Cheney ties to contractor questioned

House Democrats seek probe of Iraq bidding

April 09, 2003|By NEW YORK TIMES NEWS SERVICE

WASHINGTON - House Democrats yesterday called for an investigation into whether Bush administration contracts to rebuild Iraq favored a corporation once headed by Vice President Dick Cheney.

The company's Texas subsidiary was selected without competitive bids to extinguish oil well fires.

Democratic Reps. Henry A. Waxman of California and John D. Dingell of Michigan, in a letter to the General Accounting Office (GAO), the investigative arm of Congress, are seeking a review of the contract process under way at the U.S. Agency for International Development for $1.7 billion worth of work in postwar Iraq.

The lawmakers want a probe of the contract given to Kellogg, Brown & Root, a Halliburton subsidiary, that was awarded by the U.S. Army Corps of Engineers. Waxman said the deal is worth "tens of millions of dollars."

Cheney was the chief executive of Halliburton from 1995 to 2000. He received $20 million in compensation when he resigned his position to become a candidate for the Republican vice presidential nomination.

A spokeswoman for the vice president did not return a call seeking comment.

A Halliburton spokeswoman in Houston, Wendy Hall, denied that Cheney's ties played a role in the contracts.

"The vice president has absolutely nothing to do with the awarding of defense contracts, the bidding process or the current work orders," Hall said.

But in the letter to the GAO, Waxman and Dingell said Cheney has received an additional $13 million in stock rights from Halliburton and continues to receive $180,000 in deferred salary, annually.

"These ties between the vice president and Halliburton have raised concerns about whether the company has received favorable treatment from the administration," the lawmakers wrote.

"These concerns have increased in recent days with the disclosure that Halliburton's subsidiary Kellogg Brown & Root has been awarded lucrative Defense Department contracts despite having a record of excessive costs and other problems," the letter stated.

Hall disputed allegations by Waxman and Dingell that Kellogg Brown & Root has a record of problems, and pointed to years of experience in working with the Pentagon during times of conflict.

She cited the production of naval ships for World War II, the construction of Phan Rang Air Base in Vietnam in 1965 and the designation of Kellogg Brown & Root has the main contractor for services provided to U.S. troops in the Balkans.

A USAID spokesman said the agency has not been formally notified about a GAO investigation, but welcomed the opportunity to respond to the lawmakers' questions.

"We have followed the same expedited procurement procedures under federal law allowing us to limit the number of competing firms in order to shorten the decision time," the USAID spokesman said.

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