Official: Cheney Didn't Know Halliburton Would Get Iraq Contract

WASHINGTON – Vice President Dick Cheney's (search) chief of staff was told in 2002 that Cheney's former company would receive no-bid work to secretly plan restoration of Iraq's oil facilities, but the information wasn't given to the vice president, a White House official said Tuesday.

Kevin Kellems, Cheney's spokesman, told The Associated Press he confirmed the decision not to inform Cheney with the vice president's chief of staff, Lewis "Scooter" Libby (search).

"The vice president was not informed" that Halliburton (search) would get the Defense Department contract, Kellems said.

Libby informed participants at a Defense Department (search) briefing in October 2002 that "the vice president's office would not be involved and would have nothing to do with the matter," Kellems said.

Libby's presence was controversial because Cheney repeatedly has said he had no involvement in that contract or any other matters involving Halliburton, a Houston-based energy and construction company.

At the briefing, a Defense official told a multi-agency group including Libby that Halliburton would secretly develop contingency plans to extinguish any oil fires set by Saddam Hussein if there was a war with Iraq.

Kellems said he also spoke with National Security Council aide Frank Miller, who attended the 2002 briefing and confirmed that Libby told the group Cheney would not be informed.

Rep. Henry Waxman, D-Calif., senior Democrat on the House Government Reform Committee, revealed Libby's presence in a letter to Cheney last weekend seeking more information.

Waxman said Libby's involvement contradicts Cheney's statements that he had no knowledge of the contract, which was awarded in March 2003.

When Hussein didn't set the oil facilities on fire, Halliburton was asked to take on a much bigger role. Again without competitive bids, the company was chosen to supervise the postwar reconstruction of Iraq's oil industry.

At a hearing of the Government Reform Committee Tuesday, Lawrence Lanzilotta, an acting undersecretary of defense, first revealed that it was agreed that Cheney would not be told of the decision to give Halliburton the contract.

Also at the hearing, leaders of the committee agreed that top executives of Halliburton would be asked to testify next month in the panel's investigation of Iraq contracting.

The executives are Halliburton's chief executive officer, David Lesar, and the CEO of the company's KBR subsidiary, Randy Harl.

Halliburton has been awarded more than $7 billion in Iraq contract work that involves not only the oil restoration work, but feeding and housing U.S. troops.

Six Defense Department witnesses at the hearing all said they knew of no Cheney influence. They said the 2002 briefing of the vice president's office was simply a routine notification, not an attempt to win approval.

Committee Chairman Tom Davis, R-Va., and Waxman agreed to issue the invitation to the executives and said they would work together to determine whether documents should be subpoenaed. Waxman said he also wants to subpoena Defense Secretary Donald H. Rumsfeld to produce records on Department of Defense contracts with Cheney's office.

Waxman said he also wants records on construction giant Bechtel, which has a major Iraq contract, and several lawmakers added companies they want to include in the investigation.

Halliburton spokeswoman Wendy Hall was noncommittal on whether the executives would agree to testify.

"Today, our primary concern is to monitor the hearing to see what issues come forward," she said. "Halliburton believes its actions in Iraq are designed to deliver the best quality products and services on the best terms available as called for in our contract. We will work with the committee to assist them in fulfilling their important oversight functions."

The agreement did not stop Republicans from accusing Waxman of politically motivated criticism of Halliburton and Cheney, nor did Waxman let up on that criticism.

"Too many Democrats, for political reasons I completely understand but personally find distasteful, have chosen to practice oversight by press release, oversight by leaking draft reports and confidential briefings," Davis said at Tuesday's committee hearing.

"This is a strategy being driven top down by the House Democratic leadership," Davis charged.

Waxman responded with examples of waste, fraud and abuse that, he said, came from former Halliburton employees who spoke privately with the committee. Among the allegations:

— A former logistics specialist said Halliburton charged taxpayers $10,000 a day to house employees in a five-star hotel in Kuwait instead of the $600 per day cost of using the same air-conditioned tents that house U.S. troops.

— A former "convoy commander" said Halliburton removed spare tires from its new $85,000 trucks and gave instructions to abandon or "torch" the vehicles if they had a flat tire.

Waxman also said the cost of a food service contract was reduced by 40 percent after Halliburton's middleman role was eliminated.

Davis said there may be explanations, stating it might be a sound policy to abandon a truck rather than change a tire if a convoy comes under attack.

Hall, the Halliburton spokeswoman, said of the allegations: "This does not serve to feed a single member of our military, create a single unit of housing, repair a single oil well or supply a single piece of material for reconstruction."