Peacekeeping Helped Cheney Company
By Karen Gullo
Associated Press Writer
Monday, Aug. 28, 2000; 3:25 p.m. EDT
WASHINGTON –– The company run until this month by former
Defense Secretary Dick Cheney has reaped more than $2 billion in
federal contracts to support U.S. troops on some of the
peacekeeping missions that George W. Bush says have helped run
down the military.
U.S. deployments in Bosnia, Kosovo, Somalia and elsewhere – the
kinds of missions Bush has pledged to reduce if elected – have
meant big contracts for Dallas-based Halliburton Co., which
Cheney, the GOP vice presidential candidate, headed from 1995
until he retired two weeks ago.
What started out as a $4 million contract in 1992 to help the
government plan how to provide meals, tents, toilets and laundry
for troops sent on missions to far-flung lands has grown
substantially for Halliburton, an oil-services conglomerate.
Halliburton's Brown & Root Services subsidiary has received the
lion's share of the Pentagon's troop support business in the years
since the Persian Gulf War, which Cheney helped direct as
secretary of defense under Bush's father.
A big chunk of the business came in 1995 when troops were sent
to Bosnia. The Army paid Brown & Root $546 million to provide
logistical support for over 20,000 American soldiers in Bosnia,
Croatia and Hungary. The company had already earned $269
million on the contract.
Two years later Brown & Root received a sole-source contract
worth $405 million to continue support services in Bosnia. Last
year the company beat out one other bidder to win a five-year
Army contract to support U.S. peacekeeping troops in the Balkans
region. Originally awarded for $900 million, work under that
contract has now reached $730 million and could go to more than
double that figure because more troops were sent to Kosovo last
year.
Another contract for support services awarded this year by the
Navy will bring in at least $300 million.
The government has hired Halliburton for dozens of other jobs,
from a $100 million contract to improve security at U.S. embassies
and consulates to a $40 million contract to maintain labs at the
National Institutes of Health.
Brown & Root and Army officials say the company won the
logistics contracts fair and square.
"There's no doubt Dick traveled around the world and had an
impact on our global business," said Larry Pope, president of Brown
& Root. But in deals with the U.S. government, Cheney didn't have
any direct bearing on the awards, he said, adding that Brown &
Root doesn't have a lock on the business – it has lost a few
federal contracts to competitors.
Brown & Root was given the sole-source contract in May 1997 to
continue supporting troops in Bosnia because the Army decided it
would be cheaper to keep the same contractor than find a new
one, said Capt. Joan Kibler, spokeswoman for Army Corps of
Engineers, which awarded the contract.
Brown & Root has worked for the government for years; it did
construction work for the military during the Vietnam War. But a
surge in U.S. troop deployments and the Pentagon's growing
reliance on private companies to provide logistics services have
been a boon for Brown & Root.
"The current administration helped set the course for them to build
the business," said Maj. Joe Bigelow, spokesman for the Army,
which has given the company more than $1 billion in business
since 1998. "Five years ago there was no Bosnia or Kosovo."
This past weekend, Cheney said the military has "too many
commitments" for the size of U.S. forces. And Bush has repeatedly
accused President Clinton and Vice President Al Gore of
overcommitting U.S. soldiers to overseas peacekeeping missions
while cutting military budgets.
Bush says that if elected, "I will tell our friends and allies, we
care
for you, we will strengthen our alliances, but if there needs to be
troops on the ground to keep warring parties apart in your
neighborhood, you get to be the peacekeepers."
Gore says more diplomacy in advance would limit the need to send
soldiers to crises abroad.
A cutback in overseas missions "will reduce our business," said
Pope. However, Halliburton derives less than 10 percent of its
revenue from federal contracts, said Wendy Hall, a company
spokeswoman. Brown & Root's revenues were $1.6 billion last year;
Halliburton had nearly $15 billion in revenues.
Brown & Root's contracts are "cost-plus-award-fee" deals,
meaning the company is reimbursed for its costs and also gets an
incentive fee – usually up to 9 percent – based on performance.
Except for some problems in the beginning of the Balkans support
mission, "generally their marks were usually very good to
excellent," said the Army's Kibler.
Complaints about escalating costs for the Bosnia peacekeeping
mission in 1997 prompted a review by the General Accounting
Office, the investigative arm of Congress.
The GAO said costs increased because the Army increased the
number of troop camps and didn't monitor the contractor properly
and because the contractor was slow to provide cost estimates.
The problems were later corrected, the GAO said.
–––
Some major contracts won by Halliburton Co.'s Brown & Root
Services subsidiary to provide logistic support services for U.S.
troops overseas:
1992-1997
Missions supported: Somalia, Zaire (Rwanda refugee crisis), Haiti,
Southwest Asia, Italy (troops patrolling no-fly zone over Bosnia
out of Aviano air base), Bosnia. Value: $815 million.
1997-1999
Missions supported: Bosnia, Hungary, Croatia. $405 million.
1999-2004
Missions supported: Bosnia, Kosovo, Macedonia, Hungary. $1.8
billion (estimate).
© Copyright 2000 The Associated Press
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