Halliburton probe could spread to US embassy staff By Joshua Chaffin and Demetri Sevastopulo in Washington
Published: February 25 2004 1:03 | Last Updated: February 25 2004 1:03
US embassy officials in Kuwait could be drawn into a criminal investigation into Halliburton's fuel imports into Iraq.
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The Pentagon has asked the State Department's inspector-general to review actions of embassy staff there as part of an investigation into whether Halliburton overcharged the government for fuel it hauled from Kuwait to Iraq, according to a letter released by Democratic members of Congress on Tuesday.
The State Department inspector-general declined to comment on Tuesday. But the request raises new questions about what role diplomats played in Halliburton's selection of Altanmia Commercial Marketing, a Kuwaiti supplier, and subsequent investigation of the arrangement.
Halliburton, an oilfield services company formerly headed by vice-president Dick Cheney, has been at the centre of a series of scandals on its work in postwar Iraq.
The Pentagon's inspector-general said on Monday it was opening a criminal inquiry after auditors determined the company's Kellogg Brown & Root division might have passed on $61m (?48m, £32m) in excess charges from Altanmia to the US government. Halliburton has consistently denied any wrongdoing, saying it supplied the fuel at the best price and value.
In December the US Army Corps of Engineers, which was overseeing the contract, appeared to exonerate KBR by granting a waiver allowing the company to continue using Altanmia despite the Kuwaiti company's reluctance to provide information that would justify its prices.
The waiver, which emerged as Pentagon auditors were scrutinising the contracts, was granted on the grounds that Altanmia was prohibited by Kuwaiti law from disclosing such information. But Henry Waxman and John Dingell, the two senior Democrats on the House government reform committee, said on Tuesday that this appeared to be a "false premise".
"Several independent sources have told us that Kuwaiti law does not prohibit the submission of certified cost and pricing data for fuel products," they wrote in a letter to the Pentagon's inspector-general, urging a review of the waiver.
According to the letter, US embassy staff in Kuwait acted as "intermediaries" between the Kuwaitis and the Corps of Engineers, and were responsible for passing on unverified claims about the country's legal statutes.
The Congressmen asked the Pentagon inspector-general to determine whether the claim was accurate, who was responsible for passing it on, and whether this was part of an attempt to block the Pentagon auditors.
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