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Last Updated: Friday, 30 May, 2003, 14:28 GMT 15:28 UK
Halliburton Iraq contract queried
US military pass burning oil pipelines near Baghdad
Halliburton could have years of work in Iraq
Halliburton, the oil services and construction group once led by US vice president Dick Cheney, is in the spotlight once again over its role in the reconstruction of Iraq.

The Houston-based firm has been given reconstruction contracts worth almost $500m so far, according to a US congressman.

Henry Waxman, a California Democrat, has written to the US army questioning why so much work has been given to Halliburton's subsidiary Kellogg Brown & Root without any competition.

Rather than opening contracts to tender, the US government has used a Halliburton contract won in 2001 to place new orders for troop support work in Iraq.

The government has denied that Halliburton received preferential treatment.

"Any allegation that this contract is set up to encourage unwarranted spending is unfounded and untrue," said Wendy Hall, a company spokeswoman.

"The vice president has nothing to do with the awarding of contracts."

'An affront'

The...contract is that it apparently allowed Halliburton to profit from virtually every phase of the war with Iraq
Henry Waxman, California Democrat

Mr Waxman said information from the US defence department suggested that Kellogg Brown & Root received $425m for its work in Iraq under a contract awarded in December 2001.

The contract, called the Logistics Civil Augmentation Program (LOGCAP), engaged Halliburton to provide support both in wartime "and other operations" - giving the company free rein to profit from the recent conflict, according to Mr Waxman.

"One of the unique features of the LOGCAP contract is that it apparently allowed Halliburton to profit from virtually every phase of the war with Iraq," said Mr Waxman in his letter.

Halliburton denied all suggestions of wrongdoing.

"To suggest that either Halliburton or any of the firms that support the Department of Defense advocate war in order to make money is an affront to all hard working, honourable Halliburton employees," said the spokeswoman.

Adding up

The 2001 contract was designed to allow the government to call on Halliburton when necessary, according to the company.

But Mr Waxman has sought assurances that the US army has measures in place to limit the total sums paid to Halliburton.

He suggested another contract with the US Army Corps of Engineers to repair and operate oil wells in Iraq was already worth more than $70m, with a ceiling of $7bn.

"When the contracts are combined, the total amount that Halliburton has received to date for work related to Iraq is now nearly $500m," said Mr Waxman.

Checking the bills

Kellogg Brown & Root is the army's only private supplier of troop support services.

It competed with two other companies to win the 2001 contract, designed to provide immediate support wherever and whenever US forces are in action overseas.

Under a similar contract, Brown & Root was paid $1.2bn for supporting US troops in the Balkans between 1992 and 1999.

An army spokesman said Brown & Root would probably receive about $500m's worth of orders for Iraq at the final count.

But he insisted the company would have to justify its costs before being paid.

"Costs are verified as they are billed," said Dan Carlson, a spokesman for the Army Field Support Command.




SEE ALSO:
Halliburton's Iraq role expands
07 May 03  |  Business
US firm wins Iraq airports deal
06 May 03  |  Business
Halliburton out of Iraq rebuild
31 Mar 03  |  Business


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