A congressional committee said yesterday it will hear testimony in July from former Halliburton Co. employees who claim the company mismanaged lucrative contracts in Iraq and will invite Halliburton executives to answer lawmakers' questions about the way it charged for goods and services.
The former employees, who were not permitted to testify at yesterday's hearings of the House Committee on Government Reform, have alleged that Halliburton mismanaged contracts for work in Iraq. Rep. Henry A. Waxman (D-Calif.) disclosed their accusations on Monday and protested their exclusion. Rep. Thomas M. Davis III (R-Va.), the committee's chairman, said he would hold follow-up hearings next month to get testimony from the former employees.
The committee also requested documents from the Defense Department and the General Accounting Office related to the involvement of a political appointee, Michael Mobbs, in the decision to award Halliburton a contract to plan the restoration of Iraq's oil fields. Mobbs, an adviser to Douglas Feith, an undersecretary of defense, told Davis and Waxman last week that he briefed top officials -- including I. Lewis Libby, Vice President Cheney's chief of staff -- before he selected Halliburton. Cheney is Halliburton's former chief executive.
However, White House officials said yesterday that Cheney was not told of the decision in advance.
Officials said Libby was part of a large meeting on Oct. 15, 2002, at which Mobbs told Bush's national security deputies that the decision had been made to give the restoration work to KBR, a Halliburton subsidiary. The meeting included other matters, the official said.
A White House official who attended the meeting quoted Mobbs as saying, "This is what we are going to do," which the administration described as evidence that the decision had been made and that Cheney's office did not influence it.
Kevin Kellems, Cheney's spokesman, said last night that Libby did not inform the vice president about that part of the briefing. "Office policy always has been and continues to be that the vice president's office does not get involved in these matters," Kellems said. "Vice presidents don't do contracting."
The Defense Department released a statement yesterday saying, "The vice president's office played no role whatsoever in the decision to contract with KBR to do contingency planning or the later sole-source contract for KBR to begin restoration work."
At yesterday's House hearing, GAO officials criticized the Defense Department's management of Iraq reconstruction contracts. David M. Walker, comptroller general of the United States, said some contracting officials paid little attention to costs while others ignored regulations by awarding task orders that reached beyond the scope of existing contracts.
For instance, the contract that called for KBR to plan the reconstruction of Iraq's infrastructure should not have been used to hire the company to repair oil fields without written justification, Walker said. He added that the GAO is struggling to understand how the $1 billion a week the United States is spending in Iraq is distributed.
"Planning is a serious problem. Oversight is a serious problem," Walker said. Asked how he would grade the Defense Department's performance in Iraq, Walker said he would give an "A" for winning wars and a "D" for "economy, efficiency, transparency and accountability."