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Halliburton Deal in Iraq Includes More Than Oil Fires

California congressman says White House hid the expanded role. The firm says its announcement in March was clear.

May 07, 2003|From Associated Press

An emergency contract the Bush administration gave to Halliburton Co. to extinguish Iraqi oil fires also gave the firm a more lucrative role in getting the country's oil system up and running, documents showed Tuesday.

A congressional critic of the Houston company, formerly run by Vice President Dick Cheney, said the administration was hiding the expanded role.

A spokeswoman for Halliburton said the company's initial announcement of the contract March 24 disclosed the larger role for its KBR subsidiary.

The Army Corps of Engineers, in a letter to Rep. Henry A. Waxman (D-Los Angeles) Friday, disclosed that the no-bid contract included not only extinguishing fires but also "operation of facilities and distribution of products."

Waxman, senior Democrat on the House Government Reform Committee, wrote Lt. Gen. Robert Flowers of the corps Tuesday, saying the contract "is considerably broader in scope than previously known."

The lawmaker also said the corps' proposal to replace the Halliburton contract with a long-term deal was at odds with administration statements that Iraq's oil belongs to the Iraqi people.

KBR was given the right to extinguish the oil fires under an existing contingency contract. Cheney's office has said repeatedly that the vice president had no role in the contract award.

Carol Sanders, a spokeswoman for the Corps of Engineers, said officials were reviewing the letter but had no response.

Halliburton spokeswoman Wendy Hall pointed to the company's announcement of the contract in March, which she said revealed the extent of the work.

The release said: "KBR's initial task involves hazard and operational assessment, extinguishing oil well fires, capping oil well blowouts, as well as responding to any oil spills. Following this task, KBR will perform emergency repair, as directed, to provide for the continuity of operations of the Iraqi oil infrastructure."

Hall said KBR was assisting Iraq's oil ministry to get the oil system operating.

But Waxman said, "Only now, over five weeks after the contract was first disclosed, are members of Congress and the public learning that Halliburton may be asked to pump and distribute Iraqi oil under the contract."

Waxman also has repeated the corps' statement that the contract could be worth as much as $7 billion for up to two years, but the corps said that figure was a cap based on a worst-case scenario of oil well fires.

Few wells were burning during the war with Iraq, and the corps said that by early April the company had been paid $50.3 million.

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