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Pentagon admits political appointee had role in awarding no-bid contract to Halliburton

14 June 2004

WASHINGTON, June 14 (HalliburtonWatch.org) - The Pentagon admitted that a $7 billion no-bid contract to extinguish oil fires in Iraq was awarded to Halliburton after a "political appointee" from the Bush administration recommended the company for the job.

Congressman Henry Waxman (D-CA) said Pentagon officials informed him last week that the political appointee was Michael Mobbs � a special assistant to Undersecretary of Defense Douglas Feith.

During the Summer of 2002, Mobbs was in charge of the Pentagon's Energy Infrastructure Planning Group to develop a plan for reconstructing Iraq's oil industry. By the Fall of 2002, Mobbs had decided that three companies could carry out the oil fire contract: Halliburton, Bechtel Group and Fluor Corp.

Contracting experts say it is highly unusual for a political appointee, rather than career civil servants, to designate which companies will compete for a government contract. "The suggestion that political appointees would be directing that type of investigation does not seem consistent with maintaining the appearance of propriety," contracting expert Steven L. Schooner told the Los Angeles Times.

In 2002, an Army lawyer objected to the oil fire contract on grounds that it would be awarded to Halliburton under the company's Army supply contract, which is not authorized to govern firefighting issues. Mobbs overruled the lawyer and the contract was later awarded to Halliburton under the Army supply contract. But the auditing arm of Congress, the General Accounting Office, will release a report this week concluding that the firefighting contract was indeed improperly awarded to Halliburton because it was not awarded as a separate contract from the company's already-existing Army supply contract.

Defense Secretary Donald H. "Rumsfeld's political lawyers steamrollered the career guys to push through Halliburton's secret deal," law professor Charles Tiefer told the Times. "It creates a disturbing appearance of influence when Cheney's lawyers are told several times Halliburton is getting special deals, and they never say, 'Make sure the career people agree this is being done right.'"

More Information

Congressman Waxman's Letter to Vice President Cheney (pdf file)