Michael Mobbs’s June 8, 2004, briefing of a House committee staff included one very surprising moment of testimony. Mobbs, a special adviser to the under secretary of defense for policy at the Pentagon, was on the Hill to discuss what the staff of Vice President Dick Cheney might have known about the multibillion-dollar government contracts awarded to Halliburton and its subsidiary KBR to rebuild infrastructure in postwar Iraq and to house and supply U.S. troops stationed there. It was one of the smaller questions at the edge of a potential scandal involving the vice president. At the time Mobbs testified, KBR (formerly Kellogg, Brown & Root) was the nation’s biggest single recipient of government funding for military logistics and reconstruction, and not only had Cheney been the CEO of its parent company for the five years before he was elected vice president, but the no-bid process by which Halliburton and KBR has gotten their Iraq contracts had been put in place by Cheney while he was Secretary of Defense, from 1989 to 1993. Considering all this, Democratic members of the House Committee on Government Reform, led by California congressman Henry Waxman, thought it well within the scope of reasonable congressional inquiry to ask if anyone on the vice president’s staff had been involved in awarding the contracts.
The vice president didn’t find it so reasonable. He had already addressed the matter on NBC’s Meet the Press nine months before, telling Tim Russert: “Since I left Halliburton to become George Bush’s vice president, I’ve severed all my ties with the company, gotten rid of all my financial interests. I have no financial interest in Halliburton of any kind and haven’t had now for over three years. And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape, or form of contracts let by the Corps of Engineers or anybody else in the federal government.”
Following the interview, Department of Defense officials confirmed that Cheney’s office had nothing to do with the contracts. Then, Judicial Watch filed a Freedom of Information Act request, and when the DOD refused to comply with the request, the public-interest foundation sued and obtained files that included an e-mail from regional director for the U.S. Army Corps of Engineers Stephen Browning stating that Halliburton contracts were “coordinated through the Vice President’s office.”
The staff meeting at which Mobbs testified was closed to the public. Only those present in the Rayburn House Office Building committee room would ever hear what he had to say. He wasn’t sworn in, as this was not a full committee hearing with members of the House present. But lying to Congress is a violation of federal law, and staff members expected the truth. They got more than they expected.
“We asked Mobbs who, outside the Pentagon, he had spoken to regarding the KBR contracts,” said a staff member who sat in on the briefing. “He said he met with the deputies… . He began to name one deputy after another [including Cheney’s deputy national security director, Stephen Hadley, who chaired the meeting]. Then we asked him, what about Cheney’s office? And he said, ‘Yeah, Scooter Libby.’”
“Yeah, Scooter Libby”?
That was a surprise.
“I don’t think anybody in the room expected to hear that,” said the House staff member.
Until he was indicted for perjury and obstruction of justice, I. Lewis “Scooter” Libby rode to work with Dick Cheney. As the vice president’s chief of staff, he met with Cheney every day. They worked together. They were friends. Their families dined together. If Libby had been briefed on the Halliburton contracts, it was all but impossible that Cheney was out of the loop.
In fact, much of what the vice president said on Meet the Press was not true. (It is not a crime to lie to a reporter.) Cheney had held more than $3 million in Halliburton stock options until sometime in 2005, according to his IRS filings. In the same year that Cheney told the NBC news anchor, “I have no financial interest in Halliburton of any kind and haven’t had now for over three years,” Halliburton paid the vice president $178,438 in deferred compensation.
Halliburton’s Iraq war revenue stream can be followed back to the military outsourcing that began in 1992, while Dick Cheney was Secretary of Defense. At Cheney’s bidding, the Defense Department paid Halliburton $3.9 million to prepare a classified report on privatizing the logistics of war—housing, feeding, and clothing troops. Halliburton went through the $3.9 million, secured an additional $5 million for a follow-up, then landed a five-year Corps of Engineers contract to provide logistical support for the Army. That process became the template for the Halliburton- KBR Iraq war contracts eleven years later. It was an extraordinary deal. On the DOD’s dime—or millions—the company wrote a classified marketing plan for its own product. Then—because it owned the proprietary information, which was classified—it effortlessly moved into the market. As Halliburton followed the Army into Somalia and Bosnia, it became the Wal-Mart of the defense service economy.
In the run-up to the Iraq war, Halliburton again got the nod, as KBR was paid $1.9 million to draw up a contingency plan to extinguish the oil well fires Saddam Hussein’s troops were expected to ignite. The proposed Restore Iraqi Oil plan ( RIO) would be worth as much as $2 billion to the company that won the contract. The Defense Department was inviting Halliburton to follow the course it had charted eleven years earlier: Draw up a contingency plan on which contractors would bid, then join the competition in bidding on the contract. The process put Halliburton squarely in conflict with procurement guidelines at the Corps of Engineers, which was issuing the big Iraq contracts. The Corps’ (and most other) procurement protocols do not allow a company that drafts a contingency plan to bid on the contracts created by that plan. It’s a logical prohibition: Knowledge of the scope and budget of a plan provides a competitive