The US Army says it has granted Halliburton a special waiver to bring fuel into Iraq under a no-bid deal with a Kuwaiti supplier despite a draft Pentagon audit that found evidence of overcharging for fuel.
Army Corps of Engineers spokesman Ross Adkins today said the waiver was granted to US Vice-President Dick Cheney's former firm to ensure much-needed fuel reached the Iraqis and the decision was not tied to the Pentagon's audit.
Corps chief Lieutenant General Robert Flowers signed the waiver on December 19 that Halliburton subsidiary Kellogg Brown and Root did not have to give certified "cost and pricing data" related to a sole-source contract with Kuwait's Altanmia Commercial Marketing Company for fuel.
"This is not linked to the draft audit and should be looked at as a separate issue," Adkins said when asked to comment on a Wall Street Journal story that the waiver meant Halliburton had effectively been cleared of allegations of overpricing raised by Pentagon auditors.
"What we are doing is a step to continue to have fuel flowing into the country," he added. "This means they can have a sole source situation because there is no other source in the region for the fuel."
Cheney was chairman of Halliburton before he became President George W. Bush's vice president three years ago.
Democratic Senator Frank Lautenberg called the waiver "outrageous" and said the defence department was ignoring its own audit that showed evidence of overcharging.
"It has become clear that taking care of corporate cronies at the expense of the public's trust is the priority of the Bush-Cheney administration," the New Jersey senator said.
The military said last week its own fuel agency, the Defence Energy Support Centre, would take over bringing in fuel as soon as it has put new contracts in place, probably by April. Until then, KBR will continue the job.