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Halliburton's Deals Greater Than Thought

Discussion in 'Politics (deprecated)' started by Boss Hog, Aug 28, 2003.

  1. Boss Hog

    Boss Hog TRIBE Member

    Halliburton's Deals Greater Than Thought

    By Michael Dobbs
    Washington Post Staff Writer
    Thursday, August 28, 2003; Page A01

    Halliburton, the company formerly headed by Vice President Cheney, has won contracts worth more than $1.7 billion out of Operation Iraqi Freedom and stands to make hundreds of millions more dollars under a no-bid contract awarded by the U.S. Army Corps of Engineers, according to newly available documents.

    The size and scope of the government contracts awarded to Halliburton in connection with the war in Iraq are significantly greater than previously disclosed and demonstrate the U.S. military's increasing reliance on for-profit corporations to run its logistical operations. Independent experts estimate that as much as one-third of the monthly $3.9 billion cost of keeping U.S. troops in Iraq is going to independent contractors.

    Services performed by Halliburton, through its Brown and Root subsidiary, include building and managing military bases, logistical support for the 1,200 intelligence officers hunting Iraqi weapons of mass destruction, delivering mail and producing millions of hot meals. Often dressed in Army fatigues with civilian patches on their shoulders, Halliburton employees and contract personnel have become an integral part of Army life in Iraq.

    Spreadsheets drawn up by the Army Joint Munitions Command show that about $1 billion had been allocated to Brown and Root Services through mid-August for contracts associated with Operation Iraqi Freedom, the Pentagon's name for the U.S.-led war and occupation. In addition, the company has earned about $705 million for an initial round of oil field rehabilitation work for the Army Corps of Engineers, a corps spokesman said.

    Specific work orders assigned to the Halliburton subsidiary under Operation Iraqi Freedom include $142 million for base camp operations in Kuwait, $170 million for logistical support for the Iraqi reconstruction effort and $28 million for the construction of enemy prisoner of war camps, the Army spreadsheet shows. The company was also allocated $39 million for building and operating U.S. base camps in Jordan, the existence of which the Pentagon never publicly acknowledged.

    Over the past decade, Halliburton, a Houston-based company that originally made its name servicing pipelines and oil wells, has positioned itself to take advantage of an increasing trend by the federal government to contract out many of its support operations overseas. It has emerged as the biggest single government contractor in Iraq, followed by such companies as Bechtel, a California-based engineering firm that has won hundreds of millions of dollars in U.S. Agency for International Development reconstruction contracts, and Virginia-based DynCorp, which is training the new Iraqi police force.

    The government said the practice has been spurred by cutbacks in the military budget and a string of wars since the end of the Cold War that have placed a enormous demand on the armed forces.

    But according to Rep. Henry A. Waxman (D-Calif.) and other critics, the Iraq war and occupation have provided a handful of companies with good political connections, particularly Halliburton, with unprecedented money-making opportunities. "The amount of money [earned by Halliburton] is quite staggering, far more than we were originally led to believe," Waxman said. "This is clearly a trend under this administration, and it concerns me because often the privatization of government services ends up costing the taxpayers more money rather than less."

    Wendy Hall, a Halliburton spokeswoman, declined to discuss the details of the company's operations in Iraq, or confirm or deny estimates of the amounts the company has earned from its contracting work on behalf of the military. In an e-mail message, however, she said that suggestions of war profiteering were "an affront to all hard-working, honorable Halliburton employees."

    Hall added that military contracts were awarded "not by politicians but by government civil servants, under strict guidelines."

    Daniel Carlson, a spokesman for the Army's Joint Munitions Command, said Brown and Root had won a competitive bidding process in 2001 to provide a wide range of "contingency" services to the military in the event of the deployment of U.S. troops overseas. He said the contract, known as the Logistics Civil Augmentation Program, or LOGCAP, was designed to free up uniformed personnel for combat duties and did not preclude deals with other contractors.

    Carlson said the money earmarked for Brown and Root was an estimate, and could go "up or down" depending on the work performed.

    The Joint Munitions Command provided The Washington Post with an updated version of a spreadsheet the Army released to Waxman earlier this month, giving detailed estimates of money obligated to Brown and Root under Operation Iraqi Freedom. Estimates of the company's revenue from Iraq have been increasing steadily since February, when the Corps of Engineers announced it had won a $37.5 million contract for pre-positioning fire equipment in the region.

    In addition to its Iraq contracts, Brown and Root has also earned $183 million from Operation Enduring Freedom, the military name for the war on terrorism and combat operations in Afghanistan, according to the Army's numbers.

    Waxman's interest in Halliburton was ignited by a routine Army Corps of Engineers announcement in March reporting that the company had been awarded a no-bid contract, with a $7 billion limit, for putting out fires at Iraqi oil wells. Corps spokesmen justified the lack of competition on the grounds that the operation was part of a classified war plan and the Army did not have time to secure competitive bids for the work.

    The corps said the oil rehabilitation deal was an offshoot of the LOGCAP contract, a one-year agreement renewable for 10 years. Individual work orders assigned under LOGCAP do not have to be competitively bid. But Waxman and other critics maintain that the oil work has nothing to do with the logistic operation.

    The practice of delegating a vast array of logistics operations to a single contractor dates to the aftermath of the 1991 Persian Gulf War and a study commissioned by Cheney, then defense secretary, on military outsourcing. The Pentagon chose Brown and Root to carry out the study, and subsequently selected the company to implement its own plan. Cheney served as chief executive officer of Brown and Root's parent company, Halliburton, from 1995 to 2000, when he resigned to run for the vice presidency.

    At the time, said P.W. Singer, a Brookings Institution scholar and author of "Corporate Warriors," it was impossible to predict how lucrative the military contracting business would become. He estimates the number of contractors in Iraq at 20,000, or about one contractor for every 10 soldiers. During the Gulf War, the proportion of contractors to servicemen was about one in 100.

    Brown and Root's revenue from Operation Iraqi Freedom is already rivaling its earnings from the Balkans, and is a major factor in increasing the value of Halliburton shares by 50 percent over the past year, according to industry analysts. The company reported a net profit of $26 million in the second quarter of this year, in contrast to a $498 million loss in the same period last year.

    Waxman aides said they have been told by the General Accounting Office that Brown and Root is likely to earn "several hundred million more dollars" from the no-bid Army Corps of Engineers contract to rehabilitate Iraqi oil fields. Waxman, the ranking minority member on the House Government Reform Committee, had asked the GAO to investigate the corps' decision not to bid out the contract.

    After a round of unfavorable publicity, the corps explained that the sole award to Brown and Root would be replaced by a competitively bid contract. But the deadline for announcing the results of the competition has slipped from August to October, causing rival companies to complain that little work will be left over for anybody else. Bechtel, one of Halliburton's main competitors, announced this month that it would not be bidding for the corps contract and would instead focus on securing work from the Iraqi oil ministry.

    In addition to the Army contracts, Halliburton has also profited from other government-related work in Iraq and the war on terrorism, and has a $300 million jumbo contract with the Navy structured along similar lines to LOGCAP.

    Pentagon officials said the increasing reliance on contractors is inevitable, given the multiple demands on the military, particularly since Sept. 11, 2001. Defense Secretary Donald H. Rumsfeld is a champion of "outsourcing," writing in The Post in May that "more than 300,000 uniformed personnel" were doing jobs that civilians could do.

    Independent experts said the trend toward outsourcing logistic operations has resulted in new problems, such as a lack of accountability and transparency on the part of private military firms and sometimes questionable billing practices.

    A major problem in Iraq, Singer said, has been the phenomenon of "no-shows" caused by the inhospitable security environment, and the killing of contract workers, including a Halliburton mail delivery employee earlier this month. "At the end of the day, neither these companies nor their employees are bound by military justice, and it is up to them whether to show up or not," Singer said. "The result is that there have been delays in setting up showers for soldiers, getting them cooked meals and so on."

    A related concern is the rising cost of hiring contract workers because of skyrocketing insurance premiums. Singer estimates that premiums have increased by 300 percent to 400 percent this year, costs that are passed on to the taxpayer under the cost-plus-award fee system that is the basis for most contracts.

    The LOGCAP contract awarded to Brown and Root in 2001 was the third, and potentially most lucrative, super-contract awarded by the Army. Brown and Root won the first five-year contract in 1992, but lost the second to rival DynCorp in 1997 after the GAO criticized the Army for not adequately controlling contracting costs in Bosnia.

    © 2003 The Washington Post Company

  2. OTIS

    OTIS TRIBE Member

    Man, I hope all those who vote for Bush again will smile throughout the whole 8 YEARS of their working lives it will take for each and every one of them to pay down the debt this administration has racked up. Fiscal trainwreck anyone?
  3. Subsonic Chronic

    Subsonic Chronic TRIBE Member

    The people who voted for Bush won't even notice. They'll be brainwashed by the constant repetition of the fact that "there is no debt, the country's economy is fine" and go about their daily lives none the wiser.

    The whole Bush campaign has just been to repeat, repeat and repeat, no matter how fraudulent the claim. The media follows suit and before you know it fiction becomes fact in the eyes of the people.

    We here know that Saddam wasn't responsible for the September 11th tragedies, but why do more than half the Americans think so? Repetition by the administration and it's lapdog corporate media.

  4. Ditto Much

    Ditto Much TRIBE Member

    No we're going to move some of our money into shares of Halliburton, waist for the price to go up a little sell and make enough money to not care about it.

    In times of peace we invest in the future in times of conflict we switch to ammo, guns, booze and resources.

    When in doubt profit on the anger!
  5. Sporty Dan

    Sporty Dan TRIBE Member

    ...maybe if the Iraqi oil pipelines would stop blowing up there wouldn;t be all this work for Haliburton to do.

    ....and out of curiousity, what company SHOULD be doing the work??

  6. OTIS

    OTIS TRIBE Member

    Who the fuck knows, it's not like there was a bid.
  7. Boss Hog

    Boss Hog TRIBE Member

    Stay angry Dan! Don't let ANYONE tell you to have a good day! Stay angry!

  8. SlipperyPete

    SlipperyPete TRIBE Member

  9. Subsonic Chronic

    Subsonic Chronic TRIBE Member

    Maybe if the Iraqis owned their own pipelines (and their own oil for that matter) they wouldn't be so eager to blow them up.

    just a hunch ;)
  10. Ditto Much

    Ditto Much TRIBE Member

    but they never owned that oil!! they never owned the pipeline and other than the fact that they pay the equivilent of about $0.02 for a litre of gas they have never recieved a benifit from this oil.

    Maybe they should have stood up to there oh so beautiful leader during one of his MANY wars and MANY purges!
  11. man_slut

    man_slut TRIBE Member

    They did, unfortunately the States helped defeat many of those rebellions by providing Saddam with money and weapons. More recently after the 1st Gulf War there was a revolt. Unfortunately the US didn't support the revolt because it would have meant that Iraq oil would be nationalized.:D
  12. wayne kenoff

    wayne kenoff TRIBE Member

    That has to change.
  13. OTIS

    OTIS TRIBE Member

    Maybe because every attempt to own it was thwarted. Timeline to Kassem in the late 50's who was assasinated & dragged through the streets along with the whole left wing party by the CIA propped Ba'ath party. All for wanting to nationalize the oil & it's ifastructure. I guess back then it was much easier for the US & UK to get away with barbarically owning the oil as nowadays the Cold war is over, so it has to be done overtly.
  14. wayne kenoff

    wayne kenoff TRIBE Member

    get your head out your ass.
  15. catilyst

    catilyst TRIBE Member

    is the answer that obvious?
  16. Deep_Groove

    Deep_Groove TRIBE Member

    How about this point:

    The oil buried under the sands of Iraq is very valuable. However, before Western governments pointed out this fact, Iraqis never cared or even knew a whit about the oil. Even when they DID find out, their educational and business establishment was not in an adequate position with respect to their scienticfic knowledge or engineering and technical competence to be able to create companies to prospect, extract and process that oil. They simply didn't have the know-how.

    So what happened? The Western governments came along to make a deal. Their oil companies would do the work, and they would pay the Iraqi state some percentage for the privilege of doing it, maybe decide upon a percentage of the Iraqi work force to be hired to work on it, whatever.

    So they did. Unfortunately, the nature of the Iraqi government being a fascist dictatorship, the Iraqi people probably didn't see very much of the money paid by the Western oil companies to their government.

    Well, that sucks. But whose fault is that? Should the Western governments NOT have given this opportunity to their oil companies and to their own economies? Should they have just let the oil sit there? They had a responsibility to the citizens who elected them, and to the growth of their economy. At least this way, the Iraqis had a CHANCE at experiencing economic growth.

    So then the Ba'ath party comes along promising to nationalize the oil industry. "Hey great!" say the Iraqis. "This is our oil, we can do with it what we want, damn it!"

    OK, great as far as it goes. Unfortunately, the U.S. and Europe, again realizing the nature of the dictatorship there, and in the context of the Cold War (where the Soviets nationalized EVERYTHING and promised benefits to those countries who followed their example) saw that bad things could happen if this was done.

    A.) Another Soviet beachhead in the mideast.

    B.) The THEFT of all the money, time, labour and equipment, OWNED BY WESTERN INVESTORS (who they have a responsibility to, btw, being their democratically-elected government) that went into this oil thing.

    C.) A dictator with imperialist ambitions could enrich himself with this stolen stuff to do bad things.

    So they (admittedly heavy-handedly) prevented this from happening.

    And now today, the Iraqi business establishment STILL doesn't have the technical know-how to rebuild their infrastructure, due to decades of educational propaganda and fascist oppression, so the U.S. contracted out the work to those U.S. firms who had proven themselves capable of doing this in the past. (Haliburton worked in Kosovo and other places, btw).

    Like SlipperyPete said, do you guys have any other suggestions regarding who should be doing this reconstruction? I mean, I know corporations are evil, man! and all that but, well...I'm all ears...

    - Deep_Groove
  17. Boss Hog

    Boss Hog TRIBE Member

    Wow. I really hit the nail on the head when I apologized to Ditto Much after realizing YOU were the one dumb as a bag of hammers.
  18. Subsonic Chronic

    Subsonic Chronic TRIBE Member


    Just when you think it can't get any dumber in here (the politics forum), it does.
  19. ~atp~

    ~atp~ TRIBE Member

    Mathematically speaking,

    Ditto Much > Hammer > Deep_Groove
  20. SlipperyPete

    SlipperyPete TRIBE Member

    umm.....actually, my quote was meant to imply that a government can say whatever it wants, and as long as they repeat it enough times people will start to buy into it. 'twas meant in reply to what subsonic pete said earlier re: Bushie's ramming the same 3 points down the throats of their country. It's taken a bit out of context -- go read Animal Farm and you'll understand where it comes from and what it was really posted for.
  21. ~atp~

    ~atp~ TRIBE Member

    don't worry man, we got it, but he didn't. ;)
  22. man_slut

    man_slut TRIBE Member

    Good Lord! Deep Groove where do you get your facts from? I would love to know your source on why Iraq is too stupid to dig there own oil. Maybe it will give me more perspective on something (the Third Reich).
  23. Boss Hog

    Boss Hog TRIBE Member

    Third Reich?

    People don't still burn their own Reichstag to start wars on other nations, do they?

  24. ~atp~

    ~atp~ TRIBE Member


  25. Deep_Groove

    Deep_Groove TRIBE Member

    It's not that they're "too stupid", they just didn't have the level of technological sophistication to do it. We're talking about countries that, before Western influence, basically had agricultural/artisan/handicraft economies. Sure they may have had some nice irrigation techniques and known how to cast a beautiful bronze vase, but the reality is, they didn't have the engineering technique to be able to drill thousands of metres into the desert and ocean floor.

    If they did, then all the big oil companies would be Saudi-owned and Iraqi-owned. Name ONE!

    What do you think, the U.S., British and French governments just came to the rulers of these countries and said: "Even though you have domestic producers who can do it, we're sending our companies in to drill the oil." What would you say to that if you were a middle eastern leader? "Screw you!". And if the Western governments did such an unjust thing, why did they even bother giving ANY of the profits to the middle eastern governments? Why not just use their militaries to brutally suppress the population while their companies extracted the oil, let their citizens investing in the oil industry keep all the profits, and be done with it? Fact is, THEY NEVER DID THAT. And don't say: "Look at the current U.S. occupation of Iraq." If the U.S. really wanted that oil, they could have just lifted the sanctions without all the expense of going to war.

    The Saudis have always had the most oil, and the Western governments have NEVER attacked them. Ask yourself, "why not?"

    - Deep_Groove

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