Cheney is still paid by Pentagon contractor

Bush deputy gets up to m from firm with Iraq oil deal

Robert Bryce in Austin, Texas and Julian Borger in Washington

Wednesday March 12, 2003

The Guardian

Halliburton, the Texas company which has been awarded the Pentagon's contract to put out potential oil-field fires in Iraq and which is bidding for postwar construction contracts, is still making annual payments to its former chief executive, the vice-president Dick Cheney.

The payments, which appear on Mr Cheney's 2001 financial disclosure statement, are in the form of "deferred compensation" of up to m (£600,000) a year.

When he left Halliburton in 2000 to become George Bush's running mate, he opted not to receive his leaving payment in a lump sum but instead have it paid to him over five years, possibly for tax reasons.

An aide to the vice president said yesterday: "This is money that Mr Cheney was owed by the corporation as part of his salary for the time he was employed by Halliburton and which was a fixed amount paid to him over time."

The aide said the payment was even insured so that it would not be affected even if Halliburton went bankrupt, to ensure there was no conflict of interest.

"Also, the vice president has nothing whatsoever to do with the Pentagon bidding process," the aide added.

The company would not say how much the payments are. The obligatory disclosure statement filled by all top government officials says only that they are in the range of 0,000 and m. Nor is it clear how they are calculated.

Halliburton is one of five large US corporations - the others are the Bechtel Group, Fluor Corp, Parsons Corp, and the Louis Berger Group - invited to bid for contracts in what may turn out to be the biggest reconstruction project since the second world war.

It is estimated to be worth up to 0m for the preliminary work alone, such as rebuilding Iraq's hospitals, ports, airports and schools.

The contract winners will be able to establish a presence in post-Saddam Iraq that should give them an invaluable edge in winning future contracts.

The defence department contract awarded to the Halliburton subsidiary, Kellog, Brown & Root (KBR), to control oil fires if Saddam Hussein sets the well heads alight, will put the company in an excellent position to bid for huge contracts when Iraq's oil industry is rehabilitated.

KBR has already benefited considerably from the "war on terror". It has so far been awarded contracts worth nearly m to build the detention camp at Guantanamo Bay in Cuba for al-Qaida suspects.

Asked whether the payments to Mr Cheney represented a conflict of interest, Halliburton's spokeswoman, Wendy Hall, said: "We have been working as a government contractor since the 1940s. Since this time, KBR has become the premier provider of logistics and support services to all branches of the military."

In the five years Mr Cheney was at the helm, Halliburton nearly doubled the amount of business it did with the government to .3bn. The company also more than doubled its political contributions to .2m, overwhelmingly to Republican candidates.

Mr Cheney sold most of his Halliburton shares when he left the company, but retained stock options worth about m. He arranged to pay any profits to charity.

· Robert Bryce is the author of Pipe Dreams: Greed, Ego, Jealousy and the Death of Enron