January 04, 2008 (the date of publication in Russian)

Grigory Tinsky


Why does the US justice so fear to touch VP Cheney's pocket firm?

Part 1:

Part 2:


Since 2004, the Federal bureau of Investigations had been receiving signals on financial swindle, committed by Halliburton's top managers. Bunnatine Greenhouse, a former employee of the corporation – where she was responsible for distribution of the Corps of Engineers' orders – underwent several interrogations. In late October 2008, Ms. Greenhouse confessed that the corporation had received multi-billion contracts for reconstruction of Iraqi oil industry under non-bid conditions, i.e. contrary to the US legislation, and agreed to cooperate with the investigation. "The Bureau's officers interrogated the witness on all major contracts of the company and involvement of top state officials", said Ms. Greenhouse's lawyer Michael Cohn.

According to Ms. Greenhouse's testimony, she repeatedly addressed the company's leadership, asking why Halliburton enjoys privileges in distribution of Pentagon's orders. She received no clear answer, but her boss isolated her from the decision room.

Speaking to press, Mr. Cohn refused to name particular defense officials whose names surfaced in the lady's testimony. He insisted that those were not top-level names. However, AP found out from another source that Ms. Greenhouse subsequently provided additional information on distribution of orders, in which one top name was mentioned. Shortly thereafter, DOD auditors recommended that Pentagon abstain from disbursing new finances to Halliburton before the first results of the investigation were available.

The attorneys admit that during 2004, Halliburton was repeatedly exposed of overvaluation of contracts for delivery of fuel, victuals, and clothing to the US contingent in Iraq. It was also confirmed that VP Dick Cheney used his position for receiving contracts for reconstruction of Iraq's oil industry for a sum of $17 billion.

Halliburton's leadership admits that an internal investigation revealed evidence of intention of some members of a consortium, where the company was involved, to bribe Nigerian officials in order to get a lucrative contract in that country – namely, for implementation of a multi-billion project of a LNG facility in Bonny Island.

However, according to Halliburton, the fact of bribery was not confirmed. The company's spokesman emphasizes that the company's then-partner M.W.Kellogg hadn't yet been purchased by Halliburton.

In another case, Halliburton was subpoenaed over a contract signed by the company's subsidiary on Cayman Isles. The company denied any facts of financial transactions through this subsidiary.

Answering to the third complaint, revealing involvement of the corporation in Iran where US companies are not allowed to run any operations, Halliburton indicated that US laws don't forbid independent subsidiaries, staffed by local personnel, to work in Iran.

Thus, the Department of Justice is investigating today only the case of overvaluation of fuel in the abovementioned contract for supplying US military forces in Iraq.



The fact that VP Dick Cheney used the war in Iraq for his personal interests is undoubted. Could he have promoted the war campaign for relevant corporate purposes? An anonymous hacker, breaking into Pentagon's postbox, conveyed a curious exchange of messages to Time's author. The messages made clear that the VP was directly involved in signing a number of oil industry reconstruction contracts for the company in Iraq.

Contrary to Cheney's allegations that he had given up all the connections with his former job after being elected VP, an unidentified army officer reports on March 5, 2003, that he "does not see any obstacles for signing the contract (with Halliburton), as the issue is already coordinated with the Office of the Vice President". Other bids for the contracts were not even taken into consideration.

The subject of distribution of military contracts excited the US lawmakers. A report, prepared by the House Government Reform Committee, acknowledged that only during the last year, a multitude of contracts for a total of $107 billion were signed without an open competition, three fourths of them being related to Iraq, and most of them won by Halliburton.

Naturally, Mr. Cheney claimed that he knew nothing of his former company's contracts in Iraq. Lewis "Scooter" Libby, then-Chief of Vice President’s Staff, said he was informed about the contracts but did not tell his boss about them: he would not like to maneuver the boss into an "awkward position". At one of the Pentagon briefings, Libby claimed that the VP's Staff would not get involved in Halliburton's activity. NSC member Frank Miller, who was present at the briefing, confirmed this fact to AP.



VP Dick Cheney has got enough grounds for getting into an awkward position. Testifying to the House Commission, several former employees of the company reported that Halliburton's contractors grossly overvalued services for US troops in Iraq. For instance, laundering of 7 kg of clobbers was priced at $100, while a $85,000-worth trucks were discarded because of a single blow out.

DOD's auditors eventually calculated that the amount of finances, overvalued or wasted by Halliburton in Iraq, reached $8 billion. The Department refused to pay the company the required $159.5 million for a major contract before the auditors check the price of food purchased by Kellogg, Brown & Root for delivery to Iraq and Kuwait. Military auditors estimated that KBR had overvalued food prices by 19%, while the terms of the contract allowed revision of the amount due.

When it was eventually found out that the purchased victuals were overvalued not by 19% but twofold to threefold, Halliburton's top managers refused to comment.



Two Democratic Reps have already accused Halliburton of deliberate overvaluation of gasoline prices, thus "profiteering for expense of US taxpayers". This scandal may flare up anew. After the almost complete destruction of Iraq's oil refining industry, the oil-rich country has to import gasoline from Kuwait.

Oil expert Phil Verleger, president of PK Verleger LLC, indicates that Halliburton's import of gasoline to Iraq is still paid twice more than that of two other companies. For instance, SOMO sells a gallon of gasoline for $0.96, and Pentagon's Energy Supply Center for $1.19. Meanwhile, Halliburton distributes gasoline for $2.64-3.4, though receiving the fuel directly from its subcontractor. "I've never seen anything like that", confesses Verleger. "This is privileged monopolist pricing, and there's no other name for it. Any US or European company would hypersalivate over such a contract".

Halliburton's officials explain the excessive pricing with high expenses for security and a "generally unstable situation in the area", complaining that the company has already lost 20 trucks, one driver killed and 9 injured. Observers argue that all the gasoline suppliers encounter those hardships but only Halliburton is allowed to trade under such terms.

Rep. (D) Henry Waxman has promised that the "odd" relationship between the White House and Halliburton will become a subject of a "most intensive scrutiny" of the Congress. "Americans pay wild money for buying gasoline for the Iraqi. That is unacceptable. But most disgustingly, all that is going on with the White House's approval", Waxman says.



A recent CBS report added more features to the portrait of Cheney's pocket company. Halliburton is reported to have dispatched its personnel to object with high risk of fatal diseases. James Gentry, a former guard of a sewage facility where toxic chemical substances were used, today suffers from a rare form of lung cancer. Journalists have found documents confirming that the company's bosses were aware of the hazard but did not inform the personnel.

Is the US justice so powerless to call the high-handed firm wasting US taxpayers' money to account? Or, maybe, DOJ’s power is long overridden by General Franco's principle "everything for friends, and law for the rest"?

(To be continued)

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