Will Stolen Iraq Oil Funds and Deals For Cronies Force Cheney Impeachment?
http://larouchepub.com/other/2005/3228halliburton.html
This article appears in the July 15, 2005 issue of Executive Intelligence
Review.
by Michele Steinberg
On June 27, a scandal large enough to lead to the impeachment of Vice
President Richard Cheney, emerged when it was revealed at a hearing called
by the Senate Democratic Policy Committee, that the latest figures in
questionable and unsupported charges to the Department of Defense by the
Halliburton Corporation, had reached over $1.4 billion. There are already
two criminal investigations by the Justice Department into Halliburton for
fraudulent billings related to Iraq war contracts-each of them potentially
as explosive as the case of the Valerie Plame CIA leak.
However, another element was added on June 27: The amount of funds that
Halliburton has looted from the DoD is nearly equivalent to the $1.5 billion
in funds that the Bush Administration had denied the Veterans Administration
for vitally needed medical services to the sick and wounded veterans and
troops. The public anger over the White House shortchanging the VA was so
huge, that the Republicans subsequently signed on to a Democratic amendment
to pass legislation giving an additional $1.5 billion to the VA.
The $1.4 billion in "questioned and unsupported" monies to Halliburton, was
the second bombshell about Iraq-war-related fraud in less than one week. On
June 21, the Subcommittee on National Security of the House Committee on
Government Reform, released a Minority Staff report, prepared at the request
of ranking Democrat Rep. Henry Waxman of California, which showed that
billions of dollars of money from the "Development Fund for Iraq," was
unaccounted for, or stolen, after the frenzy of cash delivery to the U.S.
occupation authority, run by Amb. Jerry Bremer in June 2004. (See report
excerpts in Documentation). Bremer did not appear at the June 21 hearing to
answer questions about the lack of control over $19.6 billion in Iraqi
funds, noted Rep. Waxman. But the missing money has already had devastating
consequences.
On July 6, an article in the London Financial Times gave the first major
hint that the U.S. occupation's looting of reconstruction funds belonging to
the Iraqi people is being called "corruption." "Iraq's financial
difficulties, and U.S. concerns over corruption and uncontrolled spending on
reconstruction, are adding to tensions between the two governments," wrote
the Financial Times. Although the economy is seen as a "vital pillar of the
... strategy to stabilize Iraq," the Iraqi government is already in big
trouble. Under U.S. auspices, the government of Iraq had signed a
"pre-agreed deficit" agreement with the International Monetary Fund, to
limit its budget deficit to $6.7 billion, or 28% of its gross domestic
product, but Iraq cannot come near that goal, and is seeking to go far
beyond that deficit limit.
The news of Iraq's financial crisis could not come at a worse time for the
Bush Administration-because the responsibility for the "corruption" in
misuse of the funds, leads right to Cheney's office through the Halliburton
corporation.
According to evidence presented on June 21 at the House Subcommittee on
National Security hearing, and on June 27, by the Senate Democratic Policy
Committee, the following has been established:
* There is more than $1.4 billion in "questioned" and "unsupported"
charges paid to Halliburton, according to Defense Department audit reports.
* There are billions of dollars unaccounted for, taken in cash from the
$19.6 billion Development Fund for Iraq account, created by UN Security
Council resolution 1483 in May 2003, and administered solely by the U.S.
occupation authority. According to the 25-page official report by the
Minority Staff of the Committee on Government Reform, these funds are
unaccounted for, have disappeared, or have been misappropriated.
* Halliburton is documented to be the largest recipient of the
Development Fund for Iraq funds (about $1.2 billion) and of all Defense
Department contracts in Iraq (more than $15 billion).
* Halliburton's contracts were handled outside of the professional,
competitive bidding process that is standard procedure in the Defense
Department. Instead, according to Ms. Bunatine Greenhouse, the top civilian
contracting official at the U.S. Army Corps of Engineers, the Halliburton
contracts were given special handling directly from "the OSD," the Office of
the Secretary of Defense. Greenhouse was forced to step down or face
demotion after objecting, in writing, to the special treatment granted to
Halliburton; instead, she chose to file a whistleblower lawsuit.
* Two executives from Lloyd-Owen International (LOI), a security and
management firm with contracts from the Iraqi government, which began after
the U.S. occupation handed over power to Iraqis, gave evidence that
Halliburton's overcharges for fuel transportation from Kuwait to Iraq are
even greater than previously believed, and that KBR, a Halliburton
subsidiary, has not completed crucial fuel distribution work, despite its
claim to have done so. In addition, Halliburton "has abused its relationship
with the U.S. Army," by attempting to close the Iraq-Kuwait border so that
LOI (a competitor of KBR) could not efficiently deliver fuel to the Iraq
government.
The two LOI executives, Alan Waller and Gary Butters, gave dramatic
testimony to the Senate that KBR managers had ordered their staff to deny
assistance to LOI personnel, who had been attacked by insurgents en route to
a base managed by KBR, near Fallujah. Four contract employees of LOI had
been killed in the attack, and several others were wounded, but a KBR e-mail
message presented to the Senators, showed that LOI was not to be helped.
Fortunately, the U.S. Marines at the base came to the assistance of LOI.
* KBR threatened personnel in Iraq, who were working under its food
service contract, if they talked to U.S. government auditors who had been
sent to look into KBR's practice of overcharging for dining hall services.
Rory Mayberry, Food Production Manager at Camp Anaconda in Iraq, testified
that he was warned, and then transferred to a much more dangerous base near
Fallujah in order to keep him from talking further to auditors.
Obstruction of Justice?
There is no question that Cheney's office was directly involved in the
special treatment given to Halliburton. A further question is whether
Cheney's pressure to prevent the Senate and House committees from
investigating constitutes obstruction of justice.
More than a year ago, on June 8, 2004, a DoD political appointee,
neo-conservative insider Michael Mobbs, who worked directly at the Office of
the Secretary of Defense, briefed the House Government Reform Committee that
Cheney's Chief of Staff and National Security advisor, I. Lewis "Scooter"
Libby, had been consulted and informed by Mobbs about a secret Iraq war
contract being awarded to Halliburton, on March 8, 2002, before the contract
had been awarded, and before the Iraq war had begun.
Mobbs acknowledged that the decision to award the contract to Halliburton,
by extending a previous contract, was not made by career civil servants, but
by political appointees, in particular by himself and an "Energy
Infrastructure Planning Group," in the DoD which he headed. Mobbs determined
that other longstanding DoD contractors-Bechtel and Fluor-were not qualified
for the job, and were not even allowed to submit bids for the oil
infrastructure contract. Mobbs, who was also acting as a special assistant
to Assistant Secretary of Defense for Policy, Doug Feith, had been a member
of Feith's law firm. Other special operations set up by Feith in 2002, such
as the Office of Special Policy, functioned as a secret, parallel
intelligence service, reporting to Cheney's office. Like the Iran-Contra
operation of the 1980s, the Cheney-OSD-Feith network was a "government
within a government."
A year later, the evidence presented at the June 27, 2005 hearing shows that
the Halliburton disease has just grown larger and larger through the special
relationship with the Vice President, The reason is simple: The appropriate
Senate and House committees-under Republican control-have refused to fulfill
the Senate's Constitutional responsibility to look into the evidence of
massive fraud and "bilking" of the American taxpayers, in the Iraq war. By
this, Congress has also jeopardized the well-being of the troops in Iraq.
The four Democratic Senators at the podium June 27 were Byron Dorgan of
North Dakota (who chaired the hearing), Harry Reid of Nevada, Frank
Lautenberg of New Jersey, and Mark Dayton of Minnesota; they were joined by
Rep. Henry Waxman of California, who has led a relentless battle to unearth
Pentagon documents about Halliburton's activities since Spring 2003. They
made clear they want official, bipartisan hearings.
Dorgan, the head of the Senate Democratic Policy Committee investigative
committee, used strong language about the American taxpayers being "bilked,"
"cheated," and "defrauded" in order "to let a few special big companies
wallow like hogs in a trough." Dorgan pointed to the Senate hearings in
1941, when the U.S. was about to enter World War II, and Harry Truman began
investigations into reports of waste, and he also referenced the manner in
which Donald Rumsfeld, as a Congressman in 1966, demanded a "vigorous
investigation" into a Vietnam War contractor-Brown & Root! (The same
Rumsfeld today who won't allow hearings.)
Lautenberg put the emphasis on Cheney: "[T]he bottom line is that the
Republican leadership in the Congress is giving Halliburton a free pass. And
I don't know whether that's because Vice President Cheney still receives a
paycheck from Halliburton. That goes on through 2007. On that payroll was
stock options."
But the Cheney/Halliburton relationship is much deeper. In 1991, when Cheney
was Secretary of Defense, he rescued the faltering Halliburton from
disaster, by putting it on the gravy train of the Defense Department, at the
very outset of the process of replacing in-house logistics capabilities with
outsourcing.
The DoD contracts breathed new life into Halliburton, which then took on
Cheney as its Chief Executive Officer in 1995. In 2000, after he had
selected himself to be George W. Bush's Vice Presidential candidate (the
Bush family had put Cheney in charge of the search committee), Cheney
resigned from Halliburton, with a $20 million retirement package, including
six-figure salaries through 2007, and 433,333 shares of unexercised stock
options.
Nobody knows the full extent of the Cheney relationship to Halliburton after
2001, since the records of the discussions that Cheney held with Halliburton
while heading the "Energy Task Force," are still top secret. Only a series
of Congressional investigations, backed by mass public support can answer
those questions.
