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Tag Archive: Halliburton

Case Study. Why Transparency is a Good Thing

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The Associated Press reported that the House Oversight and Government Reform Committee will investigate how a huge loophole in federal overseas contracting was slipped into regulations being drafted to limit waste and fraud in government-funded projects. The regulations, when enacted, will require contractors to establish and maintain specific internal controls to detect and prevent improper conduct in connection with a government contract. The loophole would specifically exempt contracts performed entirely outside the U.S.

According to the report, the Committee will "look at whether the exemption was added at the request of private firms, or their lobbyists, to escape having to report abuse in U.S. contracts performed abroad."

It's a good question, but, as long as we are on the subject of waste, we would suggest a simple fix that could lead directly to an answer, without spending taxpayer dollars on document reviews, staff interviews, subpoenas, hearings and testimony stemming from an investigation. If Congress had enacted H.R. 984, Congressman Waxman's Executive Branch Reform Act, a few keystrokes on a computer might provide us with an answer as to whether a firm or lobbyist requested the exemption.

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  • The Washington Post follows up on the report issued by the Minority Office of the House Committee on Government Reform on contracting abuses by the Halliburton subsidiary Kellogg, Brown and Root. According to the Post, “Pentagon auditors have challenged $45 million worth of company costs, out of $365 million in charges that were reviewed. … In one case, the government's contracting officials reported that KBR attempted to inflate its cost estimates by paying a supplier more than it was due. In another, KBR cut its cost estimates in half after it was pressed on its true expenses. In a third, KBR billed for work performed by the Iraqi oil ministry.”
  • The Government Accountability Office released a report warning that, “Incentives for oil and gas companies that drill in the Gulf of Mexico will cost the federal government at least $20 billion over the next 25 years,” according to the New York Times. The government could also lose “$80 billion in revenue … over the same period if oil and gas companies won a new lawsuit that seeks a further reduction in their royalty payments.” The GAO notes that “the Interior Department, which runs the offshore leasing program, had never carried out a ‘robust’ cost-benefit analysis of the original program or of incentives added in the last five years.”
  • Raw Story reports that a biography of Jack Abramoff prepared by his lawyers as a plea for leniency states that the lobbyist is ashamed of the profanity used in a 1980s anti-communist movie he produced titled “Red Scorpion.” Abramoff, however, is not ashamed of making the movie in South African-occupied Namibia or from using money and assistance provided by the apartheid regime of South Africa. Cast and crew members also allege that many of them were never paid for their work.
  • The Cincinnati Post reports that, “A federal appeals court Tuesday ordered a Washington congressman [Rep. Jim McDermott (D)] to pay West Chester Republican John Boehner $700,000 for leaking an illegally taped phone conversation between Boehner and then-Speaker Newt Gingrich.”
  • The head of the Environmental Protection Agency was the featured speaker at a Colorado fundraiser for Rep. Rick O’Donnell (R-CO). The Denver Post reports that, “The guests included representatives from El Paso Natural Gas, the Colorado Mining Association and the Colorado Petroleum Association. El Paso and member companies of the two associations have activities that come under federal environmental regulations.”
  • The revolving door continues to spin as TNR’s The Plank reports that former Senator Howard Baker, who, until last year, was our ambassador to Japan, has registered to lobby for “Toshiba Corporation on ‘Consultations with eh [sic] appropriate members of the Executive and Legislative branches of the federal government, and the applicable agencies on CFIUS and antitrust matters, all related to Toshiba Corporation's acquisition of Westinghouse Electric Company.’”

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  • The Hill reports that Melissa Bean’s (D-IL) “aggressive courting of K Street” is putting her challenger at a disadvantage in fundraising. The political director of the business lobby the Chamber of Commerce stated, “In Bean’s case, she has stepped out and has supported our agenda.” Bean is one of a handful of House Democrats who voted in favor of the Central American Free Trade Agreement, which was a huge victory for the business lobby.
  • Google has hired two lobbying firms, one bipartisan and another with close ties to Karl Rove and Ken Mehlman, as it enters the world of Washington politics, according to the New York Times. The internet powerhouse also plans to hire a Republican political director for a new political action committee and give campaign contributions to both Republicans and Democrats. The company currently has an image as a Democratic donor as almost every employee employee contribution in 2004 went to the Democrats.
  • Lobbying reform appears to be back on track in the Senate as Sen. Chuck Schumer (D-NY) agreed to remove an amendment that sought to prohibit a Dubai company from taking over control of a number of ports. According to Roll Call, the Senate appears ready to hear the bill and one of the bill’s principal authors Sen. Trent Lott (R-MS) stated, “If they’ll give me a day, I can do it.” On the House side chances for reform look questionable as the Republican caucus cannot decide what direction to take nor which proposals to consider.
  • Ralph Reed is getting off the hook for his alleged violations of lobbying laws in Texas because the two-year statute of limitations had expired, according to the Atlanta Journal-Constitution. Travis County Attorney David Escamilla said, “There’s smoke. And we have the tools, via grand juries and subpoenas, to go find out if there's fire. But all of the smoke relates to a time period I can't do anything about.”
  • In a new report by the Minority Office of the House Committee on Government Reform the second Iraqi oil contract for Halliburton comes under intense scrutiny and criticism for “intentional overcharging,” “inadequate cost reporting,” and a “refusal to cooperate.”
  • The Associated Press reports that, “The former Republican leader of the Wisconsin Assembly was sentenced Monday to 60 days in jail for putting a party fundraiser on the state payroll.” Steven Foti is the “third former state legislator to be sentenced among five convicted in an investigation that began in 2001. Two of the others are Democrats, and two are Republicans.”
  • According to the Wall Street Journal, the White House has pulled the nomination of David Sanborn to run the U.S. Maritime Administration. Sanborn was previously the former director of operations for Europe and Latin America for Dubai Ports World and his nomination became a key point of attack for critics of the deal for DP World to take over American port operations. The article notes, “Sen. Bill Nelson (D., Fla.) said he would block it until he learned more about Mr. Sanborn's involvement in the deal that gave operation of some U.S. ports to DP World, and about DP World's pending sale of those operations.”

 

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Contractor Wastes Money, Gets Slap on Wrist:

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The Army will reimburse a subsidiary of the oil and gas giant Halliburton for close to the entirety of its $2.41 billion dollar contract, “even though the Pentagon's own auditors had identified more than $250 million in charges as potentially excessive or unjustified.” A spokeswoman for the Army Corps of Engineers stated that, “the contractor is not required to perform perfectly to be entitled to reimbursement.” The Pentagon will withhold $10.1 million from the contract, just 3.8 percent of the total questionable charges. This low amount is far outside the norm according to the New York Times, “In 2003, the agency's figures show, the military withheld an average of 66.4 percent of what the auditors had recommended, while in 2004 the figure was 75.2 percent and in 2005 it was 56.4 percent.”

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