Document: Ambassador intervened in contract

WASHINGTON - The U.S. ambassador to Kuwait intervened last year to ensure that Halliburton, the oil services company once led by Vice President Dick Cheney, retained a Kuwaiti business as a subcontractor to deliver fuel to Iraq, documents released Wednesday show.

State Department documents appear to contradict the Bush administration's assertion that all decisions involving Halliburton's contracts were handled only by career contracting officers for the government.

The ambassador's effort was aimed at ensuring that the company favored by the Kuwaiti government remained part of the contract. With Iraq experiencing a gasoline shortage after the U.S.-led invasion last year, U.S. officials gave Halliburton the job of obtaining fuel in Kuwait and delivering it to Iraq. The work was part of Halliburton's existing $2.5-billion no-bid work to restore Iraq's oil industry.

On May 4, 2003, Halliburton asked three Kuwaiti companies to bid. On May 5, Halliburton, through its KBR subsidiary, placed its first order with Altanmia.

By that December, an Army Corps of Engineers contracting officer was pushing Halliburton to put the fuel delivery contract out for competitive bids.

That same month, U.S. Ambassador Richard Jones wrote that Halliburton officials had to "get off their butts and conclude deals" that would keep Altanmia as a subcontractor.

"Tell them we want a deal done with Altanmia within 24 hours and don't take any excuses," Jones wrote. The documents, turned over to a congressman by the State Department, do not disclose to whom the message was sent.

A memo to Jones said: "As KBR has been told repeatedly, Altanmia is the GOK's (government of Kuwait's) sole source provider. The GOK has established Altanmia as a sop to the USG (United States government) in order to allow sales from Altanmia to KBR."

A Halliburton spokeswoman, Wendy Hall, said that KBR "delivered fuel to Iraq at the best value, the best price, and the best terms and in ways completely consistent with government procurement policies. The original mission detailed by the Army Corps of Engineers was to find a fuel source in the region. The first fuel source found was in Kuwait."

A State Department spokesman, Kurtis Cooper, said Jones' e-mail was sent in his capacity as deputy administrator of the Coalition Provisional Authority, the U.S. entity that ran Iraq after the invasion. Jones "reflected the growing frustration felt by CPA officials over the problem of ensuring delivery of badly needed fuel for Iraqi civilians," Cooper said.

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