Whistleblower claims of deals
for Halliburton
DentonRC.com
Associated Press
By WILLIAM C. MANN
10/24/2004
The Army has agreed to a Pentagon investigation into claims by
a top contracting official that a Halliburton subsidiary unfairly
won no-bid contracts worth billions of dollars for work in Iraq
and the Balkans, according to Army documents obtained Sunday.
The complaint alleges that the award of contracts without
competition to restore Iraq's oil industry and to supply and feed
U.S. troops in the Balkans puts at risk "the integrity of the
federal contracting program as it relates to a major defense
contractor."
It also asks protection from retaliation for the
whistle-blower, Bunnantine Greenhouse, chief contracting officer
of the Army Corps of Engineers.
In a letter to Greenhouse's lawyer, an Army attorney said that
the matter is being referred to the Defense Department's
inspector general for "review and action, as appropriate." It
also said the Corps had been ordered to "suspend any adverse
personnel action" against Greenhouse "until a sufficient record
is available to address the specific matters" in her
complaint.
Copies of the letter and complaints, documents which were
provided to some members of Congress, were obtained Sunday by The
Associated Press.
Halliburton spokeswoman Wendy Hall said from Houston, where
the company is headquartered, "KBR doesn't have any information
on what Bunny Greenhouse may or may not have said to other
Pentagon officials in early 2003. Certainly we can't address any
threatened legal action she may be considering against her
employer."
"On the larger issues, the old allegations have once again
been recycled, this time one week before the election," Hall
said. She said that Halliburton is proud to serve the troops just
as we have for the past 60 years for both Democrat and Republican
administrations."
The contract has been a focus of the presidential campaign
because of Vice President Dick Cheney past tries to the company.
Cheney was chief executive officers of Halliburton and continues
to receive deferred compensation from the company.
Michael D. Kohn, who is Greenhouse's lawyer , in a letter to
acting Army Secretary Les Brownlee, charged that in the Balkan
contract a deputy assistant secretary of the Army had ordered
changes in documents to legitimate the contract "for political
reasons."
Kohn's complaint said contracts were approved over
Greenhouse's reservations, handwritten on the original contracts,
and extensions were awarded because underlings signed them
without her knowledge and in collusion with senior officials.
After her superiors signed off on the Iraq contract and
returned it for her necessary approval, the complaint said,
Greenhouse wrote beside her signature: "I caution that extending
this sole-source effort beyond a one year period could convey an
invalid perception that there is not strong intent for a limited
competition."
The contracts under investigation grew out of a $7 billion
multiple-year award to Halliburton's KBR subsidiary to
rehabilitate Iraq's oil industry after the U.S.-led invasion last
year; and an 11-month extension, which cost $165 million, of a $2
billion services contract the Army awarded in May 1999.
The Iraq contract was awarded in February 2003, less than a
month before the invasion, under a clause specifying no-bid
contracts in cases of "compelling emergency." The complaint said
Greenhouse objected to the five-year term, asking why the
certainty that the emergency would continue for five years.
Kohn said Sunday that he still wants an independent
investigation and will ask Attorney General John Ashcroft to
appoint investigators to conduct their own probe to ensure the
investigation is complete, independent and fair to his
client.
"This needs to be done by an outside agency," Kohn said. "From
past experience, we are uncomfortable with the DOD-IG handling
this investigation by themselves."
According to the complaint, in January 2002 Greenhouse sent an
investigative team to examine the Balkan operation. Afterward,
she reported: "The general feeling in the theater is that the
contractor (KBR) is `out of control'" and was able to manipulate
Corps of Engineer officials.
The Balkan contract was to have expired no later than May 27
of this year but was extended, without Greenhouse's knowledge,
after a hunt for other contractors was stopped. Whereas it
originally was awarded as a compelling emergency, the extension
was awarded under the exception that KBR was the "one and only
source."
Greenhouse questioned why the reason for extension was
changed. While she never was officially provided the answer, the
document said, "two individuals" told her in her office that Tina
Ballard, deputy assistant Army secretary for policy and
procurement, was telephoned during a meeting on the matter and
ordered the change for "political reasons."
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