U.S. ambassador tied to purchase of Kuwaiti fuel
WASHINGTON – The U.S. ambassador to Kuwait pressured other U.S. officials to force Halliburton Co. to continue buying fuel from a Kuwaiti company that was allegedly overpriced, according to State Department documents released Wednesday.
Then-ambassador Richard H. Jones urged the purchase of additional fuel from Altanmia Commercial Marketing Co. last year, contending that quick action was needed so that a Halliburton subsidiary, KBR, could head off a critical fuel shortage in Iraq.
His demand also was aimed at settling a heated business dispute between the two companies over previous fuel supplies. Altanmia complained that Halliburton officials demanded kickbacks, smuggled oil and in one case, forced a hotel to buy a diamond-encrusted Cartier watch for an executive’s wife. Halliburton accused the company of failing to perform, the documents show.
“Please tell KBR to get off their butts and conclude deals with Kuwait NOW!” Jones wrote in the December 2003 e-mail to an unidentified U.S. official. “Tell them we want a deal done with Altanmia within 24 hours and don’t take any excuses.”
Halliburton’s fuel purchases from Altanmia are at the center of an ongoing criminal investigation into whether the Houston-based oil industry company overcharged U.S. taxpayers by $61 million for millions of gallons of fuel. The e-mails seemed to bolster Halliburton’s contention that it tried to buy cheaper fuel from Turkey, but was instructed by the U.S. government to buy higher-priced fuel from Kuwait.
The e-mails also renewed concerns about the conduct of Halliburton officials in Iraq and Kuwait. Halliburton fired two employees earlier this year after learning that they had demanded as much as $6.1 million in kickbacks as part of another contract. And the documents raised questions about whether Jones and other U.S. officials had influenced the contracting process, which is supposed to be free from bias to protect taxpayer dollars.
A U.S. Army Corps of Engineers contracting official has complained about being pressured by higher-ups to order Halliburton to buy fuel exclusively from Altanmia.
A Halliburton spokeswoman said the company was not aware of the accusations and that it followed U.S. government requests in purchasing the fuel.
“The facts show 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,” said spokeswoman Wendy Hall.
Rep. Henry Waxman, a California Democrat, released portions of more than 400 documents on Halliburton’s fuel contract Wednesday. The name of the U.S. official to whom Jones addressed his e-mail last December was edited out of the documents.
The e-mails offer details of the chaos and sense of urgency that surrounded the fuel contract, which was worth up to $7 billion when it was awarded to Halliburton in March 2003 without competitive bidding.
Soon after the invasion, Halliburton signed a subcontract to buy fuel for delivery into Iraq from Altanmia, a Kuwait company with no previous experience in supplying fuel.
By summer 2003, the companies had gotten into a dispute over whether Altanmia had fulfilled its end of the bargain, and Halliburton was shopping around for other fuel suppliers.
The company complained to the U.S. Embassy in Kuwait that Halliburton was planning to exclude it from bidding on a follow-up contract because it had refused to pay Halliburton executives kickbacks and bribes, according to the documents.