Sunday, October 31, 2004

More Questions About Halliburton

The New York Times
October 31, 2004

More Questions About Halliburton

Halliburton, the big oil services conglomerate headed by Dick Cheney between his stints as defense secretary and vice president, is again drawing embarrassing headlines over the lucrative contracts it was awarded to service Pentagon operations in Iraq. No wrongdoing has been proven and the company is entitled to the presumption of innocence. Yet the charges, which include price gouging and improper influence over contracting, have been serious enough to interest the F.B.I. At least one member of Congress also wants the Pentagon's inspector general to look into them.

There is a reason that big defense contractors often recruit well-connected former government officials as their chief executives. They do not operate in a normal business environment, where companies must compete on the basis of their performance and efficiency. Instead, they sit in a kind of financial wonderland where huge profits can be made with minimal risk. Lucrative contracts are awarded without competitive bidding, and unexpected cost overruns and other dubious charges are simply passed along to the taxpayer. Most of this is, unfortunately, completely legal. But safeguards do exist to protect the public from being totally fleeced. According to the senior civilian contract monitor for the Army Corps of Engineers, Bunnatine Greenhouse, Halliburton may have violated them.

Earlier this month, Ms. Greenhouse, whose responsibility includes making sure that the corps follows Pentagon contracting rules meant to prevent undue outside influence, detailed her concerns in a letter to the acting Army secretary, Les Brownlee. She recounted a pattern of favoritism toward the company, and threats of retaliation for her complaints about it, that endangered the "integrity of the federal contracting program" and interfered with her ability to do her job. She reported that at one meeting she personally witnessed, Halliburton officials were improperly allowed to sit in on an Army discussion of contract terms.

Ms. Greenhouse also objected to the shameless stretching of a provision allowing noncompetitive contracts to be awarded on an emergency basis to grant Halliburton a five-year contract for Iraqi oil field repairs. Later, after a Congressional and public outcry, the contract was rebid after one year, as she had originally demanded. Ms. Greenhouse says that after repeatedly raising questions about Halliburton, she was excluded from decision making and her job was threatened.

By the time these controversial contracts were signed, Mr. Cheney no longer worked for Halliburton. In his current job, his duty is to protect the interests of Halliburton's customer in Iraq, the United States military, and its paymaster, the American taxpayer. One of the questions facing voters is how well he and the president have been doing that.