The Army has agreed to a Pentagon investigation into claims by a top contracting official that a Halliburton subsidiary unfairly won no-bid contracts worth billions of dollars for work in Iraq and the Balkans, according to Army documents.
The complaint alleges the no-bid awarding of contracts to restore Iraq's oil industry and to supply and feed US troops in the Balkans jeopardizes "the integrity of the federal contracting program as it relates to a major defense contractor."
It also asks protection from retaliation for the whistle-blower, Bunnatine Greenhouse, chief contracting officer of the Army Corps of Engineers.
In a letter to Greenhouse's lawyer, an Army attorney said that the matter is being referred to the Defense Department's inspector general for "review and action, as appropriate." It also said the Corps had been ordered to "suspend any adverse personnel action" against Greenhouse "until a sufficient record is available to address the specific matters" in her complaint.
Copies of the letter and complaints -- documents which were provided to some members of Congress -- were obtained Sunday by The Associated Press.
Wendy Hall, spokeswoman for the Houston-based Halliburton, said the subsidiary, KBR, "doesn't have any information on what Bunny Greenhouse may or may not have said to other Pentagon officials in early 2003. Certainly we can't address any threatened legal action she may be considering against her employer."
"On the larger issues, the old allegations have once again been recycled, this time one week before the election," Hall said.
She emphasized that a report earlier this year by the Government Accountability Office, the auditing arm of Congress, concluded the Iraq contract had been properly awarded, and she said the Balkans issue "was fully dealt with and resolved several years ago ... [and] since that time KBR has received high marks from the Army on our Balkans support contract."
The contract has been a focus of the presidential campaign as Vice President Dick Cheney was Halliburton's chief executive officer, and continues to receive deferred compensation from the company.
In a letter to acting Army Secretary Les Brownlee, Greenhouse's attorney, Michael Kohn, charged that in the Balkan contract a deputy assistant secretary of the Army had ordered changes in documents to legitimate the contract "for political reasons."
Kohn's complaint said contracts were approved over Greenhouse's reservations, handwritten on the original contracts, and extensions were awarded because underlings signed them without her knowledge and in collusion with senior officials.
After her superiors signed off on the Iraq contract and returned it for her necessary approval, the complaint said, Greenhouse wrote beside her signature: "I caution that extending this sole-source effort beyond a one year period could convey an invalid perception that there is not strong intent for a limited competition."
The contracts under investigation grew out of a US$7 billion multiple-year award to KBR to rehabilitate Iraq's dilapidated oil industry after the US-led invasion last year, and an 11-month extension of a US$2 billion services contract the Army awarded in May 1999.
The Iraq contract was awarded in February last year, less than a month before the invasion, under a clause specifying no-bid contracts in cases of "compelling emergency." The complaint said Greenhouse objected to the five-year term, asking why the certainty that the emergency would continue for five years.
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