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FBI investigates Halliburton complaint

Greenhouse, shown in an undated government photo, is said to be wanting whistleblower protection.
Halliburton Company
Federal Bureau of Investigation (FBI)
Dick Cheney

WASHINGTON (CNN) -- The FBI has made a formal request to interview the Army Corps of Engineers chief contracting officer who has alleged her agency unfairly awarded no-bid contracts worth billions of dollars to a Halliburton subsidiary for work in Iraq, law enforcement sources said Thursday.

The FBI interview of Bunnatine Greenhouse, who has made the allegations, has not yet taken place. Law enforcement sources also said several documents have been gathered by the FBI related to the no-bid contracts, but they did not characterize the nature of the documents.

A senior law enforcement official, meanwhile, insisted there is no federal investigation of the White House or Dick Cheney, who headed up Halliburton before he became vice president.

White House spokesman Trent Green declined to comment on the matter.

"To ensure that the process goes forward, we wouldn't want to say anything or do anything to interfere with that process. The Justice Department is the appropriate agency to handle these questions," he said.

Time magazine reported this week that Greenhouse raised concerns about the awarding of a $7 billion no-bid contract to Kellogg Brown and Root, a Halliburton subsidiary, during a meeting in February 2003, just one month before the invasion of Iraq began.

She argued that the five-year term of the contract was not justified. Afterward, she was warned to stop interfering and threatened with demotion, according to Time, which spoke with her attorney, Michael Kohn.

Law enforcement sources told CNN the inquiry is in the very early stages and that "inferring anything at this juncture would be pointless." One senior law enforcement official said that following up such a public allegation of wrongdoing is nothing more than "due diligence."

Sources close to Greenhouse said she is willing to cooperate, but wants whistleblower protection to ensure no possible Pentagon retaliation to her going public.

Calls to Halliburton and the Army Corps of Engineers went unreturned Thursday.

Democrats consistently have raised questions about contracts in Iraq awarded to Halliburton, alleging that the oil services giant has been given special treatment because of its past ties to the vice president. Cheney ran the Dallas-based company from 1995 until August 2000.

Halliburton has received multiple contracts in Iraq worth billions of dollars. The Pentagon is investigating whether the company overcharged for the fuel delivered to Iraqi civilians, and its KBR subsidiary has agreed to refund $27 million for potential overbillings at military dining halls in Iraq and Kuwait. The company has denied any wrongdoing in those cases.

Halliburton also has announced a restructuring of KBR to trim up to $100 million.

Federal regulators have also investigated a change in accounting practices at Halliburton that occurred in 1998 and 1999, when Cheney was the company's CEO. Cheney gave sworn testimony to the Securities and Exchange Commission on the matter, and Halliburton later agreed to pay the SEC $7.5 million for failing to disclose the accounting change.

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