled, awaiting additional documents from the Pentagon, the committee’s Democrats have started to raise questions about no-bid contracts doled out to companies in the wake of Hurricane Katrina. One of those companies is KBR, and the other is Shaw Group — both clients of former Federal Emergency Management Agency director Joe Allbaugh.
KBR is repairing damaged naval facilities under a $500 million Defense Department contract. Baton Rouge, La.-based Shaw Group is working on mobile homes.