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[ The Atlanta Journal-Constitution: 8/28/03 ]

Halliburton's Iraq earnings rise
$1.7 billion paid to firm tied to Cheney

By MICHAEL DOBBS
Washington Post

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WASHINGTON -- Halliburton, the company formerly headed by Vice President Dick Cheney, has won contracts worth more than $1.7 billion out of Operation Iraqi Freedom and stands to make hundreds of millions more 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 up to 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 & Root subsidiary, include building and managing military bases, providing logistical support for the 1,200 intelligence officers hunting Iraqi weapons of mass destruction, delivering mail and producing hot meals.

Spreadsheets drawn up by the Army Joint Munitions Command show that about $1 billion had been allocated to Brown & 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.

Over the past decade, Halliburton, a Houston-based company that originally made its name servicing pipelines and oil wells, has positioned itself to take advantage of an increasing trend by the federal government to contract out many of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 an enormous demand on the armed forces.

But according to Rep. Henry 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.

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."

Daniel Carlson, a spokesman for the Army's Joint Munitions Command, said Brown & 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 & Root was an estimate and could go "up or down" depending on the amount of work performed.

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

The practice of delegating a vast array of logistics operations to a single contractor dates to the aftermath of the Persian Gulf War in 1991 and a study commissioned by Cheney, then defense secretary, on military outsourcing. The Pentagon chose Brown & Root to carry out the study and subsequently selected the company to implement its own plan.

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