Halliburton whistle-blower to sue after demotion

WASHINGTON - A former top US Army procurement official who raised concerns about Halliburton Co's contracts in Iraq plans to sue the Army after being demoted, her lawyer said.

Lawyer Michael Kohn said Bunny Greenhouse, the Army Corps of Engineers' top contracting official-turned whistle-blower, was removed, effective Saturday, from the senior executive service and moved into a lower-ranking job.

Earlier, in a June 3 memo, Army Corps of Engineers Commandant Lieutenant General Carl Strock, said the move came after a staff analysis clearly showed the decision was based on Greenhouse's "unacceptable performance" and "not in retaliation for any disclosures of alleged improprieties she may have made."

But Greenhouse's lawyer and Democratic lawmakers disputed that characterisation and urged the Pentagon to investigate.

"This is pure retaliation for having exposed contract abuse dealing with Halliburton and stemming back even before that," said Kohn, noting that he planned to file a federal lawsuit next month against the Army and Army Secretary Francis Harvey, alleging racial, sexual and whistle-blower discrimination.

He said a similar claim filed against the Army had stalled since February, after he raised conflict-of-interest questions about the involvement of an Army lawyer in that investigation who had played a role in taking action against Greenhouse.

Two Democratic senators and one congressman on Monday urged Defence Secretary Donald Rumsfeld to conduct an investigation into the Army's action against Greenhouse, saying her sudden dismissal appeared "highly suspect" since the Pentagon inspector general was still investigating her allegations.

They said the inspector general's office had also told them it was "working with the Department of Justice regarding potential prosecutions relating to the Halliburton contracts."

"Retaliation against employees for providing information to Congress is illegal and entirely unacceptable," Sen Byron Dorgan of North Dakota, Sen Frank Lautenberg of New Jersey and Rep Henry Waxman of California said in the letter.

Halliburton's subsidiary KBR is the US military's biggest contractor in Iraq and has been accused by Democrats of getting lucrative work there because of its ties to Vice President Dick Cheney who headed Halliburton company from 1995-2000.

Halliburton has strongly rejected Greenhouse's comments. Both the Pentagon and the Corps, which was in charge of a sole-source oil contract given to KBR in Iraq, have denied any special treatment for KBR.

Greenhouse first raised questions internally in 2003 about the five-year term of a no-bid contract awarded to Texas-based Halliburton to repair Iraqi oil fields.

Last fall, she went public with her allegations, and the Army referred them to the Pentagon inspector general for further investigation. At the time, acting Army Secretary Les Brownlee ordered that any adverse actions against Greenhouse be suspended until a "sufficient record" was available.

The IG investigation is ongoing, said Pentagon spokeswoman Lt Col Rose-Ann Lynch, declining further comment.

Army spokeswoman Nancy Ray declined comment on the decision to demote Greenhouse, which was approved by Harvey last month.

"Personnel actions are personal matters and we don't comment on personnel action," she said. "We respect people's privacy." Army Corps spokeswoman Carol Sanders also declined comment.

Greenhouse told congressional Democrats at a hearing in June that Halliburton's deals in Iraq were the worst example of contract abuse she had seen, adding that "every aspect" of the deal had been under the control of Rumsfeld's office.

"I can unequivocally state that the abuse related to contracts awarded to KBR (Kellogg Brown and Root) represents the most blatant and improper contract abuse I have witnessed during the course of my professional career," said Greenhouse, a procurement veteran of more than 20 years.

- REUTERS