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Halliburton Memo Boosts Hill Critics

Armed with new evidence that suggests Vice President Cheney’s office may have had a role in approving a government contract for Cheney’s former employer, Halliburton, Senate Democrats are planning to force more votes on the oversight of government contracting in Iraq.

With the Defense Department reauthorization bill on the Senate floor for at least another week, Democrats are preparing a variety of amendments crafted to highlight what they consider widespread fraud and waste among contractors in Iraq, as well as the dubious nature under which they allege the Bush administration has awarded some contracts.

“A firewall needs to be established,” said Senate Minority Leader Tom Daschle (D-S.D.). “There ought to be no question about the propriety of those contracts.”

The Democratic push to provide more transparency in military and reconstruction contracts relating to Iraq was given new life with the release this week of an Army Corps of Engineers e-mail by Judicial Watch, a conservative watchdog group that has also taken on Bush administration figures, including Cheney.

The e-mail suggests that Cheney’s office may have “coordinated” the awarding of a $2.2 billion Iraqi oil-well cleanup contract to Halliburton at the start of the war last year.

Cheney served as Halliburton’s CEO for five years until he ran for vice president in 2000, and he continues to receive deferred compensation from the company. The vice president’s office and the Defense Department say Cheney’s office merely “coordinated” the declassification of the contract, not the contract itself.

The Corps of Engineers memo is just the latest in a string of allegations about Halliburton and federal contracts. The company has been accused of overcharging the U.S. government by more than $60 million for oil imports as well as for food-service contracts in Iraq. Two Halliburton employees were also accused of taking more than $6 million in kickbacks on government contracts.

Halliburton has agreed to give back $36 million in charges for meals, but the company has asserted that it did nothing improper in its billing of the military.

Among the more contentious amendments Democrats are proposing is a plan drawn up by Sen. Frank Lautenberg (D-N.J.) that would force Attorney General John Ashcroft to appoint a special counsel to investigate whether the vice president had any role in awarding the contract to Halliburton. The special counsel would also investigate any other potential improprieties by government officials who approved the contract.

Lautenberg has repeatedly asked Senate Governmental Affairs Chairwoman Susan Collins (R-Maine) to hold investigative hearings on Iraqi reconstruction contracts awarded to Halliburton — an entreaty he reiterated at a committee meeting Wednesday.

But Collins dismissed Lautenberg’s suggestion, saying it would be inappropriate for her to begin an inquiry while four other investigations into Iraq contracting — including one by the Pentagon’s inspector general and another by the Government Accounting Office — are underway.

“I have a very busy agenda for the committee,” said Collins. “I think it’s an unnecessary undertaking for the committee at this time. Of course, I continue to watch any developments.”

In the absence of a committee investigation, Lautenberg plans to offer his amendment not just to the Defense bill but also to other bills, said Lautenberg chief counsel Dan Katz.

“If they’re not going to hold hearings on this outrageous Halliburton contract, then we’re going to make them go on record saying it’s OK,” Katz said.

Sen. Patrick Leahy (D-Vt.) will also join the fray, offering his amendment to punish “war profiteers” with 20 years in prison and a $1 million fine. Leahy’s proposal was added to last year’s $87 billion Iraq supplemental spending bill, but was stripped form the measure during the House-Senate conference.

Leahy said he hoped the amendment will fare better this time around, noting that GOP House Members lamented having to push for its elimination from the Iraq supplemental conference report.

“They openly referred to it as the Halliburton amendment,” said Leahy. “The pressure from the White House was enormous to take it off [the bill]. … The White House told them they had to.”

Sens. Ron Wyden (D-Ore.) and Byron Dorgan (D-N.D.) also have proposed forcing the Pentagon to bring oversight of Iraqi military contracts back in-house. Currently, the Defense Department contracts with other companies to make sure government contracts are being fulfilled and are free from fraud and waste. Dorgan said that many of the companies charged with overseeing others “have inherent conflicts of interest.”

Republican reaction to the revelations about Cheney’s possible involvement in the Halliburton contract suggests that many in the party consider the Democratic amendments to be partisan exercises.

“You see these allegations, and a lot of times they are disproven,” said Sen. John McCain (R-Ariz.).

Similarly, Senate Armed Services Chairman John Warner (R-Va.) said he saw no need to look further into the matter. “At this point in time, I don’t think there are sufficient facts to warrant” an investigation, Warner said.

Indeed, even Democrats acknowledged that their efforts were unlikely to succeed. “I think [Republicans] will all pretty much hold firm,” said Senate Foreign Relations ranking member Joseph Biden (D-Del.). “But I think it’s worth making the fight.”

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