Informant38

Corruption and scandal:

The official who ran the scandal-plagued United Nations aid program for Iraq took $147,184 from an oil trading company for helping the business get contracts to buy Iraqi oil, according to an inquiry led by former U.S. Federal Reserve chairman Paul Volcker.
The 88-page report released today in New York said Benon Sevan, former head of the oil-for-food program, "derived personal pecuniary benefit from the program through cash receipts from the sale of oil allocated by Iraq to Mr. Sevan and bought by African Middle East Petroleum Co. Ltd." The report said he "had knowledge that some of the oil was purchased by paying illegal surcharges to Iraq in violation of United Nations sanctions."
New information obtained by the panel "raises further questions" about whether Secretary-General Kofi Annan knew that Cotecna SA, a Geneva-based goods inspection company, was bidding for a program contract at a time in 1998 when his son, Kojo, was working for the firm, the report also said. Annan has denied knowing about Cotecna's efforts to obtain the contract, and the Volcker report said that line of inquiry is continuing.
Mismanagement and possible corruption in the Iraq program is forcing an overhaul of UN procedures and accountability. U.S. Republican lawmakers have threatened cuts in American financial support for the world body unless changes are made.
[...]
Volcker on Feb. 3 said Sevan, 67, created a "grave" conflict of interest by soliciting oil purchases on behalf of African Middle East Petroleum, conduct that was "ethically improper and seriously undermined the integrity of the United Nations." The report, while saying Sevan couldn't reasonably account for $160,000 of income at that time, didn't say he accepted money from the company.
Iraq sold 7.3 million barrels of oil between 1998 and 2001 to the company, which then resold the oil for a profit of $1.5 million, according to the Volcker investigation.

Bloomberg 08.08.05

-Corruption and no scandal:

In one case, Greenhouse criticized the Army Corps for hiring KBR [Kellog Brown & Root, a subsidiary of Halliburton Co.] in 2002 to draft "contingency plans" for repairing Iraq's oil infrastructure. The Corps has no experience in repairing oil infrastructure, she said, and oil work is outside the scope of the Corps' congressionally-mandated mission. More importantly, by drafting the contingency plans for Iraq's oil, KBR essentially wrote the Iraqi oil infrastructure contract and decided for itself what costs would be considered "reasonable" by the Army. Normally, when a private company is hired to write a contract for the military, the company is forbidden from bidding on the contract. But, in the cozy world of KBR and the Pentagon, not only did KBR write its own $7 billion Iraqi oil infrastructure contract and determine the definition of "reasonable cost," the Army awarded the contract to KBR without competition.

Halliburton Watch 29.06.05
-

The U.S. Army on Tuesday awarded Halliburton a troop logistics contract for the Balkans despite an ongoing federal criminal probe into the legality of the company's existing Balkans contracts.
The Federal Bureau of Investigation (FBI) opened a probe last year into allegations by Bunnatine Greenhouse, a senior contracting specialist with the Army, who said Halliburton's troop logistics work in the Balkans was "out of control." The Army opened an investigation into her allegations last year.
Halliburton's KBR subsidiary, also known as Kellogg Brown & Root, is responsible for carrying out the Army's troop logistics work in the Balkans and elsewhere.
The nonpartisan auditing arm of Congress found in 1997 that KBR billed the Army for questionable expenses for work in the Balkans, including charges of $85.98 per sheet of plywood that cost $14.06. A follow-up report in 2000 found more inflated costs, including charges for cleaning offices up to four times a day.

ibid. 21.06.05
-

The alleged bribes were paid by a consortium of four companies, which includes Halliburton's KBR subsidiary, to officials of the Nigerian government for the purpose of winning a multibillion dollar construction contract. The consortium, known as "TSKJ," ultimately won the contract.
U.S. Vice President Dick Cheney was Halliburton's CEO when many of the alleged bribes were paid. He currently has not been accused of any wrongdoing.
Bribing foreign officials is a criminal offense under the U.S. Foreign Corrupt Practices Act.

ibid. 20.06.05
-

Halliburton announced on Friday that its KBR division, responsible for carrying out Pentagon contracts, experienced a 284 percent increase in operating profits during the second quarter of this year.
The increase in profits was primarily due to the Pentagon's payment of "award fees" for what military officials call "good" or "very good" work done by KBR in the Middle East for America's taxpayers and the troops.
Despite the scandals that plague KBR's military contracts, the Pentagon awarded $70 million in "award" fees to the company, along with four ratings of "excellent" and two ratings of "very good" for the troop logistics work under the Army's LOGCAP contract.
The Pentagon has provided preferential treatment to Halliburton on a number of occasions, including the concealment from the public of critical reports by military auditors.

ibid. 25.07.05
-

Linda Theis, a spokeswoman for the U.S. Army Field Support Command in Rock Island, Ill., said the military signed the work order with Halliburton unit KBR in May.
The new deal, worth $4.97 billion over the next year, was not made public when it was signed because the Army did not consider it necessary, she said.
"We did not announce this task order as this is really not something we ever really thought about doing," Theis said.
Halliburton, run by Vice President Dick Cheney from 1995 to 2000, has been under scrutiny for its contracts in Iraq, and several U.S. government agencies are looking into whether it overcharged for some work.
In March, a former KBR employee and a Kuwaiti citizen were indicted on charges of defrauding the U.S. government of more than $3.5 million by inflating the cost of fuel tankers.
A top U.S. Army procurement official said last week that Halliburton's deals in Iraq were the worst example of contract abuse she had seen...

LATimes/FacingSouth 08.07.05