Halliburton unit is tapping pipeline of illicit workers for U.S. military jobs in war zone
By CAM SIMPSON and AAMER MADHANI, Chicago Tribune
First published: Sunday, October 16, 2005
American tax dollars and the wartime needs of the U.S. military are fueling an illicit pipeline of cheap foreign labor, mainly impoverished Asians who often deceived, exploited and put in harm's way in Iraq with little protection.
The United States has long condemned the practices that characterize this human trade as it operates elsewhere in the Middle East. Yet this very system is now part of the privatization of the American war effort and is central to the operations of Halliburton subsidiary KBR, the U.S. military's biggest private contractor in Iraq.
To document this system, the Chicago Tribune retraced the journey of 12 Nepalese men kidnapped last year from an unprotected convoy en route to an American military base in Iraq. The Tribune's reporting found that:
To maintain the flow of low-paid workers key to military support and reconstruction in Iraq, the U.S. military has allowed KBR to partner with subcontractors that hire laborers from Nepal and other countries that prohibit citizens from being deployed in Iraq. That means brokers recruiting such workers operate illicitly.
The U.S. military and KBR assume no responsibility for the recruitment, transportation or protection of foreign workers brought to the country. KBR leaves every aspect of hiring and deployment in the hands of its subcontractors. Those subcontractors often turn to job brokers dealing in menial laborers.
Working in tandem with counterparts in the Middle East, the brokers in South and Southeast Asia recruit workers from some of the world's most remote areas. They lure laborers to Iraq with false promises of lucrative, safe jobs in nations such as Jordan and Kuwait, even falsifying documents to complete the deception.
Even after foreign workers discover they have been lured under false pretenses, many say they have little choice but to continue into Iraq or stay longer than planned. They feel trapped because they must repay brokers' huge fees.
Some U.S. subcontractors in Iraq -- and the brokers feeding them -- employ practices condemned by the U.S. elsewhere, including fraud, coercion and seizure of workers' passports.
The State Department has long expressed concerns about the treatment of foreign workers in the same Middle Eastern nations the United States relies on to supply labor for bases in Iraq. In June, the department added four of these nations -- Kuwait, Qatar, Saudi Arabia and the United Arab Emirates -- to the top tier of its human trafficking watch list for not undertaking "significant efforts to combat forced labor trafficking."
U.S. law calls for sanctions in such cases. But last month, citing Kuwait's and Saudi Arabia's efforts in the "global war on terror," President Bush waived the sanctions against them. This allowed more than $6 billion in combined military sales to go forward. One reason laborers from developing countries are sought for work in Iraq is the U.S. military fears that hiring Iraqis would allow insurgents to infiltrate its bases.
Halliburton would not say whether it includes such laborers in its public tallies of contractor casualties in Iraq. But figures compiled by Iraq Coalition Casualty Count, a private group, indicate that third-country nationals -- neither Iraqis nor citizens from U.S. coalition members -- account for more than 100 of the roughly 270 contractor fatalities in the country since the start of the war. Those numbers are based on the group's tracking of Defense Department releases and media accounts.
Halliburton declined to make KBR executives available for an interview, agreeing to respond only to written questions from the Tribune. In a written statement, Halliburton said it outlines the "legal and ethical behaviors that all employees and subcontractors are expected to follow in every aspect of their work."
The U.S. military has outsourced vital support operations in Iraq to KBR at an unprecedented scale, a deal that has cost U.S. taxpayers more than $12 billion. KBR, in turn, outsources much of that work to more than 200 subcontractors, many of them based in the Middle East.
The subcontractors employ an army of workers from developing countries to dish out food, wash clothes and clean latrines. About 35,000 of the 48,000 people working for those subcontractors are not Americans, KBR has said.
According to salary statements obtained by the Tribune, the pay for such workers can range from about $65 to $112 weekly -- a fortune to those scratching a living from the farm fields and brick factories of Nepal, where the per capita annual income is about $270.
The Nepalese government must grant permission before workers can legally go abroad or brokers can legally send them. It has refused to do so for Iraq, because of the dangers there.
Some Nepalese job brokers have been raided or shut down, but it is unclear how vigorously authorities have pursued those involved. The government, consistently ranked among the world's most corrupt, has little incentive to do so because the Nepalese economy is reliant on the estimated $1 billion sent home each year by citizens working overseas.
Many Nepalis willingly assume the risks of working in Iraq, although their knowledge of its dangers before leaving home is questionable. Only 16 of every 1,000 Nepalis even had a phone line when the war broke out in 2003.
Asked what it was doing to stop the flow of workers from these nations or to monitor its subcontractors, KBR said questions "regarding the recruitment practices of subcontractors should be directed to the subcontractor."
The U.S. Army, which oversees the contract, said much the same. "Questions involving alleged misconduct toward employees by subcontractor firms should be addressed to those firms, as these are not Army issues."
An estimated 10,000 Nepal citizens are now in Iraq despite policies restricting such work.
Editor's note: Read a local soldier's blog entry about "Third Country Nationals" in the timesunion.com Life During Wartime blog.
Sunday, October 16, 2005
Monday, September 26, 2005
Missteps Hamper Iraqi Oil Recovery - Los Angeles Times
Efforts to fix facilities founder. Hundreds of millions of dollars are lost as fields deteriorate.
By T. Christian Miller
Times Staff Writer
September 26, 2005
QARMAT ALI, Iraq — The failure to rebuild key components of Iraq's petroleum industry has impeded oil production and may have permanently damaged the largest of the country's vast oil fields, American and Iraqi experts say.
The deficiencies have deprived Iraq of hundreds of millions of dollars in potential revenue needed for national rebuilding efforts and kept millions of barrels of oil off the world market at a time of growing demand.
Engineering mistakes, poor leadership and shifting priorities have delayed or led to the cancellation of several projects critical to restoring Iraq's oil industry, according to interviews with more than two dozen current and former U.S. and Iraqi officials and industry experts.
The troubles have been compounded in some cases by security issues, poor maintenance and disputes between the U.S. and its main contractor, Houston-based KBR, a subsidiary of Halliburton Corp., according to the interviews and documents.
Despite the United States' spending more than $1.3 billion, oil production remains below the estimated prewar level of 2.5 million barrels per day and well below a December 2004 goal of up to 3 million barrels per day.
Interviews and documents from whistle-blowers show problems with at least three projects deemed crucial to Iraq's oil production:
• Qarmat Ali water treatment plant. This massive pumping complex is needed to inject water into Iraq's southern oil fields to aid in oil extraction. Under a no-bid contract, KBR was instructed to repair the complex at a cost of up to $225 million, but not the leaky pipelines carrying water to the fields. As a result, the water cannot be delivered reliably, raising concerns that some of Iraq's oil may not be recoverable.
• Al Fathah pipelines. As part of the same no-bid contract, the U.S. gave KBR a job worth up to $70 million to rebuild a pipeline network in northern Iraq despite concerns that the project was unsound. In the end, KBR built fewer than half the pipelines, and the project was given to another contractor. The delay has aggravated oil transport problems, which have forced Iraq to inject millions of barrels of oil back into the ground, a harmful practice for the oil fields and the environment. A government audit is being conducted based on a complaint by a whistle-blower.
• Southern oil well repairs. A $37-million project to boost production at dozens of Iraqi oil wells was canceled after KBR refused to proceed without a U.S. guarantee to protect it from possible lawsuits.
It is striking that although the reconstruction of the northern oil infrastructure has been hampered by security issues, the southern oil fields — which account for most production — have been attacked only a few times since the conflict in Iraq began but still face serious problems.
After the 2003 invasion, U.S. officials and KBR moved swiftly, resuming oil production only a month after the war began and slowly increasing output. But after matching the prewar peak of 2.5 million barrels a day in September 2004, production declined to about 2.2 million barrels daily last month.
If the U.S. had successfully completed the planned repairs, Iraq could be producing up to 500,000 additional barrels a day, according to some estimates.
The difference would add up to more than $8 billion a year — money that the Iraqi government could use for new schools and hospitals, to supplant U.S. reconstruction spending and improve the Iraqi security forces that Washington hopes will replace American troops.
U.S. reconstruction officials acknowledged the delays but said the efforts had turned a corner and that despite the contract disputes, they were satisfied with KBR's performance. The company avoided a possible cancellation of its contract this year after addressing problems associated with cost estimates. The U.S. also has brought in an Australian-American firm to finish several projects started by KBR that had been delayed.
"Overall, reconstruction is moving forward," said Bob Todor, the senior U.S. advisor to Iraq's Oil Ministry. "Like everything else, it took longer than everyone expected."
KBR officials, meanwhile, said their work reflected the orders they had been given by U.S. reconstruction officials. The rebuilding, they said, takes place under difficult conditions, especially in the north.
"KBR can't emphasize enough that it performs all work at the direction of the U.S. government," spokeswoman Melissa Norcross said in an e-mailed response to questions. "We only do what we are tasked to do."
Current and former Iraqi oil officials expressed disappointment, frustration and anger at the U.S. performance.
They said that rather than tapping Iraqi state oil company officials, the U.S. program was overseen by American officials with little experience in the oil industry. In an interview, one senior U.S. official managing part of the restoration effort jokingly described his knowledge level as "Oil for Dummies."
Iraqi officials also said KBR relied too heavily on foreign contractors, conducted lengthy, unnecessary studies and failed to deliver promised equipment. They acknowledged that Iraq needed to spend more on its oil industry but wondered why the U.S. investment had not had more of an effect.
"They need to speed it up a bit," said Ibrahim Bahr Uloum, the Iraqi oil minister, in an interview. "There's great work to be done in all these fields."
Other Iraqis said that the U.S. and KBR simply failed to deliver. "I think we had the worst quality of U.S. service, staff and companies," said Jaafar Altaie, who was a senior planner at the Oil Ministry and now works with Amman-based Tabouk Energy Group, a consulting firm. "We had maximum rhetoric and minimum results on the ground."
Only weeks after the U.S.-led invasion in March 2003, the U.S. hired KBR under a no-bid contract to repair the Qarmat Ali water treatment plant, a complex of twisting pipes and rusting metal that sits in the middle of drab, flat desert a few miles north of Basra in southern Iraq.
Both the United States and Iraq considered the water treatment plant a high priority. Oil rises from the ground in southern Iraq because of natural pressure in the sands. As the oil surges out, the pressure declines, making extraction more difficult.
*
Oil and Water
To counter the problem, the Iraqis inject water into the earth to maintain the pressure in the oil field. That water, however, must be first cleaned at Qarmat Ali so that particles or bacteria don't plug up the holes in the soil that allow the oil to rise.
By August 2004, KBR had completed most repairs at the plant, which had badly deteriorated during 12 years of sanctions and because of the looting that followed the U.S.-led invasion. KBR rebuilt motors, refurbished pumps and installed electrical generators and chlorination and anti-corrosion systems.
But when KBR opened the taps to send the treated water to Iraq's legendary Rumaila oil field, the deteriorated pipes were unable to handle the increased pressure. The pipeline burst repeatedly, delaying work for weeks on end, KBR and U.S. Army Corps of Engineers officials said. In the five months ending December 2004, KBR managed to send water through the pipes for only 29 days. Even today, the plant delivers only about a third of its capacity.
To make matters worse, farmers tapped into the pipeline, using it to irrigate their fields. KBR found one local who was watering his entire tomato crop courtesy of the Qarmat Ali pipeline.
Despite the problems, the U.S. never assigned KBR the task of repairing the aging lines. Todor, the U.S. oil advisor, said that by the time the problem became apparent, most of the money available in the south had already been committed to other projects.
The Iraqis, meanwhile, have not invested in repairs, using most of their oil revenue for fuel subsidies and salaries.
"The Iraqis have not had the money to do the work," Todor said.
On a recent tour of the sprawling, decades-old complex, its decrepit state was obvious. The walls were cracked; motors, valves and pipes were rusted. Dirt and mud covered the floors.
Only two of the five pumps that KBR fixed were operating. An Iraqi engineer said a machine to add cleaning chemicals to the water was unusable. Another system to protect the interior of the pipelines from rust was not being used for fear that the anti-corrosion additive would damage the oil fields.
Neither the U.S. nor KBR have provided additional maintenance or operating funds to the plant since turning it over to the Iraqis. For their part, the Iraqis said KBR had installed substandard equipment and had not provided sufficient training.
"It's useless. We have material from KBR, but we don't have documents on how to use it," said the Iraqi engineer, who requested anonymity because of security concerns.
KBR said it had done all that was asked of it.
"KBR is not responsible to support with the ongoing maintenance and repair of these facilities unless tasked to do so" by the U.S. government, said Stephanie Price, another KBR spokeswoman, in response to questions sent by e-mail. "To date, most of the follow-on problems at [Qarmat Ali] have stemmed from the overall age of the equipment and the availability of spare parts."
A big part of the problem, some U.S. officials said, was the Army Corps of Engineers, which oversaw initial repairs under the Restore Iraqi Oil project. The Corps, which had little experience in the oil industry before the war, was forced to rely on advice from KBR and other experts in making rebuilding decisions.
Bunnatine Greenhouse, who was the top contracting official in the Corps, sharply criticized its involvement at a congressional hearing in June. "The Corps had absolutely no competencies related to oil production," said Greenhouse, who also criticized the no-bid contracts awarded to KBR. She was demoted in August. The end result of the U.S. investment here is that Qarmat Ali still does not produce enough water to be used for injection into the oil fields, nor can the water reliably be delivered to the injection stations, which also remain in need of repair.
That means that every day, Iraq forgoes about 200,000 barrels of oil — or about $11 million in revenue at current Iraqi crude prices, according to Iraqi and U.S. officials. A joint venture formed by Australian firm WorleyParsons Ltd. and Pasadena-based Parsons Corp. was recently brought in to complete the work that KBR began.
The lack of reliable water injection has led to a debate about whether Iraq's southern oil fields have been permanently damaged. Although nobody is sure, some oil experts fear that America's failure to fix the problems has worsened damage that may have occurred during Saddam Hussein's rule.
United Nations oil experts have told the U.S. government that some oil reservoirs in southern Iraq have been so badly managed that the Iraqis will be able to recover only between 15% to 25% of the oil, well below the industry standard of 35% to 60%, a recent Department of Energy report states.
Norm Szydlowski, a U.S. consultant to the Iraqi Oil Ministry, said that the Iraqis had begun an in-depth study of the health of their fields, the first in years.
The possibility of damage "was and is a focus. It is a significant concern," Szydlowski said. "The extent of the potential damage is really unknown. The Iraqis prudently have been working at this stage of the game as quickly as they can to get the right analysis of their reservoirs."
But some said the U.S. and Iraq needed to work harder, especially on fixing Qarmat Ali.
"It's frustrating. You've got one of the biggest fields in the world that's sitting there and needs some help," said one contractor familiar with the project who asked not to be named. "It's like your favorite pet dog got hurt and you want to help it."
The status of reservoirs elsewhere in Iraq is also a concern. Once an oil well begins production, it is difficult to shut it down. But attacks on pipelines in the north are so frequent that the Iraqis can't export the oil, nor do they have enough capacity to store it.
As a result, when oil production backs up, the Iraqis are forced to pump the oil back into the ground — a practice widely condemned in the industry because the re-injected oil, which is thicker, can plug fissures through which the petroleum flows. Iraq puts almost 200,000 barrels of oil per day back into the ground — meaning that Iraq's net production is even lower than the official figure of 2.2 million barrels.
"Once you have damaged the fields, there is almost nothing you can do about it. I have a great worry that we are not too far from it," said Farouk Kasim, an Iraqi oil expert, at a conference in London this summer. "The last two years have been a nightmare."
*
Al Fathah
The pipelines at Al Fathah bridge became one of the nightmares of the reconstruction effort.
A squat concrete and steel structure over the Tigris River in northern Iraq, the bridge was bombed by U.S. jets during the 2003 invasion. The attack knocked out a stretch and destroyed a network of oil and gas pipelines that ran underneath.
The 16 pipelines were a crucial part of Iraq's deteriorating oil infrastructure, moving crude and other petroleum products from northern wells around Kirkuk to Baiji, a dusty refinery town south of the bridge.
The Army Corps of Engineers decided it would be quicker to run the pipelines under the riverbed instead of repairing the bridge. The agency ordered KBR to drill under the river despite warnings against such a route, said a Corps contracting official involved in the project. The official asked to remain anonymous, fearing retaliation from commanders.
Trouble began soon after the project started in January 2004. The soil was unstable, and a borehole drilled to hold the pipes collapsed. In an e-mail obtained by The Times, the contracting official described the project as "placing a pipe in a large box of marbles."
The project, originally envisioned to take 10 weeks, turned into a nearly yearlong job. As the months went by, the cost soared. In the end, KBR managed to install six of the sixteen pipelines originally planned. Although the Corps said it still had not determined the final cost of the project, one source said it might approach $88 million. KBR defended the project, saying that "unforeseen" subsurface conditions had resulted in "technical challenges." They also noted that the horizontal drilling needed to install the pipelines below the riverbed had never been done in Iraq, requiring the importation of new equipment.
"KBR ultimately completed six of the drill lines and installed six of the pipelines when [the Army Corps] decided to stop work on the project due to funding limitations at the time," Price, the KBR spokeswoman, wrote.
Todor, the advisor to the Oil Ministry, said neither the Army Corps nor KBR anticipated the poor soil conditions. KBR and Army Corps officials said they were unaware of any study warning against the pipeline plan.
"In hindsight, maybe you would have done things differently," Todor said.
In February this year, the U.S. reassigned the pipeline crossing to the joint venture led by WorleyParsons. When the project is completed, Iraq will be able to increase exports and stabilize a system that has suffered constant attack by insurgents in the region around the bridge. Increased flow also will mean that Iraq will have to inject less oil back in the ground around its northern fields.
Two years after the project was first proposed, a senior U.S. official said the fully restored pipeline network would be completed this fall.
*
The Wells
Another crucial aspect to restoring Iraq's oil production have been "well work-overs" — cleanup jobs that can improve the productivity of oil wells.
The Project and Contracting Office, a government reconstruction agency, wanted KBR to perform 30 work-overs on wells in southern Iraq for $37 million.
Negotiations got bogged down over KBR's demand that the U.S. indemnify it in case of lawsuits arising from the work, a senior U.S. official said.
KBR insisted on the guarantee, saying that indemnity was provided by governments worldwide. The U.S. said that only the Iraqi government, as a sovereign nation, could give such protection. In July, the two sides reached an impasse and the U.S. terminated the project, according to a statement. Other companies approached by U.S. officials also refused to take on the project without indemnification.
The U.S. has now decided to use the $37 million to train Iraqis to do the work-overs. At stake: an estimated increase of 300,000 barrels of oil per day.
"Indemnification was a big problem. For a lot of companies, it was a stumbling block," said a senior U.S. official overseeing the work-over project. "Our schedule, though behind, should get a lot better now."
*
Broken Promises
Such promises ring hollow to Iraqis, who are frustrated with the U.S. and KBR. Abdul Raof Ibraheem is a manager at one of Iraq's largest refineries. His massive complex of rusting metal spheres is nearly silent these days. KBR is supposed to be supplying parts to fix the plant. But the firm recently told Ibraheem that the worldwide spending boom in oil infrastructure had made it hard to purchase the required equipment. The parts will arrive perhaps by next summer, KBR officials told him.
Ibraheem said he had expected more.
"Frankly speaking, I am not satisfied with KBR's work. What I saw from KBR, their performance is not what we had expected. We heard a lot about KBR, but we're not satisfied.
"The results have meant nothing for us."
By T. Christian Miller
Times Staff Writer
September 26, 2005
QARMAT ALI, Iraq — The failure to rebuild key components of Iraq's petroleum industry has impeded oil production and may have permanently damaged the largest of the country's vast oil fields, American and Iraqi experts say.
The deficiencies have deprived Iraq of hundreds of millions of dollars in potential revenue needed for national rebuilding efforts and kept millions of barrels of oil off the world market at a time of growing demand.
Engineering mistakes, poor leadership and shifting priorities have delayed or led to the cancellation of several projects critical to restoring Iraq's oil industry, according to interviews with more than two dozen current and former U.S. and Iraqi officials and industry experts.
The troubles have been compounded in some cases by security issues, poor maintenance and disputes between the U.S. and its main contractor, Houston-based KBR, a subsidiary of Halliburton Corp., according to the interviews and documents.
Despite the United States' spending more than $1.3 billion, oil production remains below the estimated prewar level of 2.5 million barrels per day and well below a December 2004 goal of up to 3 million barrels per day.
Interviews and documents from whistle-blowers show problems with at least three projects deemed crucial to Iraq's oil production:
• Qarmat Ali water treatment plant. This massive pumping complex is needed to inject water into Iraq's southern oil fields to aid in oil extraction. Under a no-bid contract, KBR was instructed to repair the complex at a cost of up to $225 million, but not the leaky pipelines carrying water to the fields. As a result, the water cannot be delivered reliably, raising concerns that some of Iraq's oil may not be recoverable.
• Al Fathah pipelines. As part of the same no-bid contract, the U.S. gave KBR a job worth up to $70 million to rebuild a pipeline network in northern Iraq despite concerns that the project was unsound. In the end, KBR built fewer than half the pipelines, and the project was given to another contractor. The delay has aggravated oil transport problems, which have forced Iraq to inject millions of barrels of oil back into the ground, a harmful practice for the oil fields and the environment. A government audit is being conducted based on a complaint by a whistle-blower.
• Southern oil well repairs. A $37-million project to boost production at dozens of Iraqi oil wells was canceled after KBR refused to proceed without a U.S. guarantee to protect it from possible lawsuits.
It is striking that although the reconstruction of the northern oil infrastructure has been hampered by security issues, the southern oil fields — which account for most production — have been attacked only a few times since the conflict in Iraq began but still face serious problems.
After the 2003 invasion, U.S. officials and KBR moved swiftly, resuming oil production only a month after the war began and slowly increasing output. But after matching the prewar peak of 2.5 million barrels a day in September 2004, production declined to about 2.2 million barrels daily last month.
If the U.S. had successfully completed the planned repairs, Iraq could be producing up to 500,000 additional barrels a day, according to some estimates.
The difference would add up to more than $8 billion a year — money that the Iraqi government could use for new schools and hospitals, to supplant U.S. reconstruction spending and improve the Iraqi security forces that Washington hopes will replace American troops.
U.S. reconstruction officials acknowledged the delays but said the efforts had turned a corner and that despite the contract disputes, they were satisfied with KBR's performance. The company avoided a possible cancellation of its contract this year after addressing problems associated with cost estimates. The U.S. also has brought in an Australian-American firm to finish several projects started by KBR that had been delayed.
"Overall, reconstruction is moving forward," said Bob Todor, the senior U.S. advisor to Iraq's Oil Ministry. "Like everything else, it took longer than everyone expected."
KBR officials, meanwhile, said their work reflected the orders they had been given by U.S. reconstruction officials. The rebuilding, they said, takes place under difficult conditions, especially in the north.
"KBR can't emphasize enough that it performs all work at the direction of the U.S. government," spokeswoman Melissa Norcross said in an e-mailed response to questions. "We only do what we are tasked to do."
Current and former Iraqi oil officials expressed disappointment, frustration and anger at the U.S. performance.
They said that rather than tapping Iraqi state oil company officials, the U.S. program was overseen by American officials with little experience in the oil industry. In an interview, one senior U.S. official managing part of the restoration effort jokingly described his knowledge level as "Oil for Dummies."
Iraqi officials also said KBR relied too heavily on foreign contractors, conducted lengthy, unnecessary studies and failed to deliver promised equipment. They acknowledged that Iraq needed to spend more on its oil industry but wondered why the U.S. investment had not had more of an effect.
"They need to speed it up a bit," said Ibrahim Bahr Uloum, the Iraqi oil minister, in an interview. "There's great work to be done in all these fields."
Other Iraqis said that the U.S. and KBR simply failed to deliver. "I think we had the worst quality of U.S. service, staff and companies," said Jaafar Altaie, who was a senior planner at the Oil Ministry and now works with Amman-based Tabouk Energy Group, a consulting firm. "We had maximum rhetoric and minimum results on the ground."
Only weeks after the U.S.-led invasion in March 2003, the U.S. hired KBR under a no-bid contract to repair the Qarmat Ali water treatment plant, a complex of twisting pipes and rusting metal that sits in the middle of drab, flat desert a few miles north of Basra in southern Iraq.
Both the United States and Iraq considered the water treatment plant a high priority. Oil rises from the ground in southern Iraq because of natural pressure in the sands. As the oil surges out, the pressure declines, making extraction more difficult.
*
Oil and Water
To counter the problem, the Iraqis inject water into the earth to maintain the pressure in the oil field. That water, however, must be first cleaned at Qarmat Ali so that particles or bacteria don't plug up the holes in the soil that allow the oil to rise.
By August 2004, KBR had completed most repairs at the plant, which had badly deteriorated during 12 years of sanctions and because of the looting that followed the U.S.-led invasion. KBR rebuilt motors, refurbished pumps and installed electrical generators and chlorination and anti-corrosion systems.
But when KBR opened the taps to send the treated water to Iraq's legendary Rumaila oil field, the deteriorated pipes were unable to handle the increased pressure. The pipeline burst repeatedly, delaying work for weeks on end, KBR and U.S. Army Corps of Engineers officials said. In the five months ending December 2004, KBR managed to send water through the pipes for only 29 days. Even today, the plant delivers only about a third of its capacity.
To make matters worse, farmers tapped into the pipeline, using it to irrigate their fields. KBR found one local who was watering his entire tomato crop courtesy of the Qarmat Ali pipeline.
Despite the problems, the U.S. never assigned KBR the task of repairing the aging lines. Todor, the U.S. oil advisor, said that by the time the problem became apparent, most of the money available in the south had already been committed to other projects.
The Iraqis, meanwhile, have not invested in repairs, using most of their oil revenue for fuel subsidies and salaries.
"The Iraqis have not had the money to do the work," Todor said.
On a recent tour of the sprawling, decades-old complex, its decrepit state was obvious. The walls were cracked; motors, valves and pipes were rusted. Dirt and mud covered the floors.
Only two of the five pumps that KBR fixed were operating. An Iraqi engineer said a machine to add cleaning chemicals to the water was unusable. Another system to protect the interior of the pipelines from rust was not being used for fear that the anti-corrosion additive would damage the oil fields.
Neither the U.S. nor KBR have provided additional maintenance or operating funds to the plant since turning it over to the Iraqis. For their part, the Iraqis said KBR had installed substandard equipment and had not provided sufficient training.
"It's useless. We have material from KBR, but we don't have documents on how to use it," said the Iraqi engineer, who requested anonymity because of security concerns.
KBR said it had done all that was asked of it.
"KBR is not responsible to support with the ongoing maintenance and repair of these facilities unless tasked to do so" by the U.S. government, said Stephanie Price, another KBR spokeswoman, in response to questions sent by e-mail. "To date, most of the follow-on problems at [Qarmat Ali] have stemmed from the overall age of the equipment and the availability of spare parts."
A big part of the problem, some U.S. officials said, was the Army Corps of Engineers, which oversaw initial repairs under the Restore Iraqi Oil project. The Corps, which had little experience in the oil industry before the war, was forced to rely on advice from KBR and other experts in making rebuilding decisions.
Bunnatine Greenhouse, who was the top contracting official in the Corps, sharply criticized its involvement at a congressional hearing in June. "The Corps had absolutely no competencies related to oil production," said Greenhouse, who also criticized the no-bid contracts awarded to KBR. She was demoted in August. The end result of the U.S. investment here is that Qarmat Ali still does not produce enough water to be used for injection into the oil fields, nor can the water reliably be delivered to the injection stations, which also remain in need of repair.
That means that every day, Iraq forgoes about 200,000 barrels of oil — or about $11 million in revenue at current Iraqi crude prices, according to Iraqi and U.S. officials. A joint venture formed by Australian firm WorleyParsons Ltd. and Pasadena-based Parsons Corp. was recently brought in to complete the work that KBR began.
The lack of reliable water injection has led to a debate about whether Iraq's southern oil fields have been permanently damaged. Although nobody is sure, some oil experts fear that America's failure to fix the problems has worsened damage that may have occurred during Saddam Hussein's rule.
United Nations oil experts have told the U.S. government that some oil reservoirs in southern Iraq have been so badly managed that the Iraqis will be able to recover only between 15% to 25% of the oil, well below the industry standard of 35% to 60%, a recent Department of Energy report states.
Norm Szydlowski, a U.S. consultant to the Iraqi Oil Ministry, said that the Iraqis had begun an in-depth study of the health of their fields, the first in years.
The possibility of damage "was and is a focus. It is a significant concern," Szydlowski said. "The extent of the potential damage is really unknown. The Iraqis prudently have been working at this stage of the game as quickly as they can to get the right analysis of their reservoirs."
But some said the U.S. and Iraq needed to work harder, especially on fixing Qarmat Ali.
"It's frustrating. You've got one of the biggest fields in the world that's sitting there and needs some help," said one contractor familiar with the project who asked not to be named. "It's like your favorite pet dog got hurt and you want to help it."
The status of reservoirs elsewhere in Iraq is also a concern. Once an oil well begins production, it is difficult to shut it down. But attacks on pipelines in the north are so frequent that the Iraqis can't export the oil, nor do they have enough capacity to store it.
As a result, when oil production backs up, the Iraqis are forced to pump the oil back into the ground — a practice widely condemned in the industry because the re-injected oil, which is thicker, can plug fissures through which the petroleum flows. Iraq puts almost 200,000 barrels of oil per day back into the ground — meaning that Iraq's net production is even lower than the official figure of 2.2 million barrels.
"Once you have damaged the fields, there is almost nothing you can do about it. I have a great worry that we are not too far from it," said Farouk Kasim, an Iraqi oil expert, at a conference in London this summer. "The last two years have been a nightmare."
*
Al Fathah
The pipelines at Al Fathah bridge became one of the nightmares of the reconstruction effort.
A squat concrete and steel structure over the Tigris River in northern Iraq, the bridge was bombed by U.S. jets during the 2003 invasion. The attack knocked out a stretch and destroyed a network of oil and gas pipelines that ran underneath.
The 16 pipelines were a crucial part of Iraq's deteriorating oil infrastructure, moving crude and other petroleum products from northern wells around Kirkuk to Baiji, a dusty refinery town south of the bridge.
The Army Corps of Engineers decided it would be quicker to run the pipelines under the riverbed instead of repairing the bridge. The agency ordered KBR to drill under the river despite warnings against such a route, said a Corps contracting official involved in the project. The official asked to remain anonymous, fearing retaliation from commanders.
Trouble began soon after the project started in January 2004. The soil was unstable, and a borehole drilled to hold the pipes collapsed. In an e-mail obtained by The Times, the contracting official described the project as "placing a pipe in a large box of marbles."
The project, originally envisioned to take 10 weeks, turned into a nearly yearlong job. As the months went by, the cost soared. In the end, KBR managed to install six of the sixteen pipelines originally planned. Although the Corps said it still had not determined the final cost of the project, one source said it might approach $88 million. KBR defended the project, saying that "unforeseen" subsurface conditions had resulted in "technical challenges." They also noted that the horizontal drilling needed to install the pipelines below the riverbed had never been done in Iraq, requiring the importation of new equipment.
"KBR ultimately completed six of the drill lines and installed six of the pipelines when [the Army Corps] decided to stop work on the project due to funding limitations at the time," Price, the KBR spokeswoman, wrote.
Todor, the advisor to the Oil Ministry, said neither the Army Corps nor KBR anticipated the poor soil conditions. KBR and Army Corps officials said they were unaware of any study warning against the pipeline plan.
"In hindsight, maybe you would have done things differently," Todor said.
In February this year, the U.S. reassigned the pipeline crossing to the joint venture led by WorleyParsons. When the project is completed, Iraq will be able to increase exports and stabilize a system that has suffered constant attack by insurgents in the region around the bridge. Increased flow also will mean that Iraq will have to inject less oil back in the ground around its northern fields.
Two years after the project was first proposed, a senior U.S. official said the fully restored pipeline network would be completed this fall.
*
The Wells
Another crucial aspect to restoring Iraq's oil production have been "well work-overs" — cleanup jobs that can improve the productivity of oil wells.
The Project and Contracting Office, a government reconstruction agency, wanted KBR to perform 30 work-overs on wells in southern Iraq for $37 million.
Negotiations got bogged down over KBR's demand that the U.S. indemnify it in case of lawsuits arising from the work, a senior U.S. official said.
KBR insisted on the guarantee, saying that indemnity was provided by governments worldwide. The U.S. said that only the Iraqi government, as a sovereign nation, could give such protection. In July, the two sides reached an impasse and the U.S. terminated the project, according to a statement. Other companies approached by U.S. officials also refused to take on the project without indemnification.
The U.S. has now decided to use the $37 million to train Iraqis to do the work-overs. At stake: an estimated increase of 300,000 barrels of oil per day.
"Indemnification was a big problem. For a lot of companies, it was a stumbling block," said a senior U.S. official overseeing the work-over project. "Our schedule, though behind, should get a lot better now."
*
Broken Promises
Such promises ring hollow to Iraqis, who are frustrated with the U.S. and KBR. Abdul Raof Ibraheem is a manager at one of Iraq's largest refineries. His massive complex of rusting metal spheres is nearly silent these days. KBR is supposed to be supplying parts to fix the plant. But the firm recently told Ibraheem that the worldwide spending boom in oil infrastructure had made it hard to purchase the required equipment. The parts will arrive perhaps by next summer, KBR officials told him.
Ibraheem said he had expected more.
"Frankly speaking, I am not satisfied with KBR's work. What I saw from KBR, their performance is not what we had expected. We heard a lot about KBR, but we're not satisfied.
"The results have meant nothing for us."
Friday, September 23, 2005
HoustonChronicle.com - Auditors investigate Katrina contracts
Halliburton, Bechtel deals not clearly defined
By HOPE YEN
Associated Press
WASHINGTON - Government auditors are questioning whether several multimillion-dollar Katrina contracts — including one involving a subsidiary of Houston-based Halliburton Co. — invite abuse because they are open-ended and not clearly defined.
The contracts, for services such as levee repair and emergency housing, were granted to companies based on their pre-existing business relationships with the government. Critics say the arrangements foster cronyism because a few repeat players typically get the best deals. The Government Accountability Office and the Homeland Security Department, which has primary responsibility for reviewing the billions of dollars worth of Katrina contracts, said they will focus on agreements awarded with little or no competition.
They include "indefinite delivery-indefinite quantity" contracts such as those involving Halliburton Co. subsidiary KBR and Bechtel Corp. Both firms have strong ties to the Bush administration.
"We've been looking at all the contracts from day one," said Richard Skinner, the Homeland Security Department's inspector general. "One concern is whether you are getting the fair market value. The second is whether the people we are giving contracts to are the best qualified."
Of the 22 contracts awarded so far by the Army Corps of Engineers, 11 are so-called ID-IQs; so are several granted by the Federal Emergency Management Agency.
One such contract is a $16 million government work order given to the subsidiary of Halliburton, the company headed by Vice President Dick Cheney from 1995 to 2000 that has been accused of overcharging the government for work in Iraq. The deal, to plug levee breaches, was awarded as part of a Navy construction contract.
Previous government audits have cited these contracts as vulnerable to abuse because government officials and companies can exploit their broadly defined terms, such as services.
"We want to make sure agencies have processes and procedures in place to ensure contracts are performed as required," said Bill Woods, a director at the GAO, the investigative arm of Congress.
"Things can slip through the cracks."
Other targets include an agreement with Bechtel Corp. for short-term housing that was awarded without competition. The company, whose CEO Riley Bechtel served on President Bush's Export Council from 2003-04, began providing work even though a formal contract with cost and payment provisions has yet to be signed.
Bechtel spokesman Howard Menaker said the company was asked to provide an immediate supply of trailers and mobile homes in the Gulf Coast based on Bechtel's "long and accomplished history in emergency response."
By HOPE YEN
Associated Press
WASHINGTON - Government auditors are questioning whether several multimillion-dollar Katrina contracts — including one involving a subsidiary of Houston-based Halliburton Co. — invite abuse because they are open-ended and not clearly defined.
The contracts, for services such as levee repair and emergency housing, were granted to companies based on their pre-existing business relationships with the government. Critics say the arrangements foster cronyism because a few repeat players typically get the best deals. The Government Accountability Office and the Homeland Security Department, which has primary responsibility for reviewing the billions of dollars worth of Katrina contracts, said they will focus on agreements awarded with little or no competition.
They include "indefinite delivery-indefinite quantity" contracts such as those involving Halliburton Co. subsidiary KBR and Bechtel Corp. Both firms have strong ties to the Bush administration.
"We've been looking at all the contracts from day one," said Richard Skinner, the Homeland Security Department's inspector general. "One concern is whether you are getting the fair market value. The second is whether the people we are giving contracts to are the best qualified."
Of the 22 contracts awarded so far by the Army Corps of Engineers, 11 are so-called ID-IQs; so are several granted by the Federal Emergency Management Agency.
One such contract is a $16 million government work order given to the subsidiary of Halliburton, the company headed by Vice President Dick Cheney from 1995 to 2000 that has been accused of overcharging the government for work in Iraq. The deal, to plug levee breaches, was awarded as part of a Navy construction contract.
Previous government audits have cited these contracts as vulnerable to abuse because government officials and companies can exploit their broadly defined terms, such as services.
"We want to make sure agencies have processes and procedures in place to ensure contracts are performed as required," said Bill Woods, a director at the GAO, the investigative arm of Congress.
"Things can slip through the cracks."
Other targets include an agreement with Bechtel Corp. for short-term housing that was awarded without competition. The company, whose CEO Riley Bechtel served on President Bush's Export Council from 2003-04, began providing work even though a formal contract with cost and payment provisions has yet to be signed.
Bechtel spokesman Howard Menaker said the company was asked to provide an immediate supply of trailers and mobile homes in the Gulf Coast based on Bechtel's "long and accomplished history in emergency response."
Monday, September 19, 2005
BostonHerald.com - Business News: Halliburton, set to clean up, denies overcharges
By Brett Arends
Monday, September 19, 2005
Politically-wired Halliburton Inc. is denying it overbilled the U.S government in Iraq – just three months after a Pentagon report showed $422 million in ``unsupported'' costs in the company's contracts.
The company, which is in line for Federal work helping rebuild New Orleans and the Gulf Coast, also responded to scrutiny of its CEO's growing fortune by taking the unusual step of highlighting the share option gains of an executive at a rival firm.
Halliburton has been a target of Bush administration critics over its work in Iraq. Vice-President Dick Cheney ran the company from 1995 to 2000.
In an exclusive communication to the Herald, company communications director Cathy Mann said audits of Halliburton's $9 billion in Iraq contracts ``are part of the normal contracting process'' and their role ``is advisory only. Any claims that the figures contained in these audit reports are `overcharges' are uninformed and flat wrong.''
Her assertion comes just three months after the release of a Pentagon report which showed $1.03 billion in ``questioned'' costs and $422 million in ``unsupported'' costs in the company's Iraq contracts.
The Department of Defense Audit Agency, in a detailed review, criticized the company for failing to provide ``current, accurate, and complete data'' on the financials of its Iraq work, noting the error was so bad ``it decreases the government confidence in and reliance on the contractor estimating system.''
Halliburton, at the time, disputed many of the findings. But it admitted, in a submission to the Defense Contract Audit Agency in December 2003, that ``we did not use current, accurate or complete information that was available for pricing of subcontracts.''
In one instance, the Pentagon found ``an approximate $67 million overstatement of proposed costs'' in Halliburton's bill setting up and running military canteens in Iraq.
In reply, Halliburton's own director of government compliance, William R. Walter, agreed with the point but disputed the figure. ``(T)he difference between the proposed cost of total dining facility costs and the amount using the current, accurate and complete data provided was a total of $37 million,'' he wrote.
``There are many excuses and reasons available – but – in the end, KBR did not include the most current data in our proposal,'' he wrote to the Pentagon.
KBR is the Halliburton division involved in the Iraqi work.
The company's latest statement followed a Herald article last week about Halliburton's soaring stock price and the resulting paper profits made by CEO David Lesar.
Communications director Cathy Mann asked why no ``other energy services company or executive'' was cited in the analysis, adding: ``A review of public trading information for other energy services industry executives would have revealed that one Weatherford executive has exercised 446,839 shares since early September.''
Companies rarely point fingers at rivals, let alone at rival executives. Weatherford, like Halliburton and most of the big oil companies, is based in Houston, Tex.
Monday, September 19, 2005
Politically-wired Halliburton Inc. is denying it overbilled the U.S government in Iraq – just three months after a Pentagon report showed $422 million in ``unsupported'' costs in the company's contracts.
The company, which is in line for Federal work helping rebuild New Orleans and the Gulf Coast, also responded to scrutiny of its CEO's growing fortune by taking the unusual step of highlighting the share option gains of an executive at a rival firm.
Halliburton has been a target of Bush administration critics over its work in Iraq. Vice-President Dick Cheney ran the company from 1995 to 2000.
In an exclusive communication to the Herald, company communications director Cathy Mann said audits of Halliburton's $9 billion in Iraq contracts ``are part of the normal contracting process'' and their role ``is advisory only. Any claims that the figures contained in these audit reports are `overcharges' are uninformed and flat wrong.''
Her assertion comes just three months after the release of a Pentagon report which showed $1.03 billion in ``questioned'' costs and $422 million in ``unsupported'' costs in the company's Iraq contracts.
The Department of Defense Audit Agency, in a detailed review, criticized the company for failing to provide ``current, accurate, and complete data'' on the financials of its Iraq work, noting the error was so bad ``it decreases the government confidence in and reliance on the contractor estimating system.''
Halliburton, at the time, disputed many of the findings. But it admitted, in a submission to the Defense Contract Audit Agency in December 2003, that ``we did not use current, accurate or complete information that was available for pricing of subcontracts.''
In one instance, the Pentagon found ``an approximate $67 million overstatement of proposed costs'' in Halliburton's bill setting up and running military canteens in Iraq.
In reply, Halliburton's own director of government compliance, William R. Walter, agreed with the point but disputed the figure. ``(T)he difference between the proposed cost of total dining facility costs and the amount using the current, accurate and complete data provided was a total of $37 million,'' he wrote.
``There are many excuses and reasons available – but – in the end, KBR did not include the most current data in our proposal,'' he wrote to the Pentagon.
KBR is the Halliburton division involved in the Iraqi work.
The company's latest statement followed a Herald article last week about Halliburton's soaring stock price and the resulting paper profits made by CEO David Lesar.
Communications director Cathy Mann asked why no ``other energy services company or executive'' was cited in the analysis, adding: ``A review of public trading information for other energy services industry executives would have revealed that one Weatherford executive has exercised 446,839 shares since early September.''
Companies rarely point fingers at rivals, let alone at rival executives. Weatherford, like Halliburton and most of the big oil companies, is based in Houston, Tex.
Tuesday, September 13, 2005
Investigators to Monitor Katrina Contracts - Yahoo! News
By LARA JAKES JORDAN, Associated Press Writer
Tue Sep 13, 4:05 PM ET
A team of investigators is being sent to the Hurricane Katrina-ravaged Gulf Coast to follow the money — namely, billions of dollars in relief aid the federal government is pouring into the region without normal contracting safeguards.
The 30 Homeland Security Department investigators and auditors are part of what officials call an unprecedented effort to ensure federal funds are properly distributed in a rescue, relief and rebuilding process expected to exceed $100 billion.
The team is being dispatched to monitor government contractors' work in Alabama, Louisiana and Mississippi as critics call the spending deluge a disaster in waiting if not properly controlled.
"The message has gone out very clearly to everybody that we're going to be efficient, we're going to cut through red tape, but we're not going to cut though the laws," Homeland Security Secretary Michael Chertoff said Tuesday.
Yet many of the normal safeguards have been temporarily suspended in Katrina's wake to ensure emergency federal aid gets to victims as soon as possible. So far, Congress has approved spending $62 billion in Katrina-related relief efforts. Of $50 billion directed to the Federal Emergency Management Agency, an arm of Homeland Security, just over $9 billion has so far been spent, FEMA spokeswoman Natalie Rule said.
"It is entirely appropriate that the money go out just as quickly as possible to people whom we think need it, and to worthy contractors on a competitive basis," said former Homeland Security inspector general Clark Kent Ervin. "But in the rush to do it, there is real potential for waste and certainly for fraud as well."
Congress also let federal employees temporarily charge up to $250,000 on government credit cards for hurricane rescue and relief operations. Guidelines issued Tuesday by the White House budget office said the new spending authority will go only to select individuals, and many purchases will require prior approval.
Some contracts, including five with emergency housing and construction companies, were awarded hurriedly without undergoing normal competitive bidding processes. Meanwhile, the Bush administration has waived prevailing wage requirements that ensure government-contracted workers in disaster areas are fairly compensated.
Among the most controversial Katrina awards is one that the Homeland Security team cannot investigate: a $16.6 million contract with Kellogg, Brown & Root Services Inc. of Arlington, Va., for emergency repairs at Gulf Coast naval and Marine facilities. The money is part of a $500 million Navy contract that KBR won by competitive bid last July.
Because the Pentagon awarded the KBR contract, Homeland Security has no authority to audit it. But KBR, a subsidiary of Halliburton Co., has been at the center of scrutiny for receiving a five-year, no-bid contract to restore Iraqi oil fields shortly before the war began in 2003. Vice President Dick Cheney headed Halliburton from 1995 to 2000, and Democrats have questioned whether the company has gotten favorable treatment because of his connection.
"Congress is rightly spending billions of dollars to help the people and businesses of the Gulf Coast who have been devastated by Hurricane Katrina," House Democratic leader Nancy Pelosi said. Over the weekend she called for an independent commission to oversee relief contracts "to ensure taxpayers' money goes to those in need, not to fraudulent contractors."
The Homeland Security investigators are part of a $15 million effort by the department's inspector general that Congress approved last week to keep an eye on Katrina relief spending.
Department officials believe the money represents the first time emergency funds have been set aside for FEMA or Homeland Security's internal watchdogs to monitor relief spending. Even investigations into contracts after the Sept. 11, 2001, terror attacks were paid for out of FEMA's relatively meager budget for internal audits.
"However, Katrina costs will be far greater than those costs associated with the federal response/recovery for 9/11," said Homeland Security Inspector General Richard Skinner, who ran FEMA's internal watchdog unit after the terror attacks.
A spokesman for Bechtel Corp. said he did not know how much the San Francisco-based engineering and construction company won to provide emergency housing to hurricane victims in southern Mississippi. But he said Bechtel was still negotiating its contract with FEMA, even after it began relief efforts around Sept. 1.
Generally, Katrina contractors "will be given the benefit of the doubt," Senate Appropriations Committee Chairman Sen. Thad Cochran (news, bio, voting record), R-Miss., said.
FEMA spokesman James McIntyre put it more bluntly: "You had 200,000 people who were displaced, possibly more," he said Monday. "We needed to get families into housing, as soon as possible, and off the floor of the stadium. "We needed the contracts to hit the ground running to get that process up and running."
___
Tue Sep 13, 4:05 PM ET
A team of investigators is being sent to the Hurricane Katrina-ravaged Gulf Coast to follow the money — namely, billions of dollars in relief aid the federal government is pouring into the region without normal contracting safeguards.
The 30 Homeland Security Department investigators and auditors are part of what officials call an unprecedented effort to ensure federal funds are properly distributed in a rescue, relief and rebuilding process expected to exceed $100 billion.
The team is being dispatched to monitor government contractors' work in Alabama, Louisiana and Mississippi as critics call the spending deluge a disaster in waiting if not properly controlled.
"The message has gone out very clearly to everybody that we're going to be efficient, we're going to cut through red tape, but we're not going to cut though the laws," Homeland Security Secretary Michael Chertoff said Tuesday.
Yet many of the normal safeguards have been temporarily suspended in Katrina's wake to ensure emergency federal aid gets to victims as soon as possible. So far, Congress has approved spending $62 billion in Katrina-related relief efforts. Of $50 billion directed to the Federal Emergency Management Agency, an arm of Homeland Security, just over $9 billion has so far been spent, FEMA spokeswoman Natalie Rule said.
"It is entirely appropriate that the money go out just as quickly as possible to people whom we think need it, and to worthy contractors on a competitive basis," said former Homeland Security inspector general Clark Kent Ervin. "But in the rush to do it, there is real potential for waste and certainly for fraud as well."
Congress also let federal employees temporarily charge up to $250,000 on government credit cards for hurricane rescue and relief operations. Guidelines issued Tuesday by the White House budget office said the new spending authority will go only to select individuals, and many purchases will require prior approval.
Some contracts, including five with emergency housing and construction companies, were awarded hurriedly without undergoing normal competitive bidding processes. Meanwhile, the Bush administration has waived prevailing wage requirements that ensure government-contracted workers in disaster areas are fairly compensated.
Among the most controversial Katrina awards is one that the Homeland Security team cannot investigate: a $16.6 million contract with Kellogg, Brown & Root Services Inc. of Arlington, Va., for emergency repairs at Gulf Coast naval and Marine facilities. The money is part of a $500 million Navy contract that KBR won by competitive bid last July.
Because the Pentagon awarded the KBR contract, Homeland Security has no authority to audit it. But KBR, a subsidiary of Halliburton Co., has been at the center of scrutiny for receiving a five-year, no-bid contract to restore Iraqi oil fields shortly before the war began in 2003. Vice President Dick Cheney headed Halliburton from 1995 to 2000, and Democrats have questioned whether the company has gotten favorable treatment because of his connection.
"Congress is rightly spending billions of dollars to help the people and businesses of the Gulf Coast who have been devastated by Hurricane Katrina," House Democratic leader Nancy Pelosi said. Over the weekend she called for an independent commission to oversee relief contracts "to ensure taxpayers' money goes to those in need, not to fraudulent contractors."
The Homeland Security investigators are part of a $15 million effort by the department's inspector general that Congress approved last week to keep an eye on Katrina relief spending.
Department officials believe the money represents the first time emergency funds have been set aside for FEMA or Homeland Security's internal watchdogs to monitor relief spending. Even investigations into contracts after the Sept. 11, 2001, terror attacks were paid for out of FEMA's relatively meager budget for internal audits.
"However, Katrina costs will be far greater than those costs associated with the federal response/recovery for 9/11," said Homeland Security Inspector General Richard Skinner, who ran FEMA's internal watchdog unit after the terror attacks.
A spokesman for Bechtel Corp. said he did not know how much the San Francisco-based engineering and construction company won to provide emergency housing to hurricane victims in southern Mississippi. But he said Bechtel was still negotiating its contract with FEMA, even after it began relief efforts around Sept. 1.
Generally, Katrina contractors "will be given the benefit of the doubt," Senate Appropriations Committee Chairman Sen. Thad Cochran (news, bio, voting record), R-Miss., said.
FEMA spokesman James McIntyre put it more bluntly: "You had 200,000 people who were displaced, possibly more," he said Monday. "We needed to get families into housing, as soon as possible, and off the floor of the stadium. "We needed the contracts to hit the ground running to get that process up and running."
___
Sunday, September 11, 2005
The Observer | Business | Congress probes hurricane clean-up contracts
Oliver Morgan, industrial editor
Sunday September 11, 2005
The Observer
A powerful investigative agency of the US Congress is to investigate the award of contracts by the Bush administration for emergency and reconstruction work in the wake of Hurricane Katrina.
The Government Accounting Office, which monitors public spending, is to audit the contracts won by the US firms. Already contracts have been given for repairing New Orleans' flood levees, rebuilding naval facilities, providing temporary housing and removing debris.
Companies winning work include US contracting giants Bechtel and Halliburton. Halliburton, formerly headed by Vice President Dick Cheney, is facing questions for allegedly overcharging on work done in Iraq. The Department of Defense was criticised for awarding Iraq reconstruction contracts to these two companies without competition. Other groups include Fluor and Shaw Group, a Louisiana engineer. The move comes as leading congressional figures express concern over the contracting process.
California representative Henry Waxman, who led much of the investigation into the Iraq reconstruction contracts, says: 'The administration has an abysmal contracting record in Iraq. We can't afford to make the same mistakes again. We must make sure taxpayer funds are not wasted, because every dollar thrown away today is a dollar that is not available to hurricane victims and their families.' Contracts had to be awarded in 'full transparency'. He added the audit of the contracting was 'a very good first step'.
Bechtel has been asked by the Federal Emergency Management Agency to assess the need for, and then to provide, temporary 'trailer' housing in the hardest hit areas.
Halliburton is repairing damage to three naval bases under a logistical contract with the US nav
Sunday September 11, 2005
The Observer
A powerful investigative agency of the US Congress is to investigate the award of contracts by the Bush administration for emergency and reconstruction work in the wake of Hurricane Katrina.
The Government Accounting Office, which monitors public spending, is to audit the contracts won by the US firms. Already contracts have been given for repairing New Orleans' flood levees, rebuilding naval facilities, providing temporary housing and removing debris.
Companies winning work include US contracting giants Bechtel and Halliburton. Halliburton, formerly headed by Vice President Dick Cheney, is facing questions for allegedly overcharging on work done in Iraq. The Department of Defense was criticised for awarding Iraq reconstruction contracts to these two companies without competition. Other groups include Fluor and Shaw Group, a Louisiana engineer. The move comes as leading congressional figures express concern over the contracting process.
California representative Henry Waxman, who led much of the investigation into the Iraq reconstruction contracts, says: 'The administration has an abysmal contracting record in Iraq. We can't afford to make the same mistakes again. We must make sure taxpayer funds are not wasted, because every dollar thrown away today is a dollar that is not available to hurricane victims and their families.' Contracts had to be awarded in 'full transparency'. He added the audit of the contracting was 'a very good first step'.
Bechtel has been asked by the Federal Emergency Management Agency to assess the need for, and then to provide, temporary 'trailer' housing in the hardest hit areas.
Halliburton is repairing damage to three naval bases under a logistical contract with the US nav
Tuesday, September 06, 2005
Halliburton's KBR unit gets contract to repair Gulf Coast facilities - 2005-09-06
Halliburton Co.'s Kellogg Brown & Root subsidiary has begun work on a $500 million U.S. Navy contract for emergency repairs at Gulf Coast naval and marine facilities that were damaged by Hurricane Katrina, according to an Associated Press report.
KBR has been under fire for receiving a five-year, no-bid contract to restore Iraqi oil fields shortly before the U.S. went to war against Iraq in 2003.
The subsidiary, Kellogg, Brown & Root Services Inc. of Arlington, Va., won the competitive-bid contract last July to provide debris removal and other emergency work associated with natural disasters.
Jan Davis, a spokeswoman for the Naval Facilities Engineering Command, told AP that KBR will receive $12 million for work at Naval Air Station Pascagoula, Naval Station Gulfport and Stennis Space Center in Mississippi. The company will receive $4.6 million for work at two smaller Navy facilities in New Orleans and others in the South.
KBR has provided similar work after major disasters in the United States and abroad for more than 15 years, including in Florida after Hurricane Andrew.
AP added that Houston-based Halliburton (NYSE: HAL) has reported being paid $10.7 billion for Iraq-related government work during 2003 and 2004. Pentagon auditors have questioned tens of millions of dollars of Halliburton charges for its operations there.
KBR has been under fire for receiving a five-year, no-bid contract to restore Iraqi oil fields shortly before the U.S. went to war against Iraq in 2003.
The subsidiary, Kellogg, Brown & Root Services Inc. of Arlington, Va., won the competitive-bid contract last July to provide debris removal and other emergency work associated with natural disasters.
Jan Davis, a spokeswoman for the Naval Facilities Engineering Command, told AP that KBR will receive $12 million for work at Naval Air Station Pascagoula, Naval Station Gulfport and Stennis Space Center in Mississippi. The company will receive $4.6 million for work at two smaller Navy facilities in New Orleans and others in the South.
KBR has provided similar work after major disasters in the United States and abroad for more than 15 years, including in Florida after Hurricane Andrew.
AP added that Houston-based Halliburton (NYSE: HAL) has reported being paid $10.7 billion for Iraq-related government work during 2003 and 2004. Pentagon auditors have questioned tens of millions of dollars of Halliburton charges for its operations there.
Friday, September 02, 2005
Halliburton Watch - Halliburton gets Katrina contract, hires former FEMA director
WASHINGTON, Sept. 1 (HalliburtonWatch.org) -- The US Navy asked Halliburton to repair naval facilities damaged by Hurricane Katrina, the Houston Chronicle reported today. The work was assigned to Halliburton's KBR subsidiary under the Navy's $500 million CONCAP contract awarded to KBR in 2001 and renewed in 2004. The repairs will take place in Louisiana and Mississippi.
KBR has not been asked to repair the levees destroyed in New Orleans which became the primary cause of most of the damage.
Since 1989, governments worldwide have awarded $3 billion in contracts to KBR's Government and Infrastructure Division to clean up damage caused by natural and man-made disasters.
Earlier this year, the Navy awarded $350 million in contracts to KBR and three other companies to repair naval facilities in northwest Florida damaged by Hurricane Ivan, which struck in September 2004. The ongoing repair work involves aircraft support facilities, medium industrial buildings, marine construction, mechanical and electrical improvements, civil construction, and family housing renovation.
In March, the former director of the Federal Emergency Management Agency (FEMA), which is tasked with responding to hurricane disasters, became a lobbyist for KBR. Joe Allbaugh was director of FEMA during the first two years of the Bush administration.
Today, FEMA is widely criticized for its slow response to the victims of Hurricane Katrina.
Allbaugh managed Bush's campaign for Texas governor in 1994, served as Gov. Bush's chief of staff and was the national campaign manager for the Bush campaign in 2000. Along with Karen Hughes and Karl Rove, Allbaugh was one of Bush's closest advisers.
"This is a perfect example of someone cashing in on a cozy political relationship," said Scott Amey, general counsel at the Project on Government Oversight, a Washington watchdog group. "Allbaugh's former placement as a senior government official and his new lobbying position with KBR strengthens the company's already tight ties to the administration, and I hope that contractor accountability is not lost as a result."
KBR has not been asked to repair the levees destroyed in New Orleans which became the primary cause of most of the damage.
Since 1989, governments worldwide have awarded $3 billion in contracts to KBR's Government and Infrastructure Division to clean up damage caused by natural and man-made disasters.
Earlier this year, the Navy awarded $350 million in contracts to KBR and three other companies to repair naval facilities in northwest Florida damaged by Hurricane Ivan, which struck in September 2004. The ongoing repair work involves aircraft support facilities, medium industrial buildings, marine construction, mechanical and electrical improvements, civil construction, and family housing renovation.
In March, the former director of the Federal Emergency Management Agency (FEMA), which is tasked with responding to hurricane disasters, became a lobbyist for KBR. Joe Allbaugh was director of FEMA during the first two years of the Bush administration.
Today, FEMA is widely criticized for its slow response to the victims of Hurricane Katrina.
Allbaugh managed Bush's campaign for Texas governor in 1994, served as Gov. Bush's chief of staff and was the national campaign manager for the Bush campaign in 2000. Along with Karen Hughes and Karl Rove, Allbaugh was one of Bush's closest advisers.
"This is a perfect example of someone cashing in on a cozy political relationship," said Scott Amey, general counsel at the Project on Government Oversight, a Washington watchdog group. "Allbaugh's former placement as a senior government official and his new lobbying position with KBR strengthens the company's already tight ties to the administration, and I hope that contractor accountability is not lost as a result."
Thursday, September 01, 2005
Middle East Times - Halliburton-linked company stripped of Iran contract
August 24, 2005
TEHRAN -- A private Iranian oil company linked to the US oil giant Halliburton has lost a multimillion-dollar contract to drill for natural gas amid accusations that it won the deal through bribery, officials said on Tuesday.
"It was recognized that there was financial corruption by Oriental Oil Kish, so according to the law the decision was made to dismiss the company from its activities," National Iranian Oil Company (NIOC) official Mohammad Reza Moghaddam told the student news agency ISNA.
The $310-million deal was awarded in January, even though a US law introduced in 1996 threatens sanctions on both American and foreign companies investing more than $40 million in Iran's energy sector.
The managing director of Pars Oil and Gas Company (POGC) - the body that supervises the South Pars gas field in question - confirmed the report.
"We have sent the cancelation of the contract with Oriental Oil Kish to NIOC and we are awaiting the decision on a new contractor," Akbar Torkan said.
Another report said that a rival to Oriental Oil Kish, the state-run National Iranian Drilling Company, had been offered the contract.
In early January the POGC awarded the contract for drilling South Pars phases 9 and 10 to Oriental Oil Kish.
Iranian officials said at the time that Halliburton had not directly signed the contract but that it had offered its services via Oriental Kish.
Halliburton, once chaired by US Vice-President Dick Cheney, has also come under investigation in the United States for its dealings with Iran.
Iran, which is OPEC's second largest oil exporter, has the world's second largest gas reserves.
Phases 9 and 10 of South Pars, operated jointly by South Korean and Iranian companies, are expected to produce 50 million cubic meters (1.8 billion cubic feet) of natural gas, 80,000 barrels of condensates and 400 tons of sulfur a day.
Iran hopes to boost gas output from 110 billion cubic meters a year in 2000 to 292 billion cubic meters in 2010. Gas accounts for about one-third of Iran's domestic energy consumption.
TEHRAN -- A private Iranian oil company linked to the US oil giant Halliburton has lost a multimillion-dollar contract to drill for natural gas amid accusations that it won the deal through bribery, officials said on Tuesday.
"It was recognized that there was financial corruption by Oriental Oil Kish, so according to the law the decision was made to dismiss the company from its activities," National Iranian Oil Company (NIOC) official Mohammad Reza Moghaddam told the student news agency ISNA.
The $310-million deal was awarded in January, even though a US law introduced in 1996 threatens sanctions on both American and foreign companies investing more than $40 million in Iran's energy sector.
The managing director of Pars Oil and Gas Company (POGC) - the body that supervises the South Pars gas field in question - confirmed the report.
"We have sent the cancelation of the contract with Oriental Oil Kish to NIOC and we are awaiting the decision on a new contractor," Akbar Torkan said.
Another report said that a rival to Oriental Oil Kish, the state-run National Iranian Drilling Company, had been offered the contract.
In early January the POGC awarded the contract for drilling South Pars phases 9 and 10 to Oriental Oil Kish.
Iranian officials said at the time that Halliburton had not directly signed the contract but that it had offered its services via Oriental Kish.
Halliburton, once chaired by US Vice-President Dick Cheney, has also come under investigation in the United States for its dealings with Iran.
Iran, which is OPEC's second largest oil exporter, has the world's second largest gas reserves.
Phases 9 and 10 of South Pars, operated jointly by South Korean and Iranian companies, are expected to produce 50 million cubic meters (1.8 billion cubic feet) of natural gas, 80,000 barrels of condensates and 400 tons of sulfur a day.
Iran hopes to boost gas output from 110 billion cubic meters a year in 2000 to 292 billion cubic meters in 2010. Gas accounts for about one-third of Iran's domestic energy consumption.
Monday, August 29, 2005
The Raw Story | Senior Democrat says decision to demote Halliburton worker will chill whistleblowing
The top U.S. Army contracting official who first raised criticism over Halliburton's no-bid contract in Iraq was demoted Sunday for what the army called poor job performance -- the first time her performance was rated low in 20 years.
Today, Sen. Frank Lautenberg (D-NJ) blasted the Bush administration’s decision to fire the lead government whistleblower in a statement to RAW STORY. Democrats also sent a letter to Defense Secretary Donald Rumsfeld today demanding an explanation. The letter follows this article.
“Secretary Rumsfeld has lowered the axe on someone courageous enough to speak the truth about an abuse of taxpayer dollars," he remarked. "Ms. Greenhouse was simply being honest, which seems to be enough to get you fired in this Administration.
"This action is meant to send a chilling message to other federal workers: keep your mouth shut," he added.
Lautenberg has repeatedly called for Senate hearings to investigate Halliburton’s contracts, but the Republican leadership of Congress has declined to hold any inquiries.
“Instead of getting to the truth of these contracts, this Administration wants to get rid of anybody who tells the truth,” Lautenberg said.
The official, Bunnatine "Bunny" Greenhouse, had overseen contracts at the Army Corps of Engineers, which has managed Iraq reconstruction work. She was removed Saturday from her elite Senior Executive Service position and reassigned her to a lesser job in the civil works division.
Greenhouse's lawyer, Michael Kohn, told the New York Times he saw "obvious reprisal" for the objections she raised to a series of decisions involving the Halliburton subsidiary Kellogg, Brown Root, which has netted more than $10 billion for work in Iraq and Afghanistan.
"She is being demoted because of her strict adherence to procurement requirements and the army's preference to sidestep them when it suits their needs," he said Sunday.
Democratic National Committee Chairman Howard Dean also weighed in, saying, "Today's news regarding Bunnatine Greenhouse is another disturbing example of the Bush Administration's determination to abuse their power to hide the truth and silence, smear or demote their critics."
A spokeswoman for the Army Corps of Engineers, told the Times that the action against Greenhouse was approved by the Army.
#
LETTER ISSUED BY REP. HENRY WAXMAN (D-CA); SEN. DORGAN (D-ND), SEN. LAUTENBERG (D-NJ)
We are writing to request that you investigate the Secretary of the Army's decision to remove Bunnatine Greenhouse, a career civil servant in the Senior Executive Service, from her position as principal assistant for contracting for the Army Corps of Engineers. The decision to remove Ms. Greenhouse from her position and demote her appears to be retaliation for her June 27, 2005 testimony before Congress.
In her June 27 testimony, Ms. Greenhouse detailed her objections to improper and potentially illegal conduct in the award of contracts for Iraq reconstruction projects. Specifically, Ms. Greenhouse objected to the contract awarded to a Halliburton subsidiary, Kellogg, Brown & Root, to restore Iraqi oil infrastructure. Ms. Greenhouse testified that the contract award process was compromised by improper influence by political appointees, participation by Halliburton officials in meetings where bidding requirements were discussed, and a lack of competition.[1]
On July 14 - less than three weeks after her testimony - the Secretary of the Army approved Ms. Greenhouse's removal. The dismissal is to take effect on August 27, 2005.
At the hearing, Ms. Greenhouse testified that she had been warned by the acting general counsel of the Army Corps of Engineers that her appearance before Congress would not be in her best interest. She testified nonetheless because she had exhausted all internal avenues and believed she had an obligation to bring her concerns to the attention of Congress. The Secretary's action appears to be the retaliation that she was warned about.
Ms. Greenhouse first raised questions about special treatment for Halliburton in 2003, when she objected to the five-year term of the no-bid, sole-source Restore Iraqi Oil contract. On October 22, 2004, the Army referred Ms. Greenhouse's allegations of procurement irregularities to the DOD Inspector General. The Acting Secretary of the Army further ordered that any adverse personnel action against Ms. Greenhouse be suspended "so that Ms. Greenhouse remains in her current position until a sufficient record is available to address the specific matters [she] raised."[2]
The DOD Inspector General's office has confirmed to our staff that its investigation of Ms. Greenhouse's allegations is "open and ongoing."[3] The Inspector General's office indicated that it has not provided any findings or final report to the Secretary of the Army regarding Ms. Greenhouse's allegations. Indeed, the office further told us that it is working with the Department of Justice regarding potential prosecutions relating to the Halliburton contracts.[4]
Given these facts, the sudden dismissal of Ms. Greenhouse appears highly suspect. The appropriate procedure would be to wait for the results of the ongoing Inspector General investigation. In fact, this is exactly what the Acting Secretary of the Army ordered last October. No explanation has been provided for the reversal in policy and the rash dismissal of Ms. Greenhouse.
Retaliation against employees for providing information to Congress is illegal and entirely unacceptable. Ms. Greenhouse has given Congress important information essential to our oversight of waste, fraud, and abuse. Instead of turning a blind eye to improper conduct, Ms. Greenhouse worked within her own agency to object. When her internal objections were dismissed, she raised her concerns with Congress. These actions to protect the integrity of the procurement process and prevent the waste of taxpayer dollars should be commended, not serve as grounds for dismissal.
We ask that you conduct an investigation into the decision to remove Ms. Greenhouse from her position. We also request that you reinstate Ms. Greenhouse pending such an inquiry.
Today, Sen. Frank Lautenberg (D-NJ) blasted the Bush administration’s decision to fire the lead government whistleblower in a statement to RAW STORY. Democrats also sent a letter to Defense Secretary Donald Rumsfeld today demanding an explanation. The letter follows this article.
“Secretary Rumsfeld has lowered the axe on someone courageous enough to speak the truth about an abuse of taxpayer dollars," he remarked. "Ms. Greenhouse was simply being honest, which seems to be enough to get you fired in this Administration.
"This action is meant to send a chilling message to other federal workers: keep your mouth shut," he added.
Lautenberg has repeatedly called for Senate hearings to investigate Halliburton’s contracts, but the Republican leadership of Congress has declined to hold any inquiries.
“Instead of getting to the truth of these contracts, this Administration wants to get rid of anybody who tells the truth,” Lautenberg said.
The official, Bunnatine "Bunny" Greenhouse, had overseen contracts at the Army Corps of Engineers, which has managed Iraq reconstruction work. She was removed Saturday from her elite Senior Executive Service position and reassigned her to a lesser job in the civil works division.
Greenhouse's lawyer, Michael Kohn, told the New York Times he saw "obvious reprisal" for the objections she raised to a series of decisions involving the Halliburton subsidiary Kellogg, Brown Root, which has netted more than $10 billion for work in Iraq and Afghanistan.
"She is being demoted because of her strict adherence to procurement requirements and the army's preference to sidestep them when it suits their needs," he said Sunday.
Democratic National Committee Chairman Howard Dean also weighed in, saying, "Today's news regarding Bunnatine Greenhouse is another disturbing example of the Bush Administration's determination to abuse their power to hide the truth and silence, smear or demote their critics."
A spokeswoman for the Army Corps of Engineers, told the Times that the action against Greenhouse was approved by the Army.
#
LETTER ISSUED BY REP. HENRY WAXMAN (D-CA); SEN. DORGAN (D-ND), SEN. LAUTENBERG (D-NJ)
We are writing to request that you investigate the Secretary of the Army's decision to remove Bunnatine Greenhouse, a career civil servant in the Senior Executive Service, from her position as principal assistant for contracting for the Army Corps of Engineers. The decision to remove Ms. Greenhouse from her position and demote her appears to be retaliation for her June 27, 2005 testimony before Congress.
In her June 27 testimony, Ms. Greenhouse detailed her objections to improper and potentially illegal conduct in the award of contracts for Iraq reconstruction projects. Specifically, Ms. Greenhouse objected to the contract awarded to a Halliburton subsidiary, Kellogg, Brown & Root, to restore Iraqi oil infrastructure. Ms. Greenhouse testified that the contract award process was compromised by improper influence by political appointees, participation by Halliburton officials in meetings where bidding requirements were discussed, and a lack of competition.[1]
On July 14 - less than three weeks after her testimony - the Secretary of the Army approved Ms. Greenhouse's removal. The dismissal is to take effect on August 27, 2005.
At the hearing, Ms. Greenhouse testified that she had been warned by the acting general counsel of the Army Corps of Engineers that her appearance before Congress would not be in her best interest. She testified nonetheless because she had exhausted all internal avenues and believed she had an obligation to bring her concerns to the attention of Congress. The Secretary's action appears to be the retaliation that she was warned about.
Ms. Greenhouse first raised questions about special treatment for Halliburton in 2003, when she objected to the five-year term of the no-bid, sole-source Restore Iraqi Oil contract. On October 22, 2004, the Army referred Ms. Greenhouse's allegations of procurement irregularities to the DOD Inspector General. The Acting Secretary of the Army further ordered that any adverse personnel action against Ms. Greenhouse be suspended "so that Ms. Greenhouse remains in her current position until a sufficient record is available to address the specific matters [she] raised."[2]
The DOD Inspector General's office has confirmed to our staff that its investigation of Ms. Greenhouse's allegations is "open and ongoing."[3] The Inspector General's office indicated that it has not provided any findings or final report to the Secretary of the Army regarding Ms. Greenhouse's allegations. Indeed, the office further told us that it is working with the Department of Justice regarding potential prosecutions relating to the Halliburton contracts.[4]
Given these facts, the sudden dismissal of Ms. Greenhouse appears highly suspect. The appropriate procedure would be to wait for the results of the ongoing Inspector General investigation. In fact, this is exactly what the Acting Secretary of the Army ordered last October. No explanation has been provided for the reversal in policy and the rash dismissal of Ms. Greenhouse.
Retaliation against employees for providing information to Congress is illegal and entirely unacceptable. Ms. Greenhouse has given Congress important information essential to our oversight of waste, fraud, and abuse. Instead of turning a blind eye to improper conduct, Ms. Greenhouse worked within her own agency to object. When her internal objections were dismissed, she raised her concerns with Congress. These actions to protect the integrity of the procurement process and prevent the waste of taxpayer dollars should be commended, not serve as grounds for dismissal.
We ask that you conduct an investigation into the decision to remove Ms. Greenhouse from her position. We also request that you reinstate Ms. Greenhouse pending such an inquiry.
Aljazeera.Net - US Army demotes Halliburton critic
A top US Army contracting official who criticised a large, non-competitive contract with the Halliburton Company for work in Iraq has been demoted for what the army called poor job performance.
The New York Times said Bunnatine Greenhouse had worked in military procurement for 20 years and for the past several years had been the chief overseer of contracts at the Army Corps of Engineers, the agency that has managed much of the reconstruction work in Iraq.
The demotion removes her from the elite Senior Executive Service and reassigns her to a lesser job in the corps' civil works division, the report said on Monday.
Greenhouse's lawyer, Michael Kohn, called the action an "obvious reprisal" for the strong objections she raised in 2003 to a series of corps decisions involving the Halliburton subsidiary Kellogg, Brown & Root which has garnered more than $10 billion for work in Iraq, The Times said.
Sidestepping requirements
Vice-President Dick Cheney was chief executive at Halliburton before he joined President George Bush's election campaign in 2000.
"She is being demoted because of her strict adherence to procurement requirements and the Army's preference to sidestep them when it suits their needs," the newspaper quoted Kohn as saying in an interview.
He also said the army had violated a commitment to delay Greenhouse's dismissal until the completion of an inquiry by the Pentagon's inspector-general.
Good past reviews
Carol Sanders, spokeswoman for the Army Corps of Engineers, said the personnel action against Greenhouse had been approved by the Department of the Army, the paper said.
In a memorandum dated 3 June 2005, the commander of the corps, Lieutenant-General Carl Strock, said the administrative record "clearly demonstrates that Ms Greenhouse's removal from the SES is based on her performance and not in retaliation for any disclosures of alleged improprieties that she may have made".
Kohn said Greenhouse had initially received stellar performance ratings, the paper pointed out.
But her reviews became negative at roughly the time she began objecting to decisions she saw as improperly favouring Kellogg Brown & Root, he said.
The New York Times said Bunnatine Greenhouse had worked in military procurement for 20 years and for the past several years had been the chief overseer of contracts at the Army Corps of Engineers, the agency that has managed much of the reconstruction work in Iraq.
The demotion removes her from the elite Senior Executive Service and reassigns her to a lesser job in the corps' civil works division, the report said on Monday.
Greenhouse's lawyer, Michael Kohn, called the action an "obvious reprisal" for the strong objections she raised in 2003 to a series of corps decisions involving the Halliburton subsidiary Kellogg, Brown & Root which has garnered more than $10 billion for work in Iraq, The Times said.
Sidestepping requirements
Vice-President Dick Cheney was chief executive at Halliburton before he joined President George Bush's election campaign in 2000.
"She is being demoted because of her strict adherence to procurement requirements and the Army's preference to sidestep them when it suits their needs," the newspaper quoted Kohn as saying in an interview.
He also said the army had violated a commitment to delay Greenhouse's dismissal until the completion of an inquiry by the Pentagon's inspector-general.
Good past reviews
Carol Sanders, spokeswoman for the Army Corps of Engineers, said the personnel action against Greenhouse had been approved by the Department of the Army, the paper said.
In a memorandum dated 3 June 2005, the commander of the corps, Lieutenant-General Carl Strock, said the administrative record "clearly demonstrates that Ms Greenhouse's removal from the SES is based on her performance and not in retaliation for any disclosures of alleged improprieties that she may have made".
Kohn said Greenhouse had initially received stellar performance ratings, the paper pointed out.
But her reviews became negative at roughly the time she began objecting to decisions she saw as improperly favouring Kellogg Brown & Root, he said.
Wednesday, August 24, 2005
Worker admits to kickbacks in Iraq - The Honolulu Advertiser - Hawaii's Newspaper
By Griff Witte
Washington Post
WASHINGTON — A former worker for a Halliburton Co. subsidiary faces up to 20 years in prison and a fine of as much as $1.25 million after pleading guilty to taking kickbacks in Iraq in a scheme that defrauded the U.S. government, court records show.
It marks the second case this year of a Halliburton worker facing criminal charges in connection with the company's work in Iraq.
Glenn Allen Powell, who pleaded guilty on Friday in U.S. District Court in Rock Island, Ill., was employed by Halliburton subsidiary Kellogg Brown & Root Inc. in Iraq from October 2003 until January 2005. During that time, he admitted to taking 20 percent off the top of a subcontract, or more than $110,000.
The fraud came as part of KBR's work on a multibillion-dollar Army contract to provide logistical support to U.S. troops worldwide, including in Iraq. According to the plea agreement, Powell accepted kickbacks from an Iraqi business that had won a job to help renovate four buildings in Iraq for office and warehouse space.
Powell's fraud was discovered in January when KBR investigators searched Powell's residence in Baghdad and found large amounts of cash, including $8,000 worth of $100 bills stuffed in a jacket pocket, $1,580 on top of the refrigerator and about $3,500 worth of Iraqi dinars in the top shelf of a dresser, the court papers said.
KBR then fired Powell, and he returned to the United States.
While the scheme was ongoing, KBR had been unwittingly billing the U.S. government an inflated amount for reimbursement because of the 20 percent kickback. The difference has since been refunded.
"When the issue was discovered, KBR removed the company in question from consideration for any future work as a subcontractor," Halliburton spokeswoman Cathy Mann said in a statement.
In March, a former KBR manager named Jeff Alex Mazon was charged in an indictment with defrauding the U.S. government of nearly $4 million by inflating the price of fuel tankers for military operations. He is accused of taking $1 million from a subcontractor. In that case, too, federal prosecutors began to investigate after an internal KBR investigation uncovered evidence of wrongdoing.
Mann said the cases are not related. Halliburton is the Pentagon's largest contractor in Iraq. Its work has come under scrutiny in part because Vice President Dick Cheney was the firm's chief executive between 1995 and 2000. Halliburton and the Pentagon deny the firm receives favorable treatment.
Washington Post
WASHINGTON — A former worker for a Halliburton Co. subsidiary faces up to 20 years in prison and a fine of as much as $1.25 million after pleading guilty to taking kickbacks in Iraq in a scheme that defrauded the U.S. government, court records show.
It marks the second case this year of a Halliburton worker facing criminal charges in connection with the company's work in Iraq.
Glenn Allen Powell, who pleaded guilty on Friday in U.S. District Court in Rock Island, Ill., was employed by Halliburton subsidiary Kellogg Brown & Root Inc. in Iraq from October 2003 until January 2005. During that time, he admitted to taking 20 percent off the top of a subcontract, or more than $110,000.
The fraud came as part of KBR's work on a multibillion-dollar Army contract to provide logistical support to U.S. troops worldwide, including in Iraq. According to the plea agreement, Powell accepted kickbacks from an Iraqi business that had won a job to help renovate four buildings in Iraq for office and warehouse space.
Powell's fraud was discovered in January when KBR investigators searched Powell's residence in Baghdad and found large amounts of cash, including $8,000 worth of $100 bills stuffed in a jacket pocket, $1,580 on top of the refrigerator and about $3,500 worth of Iraqi dinars in the top shelf of a dresser, the court papers said.
KBR then fired Powell, and he returned to the United States.
While the scheme was ongoing, KBR had been unwittingly billing the U.S. government an inflated amount for reimbursement because of the 20 percent kickback. The difference has since been refunded.
"When the issue was discovered, KBR removed the company in question from consideration for any future work as a subcontractor," Halliburton spokeswoman Cathy Mann said in a statement.
In March, a former KBR manager named Jeff Alex Mazon was charged in an indictment with defrauding the U.S. government of nearly $4 million by inflating the price of fuel tankers for military operations. He is accused of taking $1 million from a subcontractor. In that case, too, federal prosecutors began to investigate after an internal KBR investigation uncovered evidence of wrongdoing.
Mann said the cases are not related. Halliburton is the Pentagon's largest contractor in Iraq. Its work has come under scrutiny in part because Vice President Dick Cheney was the firm's chief executive between 1995 and 2000. Halliburton and the Pentagon deny the firm receives favorable treatment.
Tuesday, August 23, 2005
Halliburton’s role in toppling Oriental Oil Kish to be probed
TEHRAN, Aug. 23 (MNA) — The Oriental Oil Kish Company’s success in the bid to drill the phases 9 and 10 of the South Pars Gas Field Development Plan against its rival companies including National Iranian Drilling Company (NIDC) became possible due to the company’s partnership with the Halliburton (the oil services company once headed by U.S. Vice President Dick Cheney).
“When it won the tender for drilling South Pars phases 9 and 10, Oriental Oil Kish was a small contractor and it lacked the necessary drilling equipment, particularly the drilling mast. But due to the presence of Halliburton and its supports for the company, the Kish Oil Company attended the tender and was even able to win the bid,” an informed source said.
He added that after the international media disclosed the Oriental Oil Kish’s relationship with an American company and their successful bid to develop oil projects in Iran, Halliburton announced that it will not work or conclude agreement with Iran. However, in an unofficial letter, it later on revealed its indirect cooperation with the Iranian side in the drilling project of the phases.
Following the withdrawal of Oriental Oil Kish Co., NIDC managing director Seifollah Jashnsaz told the Iranian Students News Agency (ISNA) that it has been about a month since they put forward the proposal for developing the project. “We have agreed to answer them by the end of the week on August 25.”
He further explained that the NIDC is reviewing the prices to see if the company is able to take the project based on the formerly suggested prices.
“When it won the tender for drilling South Pars phases 9 and 10, Oriental Oil Kish was a small contractor and it lacked the necessary drilling equipment, particularly the drilling mast. But due to the presence of Halliburton and its supports for the company, the Kish Oil Company attended the tender and was even able to win the bid,” an informed source said.
He added that after the international media disclosed the Oriental Oil Kish’s relationship with an American company and their successful bid to develop oil projects in Iran, Halliburton announced that it will not work or conclude agreement with Iran. However, in an unofficial letter, it later on revealed its indirect cooperation with the Iranian side in the drilling project of the phases.
Following the withdrawal of Oriental Oil Kish Co., NIDC managing director Seifollah Jashnsaz told the Iranian Students News Agency (ISNA) that it has been about a month since they put forward the proposal for developing the project. “We have agreed to answer them by the end of the week on August 25.”
He further explained that the NIDC is reviewing the prices to see if the company is able to take the project based on the formerly suggested prices.
Monday, August 22, 2005
HoustonChronicle.com - Chicago Bridge gets Halliburton-related subpoena
Dow Jones/AP
WASHINGTON — Chicago Bridge & Iron Co., a Netherlands-based engineering and construction company, has received a subpoena from a Securities and Exchange Commission investigation into a Halliburton Co. construction project in Nigeria where Chicago Bridge was a subcontractor.
Houston-based Halliburton's foreign operations have been the focus of investigations by various regulatory agencies. The U.S. Department of Justice and the SEC have been investigating allegations of bribery of Nigerian officials connected to the construction of a natural-gas liquefaction plant at Bonny Island.
Halliburton said it was under formal SEC investigation in June 2004.
Chicago Bridge & Iron said in its filing Friday with the SEC that it is cooperating with the request, but it didn't provide further details about the subpoena.
WASHINGTON — Chicago Bridge & Iron Co., a Netherlands-based engineering and construction company, has received a subpoena from a Securities and Exchange Commission investigation into a Halliburton Co. construction project in Nigeria where Chicago Bridge was a subcontractor.
Houston-based Halliburton's foreign operations have been the focus of investigations by various regulatory agencies. The U.S. Department of Justice and the SEC have been investigating allegations of bribery of Nigerian officials connected to the construction of a natural-gas liquefaction plant at Bonny Island.
Halliburton said it was under formal SEC investigation in June 2004.
Chicago Bridge & Iron said in its filing Friday with the SEC that it is cooperating with the request, but it didn't provide further details about the subpoena.
Saturday, August 20, 2005
Ex-Halliburton Subsidiary Worker Guilty
By JAN DENNIS
The Associated Press
Friday, August 19, 2005; 8:32 PM
PEORIA, Ill. -- A former employee of a Halliburton Co. subsidiary pleaded guilty Friday to accepting more than $100,000 in kickbacks from an Iraqi company in exchange for securing it a U.S. military construction contract, prosecutors said.
Glenn Allen Powell, 40, of Cedar Park, Texas, will be sentenced Nov. 18 in federal court for major fraud against the United States and violating the anti-kickback act. He faces 10 years in prison on each count and up to $1.25 million in fines.
"He's very sorry about what he did. He made a mistake and he wants to make it right," said Powell's attorney, Samuel Bassett.
Powell, who was fired after an internal investigation, has repaid part of the money to Halliburton and plans to repay the rest, Bassett said.
Prosecutors say Powell was a subcontracts administrator for Halliburton subsidiary KBR Inc., which provides engineering and other project management services for the military.
In exchange for $110,300 in kickbacks, Powell recommended the Iraqi company for a $609,000 subcontract to renovate four buildings into office and warehouse space, prosecutors say. Prosecutors declined to name the company.
"A government contract is not a license to steal," U.S. Attorney Jan Paul Miller said in a statement. "The public should be able to trust that the individuals who implement government contracts do so honestly."
Halliburton has removed the Iraqi company from its list of subcontractors and given the military a credit for the amount of the kickback, spokeswoman Melissa Norcross said.
Vice President Dick Cheney headed Halliburton from 1995 to 2000, and Democratic members of Congress have repeatedly questioned whether Halliburton and its subsidiaries received favorable treatment because of its connections. Cheney and other administration officials have denied Cheney had any role in Halliburton's government contract work.
The Associated Press
Friday, August 19, 2005; 8:32 PM
PEORIA, Ill. -- A former employee of a Halliburton Co. subsidiary pleaded guilty Friday to accepting more than $100,000 in kickbacks from an Iraqi company in exchange for securing it a U.S. military construction contract, prosecutors said.
Glenn Allen Powell, 40, of Cedar Park, Texas, will be sentenced Nov. 18 in federal court for major fraud against the United States and violating the anti-kickback act. He faces 10 years in prison on each count and up to $1.25 million in fines.
"He's very sorry about what he did. He made a mistake and he wants to make it right," said Powell's attorney, Samuel Bassett.
Powell, who was fired after an internal investigation, has repaid part of the money to Halliburton and plans to repay the rest, Bassett said.
Prosecutors say Powell was a subcontracts administrator for Halliburton subsidiary KBR Inc., which provides engineering and other project management services for the military.
In exchange for $110,300 in kickbacks, Powell recommended the Iraqi company for a $609,000 subcontract to renovate four buildings into office and warehouse space, prosecutors say. Prosecutors declined to name the company.
"A government contract is not a license to steal," U.S. Attorney Jan Paul Miller said in a statement. "The public should be able to trust that the individuals who implement government contracts do so honestly."
Halliburton has removed the Iraqi company from its list of subcontractors and given the military a credit for the amount of the kickback, spokeswoman Melissa Norcross said.
Vice President Dick Cheney headed Halliburton from 1995 to 2000, and Democratic members of Congress have repeatedly questioned whether Halliburton and its subsidiaries received favorable treatment because of its connections. Cheney and other administration officials have denied Cheney had any role in Halliburton's government contract work.
Monday, August 15, 2005
Vanguard - Cover Stories : Senate probes N280bn Halliburton contract
By Emmanuel Aziken & Hector Igbikiowubo
Posted to the Web: Monday, August 15, 2005
*Crude oil prices top $67p/b
ABUJA —THE Senate has launched a probe into the $2 billion (about N280 billion) gas to liquid project awarded by the Chevron/NNPC joint venture to Halliburton, the American-based multinational service company that was recently accused of paying $180 million bribe to past Nigerian officials.
The US thirst for gasoline and fears of a hurricane have pushed the oil market further into uncharted territory, with prices breaking the $67 mark at the weekend.
Besides, the Senate investigation under the aegis of its Committee on Upstream Petroleum, is also focusing attention on the Nigerian National Petroleum Corporation (NNPC’s) utilisation of the 450,000 barrels of crude allocated to it daily for domestic utilisation. The NNPC which is spearheading agitation for the increase of the domestic prices of petroleum products has acknowledged importing a significant proportion of products utilised in the country.
The Senate investigations, according to letters dispatched to the NNPC, ChevronTexaco and the Department of Petroleum Resources (DPR), followed petitions on contracts received by stakeholders. The DPR is being drawn into the investigation to ascertain the quantity of crude it has been allocating to the NNPC for domestic consumption.
The letters were signed by Senator Lee Maeba, chairman of the Senate Committee on Upstream Petroleum.
In its letter to ChevronTexaco entitled: “Request for Information on the Escravos Gas to Liquid (GTL) Project,” the Senate Committee requested information on the contract awarded to Halliburton.
The letter reads:
“The Senate Committee on Petroleum Resources, Upstream has received several petitions from the public with respect to the Escravos Gas to Liquid (GTL) project.
“You are, therefore, requested to submit all information on the project which include but not limited to:
lEvidence of due process leading to the award of the contract.
lCopy of the contract to Halliburton Services Inc. including commercial value of (the) project
lTechnical/Commercial evaluation report of all bids received
lDetails of Final Investment Decision (FID) reached with the NNPC
lAny other information to prove transparency of the process…”
Halliburton was, in 2004, the subject of an investigation that centred on the alleged payment of an estimated $180 million of bribe to past Nigerian government officials.
In its letter to Dr Funso Kupolokun, Group Managing Director of the NNPC dated August 2, 2005, on the same project, the Senate Committee requested information on the project and also information on the utilisation of the 450,000 barrels of crude given the NNPC for domestic consumption.
Crude oil prices top $67 p/b
On the local front, the Shell Petroleum Development Company operated Joint Venture in Nigeria’s upstream petroleum sector paid over $3.5billion (about N469 billion) in taxes and royalties to both the state and Federal Governments in year 2004, indicating a quantum leap when compared to the previous year’s figures.
US light crude closed $1 up at $66.80 a barrel, after hitting $67.10 earlier, while in London Brent crude closed $1.12 higher at $66.50. Worldwide petrol and gasoline prices are at unprecedented levels. US refinery stoppages came just as car sales and demand hit highs. The latest surge has been partly triggered by more than a dozen breakdowns at US installations, the latest of which hit a ConocoPhillips refinery in Illinois.
And fears Tropical Storm Irene, which could intensify to hurricane strength, is heading for the US Gulf Coast have added to worries about supply interruptions. Last week, US government figures showed a 2.1 million barrel decline in US stockpiles during the first week of August.
Shell pays $3.5bn tax
The SPDC joint venture also accounted for 43 per cent of Nigeria’s total crude oil production, while topping gas production by six per cent during the period under review.
Specifically, last year, the SPDC joint venture paid $2.2 billion (about N294.8 billion) as Petroleum Profit Tax to the Federal Government, representing an 83 per cent increase compared to $1.2billion (about N160.8billion) paid in 2003.
The joint venture also paid $904 million (about N121.136 billion) as royalty payments, indicating over 40 per cent increase compared to $608 million (about N81.472 billion) paid in year 2003. “The SPDC also made a statutory contribution of $68.9 million (about N9.23billion) to the NDDC (of which Shell share was $21 million).”
The SPDC joint venture also paid Pay As You Earn (PAYE) tax to state governments where its staff are resident as well as education tax to the Federal Government coffer. Although the amount paid by the joint venture as PAYE tax and education tax could not be ascertained from the report, there are indications that it may exceed $350 million (about N46.9 billion).
Oil production during the period also averaged one million barrels per day (p/d) compared to 910,000 b/d in 2003, indicating a 10 per cen increase and the highest level achieved since 1980.
The increase in production is due to a higher contribution from the EA field which accounts for 150,000 b/d, lower production deferments and the reactivation of some previously shut-in oil wells.
This improved working environment saw the joint venture’s crude oil output accounting for 43 per cent of Nigeria’s total output in 2004. Similarly, gas sales recorded an average 1,242 million standard cubic feet per day, against 1,171 million standard cubic feet p/d sold in 2003.
The report also revealed that during the period crude oil theft peaked at 60,000 b/d and low periods of 40,000 b/d, recorded from 71 incidents, indicating a 20 per cent drop from 88 incidents in year 2003.
The report also showed that the joint venture increased the use of local contractors in support of the Federal Government’s drive for improved Nigerian content, pointing out that contracts valued at $727 million (about N97.4 billion) was awarded to Nigerian companies. “20 per cent from the Niger Delta).”
Responding to questions on the report, Shell's Director of External Affairs, the Reverend Precious Omuku, explained that contrary to reports about a tax default by some oil companies, there was an assumption on the part of oil companies that the Federal Government would let them enjoy some of the oil windfall.
“When the oil price gets to $30, according to the MoU, government can begin to be generous to the industry by letting it use certain percentage in the upside by giving you some of the windfall. But you can not take it unless government gives you. There was an assumption that government would give. But government did not give. That is what they were referring to. It wasn’t a default on tax,” he said.
On the issue of gas supply to proposed IPPs for the Niger Delta, the Shell director explained that a gas supply programme was required, adding that this will take sometime to put in place.
“They can build those thermal plants very quickly. They can even buy them off the shelf. But you need a programme to gather the gas to supply to them. So the two must shake hands. That is what we mean when you hear we can not supply all of them in the time span.
“But given time to develop all your gas projects, you can supply them. There isn’t a dearth of gas, it is the timing. We need an alignment of the two. Everybody would have to bring money to the table. It has cost us in the past like two billion dollars in gas development.
When I say us, I mean the joint venture and that money has to be found in order to grow that kind of venture. Among the stakeholders, there is no lack of commitment to any of the IPPs,” he said.
Ön shortage of gas supply to the Egbin thermal power plant, he said contrary to claims, there was no competition between LNG and domestic supplies, adding that the power utility company has suddenly become more efficient.
“What has happened is that NEPA suddenly became more efficient and started demanding for more gas beyond the contract level that we have with the NGC and so there is a tightness in the supply. We have had very good consultations with NEPA and NGC and there is this level of growth and the industry is ramming up to get to that level of supply. There was no failure really or preference to supply to the NLNG.”
He also reiterated the joint venture’s commitment to the flare-out target noting however, that the target is predicated on a particular level of funding.
Posted to the Web: Monday, August 15, 2005
*Crude oil prices top $67p/b
ABUJA —THE Senate has launched a probe into the $2 billion (about N280 billion) gas to liquid project awarded by the Chevron/NNPC joint venture to Halliburton, the American-based multinational service company that was recently accused of paying $180 million bribe to past Nigerian officials.
The US thirst for gasoline and fears of a hurricane have pushed the oil market further into uncharted territory, with prices breaking the $67 mark at the weekend.
Besides, the Senate investigation under the aegis of its Committee on Upstream Petroleum, is also focusing attention on the Nigerian National Petroleum Corporation (NNPC’s) utilisation of the 450,000 barrels of crude allocated to it daily for domestic utilisation. The NNPC which is spearheading agitation for the increase of the domestic prices of petroleum products has acknowledged importing a significant proportion of products utilised in the country.
The Senate investigations, according to letters dispatched to the NNPC, ChevronTexaco and the Department of Petroleum Resources (DPR), followed petitions on contracts received by stakeholders. The DPR is being drawn into the investigation to ascertain the quantity of crude it has been allocating to the NNPC for domestic consumption.
The letters were signed by Senator Lee Maeba, chairman of the Senate Committee on Upstream Petroleum.
In its letter to ChevronTexaco entitled: “Request for Information on the Escravos Gas to Liquid (GTL) Project,” the Senate Committee requested information on the contract awarded to Halliburton.
The letter reads:
“The Senate Committee on Petroleum Resources, Upstream has received several petitions from the public with respect to the Escravos Gas to Liquid (GTL) project.
“You are, therefore, requested to submit all information on the project which include but not limited to:
lEvidence of due process leading to the award of the contract.
lCopy of the contract to Halliburton Services Inc. including commercial value of (the) project
lTechnical/Commercial evaluation report of all bids received
lDetails of Final Investment Decision (FID) reached with the NNPC
lAny other information to prove transparency of the process…”
Halliburton was, in 2004, the subject of an investigation that centred on the alleged payment of an estimated $180 million of bribe to past Nigerian government officials.
In its letter to Dr Funso Kupolokun, Group Managing Director of the NNPC dated August 2, 2005, on the same project, the Senate Committee requested information on the project and also information on the utilisation of the 450,000 barrels of crude given the NNPC for domestic consumption.
Crude oil prices top $67 p/b
On the local front, the Shell Petroleum Development Company operated Joint Venture in Nigeria’s upstream petroleum sector paid over $3.5billion (about N469 billion) in taxes and royalties to both the state and Federal Governments in year 2004, indicating a quantum leap when compared to the previous year’s figures.
US light crude closed $1 up at $66.80 a barrel, after hitting $67.10 earlier, while in London Brent crude closed $1.12 higher at $66.50. Worldwide petrol and gasoline prices are at unprecedented levels. US refinery stoppages came just as car sales and demand hit highs. The latest surge has been partly triggered by more than a dozen breakdowns at US installations, the latest of which hit a ConocoPhillips refinery in Illinois.
And fears Tropical Storm Irene, which could intensify to hurricane strength, is heading for the US Gulf Coast have added to worries about supply interruptions. Last week, US government figures showed a 2.1 million barrel decline in US stockpiles during the first week of August.
Shell pays $3.5bn tax
The SPDC joint venture also accounted for 43 per cent of Nigeria’s total crude oil production, while topping gas production by six per cent during the period under review.
Specifically, last year, the SPDC joint venture paid $2.2 billion (about N294.8 billion) as Petroleum Profit Tax to the Federal Government, representing an 83 per cent increase compared to $1.2billion (about N160.8billion) paid in 2003.
The joint venture also paid $904 million (about N121.136 billion) as royalty payments, indicating over 40 per cent increase compared to $608 million (about N81.472 billion) paid in year 2003. “The SPDC also made a statutory contribution of $68.9 million (about N9.23billion) to the NDDC (of which Shell share was $21 million).”
The SPDC joint venture also paid Pay As You Earn (PAYE) tax to state governments where its staff are resident as well as education tax to the Federal Government coffer. Although the amount paid by the joint venture as PAYE tax and education tax could not be ascertained from the report, there are indications that it may exceed $350 million (about N46.9 billion).
Oil production during the period also averaged one million barrels per day (p/d) compared to 910,000 b/d in 2003, indicating a 10 per cen increase and the highest level achieved since 1980.
The increase in production is due to a higher contribution from the EA field which accounts for 150,000 b/d, lower production deferments and the reactivation of some previously shut-in oil wells.
This improved working environment saw the joint venture’s crude oil output accounting for 43 per cent of Nigeria’s total output in 2004. Similarly, gas sales recorded an average 1,242 million standard cubic feet per day, against 1,171 million standard cubic feet p/d sold in 2003.
The report also revealed that during the period crude oil theft peaked at 60,000 b/d and low periods of 40,000 b/d, recorded from 71 incidents, indicating a 20 per cent drop from 88 incidents in year 2003.
The report also showed that the joint venture increased the use of local contractors in support of the Federal Government’s drive for improved Nigerian content, pointing out that contracts valued at $727 million (about N97.4 billion) was awarded to Nigerian companies. “20 per cent from the Niger Delta).”
Responding to questions on the report, Shell's Director of External Affairs, the Reverend Precious Omuku, explained that contrary to reports about a tax default by some oil companies, there was an assumption on the part of oil companies that the Federal Government would let them enjoy some of the oil windfall.
“When the oil price gets to $30, according to the MoU, government can begin to be generous to the industry by letting it use certain percentage in the upside by giving you some of the windfall. But you can not take it unless government gives you. There was an assumption that government would give. But government did not give. That is what they were referring to. It wasn’t a default on tax,” he said.
On the issue of gas supply to proposed IPPs for the Niger Delta, the Shell director explained that a gas supply programme was required, adding that this will take sometime to put in place.
“They can build those thermal plants very quickly. They can even buy them off the shelf. But you need a programme to gather the gas to supply to them. So the two must shake hands. That is what we mean when you hear we can not supply all of them in the time span.
“But given time to develop all your gas projects, you can supply them. There isn’t a dearth of gas, it is the timing. We need an alignment of the two. Everybody would have to bring money to the table. It has cost us in the past like two billion dollars in gas development.
When I say us, I mean the joint venture and that money has to be found in order to grow that kind of venture. Among the stakeholders, there is no lack of commitment to any of the IPPs,” he said.
Ön shortage of gas supply to the Egbin thermal power plant, he said contrary to claims, there was no competition between LNG and domestic supplies, adding that the power utility company has suddenly become more efficient.
“What has happened is that NEPA suddenly became more efficient and started demanding for more gas beyond the contract level that we have with the NGC and so there is a tightness in the supply. We have had very good consultations with NEPA and NGC and there is this level of growth and the industry is ramming up to get to that level of supply. There was no failure really or preference to supply to the NLNG.”
He also reiterated the joint venture’s commitment to the flare-out target noting however, that the target is predicated on a particular level of funding.
Wednesday, August 10, 2005
Al Jazeera - Halliburton provided Iran with key nuclear reactor components
Halliburton, the scandal-plagued oil company, that Vice President Dick Cheney used to run, sold an Iranian company key components for a nuclear reactor, Halliburton sources revealed.
Cheney was CEO from 1995 to 2000, during which Halliburton Products and Services set up shop in Iran.
Halliburton, which sells about $40 million a year worth of oil field services to the Iranian Government, was secretly aiding one of Iran’s top nuclear program officials on natural gas related projects and provided the official's oil development company with the components last April, the sources said.
FARS, one of Iran's many state controlled news agencies reported last month the arrest of several executives of the Oriental Oil Kish Company, which is owned by sons and other relatives of the defeated mullah presidential candidate Hashemi Rafsanjani, saying that the men were involved in widespread corruption of Iran's oil industry, specifically tied to the country's business dealings with Halliburton.
According to a report posted on the Iran Press News website: "They were brought up on charges of economic corruption". “Following the necessary investigations by the judiciary's bailiffs, with warrants from the public prosecutor's office, the case of economic corruption and malfeasance, certain of the authorities of Oriental Kish Oil Company have been arrested and under questioning. The head of the board of directors was also among those detained.”
Halliburton, with a history of violations of U.S. law by conducting business with countries the Bush administration claims are supporting “terrorism”, was working with Cyrus Nasseri, vice chairman of the board of directors of Oriental Oil Kish, on oil and natural gas development projects in Tehran, registered in the United Kingdom and Dubai. Nasseri, a key member of Iran’s nuclear development team, participated in Iran’s nuclear negotiating with the European Union and the International Atomic Energy Agency.
According to a report published by the Financial Times: “Nasseri, a senior Iranian diplomat negotiating with Europe over Iran's nuclear program, is at the heart of deals with U.S. energy companies to develop the country's oil industry”.
“A reliable source stated that, given the parameters, the close-knit cooperation and association of one of the key members of the regime's nuclear negotiation team with Halliburton can be an alarm bell which will necessarily instigate the dynamics of the members of the regimes' negotiating committee,” according to the Iran Press News story.
In late July, Nasseri was questioned for passing Iran’s nuclear secrets to Halliburton and receiving $1 million in bribes from the company, Iranian government officials said.
According to Iran Press News, a huge network of oil mafia was uncovered during investigations.
Halliburton sources revealed that the company sold Iran centrifuges and detonators to be used specifically for a nuclear reactor as well oil and natural gas drilling parts for well projects to Oriental Oil Kish.
Halliburton’s business with Oriental Oil Kish first surfaced in January, when the Iranian company said that it gave some contracts of the South Pars natural gas drilling project to Halliburton Products and Services, a subsidiary of Dallas-based Halliburton.
Later on, Halliburton said the South Pars gas field project in Iran will be the its last project in the country, “due to a poor business environment,” according to BBC.
In May and under mounting pressure from lawmakers in Washington, Halliburton decided to end its deals with Nasseri, but continued acting as an advisory capacity to his company.
Currently, the U.S. law doesn’t prohibit foreign subsidiaries from having business with what President Bush calls “rouge” nations as long as the subsidiaries are truly independent of the mother company.
But Halliburton’s Cayman Island subsidiary never did fit that description.
According to a February 2001 report in the Wall Street Journal, “Halliburton Products & Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is non-American. But, like the sign over the receptionist's head, the brochure bears the company's name and red emblem, and offers services from Halliburton units around the world.”
Cheney was CEO from 1995 to 2000, during which Halliburton Products and Services set up shop in Iran.
Halliburton, which sells about $40 million a year worth of oil field services to the Iranian Government, was secretly aiding one of Iran’s top nuclear program officials on natural gas related projects and provided the official's oil development company with the components last April, the sources said.
FARS, one of Iran's many state controlled news agencies reported last month the arrest of several executives of the Oriental Oil Kish Company, which is owned by sons and other relatives of the defeated mullah presidential candidate Hashemi Rafsanjani, saying that the men were involved in widespread corruption of Iran's oil industry, specifically tied to the country's business dealings with Halliburton.
According to a report posted on the Iran Press News website: "They were brought up on charges of economic corruption". “Following the necessary investigations by the judiciary's bailiffs, with warrants from the public prosecutor's office, the case of economic corruption and malfeasance, certain of the authorities of Oriental Kish Oil Company have been arrested and under questioning. The head of the board of directors was also among those detained.”
Halliburton, with a history of violations of U.S. law by conducting business with countries the Bush administration claims are supporting “terrorism”, was working with Cyrus Nasseri, vice chairman of the board of directors of Oriental Oil Kish, on oil and natural gas development projects in Tehran, registered in the United Kingdom and Dubai. Nasseri, a key member of Iran’s nuclear development team, participated in Iran’s nuclear negotiating with the European Union and the International Atomic Energy Agency.
According to a report published by the Financial Times: “Nasseri, a senior Iranian diplomat negotiating with Europe over Iran's nuclear program, is at the heart of deals with U.S. energy companies to develop the country's oil industry”.
“A reliable source stated that, given the parameters, the close-knit cooperation and association of one of the key members of the regime's nuclear negotiation team with Halliburton can be an alarm bell which will necessarily instigate the dynamics of the members of the regimes' negotiating committee,” according to the Iran Press News story.
In late July, Nasseri was questioned for passing Iran’s nuclear secrets to Halliburton and receiving $1 million in bribes from the company, Iranian government officials said.
According to Iran Press News, a huge network of oil mafia was uncovered during investigations.
Halliburton sources revealed that the company sold Iran centrifuges and detonators to be used specifically for a nuclear reactor as well oil and natural gas drilling parts for well projects to Oriental Oil Kish.
Halliburton’s business with Oriental Oil Kish first surfaced in January, when the Iranian company said that it gave some contracts of the South Pars natural gas drilling project to Halliburton Products and Services, a subsidiary of Dallas-based Halliburton.
Later on, Halliburton said the South Pars gas field project in Iran will be the its last project in the country, “due to a poor business environment,” according to BBC.
In May and under mounting pressure from lawmakers in Washington, Halliburton decided to end its deals with Nasseri, but continued acting as an advisory capacity to his company.
Currently, the U.S. law doesn’t prohibit foreign subsidiaries from having business with what President Bush calls “rouge” nations as long as the subsidiaries are truly independent of the mother company.
But Halliburton’s Cayman Island subsidiary never did fit that description.
According to a February 2001 report in the Wall Street Journal, “Halliburton Products & Services Ltd. works behind an unmarked door on the ninth floor of a new north Tehran tower block. A brochure declares that the company was registered in 1975 in the Cayman Islands, is based in the Persian Gulf sheikdom of Dubai and is non-American. But, like the sign over the receptionist's head, the brochure bears the company's name and red emblem, and offers services from Halliburton units around the world.”
Sunday, August 07, 2005
The Seattle Times: Nation & World: Unafraid to blow the whistle
By Deborah Hastings
The Associated Press
WASHINGTON — In the world as Bunnatine Greenhouse sees it, people do the right thing. They stand up for the greater good, and they speak up when things go wrong. She believes God has a purpose for each life, and she prays every day for that purpose to be made evident.
She is praying her heart out these days, because she is in a great deal of trouble.
Bunnatine "Bunny" Greenhouse is the Principal Assistant Responsible for Contracting ("PARC" in the alphabet soup of military acronyms) in the Army Corps of Engineers. Lest the title fool, she is responsible for awarding billions upon billions in taxpayers' money to private companies hired to resurrect war-torn Iraq and to feed, clothe, shelter and do the laundry of American troops stationed there.
She has rained a mighty storm upon herself for standing up, before members of Congress and live on C-SPAN, to proclaim things are just not right in this staggeringly profitable business.
She has asked many questions: Why is Halliburton — a giant Texas firm that holds more than 50 percent of all rebuilding efforts in Iraq — receiving billions in contracts without competitive bidding? Do the duration of those contracts make sense? Have there been violations of federal laws regulating how the government can spend its money?
Halliburton denies wrongdoing. "These false allegations have been recycled in the media ad nauseam," the company said in response to a list of e-mailed questions from The Associated Press.
Bunny Greenhouse now may lose her job — and her reputation, which she spent a lifetime building.
She is a black woman in a world of mostly white men; a 60-year-old workaholic who abides neither fools nor frauds. But she is out of her element in this fight, her former boss said.
"What Bunny is caught up in is politics of the highest damn order," said retired Gen. Joe Ballard, who hired Greenhouse and headed the Corps until 2000. "This is real hardball they're playing here. Bunny is a procurement officer, she's not a politician. She's not trained to do this."
Stirring the pot
Greenhouse has known for a long time that her days may be numbered. Her needling of contracts awarded to Halliburton subsidiary Kellogg, Brown & Root (KBR) predated the Iraq war, beginning with costs she said were spiraling "out of control" from a 2000 Bosnia contract to service U.S. troops. From 1995 to 2000, Halliburton's CEO was Dick Cheney, who left to run for vice president. He maintains his former company has not received preferential treatment.
She since had questioned both the amounts and the reasons for giving KBR tremendous contracts in the buildup to invading Iraq. She was ignored at first, she said. She then was cut out of the decision-making process.
On Oct. 6, she was summoned to the office of her boss. Maj. Gen. Robert Griffin, the Corps' deputy commander, was demoting her, he told her, taking away her Senior Executive Service status and sending her to midlevel management. Griffin declined to be interviewed.
Her performance was poor, according to a letter he presented. This was a surprise. Her previous job evaluations had been exemplary, she said.
If she didn't want the new position, she could retire with full benefits, the letter noted.
Over my dead body, Greenhouse said.
She has hired lawyer Michael Kohn. Two weeks after Greenhouse's trip to the woodshed, Kohn wrote a letter to the acting secretary of the Army, requesting an independent investigation of "improper action that favored KBR's interests."
The status of an independent investigation by the Defense Department is unclear. "As a matter of policy, we do not comment on open and ongoing investigations," said Lt. Col. Rose-Ann Lynch, a Pentagon spokeswoman.
Halliburton also is under federal investigation for alleged favoritism by the Bush administration. FBI agents questioned Greenhouse for nine hours in November about that probe. In March, a former employee was indicted for taking bribes while working for KBR in Iraq.
Company spokeswoman Melissa Norcross said KBR has "delivered vital services for U.S. troops and the Iraqi people at a fair and reasonable cost, given the circumstances."
Going after the big boys
When Ballard hired Greenhouse in 1997 she was overqualified — three master's degrees and more than 20 years of contracting experience in private industry and the military.
"She is probably the most professional person I've ever met," Ballard said.
Ballard used her, he said, to help him revolutionize the Corps — by ending the old-boys practice of awarding contracts to a favored few, and by imposing private-industry standards on a mammoth, 230-year-old government agency.
"The Corps is a tough organization. And I'll tell you, it's not easy to be a woman in this organization, and a black one at that," said Ballard, who was the first black leader of the Corps.
He is not optimistic about her future.
"I think you can put a fork in it," he said. "Her career is done."
At Corps headquarters, few speak to her, she said, and her bosses write down what she says at departmental meetings.
In a city where politics is everything, including blood sport, she refuses to play.
"I have never gone along to get along," she said.
Her contracting staff was reduced sharply, she said, and her superiors have gone behind her back, most notably in issuing an emergency waiver — on a day she was out of the office — that allowed KBR to ignore requests from Department of Defense auditors who issued a draft report in 2003 concluding KBR overcharged the government $61 million for fuel in Iraq.
The Army Corps of Engineers declined to comment on Greenhouse's complaints. "It's a personnel matter," Corps spokeswoman Carol Sanders said.
"They want me out," Greenhouse said.
A list of one
Greenhouse is mandated by Congress to find the best quality at the cheapest price from the most qualified supplier. Over her objections, KBR was awarded three multibillion-dollar contracts, two without competitive bidding.
Greenhouse's most strenuous complaints were over the Restore Iraqi Oil contract, estimated at $7 billion, originally planned to handle oil-field fires that might be started by Saddam Hussein's troops. When that didn't happen, it morphed into an agreement to repair oil fields and import fuel.
KBR was given the contract in March 2003. In Greenhouse's view, that process violated federal regulations concerning fair and open bidding. Halliburton denies that.
Later, she would tell Democratic members of Congress: "The abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have ever witnessed during the course of my professional career."
At the Corps, Greenhouse said she was told KBR was the only qualified firm.
With the country on the brink of war, she reluctantly signed the RIO contract.
Greenhouse grew up in the segregated South. Her brother is Elvin Hayes, the Hall of Fame basketball player. She's a registered independent. Her husband, Aloyisus, is retired after a career as a senior Army procurement officer. They have three grown children.
No matter what, Bunny Greenhouse's faith still beams.
"I simply believe that we have callings and purposes in this life. I walk through this life for a purpose. I wake up every day for a purpose. And every day I say, 'Here I am. Send me.' "
Copyright © 2005 The Seattle Times Company
The Associated Press
WASHINGTON — In the world as Bunnatine Greenhouse sees it, people do the right thing. They stand up for the greater good, and they speak up when things go wrong. She believes God has a purpose for each life, and she prays every day for that purpose to be made evident.
She is praying her heart out these days, because she is in a great deal of trouble.
Bunnatine "Bunny" Greenhouse is the Principal Assistant Responsible for Contracting ("PARC" in the alphabet soup of military acronyms) in the Army Corps of Engineers. Lest the title fool, she is responsible for awarding billions upon billions in taxpayers' money to private companies hired to resurrect war-torn Iraq and to feed, clothe, shelter and do the laundry of American troops stationed there.
She has rained a mighty storm upon herself for standing up, before members of Congress and live on C-SPAN, to proclaim things are just not right in this staggeringly profitable business.
She has asked many questions: Why is Halliburton — a giant Texas firm that holds more than 50 percent of all rebuilding efforts in Iraq — receiving billions in contracts without competitive bidding? Do the duration of those contracts make sense? Have there been violations of federal laws regulating how the government can spend its money?
Halliburton denies wrongdoing. "These false allegations have been recycled in the media ad nauseam," the company said in response to a list of e-mailed questions from The Associated Press.
Bunny Greenhouse now may lose her job — and her reputation, which she spent a lifetime building.
She is a black woman in a world of mostly white men; a 60-year-old workaholic who abides neither fools nor frauds. But she is out of her element in this fight, her former boss said.
"What Bunny is caught up in is politics of the highest damn order," said retired Gen. Joe Ballard, who hired Greenhouse and headed the Corps until 2000. "This is real hardball they're playing here. Bunny is a procurement officer, she's not a politician. She's not trained to do this."
Stirring the pot
Greenhouse has known for a long time that her days may be numbered. Her needling of contracts awarded to Halliburton subsidiary Kellogg, Brown & Root (KBR) predated the Iraq war, beginning with costs she said were spiraling "out of control" from a 2000 Bosnia contract to service U.S. troops. From 1995 to 2000, Halliburton's CEO was Dick Cheney, who left to run for vice president. He maintains his former company has not received preferential treatment.
She since had questioned both the amounts and the reasons for giving KBR tremendous contracts in the buildup to invading Iraq. She was ignored at first, she said. She then was cut out of the decision-making process.
On Oct. 6, she was summoned to the office of her boss. Maj. Gen. Robert Griffin, the Corps' deputy commander, was demoting her, he told her, taking away her Senior Executive Service status and sending her to midlevel management. Griffin declined to be interviewed.
Her performance was poor, according to a letter he presented. This was a surprise. Her previous job evaluations had been exemplary, she said.
If she didn't want the new position, she could retire with full benefits, the letter noted.
Over my dead body, Greenhouse said.
She has hired lawyer Michael Kohn. Two weeks after Greenhouse's trip to the woodshed, Kohn wrote a letter to the acting secretary of the Army, requesting an independent investigation of "improper action that favored KBR's interests."
The status of an independent investigation by the Defense Department is unclear. "As a matter of policy, we do not comment on open and ongoing investigations," said Lt. Col. Rose-Ann Lynch, a Pentagon spokeswoman.
Halliburton also is under federal investigation for alleged favoritism by the Bush administration. FBI agents questioned Greenhouse for nine hours in November about that probe. In March, a former employee was indicted for taking bribes while working for KBR in Iraq.
Company spokeswoman Melissa Norcross said KBR has "delivered vital services for U.S. troops and the Iraqi people at a fair and reasonable cost, given the circumstances."
Going after the big boys
When Ballard hired Greenhouse in 1997 she was overqualified — three master's degrees and more than 20 years of contracting experience in private industry and the military.
"She is probably the most professional person I've ever met," Ballard said.
Ballard used her, he said, to help him revolutionize the Corps — by ending the old-boys practice of awarding contracts to a favored few, and by imposing private-industry standards on a mammoth, 230-year-old government agency.
"The Corps is a tough organization. And I'll tell you, it's not easy to be a woman in this organization, and a black one at that," said Ballard, who was the first black leader of the Corps.
He is not optimistic about her future.
"I think you can put a fork in it," he said. "Her career is done."
At Corps headquarters, few speak to her, she said, and her bosses write down what she says at departmental meetings.
In a city where politics is everything, including blood sport, she refuses to play.
"I have never gone along to get along," she said.
Her contracting staff was reduced sharply, she said, and her superiors have gone behind her back, most notably in issuing an emergency waiver — on a day she was out of the office — that allowed KBR to ignore requests from Department of Defense auditors who issued a draft report in 2003 concluding KBR overcharged the government $61 million for fuel in Iraq.
The Army Corps of Engineers declined to comment on Greenhouse's complaints. "It's a personnel matter," Corps spokeswoman Carol Sanders said.
"They want me out," Greenhouse said.
A list of one
Greenhouse is mandated by Congress to find the best quality at the cheapest price from the most qualified supplier. Over her objections, KBR was awarded three multibillion-dollar contracts, two without competitive bidding.
Greenhouse's most strenuous complaints were over the Restore Iraqi Oil contract, estimated at $7 billion, originally planned to handle oil-field fires that might be started by Saddam Hussein's troops. When that didn't happen, it morphed into an agreement to repair oil fields and import fuel.
KBR was given the contract in March 2003. In Greenhouse's view, that process violated federal regulations concerning fair and open bidding. Halliburton denies that.
Later, she would tell Democratic members of Congress: "The abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have ever witnessed during the course of my professional career."
At the Corps, Greenhouse said she was told KBR was the only qualified firm.
With the country on the brink of war, she reluctantly signed the RIO contract.
Greenhouse grew up in the segregated South. Her brother is Elvin Hayes, the Hall of Fame basketball player. She's a registered independent. Her husband, Aloyisus, is retired after a career as a senior Army procurement officer. They have three grown children.
No matter what, Bunny Greenhouse's faith still beams.
"I simply believe that we have callings and purposes in this life. I walk through this life for a purpose. I wake up every day for a purpose. And every day I say, 'Here I am. Send me.' "
Copyright © 2005 The Seattle Times Company
Saturday, August 06, 2005
Ex-Employees Faulted Halliburton Role in Iraq - from TBO.com
By Deborah Hastings The Associated Press
Published: Aug 6, 2005
WASHINGTON (AP) - Others besides Bunnatine Greenhouse have testified that Halliburton, the biggest holder of American rebuilding contracts in Iraq, has deceived the government and cheated taxpayers.
The company denies the claims.
Rory Mayberry, who worked for Halliburton subsidiary KBR from February through April 2004, testified from Iraq, via videotape, to the Democratic Policy Committee in June.
As a food manager at a U.S. military camp, Mayberry said he witnessed KBR employees serving spoiled food to American troops, including items whose expiration date was more than a year old, and food from trucks that had been bombed and shot at. "We were told to go into the trucks and remove the food items and use them after removing the bullets and any shrapnel," Mayberry said.
Halliburton also charged the U.S. government for hundreds of specialty meals prepared for foreign workers from Turkey and the Philippines, Mayberry said. The foreign workers were actually given leftovers from troop meals, Mayberry said.
KBR managers told employees not to speak with government auditors who arrived at the camp, Mayberry said, saying he ignored those orders. As punishment, he said, he was sent to Fallujah for three weeks, where there was heavy fighting. "The employees that talked to the auditors were moved to other bases that were under fire," Mayberry told the committee.
Its members expressed outrage.
"There obviously is no honor by a company that would serve outdated food to American troops in Iraq, serving their country," said Sen. Byron Dorgan, D-N.D. "The more I learn, the more I shake my head and wonder. Who on Earth is minding the store here?"
Halliburton spokeswoman Melissa Norcross said the claims were a "gross mischaracterization." KBR does not interfere with government auditors, she said. Food service is monitored by employees and invoices are not padded.
"The only thing that has been inflated is the political rhetoric," Norcross said.
In July 2004, former KBR logistics and subcontract planner Marie DeYoung testified before the House Committee on Government Reform. While working in Kuwait, she said, she was told by KBR managers to pay invoices to subcontractors without verifying their accuracy - because government auditors were only scrutinizing unpaid bills.
DeYoung said she also witnessed "significant waste and overpricing" for laundry and other services provided to troops. That included paying $100 per 15-pound bag of laundry in Iraq, a cost which was passed on to the government.
"Every dollar that is squandered because of waste, fraud, or abuse is a dollar we do not have for critical equipment and supplies for our troops," said DeYoung, who served more than 10 years in the military as a commander, a chaplain and an operations officer.
Published: Aug 6, 2005
WASHINGTON (AP) - Others besides Bunnatine Greenhouse have testified that Halliburton, the biggest holder of American rebuilding contracts in Iraq, has deceived the government and cheated taxpayers.
The company denies the claims.
Rory Mayberry, who worked for Halliburton subsidiary KBR from February through April 2004, testified from Iraq, via videotape, to the Democratic Policy Committee in June.
As a food manager at a U.S. military camp, Mayberry said he witnessed KBR employees serving spoiled food to American troops, including items whose expiration date was more than a year old, and food from trucks that had been bombed and shot at. "We were told to go into the trucks and remove the food items and use them after removing the bullets and any shrapnel," Mayberry said.
Halliburton also charged the U.S. government for hundreds of specialty meals prepared for foreign workers from Turkey and the Philippines, Mayberry said. The foreign workers were actually given leftovers from troop meals, Mayberry said.
KBR managers told employees not to speak with government auditors who arrived at the camp, Mayberry said, saying he ignored those orders. As punishment, he said, he was sent to Fallujah for three weeks, where there was heavy fighting. "The employees that talked to the auditors were moved to other bases that were under fire," Mayberry told the committee.
Its members expressed outrage.
"There obviously is no honor by a company that would serve outdated food to American troops in Iraq, serving their country," said Sen. Byron Dorgan, D-N.D. "The more I learn, the more I shake my head and wonder. Who on Earth is minding the store here?"
Halliburton spokeswoman Melissa Norcross said the claims were a "gross mischaracterization." KBR does not interfere with government auditors, she said. Food service is monitored by employees and invoices are not padded.
"The only thing that has been inflated is the political rhetoric," Norcross said.
In July 2004, former KBR logistics and subcontract planner Marie DeYoung testified before the House Committee on Government Reform. While working in Kuwait, she said, she was told by KBR managers to pay invoices to subcontractors without verifying their accuracy - because government auditors were only scrutinizing unpaid bills.
DeYoung said she also witnessed "significant waste and overpricing" for laundry and other services provided to troops. That included paying $100 per 15-pound bag of laundry in Iraq, a cost which was passed on to the government.
"Every dollar that is squandered because of waste, fraud, or abuse is a dollar we do not have for critical equipment and supplies for our troops," said DeYoung, who served more than 10 years in the military as a commander, a chaplain and an operations officer.
9news.com | News | Ex-employees faulted Halliburton role in Iraq
WASHINGTON (AP) - Others besides Bunnatine Greenhouse have testified that Halliburton, the biggest holder of American rebuilding contracts in Iraq, has deceived the government and cheated taxpayers.
The company denies the claims.
Rory Mayberry, who worked for Halliburton subsidiary KBR from February through April 2004, testified from Iraq, via videotape, to the Democratic Policy Committee in June.
As a food manager at a U.S. military camp, Mayberry said he witnessed KBR employees serving spoiled food to American troops, including items whose expiration date was more than a year old, and food from trucks that had been bombed and shot at. "We were told to go into the trucks and remove the food items and use them after removing the bullets and any shrapnel," Mayberry said.
Halliburton also charged the U.S. government for hundreds of specialty meals prepared for foreign workers from Turkey and the Philippines, Mayberry said. The foreign workers were actually given leftovers from troop meals, Mayberry said.
KBR managers told employees not to speak with government auditors who arrived at the camp, Mayberry said, saying he ignored those orders. As punishment, he said, he was sent to Fallujah for three weeks, where there was heavy fighting. "The employees that talked to the auditors were moved to other bases that were under fire," Mayberry told the committee.
Its members expressed outrage.
"There obviously is no honor by a company that would serve outdated food to American troops in Iraq, serving their country," said Sen. Byron Dorgan, D-N.D. "The more I learn, the more I shake my head and wonder. Who on Earth is minding the store here?"
Halliburton spokeswoman Melissa Norcross said the claims were a "gross mischaracterization." KBR does not interfere with government auditors, she said. Food service is monitored by employees and invoices are not padded.
"The only thing that has been inflated is the political rhetoric," Norcross said.
In July 2004, former KBR logistics and subcontract planner Marie DeYoung testified before the House Committee on Government Reform. While working in Kuwait, she said, she was told by KBR managers to pay invoices to subcontractors without verifying their accuracy -- because government auditors were only scrutinizing unpaid bills.
DeYoung said she also witnessed "significant waste and overpricing" for laundry and other services provided to troops. That included paying $100 per 15-pound bag of laundry in Iraq, a cost which was passed on to the government.
"Every dollar that is squandered because of waste, fraud, or abuse is a dollar we do not have for critical equipment and supplies for our troops," said DeYoung, who served more than 10 years in the military as a commander, a chaplain and an operations officer.
The company denies the claims.
Rory Mayberry, who worked for Halliburton subsidiary KBR from February through April 2004, testified from Iraq, via videotape, to the Democratic Policy Committee in June.
As a food manager at a U.S. military camp, Mayberry said he witnessed KBR employees serving spoiled food to American troops, including items whose expiration date was more than a year old, and food from trucks that had been bombed and shot at. "We were told to go into the trucks and remove the food items and use them after removing the bullets and any shrapnel," Mayberry said.
Halliburton also charged the U.S. government for hundreds of specialty meals prepared for foreign workers from Turkey and the Philippines, Mayberry said. The foreign workers were actually given leftovers from troop meals, Mayberry said.
KBR managers told employees not to speak with government auditors who arrived at the camp, Mayberry said, saying he ignored those orders. As punishment, he said, he was sent to Fallujah for three weeks, where there was heavy fighting. "The employees that talked to the auditors were moved to other bases that were under fire," Mayberry told the committee.
Its members expressed outrage.
"There obviously is no honor by a company that would serve outdated food to American troops in Iraq, serving their country," said Sen. Byron Dorgan, D-N.D. "The more I learn, the more I shake my head and wonder. Who on Earth is minding the store here?"
Halliburton spokeswoman Melissa Norcross said the claims were a "gross mischaracterization." KBR does not interfere with government auditors, she said. Food service is monitored by employees and invoices are not padded.
"The only thing that has been inflated is the political rhetoric," Norcross said.
In July 2004, former KBR logistics and subcontract planner Marie DeYoung testified before the House Committee on Government Reform. While working in Kuwait, she said, she was told by KBR managers to pay invoices to subcontractors without verifying their accuracy -- because government auditors were only scrutinizing unpaid bills.
DeYoung said she also witnessed "significant waste and overpricing" for laundry and other services provided to troops. That included paying $100 per 15-pound bag of laundry in Iraq, a cost which was passed on to the government.
"Every dollar that is squandered because of waste, fraud, or abuse is a dollar we do not have for critical equipment and supplies for our troops," said DeYoung, who served more than 10 years in the military as a commander, a chaplain and an operations officer.
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