The Atlanta Journal-Constitution: 5/8/03 ]
OUR VIEW
Secret Halliburton deal endangers U.S. credibility
After repeated assurances that the United States had no intention of handing control of Iraq's oil reserves to American companies, the news comes out that a no-bid contract granted to a company controlled by Halliburton -- Vice President Dick Cheney's old employer -- goes beyond emergency repair of Iraqi oil infrastructure to include running Iraq's oil business and distributing its products.
That contract had already been a cause of considerable controversy. Only Kellogg, Brown & Root, the Halliburton subsidiary, had been invited to bid on it, and the contract did not become public until two weeks after it was signed in March. The true scope of the contract was not disclosed until May 2.
The contract was also awarded despite serious concerns about waste and fraud in previous KBR contracts with the Army, carried out while Cheney was Halliburton's CEO. One allegation in a General Accounting Office report in 1997 claimed KBR charged the Army more than $85 per sheet for plywood for building projects in Bosnia. A follow-up report in 2000 said KBR crews were being paid to clean offices as often as four times a day. The company received more than $2 billion for contract work in the Balkans.
It may be perfectly true, as the Army Corps of Engineers asserts, that KBR was the only company with the proper security clearances, equipment and expertise to put out oil fires in Iraq, although others in the industry dispute that claim. It may also be advisable to allow KBR to pump and distribute oil from the repaired oil fields until a competitive bidding procedure can be put in place.
The KBR contract may indeed have been the best way to handle an emergency that could have been critical to the war effort in Iraq. And Cheney's connections with the firm -- he still receives $180,000 a year in deferred compensation from Halliburton -- probably had no direct impact on its ability to win the Iraq oil contract.
Yet, if all that is true, why award the contract in secret? Why not disclose the entire scope of the contract -- up to $7 billion over two years -- immediately? Why not explain to the American people why KBR was the best company to carry out the work, despite concerns about past performance and the appearance of a connection with the vice president?
The administration asks the people of both the United States and Iraq to trust that, when the dust of war settles, Iraq's oil wealth will belong to its people and will be used to rebuild the country's infrastructure and institutions. But to gain that trust, the administration must stop appearing to wield secrecy and favoritism in the award of contracts.
Otherwise, the perception of colonial intentions will turn into resistance and resentment on both sides of the Atlantic. And that will scuttle whatever good was done by disposing the Saddam Hussein regime. |
