Halliburton Fans Spy Opportunity in Iraq Crisis

He says Halliburton contracted out the Kuwait fuel delivery project to the only bidder that qualified and, by shifting some of that business away from the firm into more affordable Turkey, actually saved taxpayers $164 million. He also viewed Halliburton's decision to bill for meals ordered -- rather than those actually delivered -- as perfectly justified.

"We consider it worth noting that estimating the required number of meals is no simple task," wrote Russell, who has an outperform rating on Halliburton's stock. "We would further guess that the soldiers involved would much rather KBR overestimate the number of meals that will need to be served upon any given day, rather than underestimate."

Russell also says Halliburton's early work in Iraq was performed under a pre-existing contract that should have never been rebid. Moreover, he says that Halliburton has since lost at least one contract to a more expensive bidder despite any old ties to Cheney.

He even explains away the expensive towels.

"It was thought that the use of labeled towels would stop, or at least deter, the stealing of towels by locals from its facilities in the Middle East," he wrote. But "we are not certain if the use of the monogrammed towels did, in fact, deter stealing."

Defensive End

Indeed, on Wall Street, Halliburton has plenty of defenders.

RBC analyst, Kurt Hallead last month, blamed "political sniping" for depressing the company's share price. He downplayed the probes now facing Halliburton as routine ones that have scored headlines only because of Cheney's past involvement with the company. And he, too, recommends the stock.

"After a careful review of the controversial issues related to Iraq, we are confident that Halliburton is unlikely to face any fines or penalties as a result of the recent government audits," Hallead wrote in March. "Halliburton appears to be attractively valued for large-cap oil service investors willing to stomach the periodic headline risk associated with the Iraq work."