Recently, a friend of mine brought what I thought to be good evidence of corruption in the Bush administration to my attention. He handed me an article from the left-leaning Greenwich Village Voice which alleged the Bush administration had transferred about $6.8 billion in assets to VP Cheney's former company, Haliburton, in a secret deal awarded to fight any potential Iraqi oil well fires.

I'm a trusting soul, at least towards close friends. I believed it was probably true -- I mean, if it happened at all, which part could be factually wrong? -- but I also try to do my own research before drawing conclusions. In the mean time, I followed another lead which also turned out to be false...

But I'm not totally dense. One question on my mind was: I wonder how much the 1991 oil fires cost to put out? It seemed that could provide a meaningful comparison, lack of competition aside. I mentioned the deal to a friend who works for the military, suggesting it was evidence of wrongdoing. He replied, reasonably: "Well, there are probably a very limited number of companies in the world who have the skills to put out oil well fires on short notice." So it wouldn't be suprising if the contract were awarded to the same company who did the '91 fires.

But that still didn't answer the question about the huge bill -- $7 billion dollars. And the article alleged it was "open-ended", seeming to imply a higher cost could still be charged than the $7 billion.

Regarding the '91 costs, I was able to get them from a pre-war MSNBC article, which said:

[T]he 1991 Kuwait fires ... were extinguished in 200 days only through a massive response of some 10,000 engineers, firefighters, equipment operators and support personnel from around the world. The cost of putting out the fires alone has been estimated at up to $2.5 billion, with another $20 billion to repair the damage to Kuwait's oil wells and infrastructure, according to U.S. government sources.

$2.5 billion in 1991. Assuming that was a fair number (seems plausable, given the number of people, resources and logistics required), then stipulating $7 billion or more for Iraq, a larger country with more reserves, in 2003, seemed reasonable at least in a worst case scenario.

But that doesn't answer the question about the closed-door award process, which I always find troubling about these things.

It turns out most of the charges originated from Rep. Henry Waxman, who requested a GAO investigation, which is apparently just beginging to yield fruit. I'm sure we'll see more details in the future. Byron York in the right-leaning NRO responds to charges of secrecy by pointing out the contract was awarded under a competitive bidding system called LOGCAP, which was also used succesfully during the previous administration:

Contrary to Waxman's assertion, the work was done under a competitively awarded contract system known as the U.S. Army Logistics Civil Augmentation Program, or LOGCAP. The LOGCAP system came about because of the military's need to perform complex jobs... on sometimes very short notice... Instead of going through a months-long competitive-bidding process for each job, the military came up with LOGCAP. LOGCAP is, in effect, a multi-year supercontract. In it, the Army makes a deal with a single contractor, in this case Halliburton, to perform a wide range of unspecified services during emergency situations in the future. The last competition for LOGCAP came in 2001, when Halliburton won the contract over several other bidders.

Further, concerning the "open-endedness" of the contract, it turns out that the "cap" was apparently $7 billion -- not a minimum as the Voice seemed to imply. The flexibilty was that Halliburton could actually be paid less:

The Army assumed a worst-case scenario and decided the contract would be worth any amount between $0 and $7 billion (a common contracting practice known as ID/IQ, which stands for indefinite delivery/indefinite quantity). The $7 billion cap was thought to be sufficient to handle any emergency.

When the Army told Waxman that, he immediately began calling the KBR deal a $7 billion contract. "We are told it was a short-term contract for very little money, then it turned out it was a $7 billion contract," he said on National Public Radio in early May. What Waxman did not say was that he had been told a month earlier that the contract would not be worth anywhere near the cap amount.

Indeed, so far actual costs seem to have been much lower than the alleged $7 billion:

As of mid June, Pawlik says, the task orders issued to Kellogg Brown & Root totaled about $214 million. It's estimated that, in the end, costs will probably amount to around $600 million.

Like I said before, I'm sure this is just the tip of the informational iceberg. If interested, the NRO article has some other interesting information, such as documenting times where Halliburton did step out of line:

That is not to say that there have not been problems with Halliburton's work -- under both administrations. For example, Waxman cites a case last year in which the company paid a $2 million fine to resolve fraud allegations stemming from its work on a California military base. He also suggests that Halliburton/KBR overcharged the military throughout the Bosnia mission.

This is why I value both parties. Though I have little respect for the kind of knowing distortions Waxman is alleged to have engaged in, I'm simultaneously grateful that, at least in some areas (heh, outside Congress, and when only one party can be faulted ;-), people are trying to keep an eye on each other.

And, as I said before, I expect we'll be finding out more details in the near future.

So I am saying rest easy, fellow citizens, there is no corruption anywhere in our government?

No, of course not. I'm deeply troubled a lot of the funds I see moving around, and nested power structures. But at the moment, I don't see any more or special evidence for alarm from this particular contract than from most other contracts granted in this or the previous several administrations.

If you have any more evidence to the contrary, or in agreement, let me know.