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Monday, Nov 23, 2009
Congressional watchdog Henry Waxman attacks Dick Cheney's former employer Halliburton for pumping up the price of gas in Iraq.
Dec 12, 2003 | On April 30, 2003, shortly after U.S. forces toppled Saddam Hussein's government, U.S. Rep. Henry Waxman, D-Calif., wrote a letter to Secretary of Defense Donald Rumsfeld inquiring about evidence that American oil services giant Halliburton Corp. had profited from doing business with countries that sponsor terrorism. He got no response. On Sept. 30, Waxman wrote to Joshua Bolten, the Bush administration's director of the Office of Management and Budget, with concerns about overspending and a lack of oversight in the reconstruction operations in Iraq. He got no response. For almost six months now the California Democrat has been asking the Bush administration to explain why Halliburton, formerly run by Vice President Dick Cheney, has been charging what appears to be five times the necessary cost of importing millions of gallons of gasoline from Kuwait into Iraq. To date, the White House hasn't responded.
The reconstruction of Iraq's oil and gas infrastructure appears to be costing American taxpayers millions of dollars more than it should -- dollars which are currently flowing into Halliburton's corporate treasury. Pentagon officials acknowledged as much Thursday, telling the New York Times that an investigation has turned up evidence that Halliburton may have overcharged the U.S. government "tens of millions of dollars" for fuel the company is shipping into Iraq. Waxman sees this as part of pattern in which the Bush administration is enriching its corporate friends -- precisely as it snubs key U.S. allies with its "macho unilateralist" approach to foreign policy. That will cost U.S. taxpayers dearly, he says.
"The Bush administration's apparent indifference to the evidence we've brought to them about overcharging, and their failure to respond to our previous letters, even though hundreds of millions of taxpayer dollars are at stake, is astounding to me," Waxman told Salon in an interview Thursday.
Since the Bush administration declared the war over in April, Halliburton has been given exclusive control of rebuilding Iraq's oil infrastructure, with no other companies allowed to bid competitively against it. According to the Times, the company has since amassed $1.4 billion in U.S.-controlled oil and gas contracts. And in that time, Waxman has amassed information on the cost of Halliburton's operations in Iraq, sometimes with information provided by the Pentagon and the U.S. Army Corps of Engineers.
It's the cost of Halliburton's exorbitant gas contracts that appears to jump completely off the scale. Without more details from the White House, Waxman is at a loss to justify Halliburton's extraordinarily high prices -- as much as $3.06 per gallon, according to his most recent letter of Dec. 10 to National Security Advisor Condoleezza Rice. "At best, I would think it's mismanagement," he told Salon. "But at worst it's government-sanctioned profiteering."
Waxman, the ranking Democrat on the Committee on Government Reform, has coauthored the series of letters to the Bush administration with Rep. John Dingell, D-Mich., which cite mounting evidence that Halliburton's 26-cent-per-gallon "markup" on gas trucked in from Kuwait -- on top of an already astronomical transportation cost of $1.21 per gallon -- makes no sense. In a Nov. 5 letter to the U.S. Army Corps of Engineers, Waxman cites energy expert Jeffrey Jones, the director of the Pentagon's own Defense Energy Support Center, who says Halliburton's prices are "extraordinarily high" and "way out of range." Officials at the support center have told Waxman that it is able to import gasoline from Kuwait into Iraq for $1.08 to $1.19 per gallon -- less than half Halliburton's alleged cost.
Whether the high gas prices are a reflection of the Bush administration's poor oversight or a carefully conceived plan to provide a lucrative role for big business in the Middle East, Waxman's allegations come at a time when the administration appears to be at war with itself over Iraq reconstruction policy. This week, Deputy Secretary of Defense Paul Wolfowitz announced that the Pentagon would shut out several key U.S. allies, including Russia, France and Germany, from bidding on $18.6 billion in future reconstruction contracts. Those nations responded angrily, with Russia promptly stating it would no longer consider debt relief for the $8 billion sum owed to it by Saddam's Iraq. Just a few days earlier the White House had mobilized former Secretary of State James Baker to travel overseas and ask for exactly such relief.
Waxman says the Pentagon's slap in the face to America's key partners will undermine Baker's mission and prove a costly diplomatic error. "Rather than increasing international cooperation in Iraq, this decision will have exactly the opposite effect," he says flatly. "It's retribution against countries that didn't buy the arguments this administration advanced for going to war in Iraq -- arguments which, for the most part, turned out to be untrue."
With billions of dollars and the future of Middle East peace at stake, Waxman believes American taxpayers deserve to know exactly how their money is being spent on the reconstruction.
He spoke with Salon by phone on Thursday from his Washington office.
What kind of response have you received from the Bush administration to your letters concerning the Halliburton contract in Iraq?
I've been sending letters and trying to get answers to some fairly simple questions for close to six months. Four letters have gone to the administration itself, two to [National Security Advisor] Condoleezza Rice and two to OMB [Office of Management and Budget] director Joshua Bolten. I haven't gotten an answer from them yet that would explain why we are overpaying Halliburton Corporation to bring in gasoline from Kuwait into Iraq, and paying two and a half to three times as much as it would otherwise cost to do the same job.
Why do you think that you've received no response? Surely the reconstruction of Iraq is at the top of the White House priority list.
There is such a lack of interest by both the administration and Republicans in the Congress about the fact that the American taxpayers may be getting gouged by Halliburton. It's hard for me to understand. At best, I would think it's mismanagement. But at worst it's government-sanctioned profiteering.
