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Update On Halliburton And Iraq

Yesterday, while reporting on Blackwater's troubles in Iraq, the News Desk blog referenced a congressional investigation dealing with Blackwater and Halliburton.

Halliburton took issue with being called a "defense company" because it no longer has a relationship with the company KBR, which was the subsidiary of Halliburton that dealt with its defense contracts in Iraq. KBR was the company under investigation.

Although it was first announced in 2005, KBR and Halliburton didn't officially split until April 5 of this year, and "all of the government services and engineering and construction businesses remained with KBR," according to Halliburton spokesperson Melissa Norcross. Today, Halliburton and its subsidiaries have no employees in Iraq or Afghanistan, Norcross said.

"This is a major event for Halliburton, especially its dedicated employees, loyal customers, and the shareholders," said Halliburton CEO Dave Lesar in a statement in April, calling it "a pure oilfield services company."

Public financial filings from 2006 gave this reason for the split: "Our decision to separate KBR arose primarily because we do not believe the full value of KBR is currently reflected in Halliburton's stock price, and few synergies exist between the two business units."

In early February, KBR was investigated by the House Committee on Oversight and Government Reform, chaired by Democratic Rep. Henry Waxman.

The California congressman was trying to figure out what company subcontracted Blackwater, which recently has been ensnared in a controversy over the death of at least 11 civilians and banned from working in Iraq by the Iraqi government.

Waxman's investigation was prompted by the deaths of four Blackwater security personnel in Fallujah in 2004, which the congressman said directly resulted in what is known as the first battle of Fallujah.

"It's remarkable that the world of contractors and subcontractors is so murky that we can't even get to the bottom of this, let alone calculate how many millions of dollars taxpayers lose in each step of the subcontracting process," Waxman said in his opening statement at the hearing in early February.

By Nikki Schwab

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