Oil deals for Halliburton's subsidiary are 'wider than first declared'

A subsidiary of Halliburton, Vice-President Dick Cheney's former company, has been given a far wider and more lucrative role in rebuilding Iraq than previously declared.

Congressman Henry Waxman said yesterday that correspondence with the US Army Corps of Engineers showed a multimillion-dollar contract included a role not only to put out oil well fires but for the "operation of facilities and distribution of products".

The contract was awarded without any tendering by other firms. "Only now, over five weeks after the contract was disclosed, are members of Congress and public learning Halliburton may be asked to pump and distribute Iraqi oil under the contract," said Mr Waxman, a Democrat from California.

The awarding of the contract in March to the Halliburton subsidiary, Kellogg Brown and Root, prompted some to question whether the administration's deep ties with Halliburton helped to secure the deal. That was something the White House adamantly denied, claiming the oil in Iraq was being protected and held for the Iraqi people.

But the exchange of letters with the Army's engineers – currently responsible for maintaining security at Iraq's oilfields – has now triggered more allegations that Mr Cheney's former role as chairman of Halliburton was an important factor in the contracts.

In a letter to Mr Waxman earlier this week, Lieutenant- General Robert Flowers, of the US Army Chief of Engineers, gave details on what the contract entailed. He said the company would "put out well fires, assess the facilities, clean up oil spills or environmental dangers at the sites, repair or reconstruct damaged infrastructure and operate facilities and distribute products". He did not elaborate on what he meant by "operation of facilities and distribution of products".

Yesterday, Halliburton said the company's initial announcement of the contract disclosed the larger role for its KBR subsidiary. That, however, appeared to be a matter of opinion: that announcement in March merely said that once the oil well fires were put out, KBR would "provide for the continuity of operations of the Iraqi oil infrastructure".

Meanwhile, Mr Cheney said yesterday he had agreed to run on the Republican ticket with President Bush next year, insisting his past health problems were no obstacle. "The President has asked me if I would serve again as his running mate. I've agreed to do that," Mr Cheney, one of the most powerful Vice-Presidents in modern times, told the Dallas Morning News.

Though Mr Bush has not formally announced he will run again, it is a foregone conclusion. But there had been doubts Mr Cheney, 62, who suffered four heart attacks before taking office, would accompany him.

* A Pentagon adviser, Richard Perle, briefed an investment seminar on ways to profit from conflicts in Iraq and North Korea just weeks after he received a top-secret government document on the crises in the two countries. The revelation yesterday provoked new concerns about conflicts of interest. Mr Perle also serves on the boards of several defence contractors.