By Erik Eckholm The New York Times
WEDNESDAY, JUNE 29, 2005
WASHINGTON Legislators from the Democratic Party stepped up criticism of Halliburton on Monday for what they called "war profiteering," citing Pentagon audits that question more than $1 billion of the company's bills for work in Iraq.
The estimates of excessive spending and improper billing by Halliburton, a Texas-based company that provides logistical support and oil-field repairs in Iraq, are more than twice as high as those in previous official reports. The findings, including previously unpublicized internal Pentagon studies, were released at a forum sponsored by the Democrats.
Party leaders said they organized the forum because the Bush administration and congressional Republicans have refused to hold the contractor accountable.
"The bottom line is, the Republican leadership in the Congress is giving Halliburton a free pass," said Senator Frank Lautenberg, a Democrat from New Jersey.
Large contracts awarded to a Halliburton subsidiary, Kellogg, Brown & Root, have been questioned and criticized since before the invasion of Iraq in 2003, in part because some contracts were awarded without competition and because of allegations that the company, led by Dick Cheney before he became vice president, was aided by political connections. In some cases, the Pentagon has publicly complained about excess billing and reduced its payments as a result, but the audit figures released by the Democrats suggest that billing disputes have been more extensive than previously revealed.
Halliburton said that it performed well and honestly in Iraq and that any billing disputes were part of the routine give-and-take of government contracting. It said that it had been singled out for partisan attack.
Kellogg, Brown & Root, or KBR, "will continue to work with our customers and with the appropriate government agencies to prove, once and for all, that KBR has delivered vital services for U.S. troops and the Iraqi people at a fair and reasonable cost, given the circumstances," said Cathy Gist-Mann, a Halliburton spokeswoman, in an e-mail message.
The estimated total for questioned bills in the Democratic hearing, Gist-Mann said, is "an aggregation of many reviews over a three-year period, and the amount is a gross mischaracterization of the true facts."
The hearing featured videotaped testimony from a former KBR food manager in Iraq who said that the dining hall where he worked in early 2004 charged the U.S. Army for 20,000 meals a day when it was serving only 10,000, routinely used expired foods and punished him for speaking to auditors by transferring him to a more dangerous outpost in Falluja.
The former manager, Rory Mayberry, worked on Halliburton's largest single contract in Iraq: providing housing, food and other logistical services to the U.S. military. As of September 2004, the company had received $8.6 billion under the contract, known as Logcap, which is part of the military's effort to outsource noncombat jobs.
Pentagon auditors had previously criticized the company for poor record-keeping and reduced some payments when the company was found to be charging for more meals than it served.
A new report, released on Monday by two Democrats, Senator Byron Dorgan from North Carolina and Representative Henry Waxman from California, quoted the chief of the Defense Contract Audit Agency, an internal Pentagon watchdog, as saying that "questioned" costs under the Logcap contract now total $813 million.
"Questioned" costs are defined by the agency as those "on which audit action has been completed" and "which are not considered acceptable."
The second-largest KBR contract, now completed and with a total billing of $2.5 billion, was for the repair of Iraqi oil fields after the 2003 invasion and for imports of consumer fuels.
Pentagon audits of the company's performance under that second contract, known as RIO-1, have found $219 million in "questioned" costs, mainly because of what critics have called exorbitant fees paid for fuel imports in 2003.
The company received the oil-repair and fuel contract without competitive bidding, and after it had been secretly hired to detail the needs and the probable costs of postwar oil repairs.
Bunnatine Greenhouse, a senior civilian contracting official with the U.S. Army Corps of Engineers, told the forum that granting the RIO-1 contract to KBR, initially for a period of up to five years, was "the most blatant and improper contract abuse I have witnessed during the course of my professional career."
Beyond the $1 billion in questioned costs, Pentagon auditors found that KBR had not properly documented another $443 million in expenditures under the two largest contracts.
The totals in the report do not include problems with a current $1.2 billion contract that KBR holds to repair Iraq's southern oil fields. The company has already been warned about serious cost overruns and poor performance.
Copyright © 2005 The International Herald Tribune | www.iht.com
Tuesday, June 28, 2005
Halliburton Accused of Iraq Fraud
By Reuters
Republished from Al Jazeera
A top US army procurement official has said Halliburton's deals in Iraq were the worst example of contract abuse she had seen.
A top US army procurement official has said Halliburton’s deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged over $1 billion of potential overcharges by the Texas-based firm.
Bunny Greenhouse, the Army Corps of Engineers’ top contracting official-turned whistle-blower, said in testimony on Monday at a hearing by Democrats on Capitol Hill that every aspect of Halliburton’s oil contract in Iraq had been under the control of the Office of the Secretary of Defence.
“I can unequivocally state that the abuse related to contracts awarded to KBR (Halliburton subsidiary Kellogg Brown and Root) represents the most blatant and improper contract abuse I have witnessed during the course of my professional career,” said Greenhouse, a procurement veteran of more than 20 years.
Her blistering criticism came as Democrats released a new report including Pentagon audits that identified more than $1.03 billion in “questioned” costs and $422 million in “unsupported” costs for Halliburton’s work in Iraq.
Full review
Defence Department spokeswoman Lieutenant-Colonel Rose-Ann Lynch said the Pentagon had received the report but had not had a chance yet to fully review it.
“The department is committed to an integrated, well-managed contracting process in Iraq,” said Lynch, adding that just because costs were questioned by auditors did not mean a company had overcharged the military.
Halliburton’s subsidiary KBR is the US military’s biggest contractor in Iraq and has been accused by Democrats of getting lucrative work there because of its ties to US Vice-President Dick Cheney who headed Halliburton from 1995-2000.
Pressed by lawmakers whether she thought the defence secretary’s office was involved in the handout and running of contracts to KBR, Greenhouse replied: “That is true.
“I observed, first hand, that essentially every aspect of the RIO (Restore Iraqi Oil) contract remained under the control of the Office of the Secretary of Defence. This troubled me and was wrong,” said Greenhouse.
Comments rejected
Halliburton issued a statement strongly rejecting comments by Greenhouse and others at the hearing, including a former KBR employee who accused the company of overcharging for food services provided to troops under a logistics deal.
“The only thing that’s been inflated is the political rhetoric which is mostly a rehash of last year’s elections,” spokeswoman Cathy Mann said of the hearing.
Regarding claims of political influence because of Cheney, Mann said it was easier to “assign devious motives than to take the time to learn the truth”.
Both the Pentagon and the Corps, which was in charge of a sole-source oil contract given to KBR in Iraq, have denied any special treatment for KBR. The Corps did not immediately respond to questions.
Investigation
Democrats called for an urgent hearing and an investigation into what they called contracting abuses involving KBR.
“This testimony doesn’t just call for Congressional oversight – it screams for it,” said Senator Byron Dorgan, a Democrat from North Dakota.
What concerned Greenhouse most was that the oil contract, which had a top value of $7 billion, was given to KBR without competitive bidding.
She irked her bosses by writing her concerns by hand in official documents but said these were overlooked.
In one instance, she said Engineers officials bypassed getting her signature to grant a waiver for KBR to be relieved of its obligation to provide cost and pricing data for bringing fuel into Iraq.
Overcharged
That waiver was granted after a draft army audit said KBR may have overcharged the military by at least $61 million to bring in fuel to Iraq to ease a shortage of refined oil.
Greenhouse acknowledged she had become a thorn in the side of the Engineers and said she had been advised not to attend the hearing because of its partisan nature.
Rory Mayberry, a former food production manager at a US military base for KBR from February-April 2004, said the company charged for meals it did not serve to troops and had dished up spoiled food.
KBR’s Mann dismissed his taped testimony and said issues regarding billing over food services had been resolved.
Reuters
Republished from Al Jazeera
A top US army procurement official has said Halliburton's deals in Iraq were the worst example of contract abuse she had seen.
A top US army procurement official has said Halliburton’s deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged over $1 billion of potential overcharges by the Texas-based firm.
Bunny Greenhouse, the Army Corps of Engineers’ top contracting official-turned whistle-blower, said in testimony on Monday at a hearing by Democrats on Capitol Hill that every aspect of Halliburton’s oil contract in Iraq had been under the control of the Office of the Secretary of Defence.
“I can unequivocally state that the abuse related to contracts awarded to KBR (Halliburton subsidiary Kellogg Brown and Root) represents the most blatant and improper contract abuse I have witnessed during the course of my professional career,” said Greenhouse, a procurement veteran of more than 20 years.
Her blistering criticism came as Democrats released a new report including Pentagon audits that identified more than $1.03 billion in “questioned” costs and $422 million in “unsupported” costs for Halliburton’s work in Iraq.
Full review
Defence Department spokeswoman Lieutenant-Colonel Rose-Ann Lynch said the Pentagon had received the report but had not had a chance yet to fully review it.
“The department is committed to an integrated, well-managed contracting process in Iraq,” said Lynch, adding that just because costs were questioned by auditors did not mean a company had overcharged the military.
Halliburton’s subsidiary KBR is the US military’s biggest contractor in Iraq and has been accused by Democrats of getting lucrative work there because of its ties to US Vice-President Dick Cheney who headed Halliburton from 1995-2000.
Pressed by lawmakers whether she thought the defence secretary’s office was involved in the handout and running of contracts to KBR, Greenhouse replied: “That is true.
“I observed, first hand, that essentially every aspect of the RIO (Restore Iraqi Oil) contract remained under the control of the Office of the Secretary of Defence. This troubled me and was wrong,” said Greenhouse.
Comments rejected
Halliburton issued a statement strongly rejecting comments by Greenhouse and others at the hearing, including a former KBR employee who accused the company of overcharging for food services provided to troops under a logistics deal.
“The only thing that’s been inflated is the political rhetoric which is mostly a rehash of last year’s elections,” spokeswoman Cathy Mann said of the hearing.
Regarding claims of political influence because of Cheney, Mann said it was easier to “assign devious motives than to take the time to learn the truth”.
Both the Pentagon and the Corps, which was in charge of a sole-source oil contract given to KBR in Iraq, have denied any special treatment for KBR. The Corps did not immediately respond to questions.
Investigation
Democrats called for an urgent hearing and an investigation into what they called contracting abuses involving KBR.
“This testimony doesn’t just call for Congressional oversight – it screams for it,” said Senator Byron Dorgan, a Democrat from North Dakota.
What concerned Greenhouse most was that the oil contract, which had a top value of $7 billion, was given to KBR without competitive bidding.
She irked her bosses by writing her concerns by hand in official documents but said these were overlooked.
In one instance, she said Engineers officials bypassed getting her signature to grant a waiver for KBR to be relieved of its obligation to provide cost and pricing data for bringing fuel into Iraq.
Overcharged
That waiver was granted after a draft army audit said KBR may have overcharged the military by at least $61 million to bring in fuel to Iraq to ease a shortage of refined oil.
Greenhouse acknowledged she had become a thorn in the side of the Engineers and said she had been advised not to attend the hearing because of its partisan nature.
Rory Mayberry, a former food production manager at a US military base for KBR from February-April 2004, said the company charged for meals it did not serve to troops and had dished up spoiled food.
KBR’s Mann dismissed his taped testimony and said issues regarding billing over food services had been resolved.
Reuters
Halliburton Iraq deals 'contract abuse'
Pentagon auditors flag over $1 billion of potential overcharges by Texas firm.
June 28, 2005: 12:10 PM EDT
WASHINGTON (Reuters) - A top Army procurement official said Monday Halliburton's deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged over $1 billion of potential overcharges by the Texas-based firm.
Bunny Greenhouse, the Army Corps of Engineers' top contracting official-turned whistle-blower, said in testimony at a hearing by Democrats on Capitol Hill that "every aspect" of Halliburton's oil contract in Iraq had been under the control of the Office of the Secretary of Defense.
"I can unequivocally state that the abuse related to contracts awarded to KBR (Kellogg Brown and Root) represents the most blatant and improper contract abuse I have witnessed during the course of my professional career," said Greenhouse, a procurement veteran of more than 20 years.
Her blistering criticism came as Democrats released a new report including Pentagon audits that identified more than $1.03 billion in "questioned" costs and $422 million in "unsupported" costs for Halliburton's work in Iraq.
Defense Department spokeswoman Lt. Col Rose-Ann Lynch said the Pentagon had received the report but had not had a chance yet to fully review it.
"The department is committed to an integrated, well-managed contracting process in Iraq," said Lynch, adding that just because costs were questioned by auditors this did not mean a company had overcharged the military.
Halliburton's subsidiary KBR is the U.S. military's biggest contractor in Iraq and has been accused by Democrats of getting lucrative work there because of its ties to Vice President Dick Cheney who headed Halliburton company from 1995-2000.
Pressed by lawmakers whether she thought the defense secretary's office was involved in the handout and running of contracts to KBR, Greenhouse replied: "That is true."
"I observed, first hand, that essentially every aspect of the RIO (Restore Iraqi Oil) contract remained under the control of the Office of the Secretary of Defense. This troubled me and was wrong," said Greenhouse.
Halliburton issued a statement strongly rejecting comments by Greenhouse and others at the hearing, including a former KBR employee who accused the company of overcharging for food services provided to troops under a logistics deal.
"The only thing that's been inflated is the political rhetoric which is mostly a rehash of last year's elections," spokeswoman Cathy Mann said of the hearing.
Halliburton defends itself
Regarding claims of political influence because of Cheney, Mann said it was easier to "assign devious motives than to take the time to learn the truth."
Both the Pentagon and the Corps, which was in charge of a sole-source oil contract given to KBR in Iraq, have denied any special treatment for KBR. The Corps did not immediately respond to questions.
Democrats called for an urgent hearing and an investigation into what they called contracting abuses involving KBR.
"This testimony doesn't just call for Congressional oversight -- it screams for it," said Sen. Byron Dorgan, a Democrat from North Dakota.
What concerned Greenhouse most was that the oil contract, which had a top value of $7 billion, was given to KBR without competitive bidding. She irked her bosses by writing her concerns by hand in official documents but said these were overlooked.
In one instance, she said Army Corps officials bypassed getting her signature to grant a waiver for KBR to be relieved of its obligation to provide cost and pricing data for bringing fuel into Iraq.
That waiver was granted after a draft Army audit said KBR may have overcharged the military by at least $61 million to bring in fuel to Iraq to ease a shortage of refined oil.
Greenhouse acknowledged she had become a thorn in the side of the Army Corps and said she had been advised not to attend the hearing because of its partisan nature.
Rory Mayberry, a former food production manager at a U.S. military base for KBR from February-April 2004, said the company charged for meals it did not serve to troops and had dished up spoiled food.
KBR's Mann dismissed his taped testimony and said issues regarding billing over food services had been resolved.
The daughter of a Halliburton employee killed in Iraq has sued the company for wrongful death. Read more here.
June 28, 2005: 12:10 PM EDT
WASHINGTON (Reuters) - A top Army procurement official said Monday Halliburton's deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged over $1 billion of potential overcharges by the Texas-based firm.
Bunny Greenhouse, the Army Corps of Engineers' top contracting official-turned whistle-blower, said in testimony at a hearing by Democrats on Capitol Hill that "every aspect" of Halliburton's oil contract in Iraq had been under the control of the Office of the Secretary of Defense.
"I can unequivocally state that the abuse related to contracts awarded to KBR (Kellogg Brown and Root) represents the most blatant and improper contract abuse I have witnessed during the course of my professional career," said Greenhouse, a procurement veteran of more than 20 years.
Her blistering criticism came as Democrats released a new report including Pentagon audits that identified more than $1.03 billion in "questioned" costs and $422 million in "unsupported" costs for Halliburton's work in Iraq.
Defense Department spokeswoman Lt. Col Rose-Ann Lynch said the Pentagon had received the report but had not had a chance yet to fully review it.
"The department is committed to an integrated, well-managed contracting process in Iraq," said Lynch, adding that just because costs were questioned by auditors this did not mean a company had overcharged the military.
Halliburton's subsidiary KBR is the U.S. military's biggest contractor in Iraq and has been accused by Democrats of getting lucrative work there because of its ties to Vice President Dick Cheney who headed Halliburton company from 1995-2000.
Pressed by lawmakers whether she thought the defense secretary's office was involved in the handout and running of contracts to KBR, Greenhouse replied: "That is true."
"I observed, first hand, that essentially every aspect of the RIO (Restore Iraqi Oil) contract remained under the control of the Office of the Secretary of Defense. This troubled me and was wrong," said Greenhouse.
Halliburton issued a statement strongly rejecting comments by Greenhouse and others at the hearing, including a former KBR employee who accused the company of overcharging for food services provided to troops under a logistics deal.
"The only thing that's been inflated is the political rhetoric which is mostly a rehash of last year's elections," spokeswoman Cathy Mann said of the hearing.
Halliburton defends itself
Regarding claims of political influence because of Cheney, Mann said it was easier to "assign devious motives than to take the time to learn the truth."
Both the Pentagon and the Corps, which was in charge of a sole-source oil contract given to KBR in Iraq, have denied any special treatment for KBR. The Corps did not immediately respond to questions.
Democrats called for an urgent hearing and an investigation into what they called contracting abuses involving KBR.
"This testimony doesn't just call for Congressional oversight -- it screams for it," said Sen. Byron Dorgan, a Democrat from North Dakota.
What concerned Greenhouse most was that the oil contract, which had a top value of $7 billion, was given to KBR without competitive bidding. She irked her bosses by writing her concerns by hand in official documents but said these were overlooked.
In one instance, she said Army Corps officials bypassed getting her signature to grant a waiver for KBR to be relieved of its obligation to provide cost and pricing data for bringing fuel into Iraq.
That waiver was granted after a draft Army audit said KBR may have overcharged the military by at least $61 million to bring in fuel to Iraq to ease a shortage of refined oil.
Greenhouse acknowledged she had become a thorn in the side of the Army Corps and said she had been advised not to attend the hearing because of its partisan nature.
Rory Mayberry, a former food production manager at a U.S. military base for KBR from February-April 2004, said the company charged for meals it did not serve to troops and had dished up spoiled food.
KBR's Mann dismissed his taped testimony and said issues regarding billing over food services had been resolved.
The daughter of a Halliburton employee killed in Iraq has sued the company for wrongful death. Read more here.
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