Halliburton deal for Iraq work rises to $76.7 million

Associated Press

WASHINGTON - The no-bid contract that Halliburton Co. received to extinguish fires at Iraqi oil wells has risen to $76.7 million, pushed higher after the government gave Vice President Dick Cheney's former company the added job of restarting Iraq's oil industry.

The expanded role has accounted for $24 million of the contract.

Rep. Henry A. Waxman, a California Democrat, disclosed Tuesday that Halliburton's KBR subsidiary would have more work than was indicated in the March announcement of a contract to extinguish oil fires.

The Bush administration denies that there is any connection between Cheney's former role in running the Houston company and the contract work. Cheney, who led the company until August 2000, has had no role in the company's government contracts, the vice president's office has said.

Asked whether the administration had a perception problem, presidential spokesman Ari Fleischer said yesterday, "Congressman Waxman has never met a Republican he didn't want to investigate." He directed questions to the contracting agency.

That agency, the U.S. Army Corps of Engineers, acknowledged playing down the extra work in comments to the news media and Congress.

Spokesman Scott Saunders said his organization did not emphasize the additional work because it was only a contingency in the original contract.

"We didn't think the initial contract would be involved with operating facilities and distribution of the product, so we didn't play that up in the beginning in correspondence to Capitol Hill and in speaking to the news media," he said.

Saunders said KBR is buying oil from Kuwait, Saudi Arabia and Turkey to meet desperate shortages, especially in Baghdad, where there has recently been only a five-day supply of gasoline.

The agency has announced that it would replace the Halliburton contract with one to be awarded in open competition, but Saunders acknowledged that the bidding - supposed to begin this month - is behind schedule.

A spokeswoman for Halliburton said Tuesday that the company's initial announcement of the contract March 24 disclosed the larger role for its KBR subsidiary.

Halliburton spokeswoman Wendy Hall pointed to the company's statement that after emergency work, the company would provide "for the continuity of operations of the Iraqi oil infrastructure."

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