Cheney Linked To Halliburton Deal

E-mail Says Iraq Contract Was 'Coordinated' With His Office

(CBS/AP)  A Pentagon e-mail indicates that a multimillion-dollar Halliburton contract for Iraqi reconstruction was "coordinated" with the office of Vice President Dick Cheney, the company's former chief executive, a newsmagazine reports.

Time magazine says the March 5, 2003 e-mail from an unknown Army Corps of Engineers official says Deputy Defense Secretary Paul Wolfowitz gave his deputy Douglas Feith the authority to "execute" the contract for restoring Iraq's oil industry.
According to the magazine, the e-mail says Feith approved the contract "contingent on informing WH (White House) tomorrow."

"We anticipate no issues since action has been coordinated w VP's (Vice President's) office."

A Cheney spokesman says the vice president "has played no role whatsoever in government-contract decisions involving Halliburton" since 2000, and that any contact over the contract was merely to prepare the vice president for possible controversy over such a lucrative deal going to his former firm.

Halliburton took in $3.6 billion last year from contracts to serve U.S. troops and rebuild the oil industry in Iraq. Halliburton executives say the company is getting about $1 billion a month for Iraq work this year.

The firm, which won large Pentagon contracts under the Clinton administration as well as the current one, has been under intense scrutiny for its performance in Iraq.

In March, the Pentagon said it plans to withhold about $300 million in payments to the company because of possible overcharging for meals served to troops in Iraq and Kuwait.

Halliburton and its military services subsidiary, KBR, face a criminal investigation into alleged misdeeds in government work in Iraq and Kuwait. In this case, Pentagon auditors accuse KBR of overestimating the number of troops to be served meals, thus reaping millions in overcharges.

Halliburton has said any mistakes in estimating the number of troops came from having to operate in a war zone where the numbers changed quickly and unpredictably.

Halliburton's other problems include allegations of a kickback scheme by two former workers in Kuwait that prompted Halliburton to reimburse the Pentagon $6.3 million; faulty cost estimates on the $2.7 billion contract to serve troops in Iraq, including failing to tell the Pentagon that KBR fired two subcontractors; and a separate audit that accused KBR of overcharging by $61 million for gasoline delivered to serve the civilian market in Iraq last year. Halliburton has said the charges were proper.

Halliburton paid $2 million in 2002 to settle charges it inflated costs on a maintenance contract at now-closed Fort Ord in California.

Federal authorities also are investigating whether Halliburton broke the law by using a subsidiary to do business in Iran, whether the company overcharged for work done for the Pentagon in the Balkans and whether it was involved in an alleged $180 million bribery scheme in Nigeria. The company admitted in 2003 that it improperly paid $2.4 million to a Nigerian tax official.

Previous reports indicate Halliburton studied the possibility of privatizing Pentagon contracts when Cheney was defense secretary, then was awarded one of the first private deals. Cheney became CEO after leaving the Pentagon.

A financial disclosure form obtained by CBSNews.com indicates that Cheney received deferred income from the firm after becoming vice president.