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Senators critical of Halliburton
Boxer sees possible 'hanky-panky' in Iraq contract; Nagel urges White House to be 'clear' on deals.
May 11, 2003: 1:58 PM EDT

WASHINGTON (CNN) - "Hanky-panky" may have gotten a subsidiary of Vice President Dick Cheney's former company a lucrative contract to rehabilitate and operate Iraq's oil wells, Sen. Barbara Boxer, D-Calif., said Sunday.

Boxer, speaking on CNN's Late Edition with Wolf Blitzer, did not accuse the vice president of wrong-doing but said it was wrong to award an open-ended contract worth up to $7 billion to Halliburton Co. (HAL: Research, Estimates) subsidiary Kellogg, Brown & Root without competitive bidding.

"I don't believe it is right to have a sole-source contract that goes on and on and on," the senator said. "For emergencies, it's fine. After 90 days, you bid it out."

"When I say hanky-panky," she said, "I mean it because the bottom line is the taxpayers have a lot at stake."

Cheney resigned as CEO of Halliburton when he became presidential candidate George W. Bush's running mate in 2000.

Last month, Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., asked the General Accounting Office, the investigative arm of Congress, to look into contracts received over the last two years by Halliburton and its subsidiaries, which the congressmen said totaled at least $600 million.

The oil contract, awarded in March, was among those the congressmen asked the GAO to investigate.

On Friday, Sen. Frank Lautenberg, D-N.J., asked the Senate Governmental Affairs Committee to formally investigate the contract.

A spokesman for the U.S. Army Corps of Engineers said on April 8 that Kellogg, Brown & Root was awarded the contract because it had already won a bid in December 2001 to pre-position firefighting assets in the region.

But earlier this week, Corps officials acknowledged that the contract, which has no set limits on time or money, allows the subsidiary to operate Iraq's oil fields and distribute its oil, rather than just putting out fires and making repairs.

Cheney's office, the White House and Halliburton have repeatedly denied any involvement in the way the Corps handled the contract.

Sen. Chuck Hagel, R-Neb., said the affair indicated how important it is for the Bush administration to be open.

"I don't know anything about hanky-panky," he said, also on Late Edition, "but this is a clear example that the administration has to be very clear, transparent with all these things, can defend it all. This is but one example and I suspect there'll be more."

Boxer called Halliburton a "very powerful special interest," and said Congress must "find out what's behind a sole-source contract" like the one to the company.  Top of page

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