US: The US army has revealed for the first time that a government contract given to the giant oil company, Halliburton, will allow a Halliburton subsidiary to operate the Iraqi oil fields for a time and distribute the petroleum, rather than just extinguish oil well fires and carry out repairs as initially reported.
The information was given to Democratic congressman Mr Henry Waxman in response to a series of questions he submitted to the army about the contract awarded to the Texan oil giant, which was run until 2000 by the Vice President, Mr Dick Cheney.
The US army corps of engineers, which awarded the contract, had earlier said the contract covered fighting fires set at Iraqi oil wells as the US-led invasion of Iraq got under way.
Mr Waxman, the senior Democrat on the House committee on government reform, said that in a reply to his queries received on on May 2nd, the army said the contract also included "operation of facilities and distribution of products". The congressman asked Lt Gen Robert Flowers of the army corps of engineers for a full explanation of the contract awarded on March 8th to Halliburton subsidiary Kellogg, Brown and Root (KBR), without putting it out to tender.
"Your May 2nd letter indicates that the contract is considerably broader in scope than previously known," Mr Waxman wrote. "Prior descriptions of the Halliburton contract had indicated that the contract was for extinguishing fires at oil wells and for related repair activities.
"These new disclosures are significant and they seem at odds with the administration's repeated assurances that the Iraqi oil belongs to the Iraqi people."
Mr Waxman has also asked for an investigation by the General Accounting Office in Congress as to whether Halliburton received favourable treatment from the Bush administration.
The vice president's office has consistently denied that Mr Cheney had any role in Halliburton or had influenced the contracts it was awarded by the Pentagon.
A spokeswoman for the company said the full role of the subsidiary was disclosed in its announcement of the contract on March 24th.
The announcement said: "KBR's initial task involves hazard and operational assessment, extinguishing oil well fires, capping oil well blowouts, as well as responding to any oil spills.
"Following this task, KBR will perform emergency repair, as directed, to provide for the continuity of operations of the Iraqi oil infrastructure."
As it turned out, few oil wells were set on fire in the war. The company was paid $50.3 million for its work up to the end of April under the contract which the army originally valued at up to $7 billion over two years based on a worst-case scenario of widespread fires in the main Iraqi oil fields.
The Halliburton spokeswoman said that KBR was assisting Iraq's oil ministry to get the oil system working again, to which Mr Waxman responded: "Only now, over five weeks after the contract was first disclosed, are members of Congress and the public learning that Halliburton may be asked to pump and distribute Iraqi oil under the contract."
Mr Waxman said in his letter that he did not mean to suggest that the army had been intentionally misleading about the contract but that he was concerned about the administration's reluctance to provide complete information to congress about this and other Iraqi contracts.
The army said the arrangement with the Halliburton subsidiary was temporary and would be replaced with a long-term contract which would be put out to tender in the summer. Mr Waxman said this was counter to assurances from the Bush administration that the Iraqi oil belonged to the Iraqi people.
Mr Waxman also wrote to the Defence Secretary, Mr Donald Rumsfeld, raising questions about dealings by Halliburton with countries listed by the US State Department as sponsors of terrorism.
These appeared to have continued under Mr Cheney, he said, and were continuing today through subsidiaries set up in off-shore territories like the Cayman Islands.