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Waxman Seeks New Halliburton Inquiry

By Robert O'Harrow Jr.
Washington Post Staff Writer
Thursday, November 11, 2004; Page A29

Citing newly disclosed State Department documents, Rep. Henry A. Waxman (D-Calif.) called yesterday for further congressional hearings on Halliburton Co.'s contracts in Kuwait and Iraq.

Waxman, senior Democrat on the House Government Reform Committee and a harsh Halliburton critic, said the documents include complaints from executives of a Kuwaiti subcontractor last year that employees of Halliburton subsidiary Kellogg Brown & Root Inc. repeatedly tried to extract bribes in exchange for fuel contracts.

_____Background_____
FBI Widens Probe of Halliburton (The Washington Post, Oct 29, 2004)
Pentagon Probes Halliburton's Iraq Contracts (The Washington Post, Oct 26, 2004)
Halliburton Charges Jumbled by Edwards and Denied by Cheney (The Washington Post, Oct 7, 2004)
Halliburton Considers Selling Troubled Unit (The Washington Post, Sep 24, 2004)

Waleed Al-Humaidhi, an official with a Kuwaiti company used to import fuel to Iraq at a time of shortages, told State Department officials that "it is 'common knowledge' " that Halliburton officials "solicit bribes openly," one document said. He later scaled back his claims, saying "no one from KBR ever requested any extra-contractual considerations," one of the State Department memos said.

Another document described how a KBR official demanded in August 2003 that a Kuwaiti hotel, which it was paying hundreds of thousands of dollars a month, buy his wife a "diamond encrusted" watch to replace one she had apparently lost.

Halliburton said in a recent regulatory filing that it told the Pentagon inspector general last month that two of its former employees in Kuwait "may have solicited and/or accepted payments" from subcontractors. Halliburton spokeswoman Wendy Hall said in an e-mail yesterday that that disclosure was unrelated to the allegations cited in Waxman's release.

In a letter to committee Chairman Thomas M. Davis III (R-Va.), Waxman said, "The implications of these new disclosures should be thoroughly investigated."

Waxman's request for new hearings was greeted as a partisan ploy by Davis spokesman David Marin, who said Davis and other committee Republicans already are reviewing the same material closely. Marin said Waxman takes "snippets out of hundreds of pages of documents and rushes to judgment on them."

"We don't jump as easily to unsubstantiated claims of corruption or improper influence as the minority does," Marin said in a written statement.

Halliburton's Hall dismissed Waxman's letter as "nothing more than a retrospective look at all the congressman's letters and news releases during the presidential campaign."

Hall said KBR got fuel to Iraq "at the best value, the best price, and the best terms and in ways completely consistent with government procurement policies."

Hall acknowledged that a hotel in Kuwait bought a watch for the wife of a KBR executive. "In regards to the watch, it was stolen while staying at the hotel and the hotel simply replaced it," she said.

In his letter to Davis, Waxman cited "extraordinarily high prices" -- about $2.64 per gallon, or twice the going price in the region at the time -- that Halliburton and KBR charged for importing gasoline from Kuwait into Iraq. Waxman said State Department officials appeared unconcerned about the cost.

Instead, Waxman wrote, documents show that State Department officials "intervened to pressure U.S. contracting officials to drop" efforts to find cheaper fuel and work exclusively with a subcontractor in Kuwait called Altanmia.

Tell "KBR to get off their butts and conclude deals with Kuwait NOW!" U.S. Ambassador to Kuwait Richard H. Jones wrote in an e-mail note in December, citing long lines at gas stations in Baghdad. Later that month Defense Department auditors announced that KBR may have overcharged the government by $61 million.


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