Halliburton Hearings

From Holden:

As they did with the Downing Street Memo, Democrats held their own hearing on Halliburton’s sugar-sweet contracts in Iraq and revealed – Surprise! – overbilling by Dick Cheney’s employer now adds up to more than a billion dollars.

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 Democrat-sponsored forum that was held, Democratic leaders maintained, 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 R. Lautenberg, Democrat of New Jersey.

Large contracts awarded to the Halliburton subsidiary Kellogg Brown & Root have been a focus of questions and criticism since even before the Iraq invasion in 2003, in part because some were awarded without competition and because of allegations that the company, formerly led by Dick Cheney before he became vice president, was aided by political connections. In some cases, the Pentagon has publicly complained about excess bills and reduced payments, but the audit figures released Monday suggest that billing disputes have been more extensive than previously disclosed.


The hearing featured videotaped testimony from a former food manager in Iraq for Kellogg Brown & Root who said the dining hall where he worked in early 2004 charged the Army for 20,000 meals a day when it was only serving 10,000, routinely used expired foods and punished him for speaking to auditors by transferring him to the more dangerous outpost of Falluja.


A new report, released on Monday by Senator Byron L. Dorgan, Democrat of North Dakota, and Representative Henry A. Waxman, Democrat of California, quotes 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.” In the case of K.B.R., the agency found many expenditures to be “unreasonable in amount,” meaning they were higher than necessary.

An Army Audit Agency report in November 2004, publicly described for the first time on Monday, found a pattern of duplicate billing and “excessive” costs in the logistics contract, including a charge of $152,000 to provide a movie library for 2,500 soldiers and the purchase of more than $500,000 worth of unneeded heavy equipment.


Pentagon audits of the firm’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.

K.B.R. received the oil-repair and fuel contract without competitive bidding, and after it had been secretly hired to detail the needs and likely costs of postwar oil repairs.


Beyond the $1 billion in questioned costs, Pentagon auditors found that K.B.R. had not properly documented another $443 million in expenditures under the two largest contracts.