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Halliburton threatens Army officials who point out contract abuse
16 Sept. 2005

WASHINGTON, Sept. 16 (HalliburtonWatch.org) -- A former contracting officer with the U.S. Army Corps of Engineers (USACE) told a congressional committee today that Halliburton regularly threatens government officials who complain about contracting abuse.

Christy Watts, who was Chief of Contracting at USACE in Louisville, Kentucky, said Halliburton and USACE "habitually" violate contracting regulations and demand employees conceal it from the public. She described a culture of fear and intimidation designed to protect Halliburton's bottom line.

"One point I need to make very clear: in my 18 years in contracting, I had never, with any other company except Halliburton, been treated in such a demeaning and intimidating manner," Watts told the Senate Democratic Policy Committee. "When pointing out to Halliburton personnel their contractual non-compliances, I was threatened verbally and physically intimidated for performing my job," she said.

Watts told the committee about frightening examples of Halliburton officials throwing temper tantrums or telephoning her home after midnight to scream at her for awarding contracts to competitors. In one instance, she was verbally accosted after informing the company that it violated regulations by failing to award 20 percent of subcontracts in Alaska to small businesses.

Watts, who worked for USACE for 12 years, is a self-described Republican who voted both times for President George W. Bush. She says contracting abuse and intimidation by her employer occurred in the Clinton administration as well.

"The problems are systemic and have been occurring for decades � through both Republican and Democrat administrations," she said. "Please serve the interests of the American people and address this as an issue of right and wrong � nothing more, nothing less."

Her superiors apparently have contempt for the government. She said USACE "views contracting professionals as a drag on their ability to do what they want." If a contracting officer speaks out against abuse, "they can expect to be terminated," she said.

When Watts left her employment with USACE, her superiors were worried she might go public with her allegations. So, they demanded a settlement agreement which banned her from contacting the U.S. Office of Special Counsel, which would be tasked with investigating her complaints. "I have concluded that the act of preventing me from communicating my concerns of contract abuse and unlawful activity freely to the Special Counsel is evidence of waste, fraud, abuse and corruption," she said.

Watts also disclosed an internal Army memorandum from her superior who admitted that Watts could make USACE "look really bad, if all the problems are found that I think they will find."

Another USACE whistleblower, Bunnatine H. Greenhouse, also spoke before the committee. Greenhouse's allegations of contracting abuse are being investigated by the Justice Department and the Pentagon's inspector general. Nevertheless, USACE recently demoted her after she disclosed her complaints to Congress. "I was removed because I steadfastly resisted and attempted to alter what can be described as casual and clubby contracting practices by the U.S. Army Corps of Engineers commanders, and because I presented testimony before this body on June 27, 2005," she said.

Although USACE officials were invited to the committee hearing, they declined to appear.

Halliburton's KBR subsidiary stands to gain additional contracts to repair damage left by Hurricane Katrina. Estimates of the federal government's reconstruction costs have been as high as $200 billion. USACE has already utilized KBR's Navy contract, or CONCAP, to hire the company for Katrina clean-up work. The Navy has currently provided two task orders to KBR, one worth $12 million for cleaning up and repairing Navy installations in Pascagoula and Gulfport, Mississippi. The other, worth $15 million, will be used by USACE and KBR for pumping water and building temporary morgues in New Orleans.

But some members of Congress are demanding an oversight committee to prevent contracting abuse. Sens. Joseph Lieberman (D-CT) and Susan Collins (R-ME), who is chairman of the Senate Homeland Security and Governmental Affairs Committee, announced a bill that would expand the role of the special inspector general for Iraq reconstruction to include oversight of contracts awarded in response to Katrina.