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Halliburton Defends No-bid Iraq Contract

“Why would a defense secretary, former chief of staff to a president and former member of Congress with no business experience become the CEO of a multibillion-dollar oil services company,” asks Lewis. “He was brought in to raise their government contract profile and he did.”

4/27/2003: (CBS) Halliburton’s government relations director says his company’s former CEO, now the vice president of the United States, has nothing to do with the company getting billions of dollars in federal contracts, including a recent no-bid job, worth up to $7 billion, to put out oil well fires in Iraq.

Halliburton vice president Charles Dominy, a retired Army general, speaks to Steve Kroft in a 60 Minutes report examining the way the federal government is awarding contracts for rebuilding Iraq.

Dominy says the connection between the vice president and Halliburton’s business with the government has “absolutely zero impact.” Asked if his being a former three-star Army general had anything to do with his employment at Halliburton, Dominy replies, “None.”

Why did they get the no-bid contract to put out oil fires for the Army? “We are the only company in the United States that had the kind of systems in place, people in place, contacts in place, to do that kind of thing,” says Dominy.

But he acknowledges the perception of cronyism it creates, which is a view only a look inside the process could dispel. “In fact, I wish I could embed [critics] inside the Department of Defense contracting system. Once they’d done that, they’d have religion just like I do about how the system cannot be influenced,” he tells Kroft.

The system has been awarding billions of dollars in military contracts to private firms. Among these firms is a Halliburton subsidiary, Kellogg, Brown & Root, which got the oil fire job, and in 1992, authored a study that concluded it would be good to privatize billions of dollars worth of military work. “Of course they said it was a terrific idea,” says Charles Lewis of the Center for Public Integrity, a group that monitors the government for possible corruption. “So they helped design the architecture for privatizing a lot of what happens today in the Pentagon when we have military engagements.”

In 1992, the Department of Defense, under then Secretary of Defense Cheney, commissioned the Halliburton subsidiary to do the study. In 1995, Cheney became the CEO of Halliburton.

Says Lewis, “Why would a defense secretary, former chief of staff to a president and former member of Congress with no business experience become the CEO of a multibillion-dollar oil services company,” asks Lewis. “He was brought in to raise their government contract profile and he did.”

Halliburton nearly doubled the value of federal contracts it received – from $1.2 to $2.3 billion – during the five years Cheney was its CEO. “I’m not saying it’s illegal,” says Lewis, who points out that many former high-ranking military officers work for firms seeking federal contracts. “They set up the system for themselves, and they may be doing it in red, white and blue, but they’re doing quite well.”

Copyright CBS News


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