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A Daily Chronicle of Bush Administration Distortion November 6, 2003
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Halliburton Contract Extension Cancelled Amid Allegations of Overcharging Taxpayers



The Army Corps of Engineers is "likely" to cancel the no-bid contract extension granted a week ago to Halliburton for delivery of oil-related services amid allegations that Halliburton is overcharging the federal government to import oil into Iraq. The decision to revisit the contract extension comes in part due to the assertions from inside the Pentagon that Halliburton's price for imported gasoline was "at least double what it should be."1

Jeffrey Jones, the Director of the Defense Energy Support Center (DESC), told minority staff of the House Government Reform Committee that it costs the DESC $1.08 to $1.19 to buy and import fuel via truck into Iraq - a price that's less than half the $2.65 Halliburton is charging the US government.2

Congress has been critical of the no-bid contract - valued at up to $7 billion, since it was awarded to VP Cheney's former employer, Halliburton. Questioned about the secretive no-bid process in April, then-White House spokesman Ari Fleischer said, "the criteria should be followed by the contracting agencies. The White House does not get involved or dictate to agencies on how to award contracts."3 But President Bush signed an executive order within a month of taking office setting terms for executive agency contracting processes, a process the White House said should strive for "the highest quality at the best price to ensure that government is a responsible steward of the American people's hard-earned tax dollars."4

Scrutiny of the Halliburton contract has become more intense since Congress passed the President's emergency request for $87 billion. Stripped from the final bill, at White House insistence, say Senate Democrats, was a provision to subject those who deliberately defrauded the United States or Iraq to jail terms of up to 20 years and costly fines.5

Sources:
  1. Letter from Rep. Henry Waxman and Rep. John Dingell to Lt. Gen. Robert B. Flowers, U.S. Army Corps of Engineers, 11/5/03.
  2. ibid.
  3. White House Press Briefing, 4/11/03.
  4. "The President's Small Business Agenda," Whitehouse.gov; http://www.whitehouse.gov/infocus/smallbusiness/taxpayer.html.
  5. "Rage erupts over profiteering clause," The Hill, 11/5/03.



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