Man on trial for allegedly rigging military bid

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By Ann McGlynn | Tuesday, April 15, 2008 |

Signing one of many documents in a trailer late at night while preparing for war in the middle of Kuwait, a retired Army colonel who went to work as an executive for KBR says he unknowingly signed off on a bid for fuel tankers that was eight times the expected cost.

And sending an e-mail from Houston to Camp Arifjan, Kuwait, a second KBR official also signed off on that bid in February 2003, not aware the estimate was $685,000, far less than the $5.5 million bid approved.

Both men, Robert “Butch” Gatlin and Don Gavin, said in testimony Tuesday in U.S. District Court in Rock Island that they trusted the man who gave or sent them the paperwork for approval in the days leading up to the invasion of Iraq.

“He was the procurement manager,” Gatlin said of Jeff Mazon, who is on trial for rigging the bid and later accepting a promise of $1 million from the man whose company won the job. “I took his word.”

The bid sheet Gatlin signed — one of several documents he put his signature on that night — showed the contract would cost $5.5 million. It did not indicate that the Army and its contractor, KBR, believed it would cost $685,000 to provide that service. No space for such information existed despite a detailed and lengthy process to approve contracts.

Gatlin was the lead manager in the Middle East for KBR on the Logistics Civil Augmentation Program, or LOGCAP III, awarded and managed by the U.S. Army Sustainment Command on Arsenal Island.

Mazon, the chief and apparently only procurement officer for KBR at Camp Arifjan, was responsible for securing firms to work on subcontracts in the days leading up to the invasion of Iraq. He is accused of inflating the fuel tanker bid to benefit the company LaNouvelle and then later accepting a promise of $1 million from one of the company’s executives, Ali Hijazi.

Hijazi also is charged in the case. He remains at large and is in Kuwait.

Testimony: Halliburton boss received alcohol from subcontractor

The CEO of Halliburton and other executives of that company and its former subsidiary, KBR, attended gatherings with bottles of alcohol provided by a Kuwaiti subcontractor later convicted of fraud, money laundering and making false statements, testimony in U.S. District Court in Rock Island revealed Tuesday.

David Lesar was one of a half-dozen executives that Robert “Butch” Gatlin said traveled to Kuwait for monthly meetings about the large logistics contract KBR has in the Middle East. Gatlin, a retired Army colonel, was the KBR project manager in Kuwait and Iraq for the multibillion contract awarded and overseen by an Army unit on Arsenal Island.

Gatlin testified that at the end of a long day of meetings, he would ask Khan to deliver two or three bottles of liquor to a Hilton townhouse where company officials lived. Alcohol is illegal in Kuwait, Gatlin acknowledged. Khan provided the bottles 10 to 15 times between February 2003 and 2004.

“There was a lot of stress,” Gatlin said of the reason behind the cocktails. The alcohol, he said, did not affect decisions regarding Tamimi Global and its contracts. Khan was the managing partner of Tamimi Global.

KBR is the lead contractor on the Logistics Civil Augmentation Program, or LOGCAP III. At the time the contract was awarded in 2001, it was a subsidiary of Halliburton. That is no longer the case.

Gatlin also admitted to attending functions at what was known as the “Tamimi Party House.” The party house has been a focal point of the criminal prosecution of Khan and two others in U.S. District Court in Rock Island.

A dinner with Khan and Pete Peleti, an Army chief warrant officer, led to Peleti attending a dozen parties at the Tamimi party house. Khan gave Peleti money and gifts. Peleti was sentenced to 28 months in prison for taking a $50,000 from another businessman.

Khan also threw a bash to celebrate Stephen Seamans’ birthday. Khan provided Seamans with a prostitute and cash in exchange for a contract. Seamans was sentenced to a year and one day in prison and to pay restitution.

Khan was sentenced to four years in prison and restitution.

KBR officials declined comment. Halliburton could not be reached for comment.

Ann McGlynn can be contacted at (563) 383-2336 or amcglynn@qctimes.com.