Details the myriad illegal, immoral, and unethical activities of Dick Cheney when CEO of Halliburton, his obstruction of justice, and lies to the American public since his appointment as Vice President. For information on an equally corrupt politician, see link to Tom DeLay-Corporate Whore. Be sure to visit our cavernous vault of archives.

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Total value of Halliburton's military contracts equals $21 billion

9 Dec. 2004

WASHINGTON, Dec. 9 (HalliburtonWatch.org) -- The total value of Halliburton's military contracts reached $21 billion in November, Wall Street advisory firm Merrill Lynch reported.

The $21 billion represents the total amount Halliburton currently expects to receive from military contracts awarded by governments around the world, including contracts for restoring Iraq's oil infrastructure and conducting military-related research at New Mexico's Los Alamos National Laboratory. Forty percent of the military business is from the U.S. Army's LOGCAP III contract, awarded to Halliburton's KBR subsidiary in December 2001.

Under LOGCAP III, KBR is responsible for providing supplies and services to the military. Typical civil logistics carried out under the contract include construction of military housing for the troops, transporting food and supplies to military bases and and managing and serving food at military cafeterias.

LOGCAP is the most valuable contract awarded by the Army and Halliburton's most lucrative government contract. At least 55 KBR employees have been killed in Iraq. Most of those employees were carrying out KBR's LOGCAP contract by driving trucks carrying military supplies.

The $21 billion represents only a current estimate of the total amount Halliburton expects to receive from its military businesses. But this amount could rise or fall in the future as war conditions escalate or diminish.

A report from Rep. Henry Waxman (D-CA) shows Halliburton has currently been paid $10 billion from the Army for work under the "LOGCAP" and "Restore Iraqi Oil" infrastructure contracts in Iraq.

Most of this money takes the form of reimbursements to KBR for expenses it incurs. KBR's profit is derived by charging the military a fee equal to a percentage of those reimbursements.

The contracts work like this: KBR purchases goods and services out of its own pocket to perform contracts, then it is reimbursed by the military for those expenses. It is then paid a fee (its profit) of one to seven percent of the value of those expenses.

This arrangement is known as "cost-plus" since the military reimburses KBR for its "costs," but then pays a percentage (the "plus") of one to seven percent ontop of that cost.

Critics say KBR has an incentive to artificially inflate costs in order to increase the amount of its fee paid by the military. The higher Halliburton's costs are, the larger its profits will be.

Halliburton's $21 billion in revenues is derived from the following sources:

U.S. Army's LOGCAP contract, 40 percent
United Kingdom's Ministry of Defense, 15 percent
U.S. Army's "Restore Iraqi Oil" (RIO) infrastructure contract, 12 percent
Balkans contract, 9 percent
United States Central Command (CENTCOM), 7 percent
U.S. Army's "Project Contracting Office" (PCO) oil infrastructure contract, 6 percent
"Other," 5 percent
Los Alamos National Laboratory, 4 percent
U.S. Navy's CONCAP contract, 2 percent

 
Switzerland shuts down Halliburton bank accounts used for 'bribery'

3 Dec. 2004

WASHINGTON, Dec. 3 (HalliburtonWatch.org) -- The government of Switzerland shut down bank accounts allegedly used by Halliburton for bribing the Nigerian government, the Associated Press (AP) reported today. Investigators believe Halliburton's KBR subsidiary and three other firms paid $180 million in bribes over a number of years to win a multibillion dollar construction contract from the Nigerian government. Halliburton and the other firms ultimately won that contract in 1995, but deny paying bribes.

According to the AP, the accounts that were shut down by Switzerland contain funds worth $100 million. The AP reported that the accounts were shut down "after France asked Switzerland to grant judicial assistance for its investigation" of the bribery scandal. The French government has been investigating the bribery allegations since October 2003. The U.S. Department of Justice is conducting an investigation as well. The Nigerian government is considered one of the most corrupt governments in the world. It is difficult for companies to do business without paying bribes to government officials, critics say.

U.S. and French law forbid companies from bribing foreign officials. Under the U.S. Foreign Corrupt Practices Act it is a crime for corporations to bribe foreigners to win government contracts.

Some of the bribes were allegedly paid during the period when U.S. Vice President Dick Cheney was chief executive of Halliburton. His involvement in the scandal is still unclear, but he could be subpoenaed for questioning by French investigators.

Although the AP concluded that Halliburton "hasn't found any evidence that supports claims of bribery," Halliburton did find evidence that bribes "may" have been paid to officials in the Nigerian government.

 
Audit: Halliburton lost track of government property in Iraq

By John Solomon, Associated Press, 11/26/2004 20:05

WASHINGTON (AP) A third or more of the government property Halliburton Co. was paid to manage for the U.S.-led Coalition Provisional Authority in Iraq could not be located by auditors, investigative reports to Congress show.

Halliburton's KBR subsidiary ''did not effectively manage government property'' and auditors could not locate hundreds of CPA items worth millions of dollars in Iraq and Kuwait this summer and fall, Inspector General Stuart W. Bowen reported to Congress in two reports.

Bowen's findings mark the latest bad news for Vice President Dick Cheney's former company, which is the focus of both a criminal investigation into alleged fuel price gouging and an FBI inquiry into possible favoritism from the Bush administration.

The Associated Press reported Wednesday that FBI agents have extensively interviewed an Army contracting officer who last month went public with allegations that the Bush administration was improperly awarding contracts to Halliburton without competitive bidding.
Halliburton and the Pentagon deny wrongdoing, and say they are cooperating in all investigations.

Company spokeswoman Cathy Gist said Friday that KBR recently conducted a ''wall-to-wall'' review of all property it is managing for the Pentagon in war zones including Iraq and Afghanistan and produced results far better than Bowen's findings.

''We are pleased to report that this total inventory review confirmed 99.4 percent accountability of all property,'' she said. ''The facts show that KBR has adequately managed property for this mission by aggressively monitoring its property management functions above and beyond what is required.''

The U.S-backed CPA officially dissolved after a year in power in Baghdad when an interim Iraqi government took control of the country this summer. But Bowen's office continues to review how money was spent and it gave a tough assessment of KBR's performance.

KBR won a key logistics contract to manage everything from trucks and generators to computers.

Bowen reported that an audit earlier this summer found KBR had lost track of more than $18 million worth of equipment in Iraq. Investigators could not track down 52 of 164 randomly selected items in an inventory of more than 20,000 items overseen by KBR, including two electric generators worth nearly $1 million, 18 trucks or SUVs and six laptop computers.

Pentagon and Halliburton officials have been searching since the summer for the missing items and have tracked down many of them. Some were found in the hands of ''unauthorized users'' and 111 vehicles had not been returned for required check-in, they said.

Bowen's auditors found the problems extended beyond Iraq's borders. More recently, auditors sought to determine how well KBR managed the inventory and supplies of the CPA offices and warehouses in neighboring Kuwait, initially sampling 90 items from an inventory of more than 3,000.

The auditors found 30 of the 90 items could not be accounted for, and then reviewed additional documents and projected a total of 1,297 of the 3,032 property items, or 42.8 percent, could not be accounted for or were missing.

The inspector general said 108 additional items were on hand but not properly recorded in inventory. The audit projected more than 400 required hand receipts for property were not available or weren't filled out.

''This occurred because KBR did not effectively manage government property: specifically, KBR did not properly control CPA property items. Further, the KBR property records were not sufficiently accurate or available to properly account for CPA property items,'' Bowen reported to Congress.

''As a result, the CPA-IG projected that property valued at more than $1.1 million was not accurately accounted for or was missing,'' it added.

Bowen's report said the Pentagon agency that managed KBR in Iraq did not agree with all of the findings, and the agency declined to force KBR to change its inventory tracking system.

The Pentagon ''stated that the contractor has put an accurate property control system in place that is effective, and an analysis of the system does not need to be performed at this time,'' Bowen's report said.

Bowen told lawmakers the Pentagon didn't provide any information to back its conclusions. However, he said the government did agree to ''conduct a thorough review of CPA property and seek to recover the cost of missing equipment from the responsible party.''

On the Net:
Latest inspector general report:
http://www.cpa-ig.com/pdf/cpaig october 30 report.pdf
Halliburton: http://www.halliburton.com/

 
Auditor to Army: Dock Halliburton Pay

Wednesday November 24, 11:08 AM EST

WASHINGTON (Reuters) - The U.S. Army should withhold 15 percent of future payments to Halliburton (HAL) for work in Iraq due to billing disputes, a government auditor said on Wednesday, a move that could cost the contractor tens of millions of dollars.

Stuart Bowen, special inspector general for Iraq reconstruction, said in a memorandum to Army auditors and commanders he believed U.S. contract laws requiring a 15 percent withholding if certain conditions were not met should be imposed on Halliburton unit Kellogg Brown and Root.
Run by Vice President Dick Cheney from 1995-2000, Halliburton has been bogged down in a long-running billing dispute with the U.S. military, and government investigators are looking into whether the company overcharged for work.

The Houston-based company is the U.S. military's biggest contractor in Iraq with the potential to earn up to $18 billion for multiple contracts there, with tasks ranging from cooking meals for troops to rebuilding Iraq's oil industry.

Bowen said based on their "limited audit work," he supported military auditors' proposals last August for the Army to implement the withholding. Documents then indicated the company had not provided enough details to support at least $1.82 billion out of $4.3 billion of logistical work.
"We agree with U.S. Army Materiel Command and DCAA (Defense Contract Audit Agency) positions (on the withholding issue)," said Bowen in the memorandum.

In August, the U.S. Army backed down from a recommendation to dock some payments for KBR's massive logistics contract serving U.S. troops in Iraq and Kuwait and said it was trying to resolve billing problems with the company.

Linda Theis, a spokeswoman for Army Field Support Command in Rock Island, Illinois, said late Tuesday no decision had been taken yet on whether to withhold 15 percent.

Halliburton did not immediately respond to questions about Bowen's memorandum but in the past the company has strongly defended its work in Iraq and says it has been targeted for political reasons because of its former ties to Cheney.

 

Grand Juries Probe Halliburton in Nigeria, Iraq, and Iran

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Vanguard (Lagos)

November 16, 2004
Posted to the web November 16, 2004

Hector Igbikiowubo With Agency Reports

The legal hurdles which has attended Halliburton's over work in Nigeria, Iraq and Iran continues to mount following the company's latest filings with the Securities and Exchange Commission which disclosed that a federal grand jury is probing possible criminal wrongdoing regarding payments to secure construction work in Nigeria.

Halliburton reported for the first time that "payments may have been made to Nigerian officials" by an agent representing Halliburton and three other construction firms who are building the liquefied natural gas plant.

Another grand jury is hearing evidence in Houston about the company's dealings in Iran, and a third is meeting in Illinois to look at Halliburton's contracts with the Pentagon for work in Iraq.

The quarterly report with the SEC, filed last Friday, also disclosed that the Justice Department "and others" are investigating Halliburton's Iraq contracts.

Some of that work apparently involves allegations last month from a top civilian contracting official of improper conduct at the U.S. Army Corps of Engineers. These involved awards of multibillion-dollar contracts to Halliburton for restoring Iraq's oil production and supporting the Army's work in the Balkans.

The allegations by contracting manager Bunnatine Greenhouse are being investigated by the FBI. Halliburton again reported that its work in Iran was in compliance with sanctions barring U.S. firms from doing business with the Iranian regime.

On its Iraq contracts, the company said it has notified the Pentagon's Inspector General of possible wrongdoing by two former employees. "Halliburton's on-going investigation has still not found any evidence that supports there were any bribes paid," said Wendy Hall, a Halliburton spokeswoman.

Poe Fratt, an energy analyst with A.G. Edwards & Sons, Inc. in St. Louis, puts all three probes into the category of "headline risk" rather than financial warning signs. On Oct. 27, Mr. Fratt upgraded Halliburton shares from a hold to a buy recommendation, largely because the company seems to be emerging from a four-year struggle with asbestos exposure liabilities.

Halliburton shares hit a 52-week high on Wednesday, rising 92 cents to close at $37.31. Democratic presidential candidate John Kerry railed against the company during the campaign because of its ties to the Bush administration, and several congressional Democrats have pressed for investigations. Vice President Dick Cheney was Halliburton's chief executive officer from 1995 until 2000, when he became George W. Bush's running mate. "With the election passing, it takes an element of the politicization out of this equation," Mr. Fratt said. "It's not going to go away completely."

Ms. Hall said: "Not many companies could have successfully withstood the kinds of attacks launched against us. Our audiences; customers, shareholders, and employees, understand the attacks for what they are.

They have found strength and not weakness in our response." Rep. Henry Waxman, D-Calif., asked Wednesday for additional hearings on Halliburton's Iraq contracts by the House Government Reform Committee.

Mr. Waxman, in a letter to committee chairman Rep. Tom Davis, R-Va., sought to reopen an investigation into Halliburton's purchases in 2003 of high-priced gasoline for the Iraqi market from a Kuwaiti company.

Mr. Waxman cited State Department documents indicating the U.S. Ambassador to Kuwait, Richard Jones, intervened to direct the gasoline contract to the Altanmia Commercial Marketing Company, the Kuwaiti subcontractor.

Other documents showed Altanmia employees told U.S. embassy officials that it was "common knowledge" that Halliburton and U.S. occupation officials in Iraq "solicit bribes openly." Halliburton paid $2.64 a gallon for the fuel bought from Altanmia. A draft Pentagon audit found Altanmia overcharged for the fuel by at least $61 million.

A State Department spokesman, Kurtis Cooper, said an e-mail from Mr. Jones was sent in his capacity as deputy administrator of the Coalition Provisional Authority, the U.S. entity that ran Iraq after the invasion. Mr. Jones "reflected the growing frustration felt by CPA officials over the problem of insuring delivery of badly needed fuel for Iraqi civilians," Mr. Cooper said.

Relevant Links West Africa Company News Energy Nigeria United States, Canada and Africa Crime and Corruption

Department officials never "participated in decision making regarding the contracts," Mr. Cooper said. Mr. Jones is a career State Department employee.

Halliburton's handling of the gasoline contract was also defended by the chief of the U.S. Army Corps of Engineers. But Mr. Waxman said the new documents "require that we examine the evidence that senior administration officials pressured career contracting officers, as well as the new allegations of kickbacks and corruption." The Associated Press contributed to this report.

 
U.S. Pressed Halliburton in Kuwaiti Deal

Wed Nov 10, 3:05 PM ET Top Stories - Reuters

By Sue Pleming

WASHINGTON (Reuters) - The U.S. ambassador to Kuwait and other senior U.S. officials put pressure on Halliburton (NYSE:HAL - news) to award a contract to a Kuwaiti company suspected of overcharging to bring fuel into Iraq (news - web sites), according to State Department documents released on Wednesday.

The documents, portions of which were released by Democratic U.S. Rep. Henry Waxman (news, bio, voting record), also said the State Department received information in the summer of 2003 that Halliburton officials demanded kickbacks and solicited bribes from Altanmia Commercial Marketing Company of Kuwait.

Altanmia is at the center of an investigation into whether Halliburton subsidiary Kellogg Brown and Root, or KBR, overcharged in 2003 for getting fuel into Iraq, which despite being oil-rich suffered a shortage of refined products.

A draft Pentagon (news - web sites) audit at the end of last year found evidence KBR might have overcharged by at least $61 million for bringing in fuel under its no-bid U.S. Army Corps of Engineers contract.

According to the documents, on Dec. 2, 2003, Richard Jones, the U.S. ambassador to Kuwait, sent an e-mail directing unidentified officials: "Tell KBR to get off their butts and conclude deals with Kuwait NOW! Tell them we want a deal done with Altanmia within 24 hours and don't take any excuses."

The e-mail added: "If Amb. Bremer hears that KBR is still dragging its feet, he will be livid," referring to the U.S. civilian administrator of Iraq, Paul Bremer.

The State Department did not immediately respond to questions about the documents and the department's Inspector General's office said it could not comment on them.

BIGGEST IRAQ CONTRACTOR

Halliburton has been a lightening rod of criticism by Democrats, who say the company is the U.S. military's biggest contractor in Iraq because of its ties to Vice President Dick Cheney (news - web sites), who ran the Texas-based company from 1995 to 2000.

Last month, just days before the U.S. presidential election, the Army Corps of Engineers top contracting official, Bunny Greenhouse, said deals given to Halliburton were the worst case of contracting abuse she had ever seen. Greenhouse is set to be interviewed by the FBI (news - web sites) about her allegations.

Waxman said more than 400 State Department documents provided to the House Committee on Government Reform, of which he is the ranking minority member, undermined claims Halliburton contracts were "awarded without political interference."

The California Democrat, one of the most vocal critics of Halliburton, asked Republican Rep. Tom Davis, chairman of the committee, for hearings into KBR's oil deals in Iraq.

One e-mail about an Aug. 4, 2003, meeting between U.S. Embassy officials in Kuwait and Altanmia, reported the Kuwaiti company's claim that coalition and KBR officers "are on the take; that they solicit bribes openly; that anyone visiting their seaside villas at the Kuwaiti Hilton who offers to provide services will be asked for a bribe."

In another "sensitive but unclassified" document, the wife of a senior KBR manager reportedly lost her diamond watch at the Kuwaiti Hilton, where most KBR staff were staying, and her husband demanded the hotel buy her another one.

The e-mail, sent by an unidentified U.S. official, said the KBR manager's wife was "enamored with her new timepiece," an expensive Cartier watch.

Halliburton did not immediately respond to questions about the latest documents but in the past has strongly denied wrongdoing, charging that claims of favoritism are politically motivated.

 
Halliburton Admits Bribes 'May Have Been Paid' in Nigeria

WASHINGTON - US oil service firm Halliburton has acknowledged that improper payments "may have been made" to Nigerian officials through a consortium of which it was a member.

In a document dated Friday and filed with the US Securities and Exchange Commission, Halliburton said the US Justice Department had expanded its investigation into potential bribes through the TSKJ consortium, a matter also under review in France and Nigeria.

"We understand from the ongoing governmental and other investigations that payments may have been made to Nigerian officials," the company said in the SEC filing.

It noted that investigators were scrutinizing the role by British lawyer Jeffrey Tesler, who has been reported to have funneled as much as 132 million dollars from the consortium, and from Halliburton's former consultant A. Jack Stanley, fired in June.

"We understand that the Department of Justice has expanded its investigation to include whether Mr. Stanley may have received payments in connection with bidding practices on certain foreign projects," Halliburton said.

TSKJ is a private limited liability company registered in Portugal comprising Technip of France, Snamprogetti Netherlands, an affiliate of the Italian group ENI, JGC Corporation of Japan, and Kellogg Brown and Root, which was acquired by Halliburton in 1998.

The company is currently under investigation in the United States for allegedly contemplating bribing Nigerian officials to win a lucrative natural gas project some 10 years ago.

The alleged payments, many of which occurred when Halliburton was being run by Dick Cheney, now the US vice president, helped a consortium including the US group to win a 12 billion dollar contract to build a gas terminal.

Halliburton has denied that its top executives were involved in any wrongdoing.

 
Cheney oil firm faces UK inquiry

US vice-president mired in claims of bribery and corruption against his former company in four countries

David Leigh, Rob Evans, David Pallister, and David Teather in New York
Saturday October 30, 2004
The Guardian

British authorities have opened a new front in the widening investigation into allegations of bribery at Halliburton, the American oil services business, while it was being run by the US vice-president, Dick Cheney.
The Guardian has learned that the Serious Fraud Office has joined the international effort at the request of the US Department of Justice in Washington. French and Nigerian officials are already involved in the inquiry.

Halliburton has become a political liability for the Bush administration as the US prepares to vote in presidential elections next week.

The company, one of the chief government contractors in Iraq and Afghanistan, has been dogged by controversy, which includes claims of White House favouritism in awarding the firm billions of dollars of contracts without being forced to bid and Pentagon allegations that the firm has massively overcharged for its work.

It emerged late on Thursday that the FBI had launched an inquiry into how Halliburton secured contracts in Iraq, so far worth almost $9bn (£4.9bn).

The Nigerian investigation centres on $180m in payments allegedly made by a consortium led by Halliburton to secure the contract to build a natural gas plant in Nigeria.

The cash was allegedly channelled through a US-owned oil engineering firm in London called MW Kellogg and was handled by a company executive based in Berkshire. The funds were said to have been paid into a Swiss bank by a British lawyer.

The Democratic challenger, John Kerry, has made repeated jibes at Halliburton during his campaign for the White House, suggesting that the vice-president is using his position to look after his friends. Referring to the shortage of flu vaccine in the US, Mr Kerry told a rally in Orlando last week: "If Halliburton made flu shots, you'd have more flu shots here than there are oranges in the state of Florida."

Mr Cheney ran Dallas-based Halliburton for five years before quitting to run for office in 2000. He banked $36m when he left and continues to receive deferred income from the company. There has been no suggestion that Mr Cheney had any personal knowledge of the Nigerian payments.

When Mr Kerry's running mate, John Edwards, referred to the Nigerian scandal during a televised debate earlier this month, Mr Cheney said there was "no substance" to the charges. But Halliburton admitted last month that it had found evidence that bribery was at least discussed. In June, the US company cut ties with a former senior executive, Jack Stanley, and said he had received as much as $5m in "improper personal benefits" related to the Nigerian scandal. The company has said it is cooperating with authorities.

A French judge has been inquiring into the alleged bribes for the past two years. He has been joined by a Nigerian par liamentary commission. The scandal has gathered pace in recent months as the justice department and the chief US financial watchdog, the Securities and Exchange Commission, launched investigations.

The French judge, Renaud Van Ruymbeke, has called for Halliburton's agent, London solicitor Jeffrey Tesler, to return to Paris next month for a second round of questioning. Mr Tesler has denied wrongdoing.

Malcolm Bruce, the Liberal Democrat trade spokesman who has pressed the British government to investigate the bribery allegations, welcomed the SFO inquiry but questioned why it had taken so long.

"Clearly the SFO is only about to take action, well after everyone else and only when asked by other governments who have been taking action for months. The British government appears to have a pretty supine and passive attitude to stamping out bribery in international contracts. The resources are not there, the will is not there."

Halliburton was secretly awarded a contract ahead of the Iraq invasion, then worth up to $7bn, to help repair the country's oil industry in the wake of war. Halliburton was handed the contract without bidding. It was also given an other contract on a no-bid basis to provide logistical backup to American troops.

The FBI investigation is based on claims by a senior army contracting official who claims she was frozen out of decisions when she questioned the Halliburton contracts.

Halliburton has repeatedly denied wrongdoing. "The old allegations have once again been recycled, this time one week before the election," a spokeswoman said.

The company has paid $7.5m to settle claims that it failed to disclose a crucial change in its accounting policy that allowed it to report higher profits and shore up its share price while Mr Cheney was in charge.

 
Army staffer: Halliburton case ‘worst abuse’ FBI widens investigation, company sees election ploy in allegations

NBC, MSNBC and news services Updated: 6:55 p.m. ET Oct. 29, 2004

WASHINGTON - An Army contracting officer who led the FBI to widen its investigation of Pentagon contracts to Halliburton told NBC News that she had never seen a worse case of contracting abuse. "It was the worst abuse of the procurement and contracting system that I have seen," Bunnatine Greenhouse, the Army Corps of Engineers’ chief contracting officer, told NBC in an exclusive interview.

Halliburton dismissed the allegations as election politics.

Sen. John Kerry's campaign has seized on the allegations to accuse the Bush administration of playing favorites.

Vice President Dick Cheney headed Halliburton before taking office.

FBI agents this week sought permission to interview Greenhouse after she alleged that her agency unfairly awarded KBR, a Halliburton subsidiary, no-bid contracts worth billions of dollars for work in Iraq. The line of inquiry expands an earlier FBI investigation into whether Halliburton overcharged taxpayers for fuel in Iraq, and it elevates to a criminal matter the election-year question of whether the Bush administration showed favoritism to Cheney’s former company.

( Related story New audit slams Halliburton work in Kuwait)

Whistle-blower protection sought

Greenhouse’s lawyers said Thursday their client will cooperate but that she wants whistle-blower protection from Pentagon retaliation. “I think it (the FBI interview request) underscores the seriousness of the misconduct, and it also demonstrates how courageous Ms. Greenhouse was for stepping forward,” said Stephen Kohn, one of her attorneys. “The initiation of an FBI investigation into criminal misconduct will help restore public confidence,” Kohn said. “The Army must aggressively protect Ms. Greenhouse from the retaliation she will encounter as a result of blowing the whistle on this misconduct.”

FBI agents also recently began collecting documents from Army offices in Texas and elsewhere to examine how and why Halliburton, a Houston-based oil services conglomerate, got the no-bid work. “The Corps is absolutely cooperating with the FBI, and it has been an ongoing effort,” said Army Corps spokeswoman Carol Sanders. “Our role is to cooperate. It’s a public contract and public funds. We’ve been providing them information for quite a while.”

The FBI declined to comment Thursday, but a law enforcement official, speaking on condition of anonymity, said the investigation does not involve anyone in the White House — including Cheney’s office.

Halliburton's response Wendy Hall, a Halliburton spokeswoman, said the company is cooperating with various investigations, but she dismissed the latest revelation as election politics. She noted Congress’ auditing arm, the Government Accountability Office, found the company’s no-bid work in Iraq was legal. “The old allegations have once again been recycled, this time one week before the election,” Hall said. “The GAO said earlier this year that the contract was properly awarded because Halliburton was the only contractor that could do the work. “We look forward to the end of the election, because no matter who is elected president, Halliburton is proud to serve the troops just as we have for the past 60 years for both Democrat and Republican administrations,” she said.

Cheney spokesman Kevin Kellems, asked if investigators had contacted the vice president or his office about the contracts, said they had not.

Democrats have tried to make Halliburton an election-year issue, and vice presidential candidate John Edwards quickly seized upon the latest development.

Sen. Frank Lautenberg, a Democrat on the Senate Governmental Affairs Committee who has been investigating Halliburton’s contracts, said his office was told the FBI recently sought documents from various government offices. The requests focused on how and why Halliburton got the Iraq contracts. “This multibillion-dollar no-bid contract to Halliburton was suspicious from Day One, and now our worst suspicions are confirmed,” Lautenberg said. “The FBI doesn’t get involved unless there are possible criminal violations.”

E-mail ties Cheney office to contract

In a formal whistle-blower complaint filed last week, Greenhouse alleged the award of contracts without competition to KBR puts at risk “the integrity of the federal contracting program as it relates to a major defense contractor.”

The contracts were to restore Iraq’s oil industry. Among the evidence cited in the complaint was an internal 2003 Pentagon e-mail that says the Iraq contract “has been coordinated” with Cheney’s White House office.

The vice president, who continues to receive deferred compensation from when he was Halliburton’s chief executive in the late 1990s, has steadfastly maintained he has played no role in the selection of his former company for federal business.

The Army last week referred Greenhouse’s allegations to the Defense Department’s inspector general.

Documents show FBI agents from Quad Cities, Ill., asked Tuesday to interview Greenhouse.

Greenhouse alleged in her complaint that after her superiors signed off on the Iraq business in February 2003, a month before the war began, and returned it for her necessary approval, she specifically asked why the work was being extended for several years. Beside her signature, Greenhouse wrote: “I caution that extending this sole-source effort beyond a one-year period could convey an invalid perception that there is not strong intent for a limited competition,” the complaint said.

The oil restoration work was given to KBR without competitive bidding through 10 separate work assignments called “task orders.” The orders were issued under an existing contract between Halliburton and the U.S. military that was awarded competitively in December 2001.

While the Corps was authorized to spend up to $7 billion for the oil restoration work, the actual cost so far has been $2.5 billion. Halliburton is still working on the oil facilities, but it is now operating under a new, competitively awarded contract.

The Associated Press contributed to this report.

 
FBI widens probe of Halliburton
War contract under scrutiny

By Robert O'Harrow Jr
The Washington Post
Published October 29, 2004

WASHINGTON -- The FBI has expanded an investigation into allegations of contract irregularities by Halliburton Co. subsidiary KBR in Iraq and Kuwait.

The agency requested an interview with a Pentagon official who complained recently that the Army gave KBR preferential treatment when granting it a $7 billion classified contract to restore Iraq's oilfields just before the war began in March 2003, her lawyers said Thursday.

The request comes at a sensitive time because Vice President Dick Cheney once was Halliburton's chief executive, and Democrats have accused the Bush administration of favoring the oil-services company.

The FBI wants to discuss allegations by Bunnatine Greenhouse, a senior Army Corps of Engineers civilian responsible for ensuring contracting competition. She said Army officials did not justify the award or show that KBR, formerly known as Kellogg Brown & Root, had "unique attributes," as required by procurement law, according to a letter her lawyers wrote to acting Army Secretary Les Brownlee and provided to lawmakers in Congress.

The letter said Army officials ignored her repeated complaint that the contract was granted without following normal procedures. It also said the Army allowed KBR representatives to participate in meetings "outside the scope of information KBR should be privy to," before the contract was awarded.

Government auditors said nine months later that KBR may have overcharged the government $61 million for fuel, which Halliburton has denied. Halliburton also is being investigated by the Justice Department and the Securities and Exchange Commission regarding work it did in Nigeria, Iran and Iraq.

Halliburton spokeswoman Wendy Hall dismissed Greenhouse's charges as politically motivated. Hall said "the old allegations by Bunny Greenhouse have once again been recycled, this time one week before the election." Hall said the Government Accountability Office concluded that the oilfield-restoration contract was properly awarded. The Army later put the contract up for bids and KBR was one of two contractors to win.

The company has disclosed in public filings that the Justice Department is investigating what it charged for fuel.

"We continue to work with all of the investigating bodies to resolve issues related to fuel delivery in Iraq," Hall said.

Greenhouse was not available for comment Thursday. In a telephone interview, her lawyer, Stephen Kohn, said federal investigators also are interested in discussing with his client earlier contracts KBR had with the Army to provide logistical support in the Balkans.

"Our concern is that Ms. Greenhouse not be retaliated against, which is what happens to most whistle-blowers," said Kohn, who specializes in whistle-blower cases. "It has not been easy for her."

The FBI investigation appears to be related to one that has been going on for several months involving the collection of records from various Pentagon agencies and private individuals.

Carol Sanders, a spokeswoman for the Corps of Engineers, said the FBI has sought records in recent months relating to Halliburton contracts. "We've cooperated with everybody who has the right to be looking, including the FBI," she said. "Our role is to cooperate."

Sanders said she could not say whether Greenhouse's case is related.

The FBI agent seeking to interview Greenhouse is Jeffrey Jackson, who works at a field office in Illinois. Earlier this year, he interviewed former KBR employees about their allegations of mismanagement of government money in Iraq.

Among the former employees was Henry Bunting, a KBR field buyer who said in July that he told Jackson and another federal agent about improper spending of money and lack of accountability by KBR operations in Kuwait during the war.

 
Beyond the Call of Duty

A whistle-blower objected to the government's Halliburton deals—and says now she's paying for it

By ADAM ZAGORIN & TIMOTHY J. BURGER
Courtesy TIME MagazineBunnatine (Bunny) Greenhouse

Sunday, Oct. 24, 2004In February 2003, less than a month before the U.S. invaded Iraq, Bunnatine (Bunny) Greenhouse walked into a Pentagon meeting and with a quiet comment started what could be the end of her career. On the agenda was the awarding of an up to $7 billion deal to a subsidiary of Houston-based conglomerate Halliburton to restore Iraq's oil facilities. On hand were senior officials from the office of Defense Secretary Donald Rumsfeld and aides to retired Lieut. General Jay Garner, who would soon become the first U.S. administrator in Iraq.

Then several representatives from Halliburton entered. Greenhouse, a top contracting specialist for the Army Corps of Engineers, grew increasingly concerned that they were privy to internal discussions of the contract's terms, so she whispered to the presiding general, insisting that he ask the Halliburton employees to leave the room.

Once they had gone, Greenhouse raised other concerns. She argued that the five-year term for the contract, which had not been put out for competitive bid, was not justified, that it should be for one year only and then be opened to competition. But when the contract-approval document arrived the next day for Greenhouse's signature, the term was five years. With war imminent, she had little choice but to sign. But she added a handwritten reservation that extending a no-bid contract beyond one year could send a message that "there is not strong intent for a limited competition."

Greenhouse's objections, which had not been made public until now, will probably fuel criticism of the government's allegedly cozy relationship with Halliburton and could be greeted with calls for further investigation. Halliburton's Kellogg, Brown and Root (KBR) subsidiary has been mired in allegations of overcharging and mismanagement in Iraq, and the government in January replaced the noncompetitive oil-field contract that Greenhouse had objected to and made two competitively bid awards instead. (Halliburton won the larger contract, worth up to $1.2 billion, for repairing oil installations in southern Iraq, while Parsons Corp. got one for the north, worth up to $800 million.) Halliburton's Iraq business, which includes another government contract as well, has been under particular scrutiny because Vice President Dick Cheney was once its CEO. The Pentagon, concerned about potential controversy when it signed the original oil-work contract, gave Cheney's staff a heads-up beforehand. (TIME disclosed that alert in June.)

Greenhouse seems to have got nothing but trouble for questioning the deal. Warned to stop interfering and threatened with a demotion, the career Corps employee decided to act on her conscience, according to her lawyer, Michael Kohn. Kohn, who has represented other federal whistle-blowers, last week sent a letter—obtained by TIME from congressional sources—on her behalf to the acting Secretary of the Army. In it Kohn recounts Greenhouse's Pentagon meeting and demands an investigation of alleged violations of Army regulations in the contract's awarding. (The Pentagon justified the contract procedures as necessary in a time of war, saying KBR was the only choice because of security clearances that it had received earlier.) Kohn charges that Greenhouse's superiors have tried to silence her; he says she has agreed to be interviewed, pending approval from her employer, but the Army failed to make her available despite repeated requests from TIME.

"These charges undercut months of assertions by Administration officials that the Halliburton contract was on the level," says Democratic Representative Henry Waxman. As the Corps's top contract specialist, the letter says, Greenhouse had noted reservations on dozens of procurement documents over seven years. But it was only after she took exception to the Halliburton deal that she was warned not to do so anymore. The letter states that the major general who admonished her, Robert Griffin, later admitted in a sworn statement that her comments on contracts had "caused trouble" for the Army and that, given the controversy surrounding the contract, it was "intolerable" and "had to stop." The letter says he threatened to downgrade her. (As with Greenhouse, the Army did not make Griffin available.) When the Pentagon's auditors accused KBR of overcharging the government $61 million for fuel, the letter says, the Army bypassed Greenhouse. Her deputy waived a requirement that KBR provide pricing data—a move that looked "politically motivated," the letter says.

The Pentagon maintains that it awarded Halliburton's Iraq contracts appropriately, as does a Halliburton spokeswoman. A senior military official says the Army "has referred the matter to the inspector general of the Department of Defense." As for Halliburton, it has faced alleged cost overruns, lost profits and seen at least 54 company contractors killed in Iraq. Greenhouse, meanwhile, has requested protection from retaliation. But her career—and reputation—are on the line.

From the Nov. 01, 2004 issue of TIME magazine

 
Cheney's Lamest Excuse Yet

by John Nichols

What do you do when the excuses you used to "justify" an unwise and unnecessary war are completely discredited.

If you're Vice President Dick Cheney, you make up a new one.

Cheney's favorite excuse, the claim that Iraqi President Saddam Hussein had significant ties to Osama bin Laden's al Qaeda network, was never credible. But the vice president's attempts to peddle the theory became absurd after it was rejected by the National Commission on Terrorist Attacks on the United States. Cheney kept trying to spin the fantasy for weeks after 9 11 Commission reported that there was no working relationship between Hussein and al Qaeda. But he finally had to acknowledge during last Tuesday night's debate with Democratic vice presidential nominee John Edwards that he has no evidence to sustain the claim.

Cheney's second favorite excuse, the claim that Iraq had weapons of mass destruction that might threaten its neighbors and the United States, was never any more credible than the al Qaeda fantasy. But Cheney knew as he debated Edwards Tuesday night that it would be completely obliterated by a report scheduled for release the following day. That report, compiled by Charles A. Duelfer, chief arms inspector for the Central Intelligence Agency, confirmed what honest observers had known for years: that Iraq had under pressure from the United Nations eliminated its capacity to develop illicit weapons by the mid 1990s.

In a bind, Cheney grabbed during the debate for one of his most ridiculous "justifications": the claim that Saddam Hussein's Iraq was harboring Abu Nidal, a Palestinian charged with masterminding acts of terrorism in the 1970s and 1980s. The problem with this claim is that Nidal died in August, 2002, two months before the Bush administration sought and received permission from the U.S. Congress to use force against Iraq.

Stuck for an excuse, Cheney hit the campaign trail the day after the debate with a new claim: The war has been necessary because Saddam Hussein and other Iraqi leaders were abusing the United Nations "Oil-for-Food" program. Dismissing the Duelfer report's confirmation that Iraq had no stockpiles of WMDs, Cheney seized on the reports mention of "Oil-for-Food" program abuses to declare, "The suggestion is clearly there by Mr. Duelfer that Saddam had used the program in such a way that he had bought off foreign governments and was building support among them to take the sanctions down." Then the vice president made the leap for a new justification for the invasion and occupation of Iraq: "As soon as the sanctions were lifted, he had every intention of going back" to his weapons program, the mind-reading vice president declared. Thus, said Cheney, "delay, defer, wait, wasn't an option."

There is little doubt that Hussein diverted money from the program, which was set up in 1996 to ease the burden on Iraqis who were suffering from hunger and lack of medical care as a result of the U.N. sanctions against the country. But as an excuse for invading and occupying a country, it is Cheney's lamest excuse yet.

After all, "Oil-for-Food" program abuses did not merely benefit Saddam Hussein and his cronies. They also, according to the report produced by CIA chief arms inspector Duelfer, benefitted a number of U.S. corporations that rushed into Iraq to siphon off money funds for themselves.

Duelfer found that Chevron, Mobil, Texaco and Bay Oil had received lucrative vouchers that allowed them to buy Iraqi oil and sell it abroad for big profits.

Additionally, Cheney's old company, Halliburton, the top oil services corporation in the U.S., filled its coffers with Iraqi money during the heyday of the Oil for Food program. When Cheney's was Halliburton's CEO, the company did not collect vouchers; rather, its subsidiaries took advantage of the opening created by the "Oil-for-Food" program to cut deals with Saddam Hussein's government that allowed it to take money directly from Iraq. During 1998 and 1999, Halliburton's Dresser Rand and Ingersoll Dresser Pump subsidiaries signed contracts to provide roughtly $73 million in oil production equipment and spare parts to Iraq.

The services provided by Halliburton's subsidiaries during the period when Cheney was chairman and chief executive officer of the Dallas-based company helped rebuild Iraq's oil production and distribution infrastructure. That work, which got Iraqi oil flowing, was, of course, necessary for the implementation of the "Oil-for-Food" program -- and, presumably for the abuses about which Cheney is now so concerned.

Under Cheney's leadership, the contracts obtained by Halliburton subsidiaries were among the most substantial awarded any U.S. firm doing business with Saddam Hussein. But they were not as ambitious as the company would have liked. A scheme to have Halliburton subsidiaries repair an Iraqi oil terminal that had been destroyed during the 1991 Gulf War was blocked by the U.S. government because it was determined to violate the sanctions regime.

Might Cheney have been unaware of the Halliburton Iraq tie -- as he tried to claim in one 2000 interview? Not likely. James Perrella, former chairman of Ingersoll Rand told the Washington Post that based on his knowledge of how Halliburton and its subsidiaries worked, Cheney had to have known. "Oh, definitely," Perrella said of Cheney, "he was aware of the business."

Only on the eve of the 2000 presidential election campaign, in which Cheney would secure a position on the Republican ticket by manipulating the vice presidential selection process in his favor, did Halliburton cut the business ties with Iraq that had been made so lucrative by the "Oil-for-Food" program.

But, now, as he searches for a new excuse to justify the invasion and occupation of Iraq, Cheney is suddenly concerned about abuses of the "Oil-for-Food" program.

What excuse is next? Perhaps Cheney will suggest that the occupation must be maintained in order to prevent war profiteering by companies such as, er, well, Halliburton.

John Nichols' book on Cheney, Dick: The Man Who Is President, has just been released by The New Press.
© 2004 The Nation

 
Cheney hasn't always liked sanctions on Iran

Vice President Dick Cheney now supports trade sanctions against Iran, but he didn't in the 1990s as chairman of Halliburton Co.

BY MATT KELLEYAssociated Press

WASHINGTON - Vice President Dick Cheney, who has called Iran ''the world's leading exporter of terror,'' pushed to lift U.S. trade sanctions against Tehran while chairman of Halliburton Co. in the 1990s.

And his company's offshore subsidiaries also expanded business in Iran.

Democratic vice presidential candidate John Edwards criticized Cheney in Tuesday night's debate for his position on Iran during the 1990s, and Edwards said he supports expanding the sanctions against Iran.

Cheney countered that he now supports sanctions against Iran but sidestepped the issue of Halliburton's involvement, saying it was being raised by Democrats ``to try to confuse the voters.''

LOTS OF BUSINESS

Halliburton's foreign subsidiaries did about $65 million in business with Iran last year, company documents say.

A federal grand jury is investigating whether Halliburton or its executives deliberately violated the U.S. ban on trade with Iran.

Foreign subsidiaries of American companies can do business with Iran as long as no Americans participate in that business.

Halliburton says it did not break that law.

While he headed the Houston-based oil services and construction company, Cheney strongly criticized sanctions against countries like Iran and Libya.

President Clinton cut off all U.S. trade with Iran in 1995 because of Tehran's support for terrorism.

UNFAIR PUNISHMENT

Cheney argued then that sanctions did not work and punished American companies.
The former defense secretary complained in a 1998 speech that U.S. companies were ''cut out of the action'' in Iran because of the sanctions.

Although Cheney maintained his opposition to unilateral U.S. sanctions during his first months as vice president, the Bush administration renewed the trade ban with Iran in March 2001.
After the Sept. 11, 2001, terrorist attacks, President Bush grouped Iran with Saddam Hussein's Iraq and North Korea as members of an ''axis of evil'' -- nations with ties to both terrorists and weapons of mass destruction.

Cheney now sounds a harder line. ''The government of Iran is the world's leading exporter of terror,'' Cheney he said less than a month after Bush's January 2002 ''axis of evil'' speech.
While campaigning, Cheney has often boasted of how the Bush administration helped shut down an underground network supplying nuclear technology to Iran, which he has called one of ``the world's most dangerous regimes.''

Halliburton, meanwhile, has defended the business deals with Iran that intensified under Cheney.

''It is neither prudent nor appropriate for our company to establish our own country-by-country foreign policy,'' Halliburton said in a January statement amid criticism of its Iran deals.

Much of Halliburton's business with Iran comes through Halliburton Products & Services Ltd., a subsidiary incorporated in the Cayman Islands and based in the United Arab Emirates. Halliburton Products & Services opened a Tehran office in early 2000, before Cheney left Halliburton to became Bush's running mate.

 
Cheney & Edwards Mangle Facts
Getting it wrong about combat pay, Halliburton, and FactCheck.org

October 6, 2004
Summary

Cheney wrongly implied that FactCheck had defended his tenure as CEO of Halliburton Co., and the vice president even got our name wrong. He overstated matters when he said Edwards voted "for the war" and "to commit the troops, to send them to war." He exaggerated the number of times Kerry has voted to raise taxes, and puffed up the number of small business owners who would see a tax increase under Kerry's proposals.

Edwards falsely claimed the administration "lobbied the Congress" to cut the combat pay of troops in Iraq, something the White House never supported, and he used misleading numbers about jobs.
Analysis

"FactCheck.com"

Cheney: Well, the reason they keep mentioning Halliburton is because they're trying to throw up a smokescreen. They know the charges are false.They know that if you go, for example, to FactCheck.com (sic), an independent Web site sponsored by the University of Pennsylvania, you can get the specific details with respect to Halliburton.

Cheney Plugs FactCheck

Cheney got our domain name wrong -- calling us "FactCheck.com" -- and wrongly implied that we had rebutted allegations Edwards was making about what Cheney had done as chief executive officer of Halliburton.

In fact, we did post an article pointing out that Cheney hasn't profited personally while in office from Halliburton's Iraq contracts, as falsely implied by a Kerry TV ad. But Edwards was talking about Cheney's responsibility for earlier Halliburton troubles. And in fact, Edwards was mostly right.

Edwards on Halliburton: Partial Credit

We can only give Edwards partial credit for his Halliburton attack, however. He implied that Cheney was in charge of the company when it did business with Libya in violation of US sanctions, but that happened long before Cheney joined the company.

"Halliburton"

Edwards: While he (Cheney) was CEO of Halliburton, they paid millions of dollars in fines for providing false information on their company, just like Enron and Ken Lay.
They did business with Libya and Iran, two sworn enemies of the United States.
They're now under investigation for having bribed foreign officials during that period of time.

Edwards was also slightly off when he said Halliburton paid millions in fines "while he (Cheney) was CEO." What he meant was that it paid fines for matters that took place while Cheney was in charge. And in fact, the Securities and Exchange Commission announced Aug. 3 that Halliburton will pay $7.5 million to settle a matter that dates back to 1998, when Cheney was CEO.

Halliburton failed to disclose a change in its accounting procedures that resulted in making its earnings look better. Cheney himself was not charged with any wrongdoing, however. The SEC said Cheney "provided sworn testimony and cooperated willingly and fully in the investigation."
On other matters, Edwards said Halliburton "did business with Libya and Iran, two sworn enemies of the United States" and is now "under investigation for having bribed foreign officials" while Cheney was CEO.

Iran: Indeed, Halliburton has said it does about $30 million to $40 million in oilfield service business in Iran annually through a subsidiary, Halliburton Products and Services Ltd. The company says that the subsidiary fully complies with US sanctions laws, but the matter currently is under investigation by a federal grand jury in Houston.

Bribery Investigation: U.S. and French authorities currently are investigating whether a joint venture whose partners included a Halliburton subsidiary paid bribes or kickbacks to win a $12 billion construction project in Nigeria.

Libya: Edwards was wrong to include Libya, however. In 1995, before Cheney joined the company, Halliburton pled guilty to criminal charges that it violated the U.S. ban on exports to Libya and said it would pay $3.81 million in fines. Those violations dated back to 1987 and 1990.

 
The Facts on Halliburton

A BUZZFLASH NEWS ALERT

From the Democratic National Committee:

Cheney: "Well, the reason they keep mentioning Halliburton is because they're trying to throw up a smokescreen. They know the charges are false." [Vice President Debate, 10/5/04]

Edwards: Halliburton Used Enron Style Accounting Practices. "While he was CEO of Halliburton, they paid millions of dollars in fines for providing false information on their company, just like Enron and Ken Lay." [Vice President Debate, 10/5/04]

Halliburton Agreed to Pay $7.5 Million to Settle SEC Probe into Cheney-Era Accounting Practices. Halliburton agreed to pay $7.5 million to settle a SEC probe of the company's accounting during the tenure of Dick Cheney. Halliburton failed in 1998 to disclose a change in the way it accounted for revenue from some construction work, the SEC said in a statement. The SEC said "the company misled investors and violated federal securities laws." [Bloomberg News, 8/3/04; Complaint of SEC vs Halliburton Company and Robert Charles Muchmore Jr. 8/3/04]

Edwards: Under Cheney, Halliburton Did Business With Iran and Libya. "They did business with Libya and Iran, two sworn enemies of the United States."[Vice President Debate, 10/5/04]

Justice Dept. Issued Subpoena Seeking Information of Halliburton’s Role In Iran Under Cheney. Halliburton received an inquiry in 2001 from the Office of Foreign Assets Control of the U.S. Treasury Department inquiring about operations in Iran by a Halliburton subsidiary. In July 2004, OFAC transferred the case to the Justice Department and a federal grand jury issued a subpoena to Halliburton seeking information about its work in Iran. Government officials told the Washington Post such cases are referred to the Justice Department only when there is evidence "intentional or willful" violations have occurred. [Houston Chronicle, 12/15/03; Halliburton Co. 10-Q, 5/7/04; Reuters, 7/19/04; Washington Post, 7/21/04]

Cheney Admitted Doing Business in Iran and Libya. When asked whether Halliburton did business with Iraq, Cheney said in 2000, "What we do with respect to Iran and Libya is done through foreign subsidiaries, totally in compliance with U.S. law." [ABC, This Week, 7/30/00]

Edwards: Halliburton is Being Investigated For Charges of Bribery Under Cheney. "They're now under investigation for having bribed foreign officials during that period of time." [Vice President Debate, 10/5/04]

SEC And Justice Department Investigating Halliburton Bribery Charges During Cheney’s Tenure. A French judge is looking at whether Vice President Dick Cheney may have been responsible under French law for at least one of four bribery payments exchanged between a Halliburton subsidiary and Nigerian officials to obtain contracts for liquefied natural projects. Under French law, "the head of a company can be charged with ‘misuse of corporate assets’ for bribes paid by any employee - even if the executive didn't know about the improper payments." Furthermore, the SEC, the Justice Department and the Nigerian government are also investigating the bribery charges against Halliburton. [Dallas Morning News, 1/25/04, 2/10/04; Associated Press, 2/4/04, 2/5/04, 2/6/04; Houston Chronicle, 2/7/04]

Edwards: Halliburton Got No-Bid Contracts in Iraq. "Not only that, they've gotten a $7.5 billion no-bid contract in Iraq, and instead of part of their money being withheld, which is the way it's normally done, because they're under investigation, they've continued to get their money." [Vice President Debate, 10/5/04]

Halliburton’s Got No-Bid Contract in Iraq. In March 2003, the Pentagon awarded a subsidiary of Halliburton a no-bid contract worth $7 billion to help rebuild Iraqi oil fields. According to Time, an internal Pentagon e-mail said "action" on the contract was "coordinated" with the Vice President’s office. A senior political appointee in the Defense Department, Michael H. Mobbs, who works for undersecretary of defense Douglas Feith, acknowledged that he selected Halliburton for Iraq reconstruction work. Before awarding the contract, Mobbs briefed top officials, including Lewis "Scooter" Libby, Cheney's top aide, and White House staff members. [Time, 5/30/04; Los Angeles Times, 5/7/03; Washington Post, 2/10/04, 6/14/04]

Halliburton Has Gotten Three Extensions To Avoid Payments Being Withheld. Under government rules, contractors cannot be paid more than 85 percent of their invoices until they fully account for their costs. It had appeared that the Army was going to withhold payments to Halliburton because the contractor cannot account for nearly half of its work in Iraq and Kuwait. But for the third time this year, the Army gave Halliburton an extension and will continue to pay them in full. This happened despite the fact that Pentagon auditors "strongly" urged the U.S. Army to start withholding millions of dollars in payments to Halliburton Co. until the company justified its bills. [Washington Post, 8/18/04; New York Times, 8/17/04; Associated Press, 8/24/04; Reuters, 8/24/04; Houston Chronicle, 8/25/04]

Edwards: Halliburton Used Off Shore Tax Shelters. "When the vice president was CEO of Halliburton, they took advantage of every offshore loophole available.They had multiple offshore companies that were avoiding taxes." [Vice President Debate, 10/5/04]

Halliburton Maintained "A Slew of Entities" in Offshore Tax Havens. In 2001, Halliburton maintained, what the Wall Street Journal described as, "a slew of entities" in offshore tax havens. According to the Journal, "Halliburton, according to its latest annual report to shareholders filed with the Securities and Exchange Commission, has units in St. Lucia, Liechtenstein, Barbados, the Cayman Islands, Cyprus, the Netherlands Antilles and the British Virgin Islands. All are well-known tax havens with few natural resources." According the Security and Exchange Commission, while Cheney was in charge, Halliburton set up over 20 affiliates in the Cayman Islands to avoid paying US taxes. [Washington Post, 8/1/02; Wall Street Journal, 8/5/02]

 
Halliburton spent $770,000 lobbying Washington in first half of 2004, a 400% increase from 2003

WASHINGTON, Oct. 2 (HalliburtonWatch.org) -- Halliburton dramatically increased lobbying activity for 2004, government records show. According to filings with the U.S. Senate Office of Public Records, Halliburton spent $150,000 lobbying Washington during the first six months of last year, but spent $770,000 during the first six months of 2004, a 413 percent increase.

Halliburton's in-house lobbyists spent $250,000 during the first half of 2004, a 67 percent increase from last year when it spent $150,000.

The in-house lobbyists include retired Army Lt. Gen. Charles E. Dominy, vice president for government affairs; Donald A. Deline, a former counsel to the Senate Armed Services Committee; Barbara Jones; and George P. Sigalos, director of government relations for KBR and a former press aide to Rep. Philip M. Crane (R-IL). These people pushed for favorable legislation on asbestos, tort reform, the WTO, energy policy, the Export-Import Bank, the Overseas Private Investment Corp., government procurement, military contracting, immigration and homeland security.

Earlier this year, Halliburton hired an outside lobbying firm, Covington & Burling, to lobby Washington on behalf of its KBR Government Operations division, the same division being pummeled by the media, the Pentagon and Congress for its handling of Iraq contracts. Covington & Burling was paid $520,000 to handle "inquiries concerning company's construction and service contracts in Iraq," the firm said in a filing.

According to the filing, Covington & Burling listed the following people as lobbyists for Halliburton/KBR: Roderick A. DeArment, who was chief of staff to now-retired Sen. Bob Dole (R-KS); Martin B. Gold, former counsel to Senate Majority Leader Bill Frist (R-TN); Stuart E. Eizenstat, U.S. ambassador to the European Union during the Clinton administration; Alan A. Pemberton, coordinator of the firm's government contracts practice; David M. Marchick, who served in various posts in the Clinton administration; Jack L. Schenendorf; Peter Flanagan; Jennifer Plitsch; Benjamin J. Razi; and Allegra Lane.

 
How Cheney's Firm Routed $132m to Nigeria via Tottenham Lawyer

by Solomon Hughes and Jason Nisse

A lawyer, based in offices in a run-down part of north London, worked with three British executives from the US construc- tion group Halliburton to pay at least $132m (£73m) in "unjustified" fees to contacts in Nigeria.

These payments, many of which occurred when Halliburton was being run by Dick Cheney, now the American Vice-President, helped a consortium including the US group to win a $12bn contract to build a gas terminal at Bonny Island in Nigeria.

In court documents submitted to a French corruption investigation, Halliburton has admitted it paid $132m to Jeffrey Tesler, a UK lawyer. Mr Tesler's firm, Kaye Tesler, is based on a run down high street in Tottenham, north London.

Mr Tesler would not return calls but his French solicitor admits Mr Tesler received the money, which he said was for advisory and other legitimate fees.

The construction of the Nigerian plant was carried out by a consortium called TSKJ, made up of Technip of France, Snamprogetti of Italy, Halliburton subsidiary Kellogg Brown & Root and the Japan Gas Corporation. After an internal investigation, Halliburton submitted notes of meetings to the French judge showing that Mr Tesler was reappointed by the consortium in 1999 at Halliburton's insistence.

Richard Northmore, a sales manager for MW Kellogg, a Halliburton subsidiary based in Greenford, Middlesex, signed contracts with Mr Tesler for the consortium, according to testimony seen by The Independent on Sunday. Syed Nasser, MW Kellogg's legal director, also acted as counsel to the TSKJ consortium, approving Mr Tesler's role. Bhaskar Patel, a sales and marketing vice-president who works in the Leatherhead office of Kellogg Brown & Root, also worked with Mr Tesler. Mr Northmore and Mr Nasser referred inquiries to Halliburton in the US. Mr Patel, who is understood to be an Africa expert, did not return calls.

A Halliburton spokesman confirmed that staff at Kellogg had been in contact with Mr Tesler. "The members from TSKJ unanimously approved of Tesler," she said. "The appointment could have been blocked by one of the members refusing to sign the minutes, and clearly this did not happen."

Evidence given by Halliburton to the French inquiry reveals that between 1996 and the present day, it paid $132.3m to Mr Tesler, more than half of which came after 1999. A letter from French investigators to the Nigerian authorities, asking for co-operation in the case, says that Mr Tesler's commissions "appear completely unjustified".

For its part, Halliburton has fired one senior executive, Jack Stanley, who it said received improper payments from Mr Tesler. Mr Stanley had been appointed to his senior role at Halliburton by Mr Cheney when he was chief executive between 1995 and 2000.

Revelations about the central role of Halliburton in the deal may force the UK's Export Credit Guarantee Department to withdraw its support from a £133m loan made last year to MW Kellogg. ECGD said it supported the loan on the basis that it was a "subcontractor to the consortium and financial arrangements were not their responsibility", but it was main- taining a "watching brief" on the French investigation.

Susan Hawley of the Corner House, a development watchdog critical of the ECGD's attitude to corruption, said: "If the ECGD was serious about stopping corruption, it would by now have demanded a full explanation from MW Kellogg as to its involvement in this case, and conducted an audit of its books."

 
Edwards v. Halliburton

By Marc Ash
t r u t h o u t Perspective
Monday 04 October 2004

The Bush campaign has its game face on in the aftermath of the first debate between Mr. Kerry and Mr. Bush, but there has to be some low level panic setting in based on Mr. Bush's performance. Not winning a debate can be a problem for a presidential candidate, but it's nothing compared with looking incapable of doing the job. Last Thursday night George W. Bush did, and his handlers can't feel comfortable with that.

Dick Cheney is not George W. Bush. He's smarter, faster and tougher. Flat-out a more formidable debating opponent than Mr. Bush. Cheney has been the tough assignment guy -- the stopper -- for Bush & Co. They are likely to turn to him Tuesday night to restore order. The Bush campaign likes the War on Terra; it is nothing less than their raison d'être. Look for Cheney to come out firing and attempt to win, in overtime, the argument Mr. Bush lost in the first debate.

For John Edwards this amounts to the challenge of a lifetime. Edwards is sharp, articulate and good looking but still remarkably down to earth for a U.S. Senator. He will need all of that against Cheney. Cheney is a master of innuendo. Never before has one man created so much confusion or disseminated so much misinformation with so few words. Cheney seems to understand precisely what his supporters want to believe, and he gives them just enough to believe it, without ever saying it. It's often said that ignorance is bliss; for Dick Cheney it's been money in the bank, literally.

Poor John Edwards will be stuck with the facts. To say that Dick Cheney has a personal conflict of interest in advocating US military action against Iraq is like saying there is an elephant on the debate lectern. Dick Cheney, since his "retirement" from Halliburton, has steadfastly maintained that, despite the multi-million dollar "retirement package" he received, Halliburton's no-bid windfall multi-BILLION dollar contracts resulting from the invasion of Iraq -- which Cheney sold to the American people -- are a mere coincidence. It is as brazen and enormous a lie as this nation has ever seen. The fact is painfully, brutally obvious.

Mr. Edwards' job will be to compel a higher standard than innuendo from Mr. Cheney. It won't be easy. There is something seductively simple about, 'vote for us . . . or die.' It gives those who hate to think permission not to. Nonetheless many Americans are quite capable of analytical thinking. They tend to be a rather independent breed, the independent voters, if you will. That is the group most likely to carefully consider a fact-based argument by Mr. Edwards. If Mr. Cheney writes them off, he will hold his base but not his job.

 
Cheney's Cronies

The Nation Editorial

As he prepares to debate Halliburton CEO turned Vice President Dick Cheney, Senator John Edwards would do well to study up on his Harry Truman. The buck-stops-here President had a word for war profiteering: "treason." He had another word for those political and business leaders who condone "waste, inefficiency, mismanagement and profiteering" during a time of war: "unpatriotic." If John Kerry's running mate wants to have a greater impact in his debate with the Vice President--which follows hard on the first presidential debate--than did the woefully inept Joe Lieberman when he faced Cheney in 2000, Edwards has to drop the faux friendliness of the Washington elites whom Truman so disdained in favor of blunt talk about Cheney, starting with his Halliburton connections.

Halliburton has been experiencing a growth spurt ever since Cheney passed through the revolving door of Washington politics to set up the Administration he manages for George W. Bush. The Texas-based corporation moved to number one on the Army's list of top contractors in 2003, pocketing 4.2 billion taxpayer dollars last year alone. It got one no-bid contract after discussions in which Cheney's chief of staff, Lewis "Scooter" Libby, was involved. (Despite soaring revenues, however, the Halliburton unit doing work in Iraq is plagued by so many problems, from mismanagement to allegations of corruption, that it may be spun off to try to salvage what's left of the parent company's reputation.)

If Edwards brings Halliburton up during his Tuesday night face-off with Cheney in Cleveland, the Vice President will undoubtedly claim--as he has whenever he's been challenged--that he no longer has any connection with Halliburton. Edwards can counter with another of those blunt Trumanisms: "liar." The Vice President continues to receive money from Halliburton--$178,437 in 2003 alone--and a Congressional Research Service study has described the sort of deferred-salary payments he receives and the millions in stock options he retains as "among those benefits described by the Office of Government Ethics as 'retained ties' or 'linkages' to one's former employer." In other words, Cheney has a great big conflict of interest, and pounding away on it will go a long way toward exposing the crony capitalism that has been a hallmark of the Bush Administration.

Edwards should talk about all the other troubling aspects of Cheney's tenure, too. As Nation Washington correspondent John Nichols explains in his new book, Dick: The Man Who Is President (New Press), most of the pathologies of the Bush Administration can be traced back to Cheney, who chaired the corrupt Energy Task Force and pressed Bush to make a second round of tax cuts for the rich, which then-Treasury Secretary Paul O'Neill worried were unwise and unsound.

This is the armchair warrior who as a college student collected five draft deferments to avoid serving in Vietnam but who entered the White House campaigning for war on Iraq and never let up. Since the September 11 attacks, and with increasing ferocity during the current campaign, Cheney has served as Bush's scaremonger in chief--evoking images of thousands of Americans killed by terrorists with nuclear weapons and seeking to justify the invasion of Iraq by repeating thoroughly discredited claims that Saddam Hussein's regime was working with Al Qaeda.
By making a link in the minds of voters between the excesses of Halliburton and the deteriorating situation in Iraq, Edwards can help refocus the campaign on the questions that matter. Among them: Which presidential team can be trusted to put the needs of Americans before their own interests and those of their friends? Cheney has made it clear where his loyalties lie.

 
Cheney changed his view on Iraq

He said in '92 Saddam not worth U.S. casualties WASHINGTON -- In an assessment that differs sharply with his view today, Dick Cheney more than a decade ago defended the decision to leave Saddam Hussein in power after the first Gulf War, telling a Seattle audience that capturing Saddam wouldn't be worth additional U.S. casualties or the risk of getting "bogged down in the problems of trying to take over and govern Iraq."

Cheney, who was secretary of defense at the time, made the observations answering audience questions after a speech to the Discovery Institute in August 1992, nearly 18 months after U.S. forces routed the Iraqi army and liberated Kuwait.

The same day in August 1992, before a Seattle audience, Cheney supported the decision not to occupy Iraq but to leave Saddam Hussein in power after the first Gulf War.

President George H.W. Bush was criticized for pulling out before U.S. forces could storm Baghdad, allowing Saddam to remain in power and eventually setting the stage for the invasion of Iraq ordered by his son, President George W. Bush, in March 2003.

The comments Cheney made more than a decade ago in a little-publicized appearance have acquired new relevance as he and Bush run for a second term.

A central theme of their campaign has been their unflinching, unchanging approach toward Iraq and the shifting positions offered by Democratic nominee John Kerry.

A transcript of the 1992 appearance was tracked down by P-I columnist Joel Connelly, as reported in today's In the Northwest column. "And the question in my mind is how many additional American casualties is Saddam worth?" Cheney said then in response to a question.

"And the answer is not very damned many. So I think we got it right, both when we decided to expel him from Kuwait, but also when the president made the decision that we'd achieved our objectives and we were not going to go get bogged down in the problems of trying to take over and govern Iraq."

About 146 Americans were killed in the Gulf War. More than 1,000 U.S. soldiers have died in the invasion of Iraq and its aftermath.

Going to Baghdad, Cheney said in 1992, would require a much different approach militarily than fighting in the open desert outside the capital, a type of warfare that U.S. troops were not familiar, or comfortable fighting. "All of a sudden you've got a battle you're fighting in a major built-up city, a lot of civilians are around, significant limitations on our ability to use our most effective technologies and techniques," Cheney said. "Once we had rounded him up and gotten rid of his government, then the question is what do you put in its place? You know, you then have accepted the responsibility for governing Iraq."

Last week, Cheney attacked Kerry for his alleged inconsistencies. "Senator Kerry ... said that under his leadership, more of America's friends would speak with one voice on Iraq. That seems a little odd coming from a guy who doesn't speak with one voice himself. By his repeated efforts to recast and redefine the war on terror and our operations in Iraq and Afghanistan, Senator Kerry has given every indication that he lacks the resolve, the determination and the conviction to prevail in the conflict we face."

Cheney's office did not respond to requests for comment about his 1992 statements, nor did the White House. The Bush-Cheney re-election campaign, also asked about the 1992 statements, did not respond.

 
Cheney 'Pushes the Envelope' on Al Qaeda-Iraq Connection

Critics say the vice president's campaign statements on terrorism 'blur the lines.'

by James Gerstenzang

WARRENTON, Mo. — The phrases vary. Some days, Vice President Dick Cheney says Saddam Hussein had "long-established" ties to Al Qaeda. Other days, he says the onetime Iraqi dictator "had a relationship" with the terrorist group.

But the underlying message remains unchanged — Cheney plants the idea that Hussein was allied with the group responsible for the Sept. 11 terrorist attacks. Although the extent of the Al Qaeda-Hussein relationship — if it existed — has been widely disputed, Cheney proceeds with nary a nod toward such questions.

And in doing so, he draws a line from the war in Iraq, on which public opinion is divided, to the larger war on terrorism, for which President Bush wins greater support.

"When voters look at Iraq as a standalone issue … it is a horrible situation for the president," said Charles Cook, a nonpartisan political analyst in Washington. "But when it is woven into the fabric of a global war on terrorism, people are more accepting of it as the price we have to pay."
Cheney slips his reference to Hussein and Al Qaeda into his litany of Hussein's offenses: the regime's production and use of chemical weapons against enemies; support for the families of suicide bombers; Iraq's defiance of various U.N. resolutions.

Each has largely been established and is subject of little debate — with the exception of the tie to Al Qaeda.

The bipartisan commission that investigated the Sept. 11 attacks said it had found no evidence of a "collaborative relationship" between Hussein and the terrorist organization led by Osama bin Laden. Its staff has said it had found "no credible evidence" that Iraq had cooperated with Al Qaeda in targeting the United States.

To back up Cheney's claim of an Al Qaeda-Hussein "relationship," his aides point to the presence in pre-invasion Iraq of Abu Musab Zarqawi, a Jordanian-born militant believed to be behind much of the insurgency in postwar Iraq.

But while Zarqawi is widely thought to have had ties to Bin Laden's group — the vice president calls him "a senior Al Qaeda associate" — the extent of his links to Hussein, if any, has never been established.

The vice president's staff notes that former CIA Director George J. Tenet testified in Congress about a relationship between Hussein and Al Qaeda. And, his aides say, Cheney has been careful to not state that Hussein was behind the Sept. 11 attacks.

Still, Cheney's references to an Al Qaeda-Hussein connection may obscure that distinction for many voters.

Surveys of Americans consistently have found large numbers who say Hussein was personally involved in the Sept. 11 attacks, despite repeated declarations by a variety of investigators to the contrary. As recently as June, a Gallup Poll found that 44% said Hussein was personally tied to the terrorist strikes; 51% said he was not.

A senior Republican who served in top White House positions during the Ford and Reagan administrations cited the Gallup findings in discussing Cheney's campaign comments on Al Qaeda and Hussein. The vice president, the senior Republican said, is "talking about something that is credible with the American people, despite the intelligence. And the intelligence community is so under attack that he can say whatever he wants.

"What he gets out of it is making the case even stronger for why we went into Iraq, and it fits a pattern of what the American people want to believe," said the Republican, who requested anonymity.

Many Democrats are infuriated by what they view as an effort by Cheney to exaggerate the link between Al Qaeda and Hussein.

"This is one of his major issues. He tries to blur the lines between Al Qaeda and 9/11, and Saddam Hussein and Iraq," said Michael B. Feldman, a senior aide four years ago to Al Gore who is not active in this year's presidential race.

"From the very beginning of the effort to sell the [Iraq] war, this has been Cheney's role. He's also … at odds with the facts…. That doesn't stop him. I don't think it's an accident. I don't think it's a slip of the tongue."

Polls have found that, overall, Cheney is one of the least popular vice presidents in recent administrations. But he is a major draw among the Republican faithful. The Bush reelection campaign frequently sends him to the most closely contested states, where he is dispatched to communities that supported the Republican ticket four years ago.

In the speeches he delivers — at rallies, at town hall question-and-answer sessions and at small round-table meetings to audiences made up almost entirely of loyal supporters admitted by invitation — the war in Iraq and the fight against terrorism are woven throughout. They are the vice president's central, inseparable themes. And he delivers his message in a rich baritone and no-nonsense manner.

He delivered one of his typical speeches Friday at a dusty fairgrounds in Warrenton, Mo., about 40 miles west of St. Louis. Speaking of Hussein, Cheney said: "He provided safe haven for terrorists over the years. He was making $25,000 payments to the families of suicide bombers, and he had a relationship with Al Qaeda, and Iraq for years was carried by our State Department as a state sponsor of terrorism."

Hours later, he made similar comments at a fundraising dinner in Tulsa, Okla.
Paul Light, a professor of public service at New York University and author of several books on the vice presidency, offered a succinct explanation for Cheney's effort to connect Hussein to Al Qaeda: He does it, Light said, "because he can."

He added: "It's a statement to the party faithful. He doesn't say Saddam Hussein planned 9/11 and funded it. There's no evidence of that. But he pushes the envelope, for sure."

Light also said that Cheney had been seen in a more serious light than most of his predecessors, taking on "an important role as a 'legitimizer' at the start of [Bush's] term," when the president was seen as inexperienced in the ways of Washington, the presidency and the world.

"The veneer of legitimacy has stuck to him," Light said of Cheney, "and allows him to say things that are outrageous."

"In a sense, Cheney wants it both ways: to be seen as an influential vice president who has expanded the job and to also have the leeway of past vice presidents and not be subjected to the same scrutiny as the president."

© 2004 Los Angeles Times

 
Nigeria Bars Halliburton Contracts After Theft

Reuters
Wednesday, September 22, 2004

ABUJA, Nigeria -- Nigeria said Monday it had banned the awarding of government contracts to Halliburton, the world's No. 2 oil services firm, following the theft of two radioactive devices from its Nigerian subsidiary.

The theft of the devices, used for X-raying cracks in oil pipelines and well-heads, had raised fears of a terror attack in Nigeria, the world's seventh-largest oil exporter.

"Mr. President has approved a ban on the award of contracts to the company by any ministry, parastatal, or agency of government until further directive on the matter," a statement from the presidency said.

German authorities intercepted the materials last year at a steel-recycling plant in Bavaria. They were reported missing by the local unit of Halliburton in December 2002.

Nigeria, which launched a probe in June to discover how the materials had ended up in Germany, said the U.S.-based firm had refused to cooperate.

Halliburton spokeswoman Cathy Gist in Houston would not comment except to say the company was working on the matter.

"Halliburton continues to work with the Nigerian government to resolve issues related to the sources in question," she said. "As the matter is continuing, we believe that further comment is not appropriate at this time."

The probe came after Germany halted its investigations and returned the radioactive materials to Halliburton, which took them back to the United States earlier this year.

Halliburton is already facing allegations of paying $180 million in kickbacks to win a contract in Nigeria in the 1990s.

The Nigerian National Assembly this month passed a motion recommending that Halliburton and its associate companies be excluded from new contracts and new business in Nigeria pending the outcome of the corruption probe.

 
Halliburton 'backed' bribes probe agent

Halliburton intervened with its partners in a huge Nigerian gas venture to secure the reappointment of a business agent now at the centre of an international bribery inquiry, a French judge has been told. Evidence before the judge suggests that in 1999 - while US Vice-President Dick Cheney was Halliburton chief executive - a Halliburton subsidiary overrode its partners' objections to rehiring a British lawyer who, it has since been alleged, channelled payments to Nigerian officials and corporate executives.

The evidence comes from a summary of the case obtained by the Financial Times along with a partial record of an interview by the judge of Jeffrey Tesler, the London-based lawyer. Halliburton, the US oil services company, has long denied breaking US laws banning foreign bribery. It admitted this month finding notes that showed executives in the joint venture had discussed bribing Nigerian officials "at least 10 years ago".

But it said there was no evidence bribes were paid and emphasised that the talks had largely pre-dated its own involvement in the venture, called TSKJ. Halliburton entered the consortium only in 1998, when it took over Dresser Industries and its M.W. Kellogg unit, which owned a 25 per cent share in TSKJ.

Nevertheless, the French papers contain claims that Kellogg actively pushed for Mr Tesler's continued role as agent even after the Halliburton takeover. It raises questions over what Mr Cheney knew - or should have known - about one of the largest contracts awarded to a Halliburton subsidiary. Mr Cheney's office did not respond to questions. The decision to reappoint Mr Tesler was taken at a 1999 meeting of the joint venture partners in London.

Kellogg wanted Mr Tesler, with whom it had a long-term relationship, to attend. But the representative from the French partner, Technip, wanted a different agent and insisted that Mr Tesler be excluded from the meeting. Even so, Mr Tesler's contract was renewed.

The case notes quote a March 2003 letter from William Chaudan, the Kellogg representative on the consortium, which said that Mr Tesler had been selected on Kellogg's recommendation and over Technip's "strong opposition". Halliburton said this month that the venture had severed ties with Mr Tesler and threatened court action against him to recover fees paid to his Gibraltar-registered company, Tri-Star.

It has also sackedtwo employees, Jack Stanley, the former head of its KBR unit, and Mr Chaudan, after both were found to have received "improper personal benefits" in connection with the project. In his testimony, Mr Tesler confirmed that he made payments to both men.

Mr Stanley declined to comment through his lawyer. Halliburton was unable to provide any contact details for Mr Chaudan. On Thursday, Halliburton denied that it had overridden Technip's objections. "We have examined the minutes from that meeting and they do not support the thesis that Technip objected to the appointment of Tesler," a spokesperson said. "In fact, the minutes specifically recite that the decision was unanimous. Technip could have blocked the appointment by refusing to sign the minutes."

Technip declined to comment.

Mr Tesler's lawyer did not respond to written questions, but has in the past denied the payments constituted bribes. Mr Tesler told the judge Mr Chaudan had been paid for finding sub-contractors for the project.

TSKJ was established in Madeira in 1994 to build the first two of a series of huge liquefied natural gas production units and was later awarded contracts for the subsequent four. The other partners were JGC of Japan and Snamprogetti of Italy.

Some $9bn (€7.4bn, £5bn) - out of a planned total of $12bn - has been invested in the project, slightly more than half of which has been paid to TSKJ.

According to the French case summary, Judge Renaud van Ruymbeke launched the investigation after being told by a former Technip executive, Georges Krammer, of the "existence of a black box set up in Madeira".

Mr Krammer also told the judge that Tri-Star "is directly linked to corruption in Nigeria". US regulators are also investigating.

Tri-Star was contracted to receive at least $160m in five agreements signed between 1995 and 2002, and the funds were directed to bank accounts in Switzerland and Monaco.

Under the 1999 contract, a copy of which was seen by the FT, Tri-Star was to be paid $32.5m. In the contract, Tri-Star agreed that it would not bribe government officials or provide funds for political campaigns or parties.

It also said that Tri-Star had not breached a no-corruption clause on its first contract signed in 1995. Halliburton pointed out that Mr Tesler signed warrants on four separate occasions declaring that he had not paid any bribes.