Congress Wants Probe of Halliburton, Bechtel
Congress Curious About Iraq Deals
By Edward Epstein
The San Francisco Chronicle
Tuesday 20 May 2003
Washington -- Top Republicans and Democrats in Congress are calling for greater scrutiny of the American effort to rebuild Iraq, and some want to investigate how huge contracts were awarded to Bechtel Corp. of San Francisco and Halliburton Co., a Houston firm once run by Vice President Dick Cheney.
Democrats such as Sen. Joe Lieberman of Connecticut, a presidential candidate, and Rep. Sherrod Brown of Ohio expect that their calls for an investigation will be dismissed as attempts to score partisan points by embarrassing President Bush. But GOP Rep. Henry Hyde of Illinois, usually a firm Bush ally and chairman of the House International Relations Committee, said he is concerned with the "lack of transparency" that has surrounded the reconstruction program for postwar Iraq.
Hyde, speaking at a hearing Thursday, said a lack of basic information about the Pentagon's Office of Reconstruction and Humanitarian Affairs has hamstrung congressional efforts to find out what's going on, who's responsible, how contracts are awarded and the effectiveness of efforts to restore law and order as well as basic services in Iraq.
"I understand, for example, that the very charter of the Office of Reconstruction and Humanitarian Affairs is still classified as national security information," Hyde said in asking for a General Accounting Office review of the Iraq situation.
Saying he is particularly concerned about reports of continuing lawlessness, Hyde asked the GAO to "monitor the reconstruction effort in detail, concentrating on the efforts to provide security and interim relief to the people of Iraq and on the rebuilding of its economy and political system."
"The committee expects the full cooperation of every element of the executive branch in the GAO's efforts," he added.
Hyde didn't mention the Bechtel or Halliburton contracts. But Lieberman did, zeroing in on Halliburton's Kellogg, Brown & Root subsidiary. Cheney headed Halliburton until 2000 and has no contact with it now, his office says.
But Cheney received $162,352 from the company in 2002, part of a five-year deferred repayment of his pay the last year he served as chairman.
In calling for Senate Governmental Affairs Committee hearings, Lieberman questioned Halliburton's no-bid contract to oversee rebuilding Iraq's oil fields. "Only through complete disclosure can we ensure that the American people will have confidence in how their government chose to award those contracts," Lieberman said. The committee chairwoman, Sen. Susan Collins, R-Maine, will have to decide whether to hold such hearings.
Halliburton has an Army Corps of Engineers' contract valued at up to $7 billion for the oil field work in which no other bids were sought. It received that huge contract after winning a far smaller, competitive bid to draw up a contingency plan before the Iraq invasion for rebuilding the oil industry.
Brown, at the House hearing, said the Army Corps estimated that Halliburton would get a maximum of $800 million for its work under the second contract, which could be rebid within a year.
"I don't take away the qualifications of Halliburton or Kellogg, Brown & Root. They are reputable companies. It didn't matter though if other companies were capable of doing a job they were never asked," Brown said.
Brown also raised questions about Bechtel's contract from the U.S. Agency for International Development, valued at up to $680 million, to rebuild everything from schools to wastewater systems and the electricity grid. The firm won the contract over eight other companies in a limited competitive- bidding process.
Bechtel's board includes former Secretary of State George Shultz, and its chief executive officer is Riley Bechtel, whom Bush has named to the administration's Export Council.
Like other administration officials who have said the contracting process was without political favoritism and delivered highly qualified firms, Wendy Chamberlin, assistant USAID administrator, defended the limited bidding process for the Bechtel contract. She said it was vital to have the contractor in place as the war ended to begin work quickly. The importance of speed short- circuited the regular bidding process, which can take six months or more, she said.
In San Francisco, Bechtel spokesman Jonathan Marshall said the company will cooperate fully with Congress. "We have nothing to hide. Our record will show we are the most qualified company for this highly complex work," he said.
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