By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – It is one thing to be governor of a state and have ties to big oil conglomerates. It's another, when the globe is watching. Any bad judgment call is a definite reflection on the ideals by which this war was fought. For KERA Marketplace Midday, I'm Maxine Shapiro.
I'm not quite sure what was going through the minds of the Army Corps of Engineers when they awarded a no-bid contract to a subsidiary of Houston-based Halliburton, KBR. The CEO of Halliburton from 1995 to 2000 was Vice President Dick Cheney. The ties run deep. In 2002, Mr. Cheney received about $162,000 in deferred compensation from Halliburton.
As more facts about the $7 billion contract are being revealed, more questions are being raised. Congress wants to know why official bidding wasn't done on such a high amount. The contract was to fight oil fires in Iraq. Another question: if it was for the initial short-term extinguishing of oil fires, why two years?
Lt. Gen. Robert B. Flowers, the Corps of Engineers commander, has replied to some of the questions. In cases of national security, federal contracts can bypass law and be awarded without competition. Extinguishing oil fields aflame in combat is one of those exceptions. But Flowers unsatisfactorily left out, why a multi-year contract? Flowers also revealed that only $50 million so far has been given to KBR from four work orders, far less than expected.
But now investigations have to begin on the awarding process and how the Bush administration is handing out the contracts to reconstruct Iraq. According to government contract experts, these current procedures may violate federal rules and international trade agreements.
And but a few hours ago, Bloomberg reported that indeed, Halliburton may lose the contract that is now worth far less than earlier anticipated. It will now be opened to bidding. This should have been done in the first place. For KERA Marketplace Midday, I'm Maxine Shapiro.
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