Tuesday, July 12, 2005

Halliburton Fails Upward

Ari Berman

The Nation -- "Lawmakers, Including Republicans, Criticize Pentagon on Disputed Billing by Halliburton," read a New York Times headline on June 22. "Worries Raised on Handling of Funds in Iraq," the Los Angeles Times wrote the same day. It seemed clear that the Bush Administration's favorite war profiteer was again in hot water. Shortly thereafter, the Democratic Policy Committee released a report alleging that Halliburton subsidiary KBR overcharged the US government by as much as $1 billion, not even counting an additional $442 million in "unsupported" billing, for work in Iraq.

The headlines ceased over the next week. Then, In early July, KBR captured coverage in a decidedly more positive light: "Halliburton Gets More Iraq Work," Reuters reported on July 7. Once again, an Administration ally was/is failing upwards. Five billion dollars of new work, to be exact, on top of a contract that has brought KBR $9.1 billion, almost one sixth of what Bush promised the entire war effort would cost.

The military signed the $4.97 billion deal in May, but didn't reveal the details until this month, "because the Army did not consider it necessary," an Army spokesman told Reuters. Most of the money will go toward logistics--food, sanitation, laundry and other services for the troops--precisely the functions KBR has failed so spectacularly to properly administer thus far.

According to government reports and Army and KBR sources, Halliburton charged the government for 10,000 meals a day it never served, dished out food that had been expired for a year and provided its Turkish and Filipino staff with leftovers in trash bags. The Government Accountability Office concluded last year that the Army could save $43 million on food just by bypassing KBR and working with a different subcontractor. The $1.5 million tailoring fees, $560,000 in unnecessary heavy equipment, $152,000 for movie screenings, $45 cases of soda and exorbitant "cost-plus" contracts were just icing on the cake.

"I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper abuse I have witnessed during the course of my professional career," Bunnatine Greenhouse, the Army's top civilian contracting official, testified before the Democratic Policy Committee. (Republicans have blocked Democratic attempts to hold official hearings on Halliburton.)

Attempting to quash the mounting evidence of misconduct, Halliburton dispatched its own internal investigative units, dubbed "Tiger Teams" to the Gulf. The Tigers' promptly raked up a $1 million bill at Kuwait's five star Kempinski Hotel, journalist Ed Harriman reports, while Army troops were "sleeping in tents at a cost of $1.39 a day."

The Tigers', after much partying, subsequently recommended that the Army extend KBR's subcontracts.

It couldn't be more obvious that the entire company needs to be caged.

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