Defense Department removing Corps of Engineers from Halliburton pact
WASHINGTON (AP) – The Defense Department is removing the Army Corps of Engineers from overseeing oil imports into Iraq, acting just weeks after Pentagon auditors said Halliburton – Vice President Dick Cheney’s former firm – may have overcharged taxpayers under the Corps’ supervision. The Defense Energy Support Center, which buys fuel for the military throughout the world, will supervise the replacement of Halliburton and the award of a new contract for the imports, the center said Tuesday.
“We’re taking over the mission,” said the center’s spokeswoman, Lynette Ebberts. She would not comment on whether the audit prompted the change, which was ordered Dec. 23.
Democratic lawmakers have been highly critical of the prices charged the U.S. government by Halliburton’s KBR subsidiary, which has been importing refined petroleum products into Iraq under a mission awarded without competitive bids. Cheney headed Halliburton before running for vice president.
Earlier this month, the Defense Department’s auditing agency supported the Democrats’ allegations, finding the company may have charged up to $61 million too much for delivering gasoline to Iraqi citizens.
President Bush tried to calm the controversy, saying Halliburton should repay the government if it overcharged for fuel, which was imported from Iraq’s neighboring countries.
Halliburton has said it expected to be cleared by the Defense Department. The company said its pricing resulted from a contract with a Kuwaiti firm, the only company approved as a supplier by the Corps.
Halliburton got its contract to rebuild Iraq’s dilapidated oil industry as an outgrowth of a contract with the Army to provide emergency logistical help for situations such as the Iraq war. The Army Corps of Engineers opened the oil rebuilding process to competitive bidding earlier this year and was preparing to award up to $2 billion in replacement contracts.
Richard J. Connelly, director of the support center, said the existing contract would remain in place for now, so that fuel deliveries will not be interrupted.
Corps spokesman Robert Faletti said, “I don’t believe the report had anything to do with the transfer.”
The support center said it would award contracts under competitive bidding, a process that could take two to three months, but would consider a short-term contract until the bids are awarded.