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Public Interest Groups Call on Government to Stop Hiding Critical Information about Iraq Contracts

Nov. 3, 2003

Public Interest Groups Call on Government to Stop Hiding Critical Information about Iraq Contracts


As Congress Nears Vote on $87 Billion Iraq Package, Government Contracts With Bechtel and Halliburton Remain Shrouded in Secrecy


WASHINGTON, D.C. – Friends of the Earth and Public Citizen are fighting to obtain basic information about government contracts for the rebuilding of Iraq – information that the groups contend is public but that the government has refused to provide.

The groups were denied access when they sought information through the Freedom of Information Act (FOIA) in June; now both organizations are appealing the rejections as Congress prepares to vote on an $87 billion package for Iraq and Afghanistan.

The Army Corps of Engineers refused to release its contract for Iraq oil industry work with Halliburton subsidiary Kellogg, Brown & Root (KBR) and any documents about how it decided to give the contract to KBR. The Army Corps asserted that the contract could not be released on national security grounds.

Separately, the U.S. Agency for International Development (USAID) refused to disclose the fixed fee, or profit amount, that the multinational engineering firm Bechtel would receive for its contract to rebuild, assess and repair water, sewerage and electrical systems in Iraq.

But the law requires the agency to release the information about both contracts, Public Citizen and Friends of the Earth said in an appeal letter sent to USAID regarding the Bechtel contract.

USAID has arbitrarily refused to disclose cost and profit information on Bechtel’s contract, even though the Freedom of Information Act, and the public interest in having that information, compels its disclosure. “Without this key information, the public’s ability to understand the operations of USAID and to evaluate and to analyze its performance in handling large sums of taxpayer resources is severely and unduly limited,” the letter said.

Regarding the Halliburton contract, the groups contend that the government withheld materials that aren’t classified. The groups plan to file an appeal letter about that contract soon.

The groups also criticized the agencies for not providing any information about environmental impact assessments concerning the companies’ operations in Iraq. USAID is statutorily required to conduct environmental assessments for overseas projects.

“Taxpayers are funding these companies with billions of dollars, but as Congress prepares to vote on this aid package, citizens can’t even find out how their money is being spent,” said David Waskow, international policy analyst for Friends of the Earth. “Apparently, the Bush administration doesn’t even want the public to know what impacts these companies might have on the Iraqi environment and people.”

Both contract awards were part of a closed process in which the administration secretly invited politically well-connected companies to participate. Halliburton, Vice President Cheney’s former firm, was awarded the Iraq contract as part of a secret no-bid deal.

“The Bush administration must be stopped from doling out contracts to undeserving firms with which it has close political ties,” said Wenonah Hauter, director of Public Citizen’s Critical Mass Energy and Environment Program. “Bechtel has an extremely poor track record.”

In Bolivia, for example, Bechtel made water so expensive that many were forced to do without. In Boston, Bechtel showed little regard for the rights of taxpayers where the federally funded “Big Dig” project has now reached more than $12 billion in cost overruns.

“Vice President Cheney’s former firm hardly has a clean record either,” said Waskow. “Halliburton has pioneered environmentally risky oil extraction techniques such as hydraulic fracturing, is attempting to build an oil export platform in protected wetlands in Latin America, and now has been accused of overcharging for gasoline in Iraq.”

In an Oct. 21 letter to Lt. Gen. Robert B. Flowers, head of the Army Corps of Engineers, U.S. Reps. Henry A. Waxman (D-Calif.) and John D. Dingell (D-Mich.) said, “Although it initially appeared that Halliburton was gouging only American taxpayers it now seems that the company is overcharging the humanitarian Oil for Food program and the Iraqi people as well. This significantly compounds the implications of Halliburton’s actions.”