- WASHINGTON (Reuters) - The
U.S. government is paying Vice President Dick Cheney (news - web sites)'s
former firm Halliburton "enormous sums" -- $2.65 a gallon --
for gasoline imported into Iraq from Kuwait, two lawmakers charged on Wednesday.
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- Democrats Rep. Henry Waxman of California and Rep. John
Dingell of Michigan said this gross overpayment was made worse by the fact
that the U.S. government was turning around and reselling the gasoline
in Iraq for four to 15 cents a gallon.
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- In a letter of complaint sent to President Bush (news
- web sites)'s national security adviser Condoleezza Rice (news - web sites),
the two lawmakers said experts they consulted think the cost of buying
and transporting gasoline from Kuwait into Iraq should cost less than $1
a gallon.
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- The Iraqi oil company SOMO is paying only 97 cents a
gallon to import gasoline from Kuwait to Iraq, they said.
-
- Waxman added in a statement: "We know that someone
is getting rich importing gasoline into Iraq. What we don't know is who
is making the money, Halliburton or the Kuwaitis?"
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- Halliburton subsidiary Kellogg Brown & Root, which
defends its pricing as fair, has a contract with the U.S. Army Corps of
Engineers to rebuild Iraq's oil sector. This has included importing oil
products in short supply as the oil-rich nation's refineries are brought
back into production.
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- As of Oct. 19, Halliburton had imported 61.3 million
gallons of gasoline from Kuwait into Iraq, and the company was paid $162.5
million for an average price of $2.65 a gallon, Waxman and Dingell wrote.
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- "The $2.65 per gallon is grossly excessive,"
they said. "Experts we consulted stated that the total price for buying
and transporting gasoline into Iraq should be less than $1.00 per gallon."
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- The U.S. government was then selling this gasoline inside
Iraq for just four to 15 cents a gallon, subsidizing over 95 percent of
the cost of gasoline consumed by Iraqis, they said.
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- "The U.S. government is paying nearly three times
more for gasoline from Kuwait than it should, and then is reselling this
gasoline at a huge loss inside Iraq," the lawmakers wrote.
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- Halliburton spokeswoman Wendy Hall defended the company
against what she said were "false statements" about its efforts
in Iraq, adding that wartime work was expensive and Halliburton only recovered
"a few cents on the dollar" for fuel costs.
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- "Four types of fuel are being purchased: gasoline,
kerosene, LPG and diesel," Hall said in a statement. These fuels had
different prices, she said, but gave no details.
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- "It is expensive to purchase, ship and deliver fuel
into a wartime situation, especially when you are limited by short duration
contracting," she said.
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- "The costs for the fuel are 'pass-through' costs
because Halliburton only recovers a few cents on the dollar for this expense,"
Hall said.
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- Cheney was Halliburton's CEO for five years before running
for vice-president in 2000.
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- Waxman wrote earlier this month to the White House Office
of Management and Budget to complain that Halliburton's subsidiary was
overcharging for petroleum products, saying it was billing an average price
of $1.59 a gallon.
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- A Waxman spokeswoman said new information the lawmaker
has received since then was broken down into gasoline from Turkey and gasoline
from Kuwait, revealing the price for gasoline imported from Kuwait to be
much higher.
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- Halliburton was charging only $1.22 per gallon to import
gasoline from Turkey into Iraq, Waxman and Dingell said.
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