Dick Cheney- Corporate Criminal


Fox News produces video valentine for Halliburton

27 April 2005

WASHINGTON, April 27 (HalliburtonWatch.org) -- The Fox News Channel joined Halliburton's latest advertising campaign today with a fluff piece glorifying the company's dining facilities in the Middle East. Fox reporter Gregg Kelly walked through a dining room in Taji, Iraq, interviewing soldiers impressed with KBR, the Halliburton subsidiary which manages the facility and prepares the food.

"The company has been rocked by accusations of overcharging the Pentagon," the Fox reporter says. "Here, however, there's no controversy about the food's quality. In fact, some worry that all the eats might make them fat when they're at war. It all stifles that ancient military pastime - complaining about the chow."

The report, which looked like a television commercial, coincides with Halliburton's new advertising campaign initiated this month entitled "Halliburton Proud."

In February, Halliburton issued a press release congratulating itself for donating a mere 12 laptop computers to an entire brigade of the Army National Guard. "You have no idea of the magnitude of this donation," a military official was quoted as saying.

In the Fox report, Chief Warrant Officer Joshua Gunter is seen eating a meal. He eagerly proclaims, "KBR does an extremely good job." The food is so good, he says, that "we've been trying to hide it from our wives." "I was talking to my wife the other day," he said. "I was like, 'Baby, it's pretty rough over here.' I said they only have 9 flavors of Baskin Robbins (laughs)."

An unidentified and non-uniformed woman is heard describing the food as "pretty unbelievable."

The Fox reporter added to the glory of KBR's food, saying, "You know, some of this looks like a brunch, you know, at a Marriott hotel or something like that. It's pretty elaborate."

The dining facility contains "probably one of the few pastry chefs ever deployed to a combat zone -- Chef Denzel from India," the reporter explained. But there was no information on one of Chef Denzel's Indian compatriots who said working in KBR's dining facilities is "hell." An Indian newspaper described the facilities as "slave camps." KBR reportedly pays Indian workers $200 per month for cooking food and cleaning toilets, a puny wage that helped double Halliburton's stock price since the U.S.-led invasion of Iraq in March 2003.

Halliburton CEO David Lesar reported to investors last week that KBR will be sold after it returns to profitability over several quarters. He also wants to settle numerous overcharging complaints from the Pentagon before offering the subsidiary for sale. In addition, KBR announced the completion of its no-bid Iraqi oil contract one-year earlier than planned, an indication that it wants to reduce work in the war-torn country because of the unrelenting violence.

In the 12 months following the fall of Saddam Hussein, KBR had built 64 dining facilities in Iraq and Kuwait. The facilities are managed by Halliburton under the Army's LOGCAP contract. The U.S. government recently settled most allegations of overcharging for food, but has expressed its desire to terminate Halliburton's contracts because of poor performance -- something not mentioned in Fox's fluff report.


Halliburton Unit's Work in Iraq Is Called 'Poor'

by Erik Eckholm

Serious cost overruns and "poor performance" have plagued the Halliburton Company's continuing $1.2 billion contract to repair Iraq's vital southern oil fields, a new State Department report says.

The news about Kellogg, Brown & Root, a subsidiary of Texas-based Halliburton, adds an additional layer of troubles to the company's multibillion dollar operations in Iraq.

Among guerrilla attacks, the unexpectedly decrepit state of oil facilities and delays in repairs, Iraq's oil output of 2.1 million barrels a day in February was lower than it was last fall, says the report, a quarterly update on Iraqi reconstruction that was delivered to Congress last week. Disappointing oil exports are worsening the Iraqi transitional government's budget deficit, which the report estimates could reach $5 billion this year. The report does not detail what it called the poor performance and excess spending. But it said that on Jan. 19, the American Embassy took the unusual step of issuing a "Cure Notice," a threat to terminate the contract. Kellogg, Brown & Root replaced some senior managers but the government remains dissatisfied, the report says.

The embassy has asked a KBR rival, Parsons Corporation, which won the contract to work on northern oil fields, "to execute some of the remaining work" in the south, originally meant for KBR. KBR has previously been criticized for excess spending in its multibillion dollar contract to provide logistical support for the military and in an earlier, $2.2 billion contract for oil repairs and fuel imports that was granted secretly as the Iraq invasion began.

But the State Department report provides the government's strongest public criticism yet of KBR's performance in southern Iraq over the last year in a competitive contract. Parts of the report were described Saturday in The Los Angeles Times.

A Halliburton spokeswoman, Beverly Scippa, said Monday in an e-mail message that the company had "made adjustments" in management of the oilfield project and was working with the government to "resolve the outstanding cost reporting issues."

New questions about the earlier oil and fuel contract were also raised Monday when a Congressional committee released data from five audits of the program, showing that Pentagon specialists had questioned $212 million of $1.69 billion in bills that KBR submitted for fuel imports in 2003 and 2004. The data were released by the minority office of the House Committee on Government Reform.

The company says that it performed admirably under difficult circumstances in the aftermath of the invasion of Iraq and that cost disputes "are part of the normal contracting process."

Accelerating a shift that began last year, the American Embassy has reallocated an additional $832 million in planned spending away from huge projects managed by American companies toward smaller repairs using local businesses and the training of Iraqis to maintain power and water systems.


Trying to get a ticket to see VP Cheney @ Burlington County College

By Mitch
Posted on Wed Apr 13, 2005 at 05:18:03 PM EST

Late last night I learned that Vice President Dick Cheney is holding a Town Meeting on Social Security at Burlington County College on Friday. Courier Post Article
Last month, President Bush held a similar Social Security "open forum" in Westfield, where tickets were only distributed to a pre-approved list of supporters through the White House and through Congressman Ferguson's office.

I wanted to find out if this was more of the same, if Dick Cheney is also going to hand pick his audience, or if there was any possibility getting a ticket so I could ask some of the REAL QUESTIONS about the Social Security Plan.

First, I called Burlington County College to see if the event hosts had information about tickets for the Town Hall Meeting. I was told that the College has nothing to do with ticketing for the event. All that the operator at BCC knew was that it is a CLOSED EVENT that is strictly INVITE ONLY, great concept for an "open forum."

My next step was to contact the White House, surely the Vice President's office would be able to point me in the right direction. After being transferred around a few times, I reached the press desk of the Vice President where I was told that tickets are only available from a NJ Congressman.

I called Mike Ferguson (R-7) only to reach his voicemail in the middle of the work day. I guess he's too busy taking money from Tom Delay. So even though he's not my Representative, I decided to call Frank Pallone's (D-6) office. At the very least, I know they would take my call. I was told that only Republican members have tickets for this event. That doesn't seem very democratic. I understand the need for some degree of screening to make sure that the audience does not have any malicious characters trying to disrupt the forum, but isn't that the reason that we let our US Congressmen hand out the tickets? Pallone's office told me that they never get any tickets to events with Bush and Cheney. So how does a regular citizen like myself gain access to one of these Town Hall Open Forums?

Back to the phones, I gave Congressman Ferguson's Washington office a call, only to be redirected to the NJ office. Ring...Ring...Ring... Still no answer from Ferguson's NJ office. Well it is 4:30pm, maybe they closed up early today? Maybe this is an attempt to readdress the 40 hour work week? One more call into Ferguson's office at 4:40pm and someone finally picks up the phone... only to have no idea what I was talking about. "Wow, VP Cheney is coming to New Jersey on Friday! This is the first I've heard of it." I'm glad to know that communication flows viscously through the Republican party. Maybe this is why "Dump Mike" is catching on in NJ's 7th Congressional District.

My only other idea was to try to contact the Republican County Organization for Burlington County, with less than 10 minutes left in the work day, I've been told that Congressman Jim Saxton (R-3) is the only game in town for tickets to VP Cheney's Town Hall Meeting. After a snicker about calling their office at 5 minutes to 5:00pm, Congressman Saxton's representative took my name and address and told me that there are only 200 seats in the room and that Saxton's constituents would have first access to any tickets delivered to their offices tomorrow afternoon. She said she would cross her fingers for me and hope that I get a ticket to attend VP Cheney's open forum. I told her my story of searching around all day for the proper channel to get tickets and was told that Congressmen Smith and LoBiondo would also have tickets available for distribution tomorrow. My fingers will remain crossed through the night.


Halliburton frantically working to end public relations nightmare

WASHINGTON, April 1 (HalliburtonWatch.org) -- Halliburton initiated a new advertising campaign this week to counter the never-ending saga of bad news that plagues the company, AdWeek reported. The ads, in both video and print format, will attempt to "educate those who didn't know what to think about all the charges," a Halliburton spokesperson said, referring to the numerous ongoing government investigations and charges of wrongdoing.

During the 2004 presidential campaign, Halliburton complained that widespread criticism of its behavior was "political" and designed only to embarrass former CEO and current U.S. Vice President Dick Cheney. But, ironically, most of the criticism came from officials inside President George W. Bush's Justice and Defense departments. Most of the government investigations from 2004 continue today even though the presidential campaign has ended.

So, it seems logical that Halliburton would embark on a new ad campaign to praise itself.

In February, the company issued a pathetic press release to congratulate itself for donating 12 -- yes 12 -- laptop computers to an entire brigade of the Army National Guard in Iraq. "You have no idea of the magnitude of this donation," exalted a military spokesperson in the company's press release. The 12 computers "will touch many" of the soldiers in Iraq, he claimed while fawning all over Halliburton. Nevermind that military auditors -- not "wild eyed liberals" -- complained that Halliburton's KBR subsidiary is unable to explain how it spent nearly $2 billion of the taxpayers' money in Iraq. In praising the company's modest 12-computer donation, the military forgot to mention that Pentagon auditors say KBR lost $18 million worth of government property in the Middle East because of mismanagement. Furthermore, President Bush's Justice Department has opened a criminal investigation into the legality of the Army's procurement process that awarded billions in Iraq contracts to Halliburton.

Halliburton's business relationship with Iran is another public relations nightmare. President Bush claims Iran is a sponsor of worldwide terrorism, but a foreign subsidiary of Halliburton has earned millions in profits from the country for a number of years. Federal law forbids U.S. companies from doing business with Iran, but foreign subsidiaries are exempt. In January, Halliburton's Cayman Islands subsidiary renewed its relationship with the Iranian government by signing a multi-year contract to develop trillions in cubic feet of natural gas. Only 20 days after announcing the new contract, Halliburton issued a press release announcing it will end its operations in Iran, but only after existing contracts come to an end. No date was given as to when it will cease operations, but the new press release could have a positive public relations impact in the United States while allowing Halliburton to continue profiting in this so-called "terrorist" nation for an undisclosed number of years. More importantly, it could have a positive impact on the Justice Department's ongoing criminal investigation into the matter.

Halliburton has never been adept at public relations. Its hometown newspaper, the Houston Chronicle, wrote a scathing editorial entitled "Public Relations Gaff: Sometimes Halliburton is its own worst enemy," in which it lambasted the company for its horrible treatment of workers. The newspaper excoriated Halliburton for suing retirees who complained about the termination of health insurance benefits. "It was a blunder on a par with the cattle industry's decision to sue Oprah Winfrey, or Fox News' lawsuit against author and liberal talk radio host Al Franken for using 'fair and balanced' in the title of his latest book," the Chronicle wrote. The newspaper also complained that, "After advertising the pride it takes in its employees, their unique skills and their devotion, Halliburton has the temerity to sue retired employees who complained about losing benefits...." The Chronicle endorsed the Bush/Cheney presidential campaign and has regularly endorsed Republican presidents for 30 years.

According to AdWeek, Halliburton's new advertising campaign is entitled "Halliburton Proud" and includes a worker saying, "I helped move containerized housing units into the camps, helped hook up running water, power and sewage so that the soldiers could have a decent place to come back to at the end of the day .... We got 80,000 troops out of the sand in three months. It was awesome. No other company could have done that."

AdWeek reported that Halliburton spent $1.5 million on advertising in 2004.

DOD Audits: Halliburton Overcharges Top $212 Million

Overcharges Identified and Costs Questioned
Under Halliburton's Iraq Oil Contract

Last month, Rep. Waxman disclosed that Defense Department auditors found $108 million in fuel-related overcharges by Halliburton for work in Iraq under Task Order 5, one of several Halliburton task orders for the importation of fuel into Iraq (LINK). Rep. Waxman also revealed that although Halliburton was paid in significant part from Iraqi oil proceeds in the Development Fund for Iraq (DFI), the Administration — acting at Halliburton’s request — concealed these overcharges from the international auditors charged by the United Nations with monitoring the expenditures from the DFI (LINK).

The Committee on Government Reform's National Security Subcommittee recently obtained additional audits of Halliburton's Iraqi oil reconstruction work under Task Orders 5 through 10 that show that that both the amount of Halliburton's overcharges and the extent of the information withheld from the auditors at the International Advisory and Monitoring Board (IAMB) are much greater than previously known.

In these new reports, DCAA auditors identify overcharges and question costs of $212.3 million, doubling the total amount of known overcharges under Halliburton's Iraq oil contract. In one case, the overcharges exceeded 47% of the total value of the task order. The reports reveal that, as with the withholding of the Task Order 5 audit, extensive additional information has been withheld by the Administration from the IAMB. A review of these audits shows that references to overcharges and other questioned costs were blacked out over 450 times in the versions of audits sent to the IAMB.

In a letter sent today to National Security Subcommittee Chairman Shays, Rep. Waxman renewed his request that the Subcommittee hold hearings on the Administration's mismanagement of the Development Fund for Iraq.


Cheney’s Oil Change at the World Bank

Tue, 29 Mar 2005
Man with a plan By Jim Vallette

Cheney moves to take control of development coffers through his main man
He wasn’t in the room when President George W. Bush announced it recently, but somewhere, Vice President Dick Cheney must have been smiling-<>well, smirking-when the commander-in-chief’s voice coupled the improbable name Paul Wolfowitz with the title “President of the World Bank.”

Cheney and Deputy Defense Secretary Wolfowitz have long worked hand-in-glove on a global quest for U.S. domination over world affairs. This latest action is as bold as the invasion of Iraq two years ago.

Dick Cheney, a long-time beneficiary of World Bank largess, has moved to take ownership of the world’s development coffers through his man, Wolfowitz. For his part, Wolfowitz will have a chance to extend his Iraq reconstruction theories to the global level. These concepts mostly involve U.S. control over energy resources. While the Bank, over which the U.S. holds de facto veto power, has done a lot for the nation’s oil interests over the years, his nomination is a clear signal that the administration craves more.

“Wolfowitz’s words and deeds are antithetical to World Bank pretenses of multilateralism and development,” said long-time World Bank critic John Cavanagh, director of the Institute for Policy Studies. “Between this and John Bolton’s nomination as ambassador to the UN, it’s March Madness on Pennsylvania Avenue.”

Like others in the Bush administration, Wolfowitz is consistent. In and out of office, he has articulated a clear vision of U.S. being the world’s only superpower, fueled by free-flowing Persian Gulf oil.

Flash back to the early 1990s. Dust settled where the Berlin Wall once stood. The old world order was gone. Then-Defense Secretary Cheney tabbed Wolfowitz-<>his Assistant Secretary for Policy-to plan new national security strategies that reflected the preeminence of corporate quests in the extension of U.S. military might. Wolfowitz and Cheney prioritized defending Middle East oil fields, which they said “ranks above South America and Africa in terms of global wartime priorities.” Wolfowitz fine-tuned this new world order in, writing: “In the Middle East and Southwest Asia, our overall objective is to remain the predominant outside power in the region and preserve U.S. and Western access to the region’s oil.”

After Cheney and Wolfowitz left office following the first President Bush’s defeat at the polls, both men continued to push for U.S. corporate access to global oil resources. Cheney, through his stint as CEO of Halliburton, parlayed his political connections into company deals in democracy-rich places like Burma and Turkmenistan. “The problem is that the good Lord didn’t see fit to always put oil and gas resources where there are democratic governments,” he grumbled to his critics. He had the World Bank, which financed projects in Azerbaijan, Bangladesh, Chad, and Kazakhstan, to thank for some part of his Halliburton paycheck.

Wolfowitz, meanwhile, articulated the intellectual side of their shared agenda. As dean of the Johns Hopkins School of Advanced International Studies, he gravely predicted the world’s fate with Middle East oil resources threatened by Saddam Hussein and weapons of mass destruction. In 1994, he expressed the new preemptive doctrine, saying “By and large, wars are not constructive acts: they are better judged by what they prevent than by what they accomplish.”

His was the clearest voice in a chorus of ex-Reagan and Bush officials calling upon Clinton to strike Hussein as the decade progressed. “The Persian Gulf with its vital oil resources is critical to us,” he told Jim Lehrer in 1996. “That’s absolutely central to constructing the kind of world that will be safer in the next century.”

Wolfowitz started warning European governments and oil companies doing business with Iraq. “Companies that want to develop Iraq’s enormous oil wealth should line up with a government of free Iraq instead,” he wrote in 1997.

He sought congressional support for a plan to install Ahmed Chalabi’s Iraq National Congress in Southern Iraq, and lashed out at European countries that opposed military measures. The French and Russians, he testified in September 1998, should understand “that the fabulous-<>and they are fabulous-oil resources of Iraq… will be ultimately in the control of a Government of Fee Iraq.”

Cheney and Wolfowitz placed their bets on Saddam’s demise. With another Bush in office, they rolled the dice.

Wolfowitz never really emphasized eliminating global poverty-<>the World Bank’s stated mission-as a national strategic priority. Bush points to Wolfowitz’s stint as U.S. Ambassador to Indonesia as proof of his “commitment to development.” But as an envoy he obsessed about gaining U.S. corporate access to Indonesia’s energy resources in the 1980s, at a time when strongman Suharto banned opposition, and skimmed plenty from World Bank and other development finance groups.

Wolfowitz’s main “development” experience is actually in post-invasion Iraq. After the invasion, he stomped through Europe, demanding that its governments cancel Iraq’s debt. When Europe balked, he signed an order saying that anyone not involved in the military coalition would be barred from Iraq reconstruction contracts. A recent Inspector General audit of coalition reconstruction funds found the coalition “did not establish or implement sufficient managerial, financial, and contractual controls to ensure (development) funds were used in a transparent manner. Consequently, there was no assurance the funds were used for the purposes mandated by” the UN.

But Cheney and crew, with the unbounded joy of spring, remain on the charm offensive, trying to secure the economic crown jewel.

Cheney and Wolfowitz understand that global hegemony requires control over the three pillars of power: military, political, and economic. The World Bank sets the terms of global development. When developing countries started demanding a decrease in U.S. political power in the institution, when the Bank balked at supporting Wolfowitz’s reconstruction and debt cancellation plans for Iraq, and when a Bank-commissioned study recommended getting out of the oil business, the World Bank became a natural target for a hostile takeover.

Cheney wants in. There’s no stopping him now, unless Europe, industrialized Asia, and the Global South decide to put up a fight.

Halliburton Bribery Scandal Deepens

Former Kuwait Manager Indicted For Million Dollar Payoff

by David Phinney, Special to CorpWatch
March 29th, 2005

Overlooking a private white sand beach on the Persian Gulf, some 40 miles south of Kuwait city, is the Khalifa Resort. It boasts no less than a dozen swimming pools and offers its guests activities such as windsurfing, banana boat rides and deep sea fishing. Every single one of the 84 luxurious air-conditioned villas face either the main pool, which is shaped like a giant guitar, or one of the two adjoining pools that resemble shimmering blue door keys.

Khalifa Resort in Kuwait

In late 2002, a company from Texas, Kellogg, Brown and Root (KBR), a subsidiary of Halliburton, arrived and took up residence in the villas, paying $200 per person, per night. The total hotel tab soon reached $1.5 million per month.

The company was deployed to Kuwait to support the 150,000 or so Army troops pouring into the country in preparation for the March 2003 invasion of Iraq. The work was part of a sweeping ten-year contract awarded in December 2001 to provide logistical international support services to the U.S. Army, known as the Logistics Civil Augmentation Program, or LOGCAP.

From food services to latrine cleaning, trucks to cots and tents, gymnasiums and showers, to generators and air conditioners -- you name it, KBR supplied it. Subsequently, the Pentagon awarded the company a no-bid contract -- which eventually ballooned into $2.5 billion -- to plan for and repair oil pipelines and wells damaged during the invasion.

While KBR held these overall agreements, the company’s Kuwait employees, led by Tom Crum, the director of KBR's office in the Middle East, and Robert "Butch" Gatlin, head of procurement, handed off the actual work to subcontractors flooding into the KBR offices from around the area, looking to get a piece of the lucrative wartime business.

Billions of dollars in work would soon be subcontracted by a staff quickly assembled by KBR on the eve of the war. These subcontracts soon became the center of controversial headlines about questionable agreements, including $186 million in bloated overcharges on meals served to troops and sky-high prices on oil and fuel deliveries, totally over $108 million in excessive costs.

The headlines reflect what Pentagon auditors found in May 2004 to be "systemic deficiencies" in KBR's business practices. Sometimes, contracts for work were nowhere to be found. Others appeared carelessly written with little or no effort in seeking competitive offers. Many proved to be highly inflated or showed little documentation of work completed or goods delivered.

Some KBR employees allegedly asked for more than just goods and services in return, according to at least one internal memo from the United States embassy in Kuwait. It was common knowledge "that anyone visiting their seaside villas who offers to provide services will be asked for a bribe," the August 6, 2003, memo stated, quoting officials from a local Kuwaiti company named Altanmia.

CorpWatch interviews with numerous former KBR workers and contractors outline similar patterns of contract mismanagement, but few were willing to go on the record. They say they are concerned about their future livelihoods, providing for their families and continuing their careers. Ongoing criminal investigations, however, by the U.S. Justice Department have recently accused several participants with wrongdoing.

Former KBR Manager Arrested

One of the managers who worked for Gatlin and Crum in Kuwait was an American named Jeff Alex Mazon. Former business associates describe Mazon as a "high-energy guy" who was always flashing a smile and who worked his way up in KBR after joining the company in 1996. In Kuwait, he is said to have sported a goatee and long hair, enjoyed partying and comfortably assumed authority over many of the subcontractors that signed on for work in the early months leading up to the Iraq invasion.

"He was a powerful person in contracting and you could tell he felt the power," said one KBR subcontractor.

In February 2003, Mazon was given the job of soliciting bids from potential subcontractors to supply fuel tanker trucks at a U.S. military airport in Kuwait for a six-month period from March through August of 2003. The company's estimated cost for this six-month contract was about $685,000.

Mazon got at least two bids -- one from an unnamed Kuwaiti company for about $1.9 million and another from a company called La Nouvelle, run by Ali Hijazi, a Saudi national, for nearly $1.7 million.

An Illinois grand jury is now alleging that Mazon fraudulently inflated both bids before the contract was awarded, more than tripling them to $6.2 million for the unnamed company and $5.5 million for La Nouvelle. La Nouvelle then won the contract on the basis that it had submitted the lower bid.

In June 2003, Mazon quit his job. Then three months after leaving KBR, he was accused of receiving a $1 million payment from La Nouvelle In an indictment issued mid-March 2005 by the grand jury. "Mazon and Hijazi also executed a promissory note as a ruse to make the $1 million payment appear to be a ... loan from Hijazi to Mazon," the indictment reads.

On March 16, 2005, Mazon was arrested in Norcross, Georgia, just outside the city of Atlanta and charged with four counts of major fraud and six counts of wire fraud. He waived his right to appear before an Atlanta court the next day and was sent to Rock Island, Illinois, where the United States Army Field Support Command is based, the military authority which issued the fuel tanker contract. Hijazi was charged but has not been apprehended yet.

If convicted, Mazon faces a maximum penalty for up to 10 years in prison and a fine of $5 million for each count of major fraud and no more than 20 years in prison and a fine of up to $250,000 for each count of wire fraud.

Marie deYoung, a meticulous former Army chaplain spent five months working for KBR in Kuwait where she was in charge of bringing subcontracts up to date. She says she found plenty of problems with the contracts with La Nouvelle and other companies.

Taking her complaints to Congress last June, deYoung testified that while reviewing those contracts, she found La Nouvelle had billed monthly for 37,200 cases of soda at a cost of $1.50 per case but delivered only 37,200 cans. She also testified that KBR was paying La Nouvelle up to $1.2 million a month to provide laundry service, equivalent to $100 per 15-pound bag. Under a separate contract with the same company, KBR paid only $28 a bag, she said.

La Nouvelle

Founded in 1997, La Nouvelle is believed to have had a number of retail franchises before entering military services. When preparations for the Iraq invasion began, the company soon landed deals with KBR worth hundreds of millions of dollars to provide dining facilities and logistical services that included construction equipment leases, generators, tents, protective suits for hazardous materials, and other services.

Hijazi, the company's managing partner, is described by several who met him as arriving at business meetings in a Land Rover, alternately dressed in polo shirts and business suits.

"He was very charming," says deYoung. "Everyone from La Novelle was charming."

Meanwhile, La Nouvelle is also currently embroiled in a lawsuit against KBR that was filed in the U.S. District Court of Eastern Virginia on October 15, 2004. The company originally claimed that KBR stiffed La Nouvelle by as much as $240 million in unpaid bills and lost equipment on more than two dozen outstanding contracts. KBR in turn disputes the matter, claiming that La Nouvelle contracts were terminated, in part, because the company "may" have paid kickbacks to KBR employees.

In a sworn statement to the court filed in February 2005, Hijazi denies that he or any of his firm's employees were involved in any kickback scheme. "I would not have condoned that," he said.

Al Homoud, another La Nouvelle partner, refused to answer questions from CorpWatch. "I really cannot say anything at this time," he said, referring further questions to Jennifer Thomas, the company spokeswoman in Washington, DC.

In a prepared e-mail statement Thomas said that Hijazi and La Nouvelle offered to fully cooperate with the United States Justice Department several months ago in the investigation of La Nouvelle's business relationship with KBR.

"Regrettably, the Department of Justice proceeded without Mr. Hijazi's assistance or input," the statement said. "Mr. Hijazi is surprised and disappointed by last week's developments. The allegations in the indictment are simply untrue, and Mr. Hijazi intends to fight the allegations vigorously."

Neither Mazon, nor his lawyer of record, former criminal prosecutor John Scott Arthur of Olympia Fields, Illinois, could be contacted for comment. Halliburton also has yet to comment to CorpWatch.

Halliburton Admits Problems

Several other KBR managers in Kuwait have quit or were fired in mysterious circumstances in what appears to be a major house-cleaning, once the news started to circulate about overcharging and fraud.

The first indication of these problems came in December 2003, when Halliburton publicly announced that it had returned $6.3 million to the military and admitted to the Pentagon that two unnamed KBR employees had taken kickbacks in return for a lucrative contract from an unnamed Kuwaiti company. (It is still not clear whether Mazon was one of the two employees.)

An internal KBR memo, dated May 2003, also cautioned employees not to "discard, shred, delete or dispose" of any documents relating to La Nouvelle and two other companies - Altanmia and Tamimi. Both companies have also been accused of possible overcharges in their billings.

In November 2004, Halliburton filed a declaration with the Securities and Exchange Commission stating that the Pentagon would be investigating two employees who worked on the Iraq contracts.

"The Inspector General's Office may investigate whether these two employees may have solicited and/or accepted payments from these third-party subcontractors while they were employed by us," the company stated. Once again, no names were disclosed.

Other KBR Managers

At least one other KBR procurement managers was apparently fired following questionable circumstances. In postings on a Web blog titled "A Minute Longer - A Soldier's Tale," Laszlo Tibold, who was responsible for procurement at Camp Anaconda, was accused of awarding a gravel contract at five times the price of a competing offer.

A March 12, 2004 posting to the website, credited to the email address of Randy Harl, chairman of KBR, says "Mr. Tibold has since been fired for his contract-writing there at Camp Anaconda, along with some of his buddies. However their contracts still remain and we continue to pay against them."

"Butch" Gatlin, the man in charge of procurement in Kuwait, has also left KBR. On Feb.15, 2004, Gatlin sent a terse letter to his bosses, which read: "This project has grown to such proportion and the issues and problems which have ensured (sic), I feel my leadership and management are ineffectifve (sic) and non-productive. I therefore request to tenure (sic) my resignation with this project, effectife (sic) immediately."

On April 10, 2004, less than two months later Gatlin wrote to Tom Crum, re-iterating his resignation as a KBR employee, and simultaneously asking for work as a sub-contractor, causing a ripple of concern at the company.

"I am generally pretty skeptical about doing business with a former employee," KBR lawyer Chris Heinrich wrote in another internal memo obtained by CorpWatch. "There is not a law or a company policy that prohibits us from doing so, but we need to be sure about what kind of business he is starting and who he is aligned with. He must have a Kuwaiti sponsor or he cannot have a business. We need to have him fully disclose all the pertinent info regarding his business and then decide if we will allow him to bid on work."

Who's Next?

Rumors continue to swirl about who might next be charged with fraud.

Marie deYoung believes the indictments issued against Mazon and Hijazi may be only a curtain-raiser for things to come.

"So many contracts were legally 'off-the-wall," she says. "Either they didn't know what they were doing or there was possible colluding going on."

She said that many of the company managers in Kuwait who frequented "the beach, getting tans," regularly overlooked overpricing and padding in billings.

The charges against Mazon and Hijazi, she estimates, are "just the tip of the iceberg."