Let's talk about the Halliburton numbers for a minute. In your Dec. 10 letter to Condoleezza Rice, you cite that the Bush administration, per the Army Corps of Engineers which directly oversees the operations, has justified what appears to be the unusually high cost of Halliburton's work by pointing to "security" concerns. Does that seem reasonable to you? Iraq is a war zone after all.

I've also heard that explanation from Halliburton itself, which has said that security issues are responsible for the cost, or that they're limited to [expensive] 30-day contracts, or that it's hard to find enough trucks. These are all the excuses that we've heard.

The fact of the matter is that the Iraqi state oil company, SOMO, which is also bringing in gasoline from Kuwait, faces the exact same situation. They transport it through the same routes, deliver it to the same depot and receive the same protection from the U.S. military as Halliburton does. Yet the Iraqi company charges only 96 cents per gallon compared to Halliburton's $2.64 per gallon. How is this possible? The administration has not given us an answer to that question.

How could Halliburton be citing security as a cost if it's being provided to them by the U.S. military? Does Halliburton pay for that security?

The U.S. military is providing the security for the convoys, and the American taxpayers are paying for the U.S. military to do that. If you look at the breakdown of the figures put out by the Army Corps of Engineers, Halliburton is paying $1.21 per gallon to transport gasoline 400 miles from Kuwait to Iraq. This is astounding, especially since Halliburton transports gasoline from Turkey for just 22 cents per gallon. Why does it cost more than five times as much to transport gasoline from Kuwait?

One thing I found especially perplexing in your Dec. 10 letter is the fact that "Halliburton itself does not purchase or transport the gasoline [to Iraq]." So is it essentially acting as a consultant or manager of the operation? What exactly is Halliburton's role in rebuilding the oil and gas infrastructure there, and how would that explain its extra costs?

Halliburton says it has a "markup" fee of 24 cents per gallon and another 2 cents for "other" charges. Their role in the actual fuel importation is limited. Essentially Halliburton's function is to hire an integrator as a subcontractor to purchase the gasoline in Kuwait and transport it into Iraq. It's very difficult to understand how this justifies an additional 26 cents per gallon charge [in addition to the cost of the fuel itself and its transport] on millions of gallons of gasoline.

According to the New York Times, Halliburton has already received more than $1.4 billion in contracts to rebuild Iraq's oil industry. To what degree is President Bush responsible for the decision making around this? Does he personally have to sign off on a project of this magnitude and import?

The Army Corps of Engineers issues the contract for Halliburton to work in Iraq -- which is the contract they were given without facing any competition. But ultimately this administration has to be responsible for handling the issues of what its contractors are doing. They should be exercising oversight, and they should be assuring that the American taxpayers are not being ripped off.

The administration's apparent indifference to the evidence that 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. I think this matter deserves immediate attention, and that's why we've kept writing to them and asking for answers to what ought to be easy questions, if they had any interest in answering them. I would think they would want, even for themselves, to be sure that they're carrying out their job adequately.

So there seems to be a dearth of detailed information. Do you feel it's reasonable to expect the American public to trust the Bush administration with the oversight of this whole operation, especially given that it has such strong personal ties to the energy industry?

Well, I don't think there's a dearth of information. I think we actually have a lot of information, in light of which any reasonable person would have to conclude that there is a great deal of overcharging going on for the work Halliburton is doing in Iraq. But it appears that this administration is not concerned about the taxpayers overpaying. Perhaps there is a certain mental or cultural attitude at work -- that as long as it's somebody else paying the bill, the Defense Department is not concerned about it, and Halliburton is not concerned about it. That does not strike me as a responsible position to take.

How do you see Vice President Dick Cheney fitting into this whole picture? We know he had a very hands-on role in planning the war in Iraq, and that he has a close relationship with the leadership in the Defense Department. We also know he is a former CEO of Halliburton.

Yes, and we also know that Vice President Cheney receives money from Halliburton in deferred compensation. But putting all that aside, the issue is not essentially a question of politics. It is a question of management and protecting the taxpayers' dollars.

Now, if the war in Iraq is an excuse simply to shift dollars to Halliburton and Bechtel and other private contractors by overpaying them, that would be a horrible thing, especially in light of the fact that we've got young men and women putting their lives on the line. This war shouldn't be used as an opportunity to do something that's essentially like a tax break for the rich, or just another exclusion from liability for an oil company -- as we've seen with the direct grants and tax breaks for billions of dollars which are part of the energy bill that the administration is supporting.

I hope that's not what we're looking at here. That's one of the reasons I feel strongly that we need to get an explanation from the administration. I would've thought that all the information that's already out there about this would have alerted them, and made them concerned about the issue.

But can we really sidestep "politics" in this discussion? Doesn't Vice President Cheney's relationship with Halliburton make the situation all the more compelling in terms of a need for transparency, the need to scrutinize costs and have a competitive bidding process for the contracts?

Absolutely. I would have thought that the relationship that the vice president had with Halliburton would have made people in the Bush administration even more sensitive to the appearance of all this. Halliburton got very special treatment from the Army Corps of Engineers. At first we were told that Halliburton got a contract, which no other company was given a chance to bid on, because they were prepared to deal with emergencies of putting out oil well fires in the case of going to war. Ironically, the reason they planned for that is because under another contract they had been asked to come up with a plan for that contingency. So then the argument became, "Well, since they had a plan for that contingency in place, they should get the contract without anybody else competing for it." But there are other companies that can put out oil well fires.

We pressed this issue, especially because the contract was a "cost-plus" contract which encourages higher costs, and because Halliburton has a history of overcharging the U.S. government in previous contracts. We found out that [the Iraq deal] wasn't just a short-term contract, it was a two-year contract with the potential for up to $7 billion in work. And it wasn't just to put out oil well fires -- it was to run the oil industry in Iraq.

It took a while to get that information. After that came out, we were told that the [Defense Department] was going to bid the contract; so while Halliburton already had it, that was supposedly only temporary. They said they would have competition for this contract by August, and then they changed it to October, and then to December, and now they're talking about some time next year.

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