Halliburton, Once Again

There is nothing lower than Halliburton on the planet.

LA TIMES EDITORIAL

Halliburton, Once Again

June 16, 2004

Vice President Dick Cheney's penchant for secrecy has repeatedly thrust him into an embarrassing spotlight. It began with his clandestine energy task force. Now it involves contracts in Iraq for Halliburton Inc., which Cheney ran from 1995 to 2000.

For months, Cheney has denied knowing about a controversial Pentagon contract awarded to Halliburton in 2002. Appearing on NBC's "Meet the Press" on Sept. 14, Cheney stated that he had not been informed about any Halliburton contracts and that political appointees were not involved with them. But Pentagon officials have acknowledged that Cheney's staff was briefed at least twice by political appointees who awarded Halliburton the contract.

The meetings may have been harmless, a simple notification of how the Pentagon intended to handle the restoration of Iraq's oil facilities after the war. And there is no evidence that Cheney used his influence to get Halliburton the contract. But what makes this more than just another Washington blip is the next chapter, the emergence of six whistle-blowers who have told Rep. Henry A. Waxman (D-Los Angeles), the ranking Democrat on the House Government Reform Committee, that Halliburton appears to be fleecing the U.S. Treasury on its cost-plus contracts.

The incentive for the company is strong. Cost-plus means Halliburton gets a set percentage above actual costs, so in general the more it spends, the more it makes.

Five of the whistle-blowers worked directly for Halliburton, and one for a major Halliburton subcontractor. The head of the Government Reform Committee, Tom Davis (R-Va.), refused to allow them to testify in a hearing Tuesday about Iraq and contracting.

David Wilson, a convoy commander for Halliburton, and James Warren, a Halliburton truck driver, stated that new $85,000 Halliburton trucks in Kuwait were "torched" if they got a flat tire. According to Wilson, the company "removed all the spare tires in Kuwait," presumably so the entire truck would have to be replaced after a blowout. In addition, they said, they were instructed not to change the oil on trucks. Warren claims that after he expressed his concerns to Randy Harl, the head of a Halliburton subsidiary, he was fired. Marie deYoung, who worked in the subcontracts department of Halliburton, said the company paid for a laundry service that was so inefficient it cost $100 a bag.

Other evidence suggests this is more than sour grapes from former employees. A May 13 Pentagon audit said Halliburton exercised little control over subcontractors and didn't monitor the costs of contracts. The General Accounting Office has also investigated and found numerous problems.

On Tuesday, Reps. Davis and Waxman made some progress by agreeing that Halliburton executives would be asked to testify to their committee and that the two House members would consult with each other on whether any documents should be subpoenaed. There may be nothing to hide in regard to the execution of the Halliburton contract. Holding open hearings is the way to demonstrate that.