[Mb-civic] Beyond the Call of Duty

[Michael Butler]

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    Beyond the Call of Duty
    By Adam Zagorin & Timothy J. Burger
    Time Magazine

     Sunday 24 October 2004
 A whistle-blower objected to the government's Halliburton deals-and says
now she's paying for it.

    In February 2003, less than a month before the U.S. invaded Iraq,
Bunnatine (Bunny) Greenhouse walked into a Pentagon meeting and with a quiet
comment started what could be the end of her career. On the agenda was the
awarding of an up to $7 billion deal to a subsidiary of Houston-based
conglomerate Halliburton to restore Iraq's oil facilities. On hand were
senior officials from the office of Defense Secretary Donald Rumsfeld and
aides to retired Lieut. General Jay Garner, who would soon become the first
U.S. administrator in Iraq.

     Then several representatives from Halliburton entered. Greenhouse, a
top contracting specialist for the Army Corps of Engineers, grew
increasingly concerned that they were privy to internal discussions of the
contract's terms, so she whispered to the presiding general, insisting that
he ask the Halliburton employees to leave the room.

     Once they had gone, Greenhouse raised other concerns. She argued that
the five-year term for the contract, which had not been put out for
competitive bid, was not justified, that it should be for one year only and
then be opened to competition. But when the contract-approval document
arrived the next day for Greenhouse's signature, the term was five years.
With war imminent, she had little choice but to sign. But she added a
handwritten reservation that extending a no-bid contract beyond one year
could send a message that "there is not strong intent for a limited
competition."

     Greenhouse's objections, which had not been made public until now, will
probably fuel criticism of the government's allegedly cozy relationship with
Halliburton and could be greeted with calls for further investigation.
Halliburton's Kellogg, Brown and Root (KBR) subsidiary has been mired in
allegations of overcharging and mismanagement in Iraq, and the government in
January replaced the noncompetitive oil-field contract that Greenhouse had
objected to and made two competitively bid awards instead. (Halliburton won
the larger contract, worth up to $1.2 billion, for repairing oil
installations in southern Iraq, while Parsons Corp. got one for the north,
worth up to $800 million.) Halliburton's Iraq business, which includes
another government contract as well, has been under particular scrutiny
because Vice President Dick Cheney was once its CEO. The Pentagon, concerned
about potential controversy when it signed the original oil-work contract,
gave Cheney's staff a heads-up beforehand. (TIME disclosed that alert in
June.)

     Greenhouse seems to have got nothing but trouble for questioning the
deal. Warned to stop interfering and threatened with a demotion, the career
Corps employee decided to act on her conscience, according to her lawyer,
Michael Kohn. Kohn, who has represented other federal whistle-blowers, last
week sent a letter-obtained by TIME from congressional sources-on her behalf
to the acting Secretary of the Army. In it Kohn recounts Greenhouse's
Pentagon meeting and demands an investigation of alleged violations of Army
regulations in the contract's awarding. (The Pentagon justified the contract
procedures as necessary in a time of war, saying KBR was the only choice
because of security clearances that it had received earlier.) Kohn charges
that Greenhouse's superiors have tried to silence her; he says she has
agreed to be interviewed, pending approval from her employer, but the Army
failed to make her available despite repeated requests from TIME.

     "These charges undercut months of assertions by Administration
officials that the Halliburton contract was on the level," says Democratic
Representative Henry Waxman. As the Corps's top contract specialist, the
letter says, Greenhouse had noted reservations on dozens of procurement
documents over seven years. But it was only after she took exception to the
Halliburton deal that she was warned not to do so anymore. The letter states
that the major general who admonished her, Robert Griffin, later admitted in
a sworn statement that her comments on contracts had "caused trouble" for
the Army and that, given the controversy surrounding the contract, it was
"intolerable" and "had to stop." The letter says he threatened to downgrade
her. (As with Greenhouse, the Army did not make Griffin available.) When the
Pentagon's auditors accused KBR of overcharging the government $61 million
for fuel, the letter says, the Army bypassed Greenhouse. Her deputy waived a
requirement that KBR provide pricing data-a move that looked "politically
motivated," the letter says.

     The Pentagon maintains that it awarded Halliburton's Iraq contracts
appropriately, as does a Halliburton spokeswoman. A senior military official
says the Army "has referred the matter to the inspector general of the
Department of Defense." As for Halliburton, it has faced alleged cost
overruns, lost profits and seen at least 54 company contractors killed in
Iraq. Greenhouse, meanwhile, has requested protection from retaliation. But
her career-and reputation-are on the line.

  

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