Halliburton Under
Renewed Fire for Iraq Deals
Emad Mekay
WASHINGTON, Jun 15 (IPS) -
U.S. military auditors have criticised construction giant Halliburton for the
way it does business in Iraq, concerns amplified by former employees who are
alleging financial abuses in the U.S.-occupied country.
”In our
opinion, the contractor's billing system is inadequate in part,” said the
Defence Contract Audit Agency (DCAA) in a report made available Tuesday by
California Representative Henry Waxman.
”Our examination disclosed
several deficiencies in KBR's billing system, resulting in billings to the
governments that are not prepared in accordance with applicable laws and
regulations and contract terms,” added the report, seen by IPS.
KBR is
Kellogg Brown and Root, a subsidiary of Houston-based Halliburton, which has
been awarded the most lucrative contracts for the reconstruction of Iraq after
it was invaded by U.S.-led forces in March 2003.
The DCAA report
examined the company's billing system, its oversight of subcontractor billing,
the management review and approval process and its training of employees.
It revealed deficiencies that resulted in invoicing mistakes that were
not prevented, detected or corrected in a timely manner. The May 13 report also
found the company ”does not monitor the ongoing physical progress of
subcontracts or the related costs and billing”.
The report demands that
KBR be required to continue to provide all billings to DCAA for provisional
approval prior to submission for payment. The auditors also recommended the
company submit a detailed milestone plan for correcting the deficiencies cited
in the report.
Waxman, from the opposition Democratic Party, expressed
concerns Monday that some KBR contracts would not be discussed in a
congressional hearing Tuesday on the company's performance in Iraq.
He
and other members of Congress have been seeking more information on contracts
entered into by the Bush administration for reconstruction and development work
in Iraq, including several billion-dollar contracts with the Halliburton
subsidiary.
Members of the Government Reform Committee said during
Tuesday's hearing they will ask Halliburton Chief Executive Officer David Lesar
and KBR CEO Randy Harl to testify before Congress over the allegations swirling
around their firms.
”DCAA has identified significant deficiencies in
KBR's estimating practices related to the award of subcontract costs,” said the
agency's director, William H Reed, in prepared remarks at the hearing.
In an email statement Halliburton said late Tuesday, ”KBR strongly
believes DCAA's view is not supported by the contract. The ultimate decision
regarding the payment of these costs will be made by KBR's customer, the Army
Material Command.”
”While we take no political position on the war in
Iraq, we remain a convenient tool for some of those who oppose it. We expected
there would be attempts before the end of June to deflect attention from the
progress being made in Iraq, but we didn't think so much of it would originate
here at home,” added the statement, sent by Wendy Hall, director of public
relations.
>From no-bid contracts with little supervision, to
allegedly manipulating gasoline prices, Halliburton -- formerly led by Vice
President Dick Cheney -- has largely come to embody the secretive nature of
awarding billions of dollars worth of contracts in post-war Iraq and hefty
profiteering by U.S. firms, many with links to the Bush administration.
The Defence Department's Inspector General has referred Halliburton's
billing for fuel in Iraq to the department's Defence Criminal Investigative
Service for a possible criminal probe after it was revealed the company upped
the price for gasoline bought in Kuwait by a dollar a gallon.
Waxman
says the firm's performance deserves deeper congressional oversight, after five
former employees and one former executive of a Halliburton subcontractor came
forward and described serious examples of waste and fraud in Iraq.
In
statements released by Waxman, David Wilson, a convoy commander for Halliburton,
and James Warren, a company truck driver, described instances where brand-new
trucks worth 85,000 dollars were abandoned if they got a flat tire or
experienced minor mechanical problems.
Marie De young, a Halliburton
logistics specialist, also described widespread overcharging and mismanagement.
For example, she disclosed the company did not comply with the U.S.
Army's request to move its employees from a five-star hotel in Kuwait, which
cost U.S. taxpayers about 10,000 dollars a day, into air-conditioned tent
facilities, which would have cost less than 600 dollars daily.
Michael
West, a former Halliburton labour foreman, said he and other employees spent
weeks in Iraq with virtually nothing to do, but were instructed to bill 12-hour
days 7 days a week on their timesheets.
He told Waxman that has superior
directed him to buy unnecessary equipment, telling him: ”Don't worry about it.
It's a cost-plus-plus contract.”
”These individuals have first-hand
knowledge of egregious examples of waste, fraud and abuse involving
Halliburton's Iraq contracts,” Waxman said in his letter.
Halliburton
has won many lucrative contracts under the growing U.S. defence budget, which is
now is at more than 400 billion dollars a year. The wars in Afghanistan and Iraq
have cost 180 billion dollars to date.
Halliburton alone received 8.2
billion dollars worth of contracts from the Pentagon to provide support services
such as meals, shelter, laundry and Internet connections for U.S. soldiers in
Iraq. It is also helping rebuild the country's oil infrastructure, according to
congressional sources. The value of its contracts is far more than any other
firm doing business in Iraq.
Its employees also allegedly received some
6.3 million dollars in kickbacks on another deal, charging for three times as
many meals as were actually served at a major army facility in Kuwait.
(END/2004)
http://ipsnews.net/interna.asp?idnews=24212