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Deal for DeLay district added to energy bill, Democrat says

WASHINGTON -- A top House Democrat is accusing GOP leaders of slipping a provision into a sprawling energy bill to give hundreds of millions of dollars to a private energy consortium in the suburban Houston hometown of House majority leader Tom DeLay -- a consortium that includes energy giant Halliburton Inc. as one of its most prominent members.

The final draft of the energy bill produced by House and Senate negotiators early Tuesday includes a 10-year, roughly $500 million research program for ''ultradeep drilling" of oil and gas from beneath the Gulf of Mexico.

The provision directs that 75 percent of that money be administered by a nonprofit ''corporation that is constructed as a consortium." Henry A. Waxman, the top Democrat on the House Government Reform Committee, said the provision was worded to ensure that the contract will go to the Research Partnership to Secure Energy for America, a nonprofit energy consortium based in Sugar Land, Texas, DeLay's hometown.

''At its essence, this provision is a . . . giveaway to the oil industry, Halliburton, and Sugar Land, Texas," Waxman, a California Democrat, wrote in a letter sent yesterday to House Speaker J. Dennis Hastert. ''[It] is an indefensible giveaway to one of the most profitable industries in America."

A DeLay spokesman, Kevin Madden, sharply disputed Waxman's contention that the provision will definitely benefit the Texas consortium, and said the proposal was always part of the energy bill being discussed. The provision provides for competitive bidding for the contract.

''Henry Waxman knows zero about Texas, zero about energy security, and apparently even less about how a bill becomes law," Madden said.

Waxman says he and other Democratic negotiators went home Tuesday at 4 a.m. believing a deal had been finalized and the provision wasn't in the bill. Leaders of the conference committee acknowledge the provision wasn't in the printed draft of the bill, but said that four leading conferees -- two Democrats and two Republicans -- agreed to add it, unbeknownst to Waxman and some other negotiators.

Bill Wicker, a spokesman for Democrats on the Senate energy committee, said that Senator Jeff Bingaman, Democrat of New Mexico, and Representative John Dingell, Democrat of Michigan, knew of the addition, along with top Republicans. ''We don't see this as a sweetheart deal for anyone," Wicker said.

He said that an open process will be used to choose the organization that administers the program and that the Department of Energy will retain a role in doling out money.

But Waxman noted that the Sugar Land-based consortium has been advocating such a research program and is in a better position than any other group to win a competitive bidding process for the contract. DeLay has called for such a research program to be launched as part of a broader strategy of reducing US dependence on foreign oil.

Waxman further noted that Halliburton, an oil company once headed by Vice President Dick Cheney, would be especially well-positioned to take advantage of any discovery of oil through the ultradeep drilling, since it would be part of the exploratory consortium. Halliburton is part of the Research Partnership to Secure Energy for America and a Halliburton executive is one of nine board members, according to the consortium's website, but it does not specify how much of the consortium is owned by the company.

Cathy Mann, a spokeswoman for Halliburton, said yesterday that Halliburton ''is not an oil or gas company" but an energy services firm and that ''Halliburton believes that decisions affecting government and industry regulation are better made by governmental authorities as opposed to individual persons or companies."

Representative Edward J. Markey, a Malden Democrat who served on the conference committee, said a member of his staff only discovered the provision during the day Tuesday, after conference committee meetings were over. He called it a ''taxpayer gift" to oil companies, though he added he's not sure which organization will benefit. ''Yet another giveaway to the oil companies was slipped into the agreement," Markey said. ''Apparently the Republicans think that the pockets of the American taxpayer are 'ultra-deep.' "

The conference committee's chairman, Representative Joe Barton, Republican of Texas, told reporters on Tuesday that the deep-water drilling research money was agreed to by negotiators and that the only way Democrats could have missed it was if ''they didn't look very hard."

He defended the expenditure as a common-sense way to address oil companies that must employ more expensive methods to seek out supplies that are more difficult to access.

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