10 February 2004	Tuesday	18 Zilhaj 1424

KUWAIT CITY, Feb 9: Kuwaiti Energy Minister Sheikh Ahmad Fahd al Sabah has ordered a judicial probe into allegations that officials have profited from a deal with US oil services giant Halliburton to supply fuel to the US military in Iraq, the official KUNA news agency said on Monday.

However, angry lawmakers, warning the issue could hurt strategic US-Kuwaiti ties, said the minister's action was not enough and threatened to conduct a parliamentary probe into the corruption allegations.

"In view of reports about the deal to supply the US Army with oil and gas products through a contractor which reached the extent of defaming some ... the supply agreement between Kuwait Petroleum Corp (KPC) and the contractor has been referred to the public prosecutor for investigation," KUNA quoted Sheikh Ahmad as saying in a statement.

A draft US audit disclosed in December that the US government had been overcharged by some 61 million dollars for oil purchased through a Halliburton subcontractor in Kuwait.

Several Kuwaiti MPs and the local press have alleged that senior officials from KPC and other agencies were involved in the scam. During Monday's parliamentary session, MPs insisted the minister's action was insufficient.

"Referring the Halliburton case to the prosecution is not sufficient. There must be political and administrative questioning because government sides sponsored the case. Kuwait's image has been tarnished," said opposition MP Waleed al Jari.

"Some US officials described us as having blackmailed them. It's unfortunate that some have provided political cover for this scandal for the benefit of a handful of people," he charged.

But the minister insisted the reports were based on "unfounded rumours", which had damaged the reputation of several officials. "As some of the press reports and rumours on the street have challenged the integrity of some people, I was compelled to refer this agreement to the public prosecutor for investigation and to give the honest and neutral judicial authority the opportunity to decide if there was an abuse of power or misuse of public funds," Sheikh Ahmad said.

"We will deal with this issue with full transparency and we will publish all findings of the public prosecution, and we will not hesitate to refer the issue to court," he said.

MP Mussallam al Barak, also an opposition lawmaker, said the Halliburton case was indicative of how widespread corruption had become in Kuwait. "The subcontractor (Al Tanmia Co) has illegally been awarded the contract with the blessing of senior officials in the oil sector," Barak charged.

"The energy minister should not try to cover up the case by referring it to the public prosecution. We will question him and hold him accountable," he added. The minister is currently in Algeria attending an OPEC meeting.

Veteran opposition MP and three-time former speaker Ahmad al-Saadun, who was quoted as saying that Al-Tanmia Co. is making profits of about 840,000 dollars a day from overcharging KBR, said the name of a brother of the energy minister was mentioned in US investigations.

"US government investigations have accused (Sheikh) Talal Fahd al-Ahmad of being a partner in the (Al Tanmia) company that has damaged Kuwait's image," Saadun told the house.

Mr Saadun later told reporters that he was not accusing the minister's brother, who is also a member of Kuwait's ruling family, but only "quoting an official US report".

Saadun said a group of MPs were planning further action on Tuesday that may include "forming a parliamentary investigation committee for grilling the minister".

Last month, Sheikh Ahmad denied Kuwait was involved in any way in the suspected contract irregularities. Halliburton, which used to be run by US Vice President Dick Cheney, said on Jan 23 that it had repaid the government 6.3 million dollars following allegations that two employees took kickbacks in exchange for awarding a Kuwait-based company an oil contract for US troops in Iraq. -AFP