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The Spoils of War
By MICHAEL SHNAYERSON

continued...

Back in Washington, Congressman Waxman had been raising a stir about KBR's
runaway costs in Iraq, so by the time deYoung reached the LOGCAP office a
"tiger team" of senior KBR managers had flown over from Houston to Kuwait
City for an intense examination of how the company was managing the job.
The tiger team, deYoung recalls, had an odd way of pursuing the problems.

Instead of demanding accountability from all the local vendors to whom KBR
had doled out contracts, the "old men," as deYoung puts it, sat by the
pool, not at their desks. "Their objective was not to set up clean
accounts or justify costs," deYoung explains. "Their No. 1 objective was
to close the books because they were operating under the assumption that
if the books were closed they wouldn't be subject to auditing." In that,
they may have been right: when teams of Defense auditors finally reached
Kuwait, in the winter of 2004, to start questioning contracts, they
focused only on the open, ongoing ones. DeYoung says the closed ones were
ignored. KBR says that government auditors audit contracts whether they're
open or not.

The tiger team was a "social gang," deYoung says, and "insiders were
rewarded with fancy digs � and promises of promotion." To stay in the
gang, you had to play the game�seeing that contracts were awarded to the
favored contractors. Proper contracting called for competitive bidding.
But according to deYoung that's not the way the gang did it. "Typically,
the high-ranking guy would go to a young, inexperienced person and use him
to award this contract to the subcontractor of choice," deYoung explains.
"If the young person refused, he'd be threatened: 'You have 24 hours to
make a decision.' If he was adamant, he'd either be sent home or to Iraq.
Which was to say they'd put his life in danger." In the subcontracts
department, deYoung adds, KBR went through 12 managers in one year. "When
you got too close to what was going on, you got moved." KBR denies this,
saying any turnover was likely due to the demands associated with working
long hours in a war zone.

What was going on?

"The subcontractor would come in with bills for four or five times the
expected cost," deYoung explains, "which had to do with under-the-table
payments."


In November 2004 the Pentagon would launch an investigation into
allegations that two Halliburton employees in Kuwait had accepted bribes
from third-party contractors, and the company would announce it had
terminated its relationship with the subcontractors in question. A company
spokeswoman, Wendy Hall, would say, "We are doing everything we can to
make sure this particular scenario doesn't happen again." But deYoung says
that that might be hard, given that a tone was set from the top. KBR
chairman Jack Stanley was forced to leave the company in June 2004 for
what Halliburton vaguely termed violations of business conduct. He is said
to have received "improper personal benefits" involving a Swiss bank
account which French investigators say contained $5 million in bribes for
KBR contracts in Nigeria. Both the U.S. Justice Department and the
Securities and Exchange Commission have launched formal investigations.

To deYoung these incidents seemed all too typical. She never saw money
change hands. But her bosses' reaction to questions she brought up about
the 519 subcontracts she was assigned left her deeply suspicious. "When I
said this work was not done or there's missing equipment, I was told that
was too much information," deYoung says. "They really just wanted enough
information so they could bill the U.S. government." She adds, "It makes
no sense that people who were presiding over this � were not willing to
fix the problems. And these inflated costs! Any normal manager would want
to keep costs down, not inflate them." KBR says deYoung was a clerical
assistant with no oversight responsibility, but deYoung has scores of
e-mails proving she did in fact vet subcontracts to confirm that work had
been properly billed.


One of the most blatant examples of misspending deYoung says she found
involved a Kuwaiti company called La Nouvelle.

The 519 subcontracts dumped in deYoung's lap added up to $l.8 billion. La
Nouvelle's contracts accounted for $400 million of that and dealt with
everything from construction equipment to transportation to dining
facilities. But what was La Nouvelle?

Its two principal managers, Ali Hijazi and Ahmed Al Homoud, describe it as
a Kuwaiti-registered company, started in 1997, that provided supplies to
U.S. armed forces and oil-field operations. But to deYoung it seemed
defined much more by its third focus, interior design, and by Al Homoud's
American-born wife, Wendy Stafford, who often represented it.

La Nouvelle had no trucks of its own, or warehouses, or dining facilities.
It merely hired local subcontractors and took a middleman fee. But it did
know how to do that, and goods did get delivered�at prices that seemed to
yield very healthy profits. DeYoung recalls Stafford in elegant, tight
clothes, with expensively teased hair and "lots of jewelry�diamonds,
diamonds, diamonds."

One of the La Nouvelle contracts that caught deYoung's eye was for
laundry�laundry, that is, for all contractors and military at a nearby
base. The bill, she says, "went from $62,000 a month to $l.2 million a
month�over about 60 days!" Given the number of people whose laundry was
being done, deYoung figured that on average a 15-pound bag was costing
$108. At the same time, KBR was paying $28 a bag under a different
contract at another site�to La Nouvelle!

"When they chose to cut a clean contract, they were quite capable of doing
that," deYoung says. "And when they chose to make a contract messy, they
could do that too." (La Nouvelle spokeswoman Jennifer Thomas replies that
deYoung's $108 estimate is incorrect, and that La Nouvelle is unaware of
the other contract to which deYoung refers.)

On March 16, 2004, deYoung met La Nouvelle's troika of top personnel for
the first time�Stafford, Al Homoud, and Hijazi�and asked the group for
documentation on the expensive laundry contract. Stafford and the others
said there wasn't any. (In retrospect, La Nouvelle says, they don't know
what documentation deYoung was referring to, nor does their
subcontractor.) DeYoung says she'd already found the paperwork herself,
and it had taken her about a minute on a calculator to conclude that KBR
and La Nouvelle together were overcharging on the laundry by about $1
million a month. By her estimate, the monthly bill should have been
$200,000, not $l.2 million. When deYoung showed her documents to Hijazi,
he e-mailed a powerful ally for help: a KBR vice president who wasn't in
procurement, deYoung says, and should have had no say over the contract.
But the V.P. was a top KBR manager in Kuwait. "Within 24 hours, I was told
I was off the La Nouvelle account."

Last June, Halliburton spokeswoman Wendy Hall declared to the Houston
Chronicle that the company's own auditing system had raised concerns about
La Nouvelle, and that La Nouvelle as a result had been "removed from
consideration for future work." La Nouvelle, on the other hand, claimed it
was owed hundreds of millions of dollars by KBR. On October 15, 2004, La
Nouvelle filed suit in a Virginia federal court, seeking at least $224
million in compensation and other damages.

In May 2004, deYoung came home. She'd seen a lot, and felt she'd had
enough. Her one regret was that she hadn't gotten into Iraq; as a former
soldier, she'd desperately wanted to do that. And so she didn't see what
it was like to work for KBR on the ground in Iraq, day after day.

But James Warren and David Wilson did.


Warren and Wilson were two of the hundreds of truckers who signed on for
Iraq duty with KBR in the fall of 2003. Patriotism was one draw, adventure
another. And the money wasn't bad: with premiums for working in Iraq,
combat duty in a convoy, and overtime, a driver could earn about $8,000 a
month. Like their fellow civilian recruits, they started in Houston with a
three-week orientation. For Warren, 48, a Nebraska-born ex�navy man who
drives his own rig, the doubts began there.

"Things didn't seem right to me from the first day in Houston," Warren
recalls, speaking to Vanity Fair by cell phone from his truck on an
all-night drive through half a dozen southwestern states. "The amount of
money being spent on these drivers, recruiting them! Every job I've ever
had, I stayed at a Motel 6 or Days Inn. These were $200-a-night hotels.
And they didn't even put two people in a room with two beds." His KBR
recruiter kept saying, "We're spending about $10,000 on each of you in
orientation." Warren says, "So taxpayers were paying hundreds of thousands
of dollars before KBR even found out if I was a felon or not."

The honeymoon ended in Iraq, when Warren and some of the other recruits
were shuttled to the U.S. military base known as Camp Cedar, south of
Baghdad. Now they were put in big tents, with 50 to 60 people to a tent.
And yet, for KBR's managers, Warren noted, the perks kept on coming.

"My first day at Camp Cedar, I noticed flatbed trucks were bringing
brand-new S.U.V.'s, like Toyota Land Cruisers, Hummers, 4Runners�some of
the most expensive S.U.V.'s that money can buy. I saw hundreds of them
going to Iraq." The S.U.V.'s weren't hauling anything, Warren says. They
were just for KBR personnel to ride in from base to base. They had power
windows and CD players. "You don't have CD players in a car in wartime,"
Warren says wonderingly. On such delicate vehicles, desert conditions were
brutal. "Within 90 days," he says, "they were completely trashed."

Warren's job was to haul supplies on an almost daily basis from Camp Cedar
north to Baghdad to Camp Anaconda�a distance of about 300 very dangerous
miles. He realized pretty quickly that the KBR people in charge of loading
up the convoys had no experience in trucking.

"A majority of the goods we transported were transported the wrong way,"
Warren explains. "You can't haul paper towels and napkins on a flatbed
when it's raining and there's no tarp. We lost millions of dollars of
goods that scattered on the roads. Pants, boots, shirts, water.� And we
couldn't stop to pick that stuff up. We told KBR time and again, You can't
haul this stuff on a flatbed�you need it in a container. But they never
did change. And what happens is, when you start losing things that way,
you attract Iraqis. We had people following convoys so they could pick up
stuff that fell off the truck."

A lot of Iraqis, unfortunately, were more aggressive than that.

David Wilson, 50, a Florida-based trucker who'd served in the U.S. Coast
Guard, became head of the convoy in which Warren was driving. Wilson was a
natural leader the others came to trust. But he could hardly control what
the Iraqis felt�or did. "The Iraqis love to throw rocks�stoning is still a
big thing over there," Wilson says wryly. They'd try to slow the trucks
down, then jump on the trailers.

Wilson expected "the danger part," as he puts it. But from the start, he
says, KBR made a bad situation much, much worse by doing nothing to
maintain the trucks. "These trucks were going through severe duty," Wilson
says. "When we started requesting maintenance and couldn't get it, I knew
that would be a problem." One day, Wilson's truck simply shut down and
stopped on the road. Its fuel filter, a $7 part, was clogged. Fortunately,
Wilson was just outside the gates of a military camp when it happened. "If
that had happened a mile from where it did, there's a very good chance you
and I wouldn't be having this conversation," Wilson says. "Over a $7 fuel
filter." (KBR says its truck maintenance from the start was "adequate,"
and that it has since improved.)

By late December 2003, trucks in the convoy began breaking down. There
were a few extra trucks, but those began breaking down, too. The KBR
managers told Wilson and his posse to fix the ones they had as best they
could and keep on driving them. Wilson and Warren did that until one day
in March 2004, when, to their astonishment, both were fired.


That July, at the congressional hearing where both Wilson and Warren
testified, a KBR supervisor said the truckers were fired for running
Iraqi-driven cars off the road with their trucks. "I did do this," Warren
says. "But Halliburton management had told us to do it!" Wilson agrees.
"We were told when we went to Kuwait that we were to do whatever we could
to protect the integrity of the convoy. Even if it meant running people
off the road." A KBR project manager for transportation later testified
that the army, which made all decisions about KBR convoy security, "does
not direct KBR drivers to run civilian vehicles off the road."

Both Warren and Wilson had become whistle-blowers after a staffer for
Congressman Waxman saw them quoted in an Associated Press story about
convoys in Iraq and got in touch with them. Warren says he came forward
without hesitation. "I just felt the taxpayers should be aware of the
money being spent on this operation, and how much was being wasted."

Wilson says he testified for the same reason, though at the House
Government Reform Committee hearings Chairman Tom Davis, of Virginia, and
other Republicans regarded the truckers with withering skepticism. They
showed no more respect for Marie deYoung, who had come home with stacks of
incriminating e-mails and decided to contact Waxman's office on her own.
"The accusations leveled by the whistle-blowers against KBR," declared
Chairman Davis in his opening statement, "both in their written testimony
and through personal interviews, are either in some cases, flat-out wrong
or minor or a na�ve or myopic view of contracting in a wartime
environment."

Yet, as Waxman observed in his own opening statement, the whistle-blowers'
testimony squared with reports from three government organizations: the
Defense Contract Audit Agency (D.C.A.A.), the Iraq Coalition Provisional
Authority's Office of the Inspector General, and the U.S. G.A.O. "All
three audit agencies," Waxman declared, "have told us Halliburton is
wasting our money."

After the whistle-blowers testified, Alfred Neffgen, KBR's chief operating
officer for government operations for the Americas, appeared before the
committee to answer their charges. He acknowledged mistakes had been made.
But, he said, the war made everything very difficult. "Under these
conditions, no one should expect the assembling and complicated logistics
would be the epitome of pristine precision."


Bunny Greenhouse did not testify that day before Congress: she hadn't
become a whistle-blower yet. Instead, she was still trying to make KBR
accountable from the inside, by doing her job and questioning contracts.
But she says she was encountering more and more resistance from her
colleagues at the U.S. Army Corps of Engineers. Since December 19, 2003,
in fact, the climate in the office had turned arctic. That was the day the
battle over KBR's fuel-price gouging in Iraq came to a head.

In the invasion's aftermath, KBR had begun importing fuel into Iraq from
Kuwait as part of its revised charter for the $7 billion RIO contract. To
do so, it had hired an obscure Kuwaiti subcontractor called the Altanmia
Commercial Marketing Company, which had no experience in fuel procurement
or transportation. An e-mail that turned up later from the U.S. Embassy in
Kuwait would refer to the Altanmia arrangement as a "sop" to the U.S.
government.

Altanmia had delivered the gasoline�but at an average price of $2.65 per
gallon. That was well over twice the rate that Iraq's State Oil Marketing
Organization (SOMO) was paying�an average of 97 cents a gallon�for
gasoline imported from the same Middle Eastern countries that Altanmia had
tapped. (KBR's Neffgen would testify that only northern Iraq could get
cheaper fuel, from Turkey, but Waxman's investigators would determine that
SOMO supplied southern Iraq as well, at less than $1 a gallon.) KBR was
paying Altanmia's invoices without complaint, while it was getting
reimbursed by the U.S. government�at cost-plus. By the end of September
2003, the D.C.A.A. (the Defense Department's own auditing office) would
conclude, KBR had paid as much as $61 million more than it should have�and
passed those costs on to U.S. taxpayers. (KBR says the army ordered it to
buy gas from Kuwait, and that Altanmia had the lowest price. But Waxman's
investigators say the bidding was done by phone, in a single day, and that
industry leaders were not invited to participate.)

Why had KBR paid so much for gasoline? An e-mail located by Waxman's
office reported an August 2003 meeting between Altanmia and U.S. Embassy
officials in which an Altanmia official complained bitterly that it was
"common knowledge" that KBR managers solicited bribes, "that anyone
visiting their seaside villas at the Kuwaiti [sic] Hilton who offers to
provide services will be asked for a bribe." According to this version,
Altanmia officials would pay generous bribes to KBR to keep the gas
contract going, then get their money back by jacking up the price per
gallon. KBR could then just invoice the U.S. government at $2.65 per
gallon and get reimbursed at cost-plus. (KBR says any implication that its
managers were extorting kickbacks from Altanmia is "an absolutely
unfounded lie.")

Yet other e-mails suggested the U.S. Embassy, not KBR, had played a
leading role. On December 2, 2003, after Halliburton and the Army Corps
actually proposed using other, less expensive suppliers for fuel in view
of the pressure that the Pentagon and various lawmakers were bringing to
bear, then U.S. ambassador to Kuwait Richard Jones sent an e-mail to an
unidentified U.S. official saying, "Tell KBR to get off their butts and
conclude deals with Kuwait NOW! Tell them we want a deal done with
al-Tanmia [sic] within 24 hours and don't take any excuses. If Amb. Bremer
hears that KBR is still dragging its feet, he will be livid." Jones was
also Bremer's right-hand man at the Coalition Provisional Authority, the
U.S. interim government of Iraq. An embassy spokesman released a statement
at the time saying the embassy had played no part in the selection of
Altanmia and had not pressured the Army Corps in any way.

By mid-December 2003, KBR was under intense pressure from the D.C.A.A. to
document how and why it had signed on with Altanmia for fuel at $2.65 a
gallon. That's when it turned to the Army Corps of Engineers for help.


As the contracting agency, the Corps had the unique power to decide it
didn't want to see KBR's paperwork, and to waive KBR's obligation to show
that paperwork to anyone else. Why would the Corps want to do that? To
this day, Bunny Greenhouse isn't sure. All she knows is that on December
19, 2003, her colleagues approved the waiver behind her back.

By then, the Corps had assigned her a new deputy. Not a civilian deputy; a
military one. "Because they can control the military," Greenhouse
explains, referring to her superiors. "They can't control civilians like
that, because civilians are going to say, 'I can go to jail.'"

Greenhouse says that her new deputy, Lieutenant Colonel Albert A. J.
Castaldo, was "promised � all sorts of things if he would come in and
disrupt my office and get Bunny Greenhouse out of this job." In this, she
says, he was encouraged by the chief of engineers at that time, Lieutenant
General Robert B. Flowers, who had advised his staff to take decisions
into their own hands when necessary. Flowers went so far as to have a
"Just Do It" card printed up and handed out. In an internal memo that
Castaldo later sent to one of his superiors, he acknowledged what his
command group had said "Just Do It" meant. "It was discussed, well known,
and even expected by the USACE Command Group that I would have to take
adverse positions against Ms. Greenhouse's desires in order to protect the
command and accomplish certain actions for the best of the command
mission. It was fully understood that I would have to exercise the 'Just
Do It' card to accomplish my mission for the command."

For weeks, Greenhouse says, Castaldo hung around her administrative
assistant's desk, craning for glimpses of Greenhouse's appointment book so
he could tip his superiors to any time she'd be away from the office. On
December 18, 2003, Greenhouse sent a slip saying she was sick with
bronchitis and would be home the next day.

On the 19th, the KBR waiver was drawn up in the Corps's Dallas office�a
necessary first step because that office was assigned to oversee the RIO
contract. Contracting Officer Gordon A. Sumner signed it. (Sumner declined
to speak with Vanity Fair in view of Greenhouse's legal dispute with the
Corps, and a Corps spokesman made clear that no other Corps officers could
cooperate either.) It was then flown up�that day�to Washington to be
signed by Lieutenant General Flowers. Ordinarily, the waiver would have
been logged into the Corps's computer system and given a tracking number.
But it wasn't. That way, Greenhouse's assistant couldn't detect its
lightning passage through government channels and notify Greenhouse at
home. Greenhouse says that no mention of the waiver was made to her by
Flowers or anyone else upon her return to the office, so she didn't find
out that it had been granted until early January, when it made the news.

As a result of the Corps's secretly granted waiver, the Pentagon
investigation into KBR's fuel surcharges ground to a halt.


The Corps couldn't fire Greenhouse directly; senior Corps officials are
unfireable. But she could be demoted, if her colleagues laid the
groundwork carefully enough. By the fall of 2004 they'd done just that.
And when Greenhouse ignored warnings not to block the next no-bid KBR
contract with her spidery script, they got her at last.

Since 1999, KBR had earned nearly $2 billion in the Balkans as the
sole-source supplier of housing, food, and other needs for U.S. troops
stationed there. As the contract's term had wound down, the Corps had made
a halfhearted attempt to let other companies bid on the job. Greenhouse
was all for that: in a candid report, she'd concluded the contractor was
"out of control," manipulating military command changes to push through
ever more expensive items. But in July the bidding process was
inexplicably curtailed; to this day, Greenhouse says, she has no idea why
that was done. Instead, Lieutenant General Strock, the new chief of
engineers, decreed that KBR should be granted a $75 million extension of
the job until April 2005.

Greenhouse objected. She pointed out that the rationale for granting the
extension�"compelling urgency"�would never hold up to scrutiny when the
army had had five years to bring in other bidders. Apparently Strock
realized she was right. On the contract's final version, in early October,
KBR was deemed the "one and only one source" that could do the job even
though the Corps had just spent months entertaining other bids. Once
again, Greenhouse objected, in a strongly worded e-mail to Strock.

Apparently, that e-mail was the last straw. The next day, she was demoted.

In the letter explaining this action, Strock informed Greenhouse her two
most recent performance ratings had been "less than fully successful."
Greenhouse believes this was the groundwork the Corps had to establish in
order to get her out of the way. Performance ratings are issued annually,
and two negative ones are necessary for punitive action to be taken.
Greenhouse's colleagues had waited two years for that, and acted as soon
as it happened.

The two recent annual reviews dramatically contradicted Greenhouse's
earlier ones, copies of which her lawyer, Michael Kohn, showed to Vanity
Fair. For her first year�October 1997 until October 1998�Greenhouse was
described as "absolutely committed � totally loyal." She "has no equal
when it comes to technical issues," the report said. On a rating basis
from one to five, with one being the highest grade, Greenhouse was given a
two that first year. On each of her next two annual reviews, she earned a
one, with many more glowing remarks. Yet on the review signed by
Lieutenant General Flowers on July 15, 2003, Greenhouse was accorded a
four. And on the one that ended September 30, 2004, she got a five.

Kohn is hoping to be heard by the Corps's Equal Employment Opportunity
Office (E.E.O.), on the grounds that Greenhouse has a "mixed case"
involving not only bureaucratic inequity but racial and gender prejudice.
"The fact is that a black female had so much power in the institution,
more than the Corps's good old boys' network ever envisioned, because the
Corps is essentially a contracting organization, so the commanders should
really be taking a backseat to professional contractors. But they had
found a way around that, and Bunny was standing in their way." The E.E.O.
review could lead to a jury trial, which is what Greenhouse wants. Who
will pay her legal bills is another question. "We hope to start a defense
fund," Kohn says. "And some of this may have to be pro bono and
contingency."


To the Corps's top brass and their cronies at KBR, Greenhouse may not be
the irritant she was, but other government bureaucrats are asking them
pointed questions, too. Last year, a Pentagon audit found that KBR could
not document more than $l.8 billion worth of work done under its LOGCAP
contract in Iraq. At first the army considered withholding payments, but
the prospect of bitter court battles led it to try to negotiate a
settlement. Ordinarily, a contractor would be asked to come up with
documentation for its claim�to date, Halliburton has charged the
government $9.5 billion for LOGCAP work in Iraq. The government would then
respond with its own documentation, and the two parties would reach a
compromise figure. Not here: strangely, an outside auditor was hired to
help decide what Halliburton would be owed if it could come up with the
paperwork�and the government would then pay that amount. Whatever the
final number, hundreds of millions of dollars will simply go unaccounted
for�the waste of war, or the spoils of war, depending on how one looks at
it. An army spokesman says the settlement will be reached this month.
Meanwhile, in early February the army announced that it would not withhold
any percentage of future payments to Halliburton�a precedent-setting
waiver.

After all this, the lucrative LOGCAP contract for troop support in Iraq
may be put out for competitive bid at last. But that's not to say that if
that happens KBR won't win it back. Last year, when the RIO contract was
finally put out for bid�as Greenhouse had called for it to be from the
start�six companies vied for the new prize of $2 billion to repair Iraqi
oil fields. KBR bid to fix the fields in the South�the larger chunk of the
contract, valued at up to $l.2 billion�and won. Parsons won the balance,
$800,000, to fix those up North. This new work is in addition to KBR's
first RIO contract, under which $2.51 billion of its potential $7 billion
was actually spent before the contract was yanked. It is also not included
in the current overall figure of $12 billion for Halliburton in Iraq.
(That total consists of the $2.51 billion plus $9.5 billion in LOGCAP
troop-support work.) So, adding the new $1.2 billion RIO contract along
with future spending under LOGCAP will push the total billions higher.

Just how much Halliburton has profited from these huge Iraq contracts is a
matter of some debate. David Lesar, Halliburton's C.E.O., told analysts
last fall that Halliburton's Iraq contracts have yielded $1.4 billion,
with a profit of merely $4 million after taxes and expenses. KBR, which
handled most of those, actually incurred an operating loss in 2003 of $36
million on revenues of $9.3 billion, even as the rest of Halliburton
increased operating profits by about $200 million to $826 million. If the
company bids for more Iraq contracts, Lesar groused, it will probably
"jack the margins up significantly."


But there's another way to look at KBR's work in Iraq. Without it, the
company would be in truly bad shape. In fact, the Iraq work accounts for
nearly all of KBR's growth at a time when it has staggered under $4.2
billion in asbestos claims�thanks in large part to Halliburton's former
C.E.O. Dick Cheney.

Back in 1998, Cheney decided to merge Halliburton with Dresser Industries,
a Texas-based energy company. Unfortunately, he failed to do his homework
on Dresser: a mountain of lawsuits over asbestos-contamination claims were
about to be filed against it. KBR, formed from the merger, bore the brunt
of those. By late 2003, Dresser was forced into bankruptcy and began
organizing a court-ordered settlement plan. KBR incurred huge
liabilities�handily offset by those contracts in Iraq.

Now that painful ordeal is over: in December a federal judge approved
Dresser's $4.2 billion asbestos settlement. That means the company can
come out of bankruptcy, and analysts seem to agree on what will happen, as
a result, in the next months.

Halliburton will sell KBR.

As for learning the real extent of malfeasance in Iraq, that may never
happen. The Republican majority in both houses of Congress seems
disinclined to hold more hearings�or to exercise the subpoena power that
only the majority wields. All the Democrats can do is shake their fists.

"If the administration shares our concern about not wasting taxpayers'
money, you would think they would want to learn from the auditors and
whistle-blowers what has gone wrong," Congressman Waxman says. Instead,
the government has ignored its own auditors�both at the Pentagon and at
the G.A.O.�who found glaring irregularities in KBR's books on Iraq. "Why
has the administration turned away?" Waxman says. "I don't know as I have
an answer to that question."


Michael Shnayerson is a Vanity Fair contributing editor. He is currently
at work on a book about mountaintop coal removal in West Virginia, to be
published by Farrar, Straus and Giroux.

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