Former attorney general Alberto Gonzales has long’standing links with both Halliurton and its legal counsel, the veneralble Texas fir of Vinson & Elkins. All the qui tam suits Grayson has filed against Halliburton and KBR have been defended by attorneys from V&E. In 1982, it was V&E that gave Gonzales his first job as a lawyer. Nine years later he became one of the firm’s first minority partners…..a prootion that his biographer Billl Minutaglio would single out as “the defining moment of his life.”

Grayson states, ” Cuulatively, the amount that’s been spent on contractors in the four plus years of the war is now over $100 billion. Pick any number between 10 percent and 50 percent….I dont’ think you can seriously argue that the scale of the fraud is less than 10 percent. Either way, you’re talking cumulatively about something between $10 and $50 billion.”

KBR’s current military’support contract is known as the Logistics civil Augmentation Program, or Logcap. This is the contract’s third inccarnation, and like its predecessors, LOGCAP3 is a “cost plus” contract: whatever KBR spends, the government agrees to reimburse, with the addition of a fee of about 3 percent. The more the company spends, the more it akes, so it pays to be profligate. LOGCAP is also an “indefinite-delivery, indefinite quantity” contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a “task order.” These can be worth hundreds of millions of dollars—-even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.

The first LOGCAP contract dates back to 1992 when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won LOGCAP1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq’s oil industry. Three years after LOGCAP1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R’s parent company, Halliburton, where he would collect some $44 million in earnings.

In 1997 LOGCAP1 expired and Halliburton lost its bid for LOGCAP2 to DynCorp.,however B&R was deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated. But the region was exempted from LOGCAP2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.

Although KBR fraud in the Balkans had been made apparent to the justice department, their sins had been forgiven in 2001. A KBR whistleblower states “what is clear is that they took no heed of what I’d been saying about Halliburton and the Balkans. Many problems that have become apparent with LOGCAP in Iraq I had identified years earlier in Kosovo and Bosnia.”

Cheney still owned substantial stock options and was receiving deferred salary payments from Halliburton, which have totaled more than $946,000 during his first five years in office.