Dick Cheney- Corporate Criminal



Cheney's Wars and the Great Energy Price Heist of 2005

by Richard Freeman

Financier-dominated synarchist forces behind Dick Cheney are seizing upon Hurricane Katrina, to manufacture a non-existent oil shortage, and ratchet up the price of oil through $70 per barrel, in the direction of $125 per barrel. This giant swindle is looting populations and transferring the loot to the swelling profits of the oil cartel companies and the banks, using such theft to attempt to postpone the implosion of the bankrupt financial system. Some $30 to $40 of the nearly $70 charged per barrel of petroleum represents pure speculative loot.

An American intelligence official told EIR on Sept. 6, that soon after Hurricane Katrina struck, the Bush-Cheney Administration was told by Saudi Arabia, Kuwait, and other oil-producing countries that they had spare refinery capacity. Saudi Arabia and Kuwait offered to deliver gasoline and other refined petroleum products to the United States, to offset the temporary shutdown of some Louisiana and U.S. Gulf state refineries, and thereby drive down prices. The source said that the Cheney-led White House turned down the offers, knowing that they could disrupt the oil cartel's mechanism for price gouging. Instead, between Aug. 29, the day that Katrina made landfall, and Sept. 9, Cheney's friends in the cartel rigged gasoline prices, sending them soaring by 50%. Profits poured into the oil companies.

On Sept. 10, a Washington-based Mideast specialist further filled out the picture. He reported that on the eve of Katrina, the world was awash in crude petroleum. He confirmed that Saudi Arabia and Kuwait have significant spare refinery capacity, and massive reserves of refined petroleum products. These countries refuse to disclose the total amount of their reserves of refined petroleum, but they have been building up their stockpiles for the past 15 years, so they are quite substantial. He asserted that, were Saudi Arabia to load four supertankers with refined petroleum products and deliver them to the United States in special sales, the price of oil would fall 40%.

Dick Cheney ruled out accepting these offers.

The synarchist financiers that run Cheney are searching for loot everywhere: They have put on the agenda the privatization of Japan's Postal Savings system, in the Sept. 11 election victory of Japan's Prime Minister Junichiro Koizumi, who campaigned on behalf of privatization (see "Wall Street Wins Japanese Election" in this issue). The nearly $4 trillion of the Japanese people's savings held in the Postal Savings system, would be moved to the world's largest banks. The same urgency to push back the general collapse of the world's monetary-financial system, has accelerated the Cheney crowd's insane push to attack and bomb Iran. Iran could spoil the oil rip-off, through its independent channels of petroleum exports—long-term state-to-state oil contracts—and its very existence, producing 3.5 million barrels of oil per day. With the threatened "mini-nuke" bombing of Iranian sites, shoot the oil price to $100, $125, $150 per barrel?

Cheney's Oil Swindle threatens to detonate chaotic breakdown in most of the economies of the world. But the scheme cannot work to save the bankrupt world financial system. In written testimony submitted to Senate Energy and Natural Resources Committee hearings Sept. 6 on the oil price spike, Lyndon LaRouche outlined steps to crush this bubble: Re-regulate the energy sector, including returning to long-term state-to-state oil contracts at non-speculative prices; and move, forced-march, to a development-centered New Bretton Woods system (see EIR, Sept. 9).

No Free Market
Over the past 30 months, the price of crude and refined oil products has been unflinchingly driven upwards. In Economics 101, one is told that the price of everything is set by "free-market forces." But in fact, this price is set by a top-down controlled process from the moment the oil gets out of the ground; the final determination of the price is enforced by the speculative world derivatives market. As a visibly moved Sen. Byron Dorgan (D-N.D.) told the same Sept. 6 Senate hearings, "There is no free market."

Indispensable to the process's workings, is the British House of Windsor-pivoted oil cartel's control of all the critical aspects of the industry, as a single integrated system: 1) in the United States, the oil production system (aside from the imports); 2) in the oil refinery network; 3) in the oil distribution network; and 4) internationally, the oil derivatives market.

Table 1 documents that just the top five oil companies—Royal Dutch Shell, ExxonMobil, BP, Chevron-Texaco, and ConocoPhilips—by dominating half or more of each of these markets, control domestic production, refinery capacity, and the supply and price of gasoline charged to retail gas stations. The head of the Society of Independent Gasoline Marketers of America, William Shipley III, testified to the Senate hearing that the oil companies tell the gas station managers what to charge. Since 1976, this cartel has shut down part of U.S. refining capacity to create a shortage. Further, merely since 2001, these five oil companies have gouged more than $175 billion in profits.

Determining the Oil Price
This oil cartel, in alliance with the City of London-Wall Street's biggest banks, has the final say on price. They dominate the two institutions where the world oil price is set: the London-based International Petroleum Exchange (IPE), and the New York Mercantile Exchange (NYMEX). The way this works, is that the trading companies that trade oil derivatives, push up the world oil price, through long positions and other manipulations, called "updrafting the market." The futures market determines the real world price. Most European oil contracts are based on the marker price of Brent Crude, which in turn is determined by the IPE. Speculators purchase futures contracts on the IPE and NYMEX exchanges; each single contract is a bet on 1,000 barrels of oil. More than 100 million of these oil derivatives contracts were traded on these exchanges in 2004, representing 100 billion barrels of oil. On the IPE, there are 570 derivatives contracts on Brent crude oil—"paper barrels of oil"—traded each year, for each physical barrel of oil produced in the North Sea.

Consider the IPE, which was created in 1980: Today, it is run by a Knight of the British Empire and former Royal Dutch/Shell official, Sir Robert Reid, and has a board which includes Lord Fraser of Carmyllie, representatives of Goldman Sachs, Morgan Stanley, BNP Paribas, Crédit Lyonnais, and French oil giant Total. Its parent holding company includes the Chicago Board of Trade's Richard Sandor (a former banker with Banque Indosuez and Drexel Burnham Lambert), and Jean-Marc Forneri, a banker who was a partner at Demachy Worms & Cie., the infamous synarchist Banque Worms. The biggest oil derivatives traders which run IPE trading include Barclays Capital, Bear Stearns International, J.P. Morgan Securities, Deutsche Futures London, BP Oil International, and Shell International Trading—the key components of the British oligarchy's world oil cartel.

Table 2 shows that for two full years before Katrina hit on Aug. 29, speculation drove up the price of gasoline by 83%, and crude oil by more than double. After Katrina hit, they drove it higher. The oil cartel used the NYMEX and IPE price as a floor, and drove the wholesale price above that, and the retail price even higher, with gas prices at $3.25 per gallon at the pump.

Sabotage of Refinery Capacity
Caught with both hands in the cookie jar, the oil cartel has turned to a Big Lie: shouting, as the American Petroleum Institute (API) has done, that there is insufficient refinery capacity, and that API's member firms are too broke to build new capacity. The truth is just the opposite.

In 1981, according to the Department of Energy, the U.S. had 324 refineries, with a refining capacity of 17.99 million barrels per day (bpd). In January 2005, after a massive campaign of shutdown, it had only 148 refineries with a capacity of 17.12 million bpd. The last time a new major refinery was built in the lower 48 states was in 1976, in Louisiana. In a June 2004 investigative report, "Campaign of Inaction: the Federal Trade Commission's Refusal to Protect Consumers from Consolidation, Cutbacks and Manipulation in America's Oil and Gasoline Markets," Sen. Ron Wyden (D-Ore.) showed that as a result of the record merger and acquisition binge in the refinery industry, 922,465 barrels per day of refinery capacity were taken out of production since 1995. Production would have tumbled further, but for increased efficiencies in refining conversion and thus output at some refineries.

Thus, the oil cartel is precisely acting the child who, after killing both parents, throws himself on the mercy of the court as an orphan.

API President Red Cavaney stated on Sept. 2 that the refinery industry could not afford to build new capacity, because it has earned "only" a 6% rate of return annually during the past 20 years. The last few years, many refinery companies have earned double-digit returns. But even taking the API argument at face value: Key U.S. electrical utilities earned a 3-6% rate of return during the period of 1950 through the end of the 1970s, but never failed to expand capacity. Moreover, last year, ExxonMobil made $25.1 billion in profits, the highest level of any industrial company in history. Couldn't it afford to build a new refinery, which costs $2.5 billion, rather than increasing dividends to reward shareholders' value?

Finally, there is the refinery capacity of Saudi and other Middle eastern countries, a portion of whose output was offered to the United States. According to the U.S. Department of Energy, Saudi Arabia possesses 1.75 million bpd of its own refining capacity; one oil industry newsletter stated that Saudi Arabia has another 720,000 bpd of in-country refinery capacity in joint ventures with other oil companies. Total refinery capacity on Saudi soil would be 2.47 million bpd. As a result, Saudi Arabia exports 1.15 million bpd of refined petroleum products; Kuwait exports 622,000 bpd; the U.A.E. exports 502,000 bpd. Part of these countries' refined product stockpiles—official and unreported—could be shipped on Very Large Long-Range Vessels, 500-750,000 barrel supertankers. Cheney said, "No."

Winter of Discontent
The scale of the Cheney-instigated oil hyperinflation is unprecedented. The Houston-headquartered Industrialinfo.com reported Sept. 14 that when, on Sept. 5, the price of gasoline was trading on the futures exchanges at $2.41 per gallon, this was equivalent to a $101.20 per 42-gallon barrel of gasoline. The prices of other refined products, such as jet fuel, home heating oil, followed the upward path. (Industrialinfo.com also reported record refinery profit margins, contrary to the claims of the oil cartel).

Economies cannot process those increases and survive. For example, the airline industry is recording tens of billions of dollars of losses. In 2004, Continental Airlines paid $1.6 billion for jet fuel, but anticipates that it will have to spend $2.9 billion in 2005. American farmers are reporting that they are paying more for diesel fuel alone than they can make from the products they produce.

The Energy Information Administration (EIA) of the U.S. Department of Energy estimated on Sept. 14 that total U.S. spending on power and energy fuels will be over $1 trillion for 2005, a 24% increase from 2004.

This will be a Winter of discontent as households cannot afford to heat their homes. The EIA forecast that, even assuming complete restoration of all Gulf energy infrastructure by Dec. 1, the natural gas retail price this Winter will average $16.65 per 1,000 cu ft (more than triple the price of the Winter of 2002-03); heating oil in the Northeast will cost $2.52/gallon, double the price of 2002-03. Mark Wolfe, the head of National Energy Assistance Directors Association, noted on Sept. 14, "A few years ago, you could heat a home for $500. Now it takes $1,500." Moreover, two Florida-based electric utilities which use a gas for electric power, Florida Power and Light and Progress Energy, have just applied for rate increases of 15% and 11%, threatening a national electric-rate spike.

The activity of Democrats and some Republicans to tackle Cheney's oil spike swindle, reflects the paradigm-shift following Katrina's destruction. The Senate on Sept. 15 unanimously passed the measure of Senators Mark Pryor (D-Ark.) and Pete Domenici (R-N.M.), requiring the Federal Trade Commission immediately to investigate gasoline price gouging, and report back in 30 days. North Dakota Senator Dorgan proposed a windfall profits tax for oil prices above $40 (see "Senators Demand End to Energy Speculation," EIR, Sept. 16, 2005).

Only by re-regulating and reversing the paradigm-shift of 35 years ago, which led to energy and industrial deregulation throughout the country, can the root problem be solved. That must be done within the context of solving the world monetary disintegration, which gives the impetus for Cheney's oil hoax and attendant wild behavior.


Halliburton threatens Army officials who point out contract abuse

16 Sept. 2005

WASHINGTON, Sept. 16 (HalliburtonWatch.org) -- A former contracting officer with the U.S. Army Corps of Engineers (USACE) told a congressional committee today that Halliburton regularly threatens government officials who complain about contracting abuse.

Christy Watts, who was Chief of Contracting at USACE in Louisville, Kentucky, said Halliburton and USACE "habitually" violate contracting regulations and demand employees conceal it from the public. She described a culture of fear and intimidation designed to protect Halliburton's bottom line.

"One point I need to make very clear: in my 18 years in contracting, I had never, with any other company except Halliburton, been treated in such a demeaning and intimidating manner," Watts told the Senate Democratic Policy Committee. "When pointing out to Halliburton personnel their contractual non-compliances, I was threatened verbally and physically intimidated for performing my job," she said.

Watts told the committee about frightening examples of Halliburton officials throwing temper tantrums or telephoning her home after midnight to scream at her for awarding contracts to competitors. In one instance, she was verbally accosted after informing the company that it violated regulations by failing to award 20 percent of subcontracts in Alaska to small businesses.

Watts, who worked for USACE for 12 years, is a self-described Republican who voted both times for President George W. Bush. She says contracting abuse and intimidation by her employer occurred in the Clinton administration as well.

"The problems are systemic and have been occurring for decades – through both Republican and Democrat administrations," she said. "Please serve the interests of the American people and address this as an issue of right and wrong – nothing more, nothing less."

Her superiors apparently have contempt for the government. She said USACE "views contracting professionals as a drag on their ability to do what they want." If a contracting officer speaks out against abuse, "they can expect to be terminated," she said.

When Watts left her employment with USACE, her superiors were worried she might go public with her allegations. So, they demanded a settlement agreement which banned her from contacting the U.S. Office of Special Counsel, which would be tasked with investigating her complaints. "I have concluded that the act of preventing me from communicating my concerns of contract abuse and unlawful activity freely to the Special Counsel is evidence of waste, fraud, abuse and corruption," she said.

Watts also disclosed an internal Army memorandum from her superior who admitted that Watts could make USACE "look really bad, if all the problems are found that I think they will find."

Another USACE whistleblower, Bunnatine H. Greenhouse, also spoke before the committee. Greenhouse's allegations of contracting abuse are being investigated by the Justice Department and the Pentagon's inspector general. Nevertheless, USACE recently demoted her after she disclosed her complaints to Congress. "I was removed because I steadfastly resisted and attempted to alter what can be described as casual and clubby contracting practices by the U.S. Army Corps of Engineers commanders, and because I presented testimony before this body on June 27, 2005," she said.

Although USACE officials were invited to the committee hearing, they declined to appear.

Halliburton's KBR subsidiary stands to gain additional contracts to repair damage left by Hurricane Katrina. Estimates of the federal government's reconstruction costs have been as high as $200 billion. USACE has already utilized KBR's Navy contract, or CONCAP, to hire the company for Katrina clean-up work. The Navy has currently provided two task orders to KBR, one worth $12 million for cleaning up and repairing Navy installations in Pascagoula and Gulfport, Mississippi. The other, worth $15 million, will be used by USACE and KBR for pumping water and building temporary morgues in New Orleans.

But some members of Congress are demanding an oversight committee to prevent contracting abuse. Sens. Joseph Lieberman (D-CT) and Susan Collins (R-ME), who is chairman of the Senate Homeland Security and Governmental Affairs Committee, announced a bill that would expand the role of the special inspector general for Iraq reconstruction to include oversight of contracts awarded in response to Katrina.


Hurricane Halliburton

Published on Monday, September 12, 2005 by The Nation
by John Nichols

Having finished the search for a luxury vacation home on the eastern shore of Maryland – which preoccupied him during the critical initial days of what is being called the worst natural disaster in American history – Vice President Dick Cheney jetted south late last week to inspect the damage.
With the wheels rolling for the purchase of his own $2.9 million home on the east coast, the Cheney was more or less ready to commiserate with the folks who had lost their homes on the Gulf Coast. Unfortunately, not all of the locals were prepared to thank the vice president for finally showing up.

Cheney was greeted in Gulfport, Mississippi, by a survivor of the disaster who – recalling the veep's blunt salutation for Vermont Senator Patrick Leahy during a visit to Capitol Hill last year – repeatedly shouted: "Go f--- yourself, Mr Cheney."

After Secret Service agents dragged the local man away, Cheney was asked by a reporter: "Are you getting a lot of that Mr. Vice President?"

Cheney answered: "First time I've heard it."

If Cheney had actually interacted with anyone on the ground, however, he would have heard a lot more. But the vice presidential visit was merely the latest in a series of photo opportunities by administration aides who are scrambling to undo the damage done by their plodding and disengaged response to a catastrophe that was made much worse by initial federal neglect and incompetence.

Gulf Coast coast residents may be in shock. But they haven't lost their sense of outrage. As Cheney posed for the cameras, Gulfport resident Lynn Lofton approached reporters and told them: "I think the media opportunity right here is a complete waste of time and taxpayer money. They should have been here last week."

In fact, Cheney arrived just in time to, as he put it, "make certain that we're doing everything that needs to be done."

The former CEO of Halliburton needn't have worried. As has been the case since the Bush-Cheney administration took office: When trouble hits, Halliburton hits it big.

The firm that has collectedjbv more than $10 billion in Iraq-war related revenues is just

One of the first corporations to be awarded a reconstruction assignment after the hurricane hit was Halliburton's KBR (Kellogg Brown & Root) subsidiary, which has been tapped to repair damaged naval facilities in Louisiana and Mississippi.

KBR, which according to the able watchdogs at HalliburtonWatch.org has an ongoing $500 million contract with the Navy, will be in thick of the reconstruction process. And don't doubt that there may be more work coming KBR's way.

Joe Allbaugh, the former director of the Federal Emergency Management Agency, has a new job. He's lobbying for the Halliburton subsidiary in Washington and elsewhere. Conveniently, Allbaugh showed up in Louisiana on the day before Cheney's visit with the purpose, in the words of a Washington Post report, of "helping his clients get business."

Even if Allbaugh drops the ball, Halliburton is well covered.

The vice president can always be counted on to "make certain that we're doing everything that needs to be done."


Cheney quip adds fuel to Katrina politics


On Saturday, Vice President Dick Cheney became the latest high profile official to offer a soundbite about Hurricane Katrina, saying all evacuees he's met have been 'thankful,' adding to a spate of comments raising eyebrows regarding the Katrina disaster, RAW STORY has found.

According to Reuters, Cheney's words were in response to reporters' questions about what evacuees had had to say to the Vice President as he toured the Austin convention centre in the wake of the demotion of FEMA director Michael D. Brown, who initially had been in charge of the federal relief efforts:

"Not one of them mentioned any of it. They're all very thankful where they find themselves right now."

Straight off the bat, on September 1st, Department of Homeland Security Director Michael Chertoff attempted to preemptively defend the Administration by blaming the victims:

"The critical thing was to get people out of [New Orleans] before the disaster. Some people chose not to obey that order. That was a mistake on their part."

The next day, in a similiar vein, FEMA Director Brown told CNN:

"... I think the death toll may go into the thousands. And unfortunately, that's going to be attributable a lot to people who did not heed the evacuation warnings. And I don't make judgments about why people choose not to evacuate. But you know, there was a mandatory evacuation of New Orleans. And to find people still there is just heart-wrenching to me because the mayor did everything he could to get them out of there."

On September 5th, former First Lady Barbara Bush unwisely cracked about the Astrodome's Hurricane Katrina evacuees:

"What I’m hearing which is sort of scary is they all want to stay in Texas. Everyone is so overwhelmed by the hospitality."

"And so many of the people in the arena here, you know, were underprivileged anyway, so this--this (she chuckles slightly) is working very well for them."

On Friday Raw Story reported that House Majority Leader Tom DeLay was overheard by Houston Chronicle's Purva Patel as he talked to three boys living on cots in the Astrodome:

"The congressman likened their stay to being at camp and asked, "Now tell me the truth boys, is this kind of fun?"

Saturday's Washington Post carried an article entitled "Some GOP Legislators Hit Jarring Notes in Addressing Katrina" which contained yet another installment in the "insensitive" series:

"The latest elected official to step into the swamp was Rep. Richard H. Baker, a 10-term Republican from Baton Rouge. The Wall Street Journal reported yesterday that he was overheard telling lobbyists: "We finally cleaned up public housing in New Orleans. We couldn't do it, but God did."

In return, on Thursday, Vice President Cheney was greeted by a doctor who had lost his home in Mississippi, who declared: 'Go fuck yourself.'


it felt good to say "GO FUCK YOURSELF" to Dick Cheney today

so i was driving to my house on 2nd Street in Gulport when the MP's would let me cross a barricade that is literally 100feet or so from my house...they told me i would have to take another route which was about an extra 20 minutes of driving....gas is really hard to come by so i was extremely aggravated then suddently a long line of dark cars pulls up and they start honking at me to backup to let the long line of cars through the barricade that supposedly no one can drive through...well that pissed me off so i flipped them off....i drove the extra 20 minutes and finally got back to my house filming video of the destruction along the way....i overheard a neighbor say that Dick Cheney was down the street talking to people...she was talking to 2 police officers at the time and so I asked them if me and my friend could go down and see what was going on....they said we could go....we grabbed my digital rebel and my videocamera and started walking....and then right in front of the tennis court i used to play on Dick Cheney was giving a speech talking to the press...the secret service guys patted us down and waved the wands over us and then let us pass....i was standing about 10 feet away from him and so i took a picture and then i yelled "Mr. Cheney Go Fuck Yourself....Go Fuck YOURSELF....Go Fuck Yourself...you asshole" at which point i noticed everyone was about to tackle me so i walked away back to my house....my friend videotaped a little bit longer and tehn he came back to the house...we were loading the things we could and about 10 minutes or so later some MP's waving M-16's showed up at my house...they said they were looking for someone who fit my description who had cursed at the VP....i told them it was me and they put me in handcuffs and 'detained' me for about 20 minutes or so and then released me after getting all my contact info....they said i had NOT broken any laws so i was free to go....


Dick Cheney Gloats Over New Halliburton Profits from Katrina Disaster as Bush Announces Plan to Cover Up Disaster Response Failure

Cheney called in as Bush says he will lead his own inquiry into Katrina

Julian Borger in Washington
Wednesday September 7, 2005
The Guardian

President Bush, facing a political crisis over the government's handling of relief efforts in the wake of Hurricane Katrina, announced yesterday that he would lead his own investigation of what went wrong.
Mr Bush also declared that he was sending Vice-president Dick Cheney to the ravaged Gulf coast region to assess recovery operations, and remove "any bureaucratic obstacles that may be preventing us from achieving our goals".

The announcements, made after a cabinet meeting in the White House, reflected anxiety that the humanitarian crisis remained grave and that the political threat to the Bush presidency's legacy and second-term agenda was growing, as more details emerged of the failure of Washington's immediate response to the disaster.

"What I intend to do is to lead an investigation to find out what went right and what went wrong," Mr Bush said. "We want to make sure that we can respond properly if there's a WMD attack or another major storm."
There were signs yesterday that the army had begun literally to turn the tide in New Orleans. After having plugged the biggest hole in the levees around the city, the engineers' corps began pumping water out of the flooded streets for the first time.

But New Orleans' mayor, Ray Nagin, warned that it would take three weeks to bail the water out, and another few weeks to remove the debris. Until then it posed a serious danger.

CNN yesterday quoted Mr Nagin's office as saying E coli bacteria had been found in the water, which is contaminated by sewage, dead bodies and toxic chemicals washed out of oil refineries and other industrial plants.

The aircraft carrier Iwo Jima arrived at New Orleans yesterday to help provide helicopters and medical care for survivors. Paratroopers from the 82nd Airborne Division were deployed with small boats to help the house-to-house search for the living and the dead, amid some predictions that the death toll could reach 10,000.

"It's going to be awful, and it's going to wake the nation up again," Mr Nagin said.

Meanwhile the US Senate launched its own investigation, as both Republicans and Democrats denounced the government's performance, which left tens of thousands of people stranded for four days or more in New Orleans with little or no food, water or medical assistance.

"Government at all levels failed," Susan Collins, a Republican on the Senate governmental affairs committee, said. "It is difficult to understand the lack of preparedness and the ineffective initial response to a disaster that had been predicted for years, and for which specific, dire warnings had been given for days."

The seriousness of the political storm Mr Bush is facing was vividly illustrated yesterday by an editorial in the staunchly conservative Wall Street Journal which warned "the aftermath of Katrina poses a threat to his entire second term".

The usually supportive editorial page concluded: "What's really at stake in the coming months is the Republican claim to be the governing party."

Mr Bush insisted he would not be drawn into the "blame game", but echoed an argument his aides have been making - that the primary responsibility lay with state and local authorities.

Meanwhile Mr Bush, already under pressure for the impression that he has been unable to empathise with the poor, mainly black victims of the disaster, was not helped by remarks made by his mother, Barbara, after touring a relief centre in Texas.

"What I'm hearing which is sort of scary is they all want to stay in Texas. Everyone is so overwhelmed by the hospitality," Mrs Bush told the Public Broadcasting Service. "And so many of the people in the arena here, you know, were underprivileged anyway, so this is working very well for them."



Halliburton gets Katrina contract, hires former FEMA director

1 Sept. 2005
WASHINGTON, Sept. 1 (HalliburtonWatch.org) -- The US Navy asked Halliburton to repair naval facilities damaged by Hurricane Katrina, the Houston Chronicle reported today. The work was assigned to Halliburton's KBR subsidiary under the Navy's $500 million CONCAP contract awarded to KBR in 2001 and renewed in 2004. The repairs will take place in Louisiana and Mississippi.

KBR has not been asked to repair the levees destroyed in New Orleans which became the primary cause of most of the damage.

Since 1989, governments worldwide have awarded $3 billion in contracts to KBR's Government and Infrastructure Division to clean up damage caused by natural and man-made disasters.

Earlier this year, the Navy awarded $350 million in contracts to KBR and three other companies to repair naval facilities in northwest Florida damaged by Hurricane Ivan, which struck in September 2004. The ongoing repair work involves aircraft support facilities, medium industrial buildings, marine construction, mechanical and electrical improvements, civil construction, and family housing renovation.

In March, the former director of the Federal Emergency Management Agency (FEMA), which is tasked with responding to hurricane disasters, became a lobbyist for KBR. Joe Allbaugh was director of FEMA during the first two years of the Bush administration.

Today, FEMA is widely criticized for its slow response to the victims of Hurricane Katrina.

Allbaugh managed Bush's campaign for Texas governor in 1994, served as Gov. Bush's chief of staff and was the national campaign manager for the Bush campaign in 2000. Along with Karen Hughes and Karl Rove, Allbaugh was one of Bush's closest advisers.

"This is a perfect example of someone cashing in on a cozy political relationship," said Scott Amey, general counsel at the Project on Government Oversight, a Washington watchdog group. "Allbaugh's former placement as a senior government official and his new lobbying position with KBR strengthens the company's already tight ties to the administration, and I hope that contractor accountability is not lost as a result."


Critic of No-Bid Halliburton Contract Demoted; Democrats Demand Probe

By T. Christian Miller, Times Staff Writer

WASHINGTON -- Congressional Democrats demanded an investigation today into the demotion of a senior U.S. military contracting official who publicly criticized a controversial no-bid contract awarded to Halliburton Corp. for work in Iraq.

With more than 20 years experience in government procurement, Bunnatine Greenhouse had been the Army Corps of Engineers' top contracting officer until she was demoted to a lower-level staff position Saturday. The military says she was demoted for poor job performance.

Greenhouse had repeatedly challenged the Army Corps' commanding officers on their decision in 2003 to give a contract worth up to $7 billion to repair oil infrastructure to Halliburton, the Houston-based oil services company once run by Vice President Dick Cheney.

""They went after her to destroy her," said Michael Kohn, her attorney, who added that the demotion was "absolutely" retaliation for her complaints about the Halliburton contract.

Democrats, who had invited Greenhouse to testify about her concerns at a June hearing, asked Defense Secretary Donald H. Rumsfeld in a letter today to reinstate her pending an investigation.

At that June hearing, Greenhouse called the Halliburton case "the most blatant and improper contract abuse I have witnessed during the course of my professional career."

The Army secretary approved the Army Corps' decision to demote Greenhouse three weeks later.

"Retaliation against employees for providing information to Congress is illegal and entirely unacceptable," said the letter, which was signed by Rep. Henry A. Waxman (D-Los Angeles) and Sens. Byron L. Dorgan (D-N.D.) and Frank Lautenberg (D-N.J.). "Ms. Greenhouse has given Congress important information essential to our oversight of waste, fraud and abuse."

Greenhouse had also angered major insurance companies with a proposal to save hundreds of millions of dollars by offering cheaper workers' compensation-style insurance to federal contractors. Her initiative drew sharp resistance from some of the country's most powerful insurance companies, which could have lost business under the proposal.

The Army Corps was scheduled to make an announcement on the cost-savings program as early as September. It was unclear whether Greenhouse's demotion would affect the program, which would have awarded the insurance to a single carrier through competitive bidding.

"This was her baby. She's the one who fought for this thing. And she made some people upset," said one insurance industry official who has monitored the program.

The officer who hired Greenhouse, who is black, said race also figured in her demotion.

Known for her insistence on following rules, she clashed repeatedly with a mostly white, "old boy" network at the Army Corps, according to Lt. Gen. Joe Ballard, the former Corps' commander who hired her.

"Greenhouse's race and gender ruffled a lot of feathers in the Corps command and also contributed to the disparate and highly critical treatment she has received," Ballard wrote as part of a deposition given during an internal process to appeal her demotion.

Ballard, who is also black, said he had received "similar treatment," even as commander.