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US: Halliburton Allegations Sent to Justice Department, Senator Says

A former contracting officer's "allegations about wrongdoing" in connection with Halliburton's Kellogg, Brown and Root unit were referred "for further criminal investigation," said North Dakota Democrat, Byron Dorgan.

by Craig TorresBloomberg
November 19th, 2005

Nov. 19 -- The Defense Department's inspector general's office referred findings in connection with a probe into Halliburton Co. contracts to the Justice Department, according to a statement from Senator Byron Dorgan.

A former contracting officer's ``allegations about wrongdoing'' in connection with Halliburton's Kellogg, Brown and Root unit were referred ``for further criminal investigation,'' Dorgan, a North Dakota Democrat, said on his Web site.

``The DOJ is in the process of considering whether to pursue the matter,'' a letter from John R. Crane, Pentagon assistant inspector general, to Dorgan said, the Washington Post reported.

The allegations of contract abuses arose from June 27 testimony by Bunnatine Greenhouse, principal assistant responsible for contracting for the U.S. Army Corps of Engineers, before the Senate Democratic Policy Committee, Dorgan, who is chairman of the committee, said in the statement.

Greenhouse held her job until August of this year, when she was removed following a warning from the unit's general counsel that testifying on contracting would ``not be in my best interest,'' according to separate testimony she gave before the committee on Sept. 16.

Halliburton

Halliburton ``continues to cooperate fully with the Justice Department's investigation of certain issues pertaining to our work in Iraq,'' Halliburton said in a written statement, the Washington Post reported. ``As the investigation is ongoing, it would be inappropriate to comment further at this time.''

Telephone and e-mail messages from Bloomberg News seeking further comment from Halliburton weren't immediately returned.

Halliburton became the sixth-largest U.S. military contractor last year because of its work to help rebuild Iraq and care for U.S. troops. Halliburton, headed from 1995 to 2000 by Republican Vice President Dick Cheney, has drawn repeated criticism from Democratic lawmakers who say the company benefited from its political connections.

Greenhouse told the Senate committee in September that a project called Restore Iraqi Oil, or RIO, ``contained the worst contract abuse'' she had seen in a career spanning 20 years, according to a Senate transcript of the hearing.

Greenhouse testified in June that KBR prepared a contingency plan to repair Iraq's oil fields, and was then allowed to participate in the follow-on no-bid, sole-source contract. She said normally contractors who prepare estimates for such contracts are prohibited from bidding because they are in a position to dictate the costs, according to a transcript of the hearing on the Senate Democratic Policy Committee's website.

``The fact that it was a no-bid, sole-source contract meant that the government was placing KBR in the position of being able to define what the reasonable costs would be to execute the RIO contract,'' Greenhouse testified.

Air Force Lieutenant Colonel Ellen Krenke said the Pentagon had no statement at this time. Justice Department spokesman Brian Roehrkasse said the department had no comment at this time.