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Auditors: Halliburton Overcharged Taxpayers $1 Billion

Tuesday 28 June 2005

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WASHINGTON: A top US army procurement official said today Halliburton’s deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged over $US1 billion ($NZ1.42 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 Defence.

"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 the Democrats released a new report including Pentagon audits that identified more than $US1.03 billion in "questioned" costs and $US422 million in "unsupported" costs for Halliburton’s work in Iraq.

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 vice president Dick Cheney who headed the company 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.

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," said spokeswoman Cathy Mann 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 Army Corps of Engineers, 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 said were 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 $US7 billion, was given to KBR without competitive bidding.

She irked her bosses by handwriting her concerns in official documents for the oil deal but said these were overlooked, she said.

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 $US61 million to bring in fuel to Iraq to ease a shortage of refined oil.

Greenhouse agreed 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 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.

But KBR’s Mann dismissed his taped testimony and said issues regarding billing over food services had been resolved.,2106,3328366a12,00.html

Cheney’s 433,000 stock options
Cheney: $1 million annual paycheck from Halliburton

Forum posts

  • It is nice to know that our government is at least holding Halliburton accountable....

    "The U.S. Army Corps of Engineers has awarded Halliburton Co. a new contract valued at up to $1.25 billion to support American troops in the Balkans and other areas."
    Halliburton wins new Army contract

    I mean really, how much more absurd does this need to get? Everyone knows Cheney is running the country, his company is stealing from the American people, and the government gives them more contracts. Is it any wonder that Cheney wants to make sure we stay in Iraq as long as possible? The fact that everyday Halliburton is raking in millions of dollars in Iraq might have something to do with him telling us that Iraq is in it’s "last throes" against all evidence and contrary to common sense. Are we really going to let him keep lying, keep letting the troops be killed to pad Cheney’s bank account?

    • Well, I am not sure what you’ve read into this post but the U.S. government is not holding KBR to any accountibility. This was just a hearing on a number of contracts and cost of the same. It is a moot hearing to show the public and possible future historians that some activity took place regarding the KRB contracts.

      To get another prespective on this, KBR is under considering to be sold by Halliburton. Prior to the war KBR had losses of approx. $109 million. The first year of the war it made a profit of approx $475 million. It was able to settle some asbestos claims and to get out from under the courts.

      Of course people are making money on this war — that’s what’s it all about. Why the "new" awakedness about this fact? Were you so clueless and blind and spooked when the war first started?

    • The Model for Bush Globalization
      The Roots of the Bush-Cheney’s Oil Government

      Dick Cheney is evil. There is a bit of evil in most human beings, but in Cheney it is easy to spot, although most people don’t have the guts to say it.


      Bush Questioned Over Papers Leaked In UK

      The evil Dick Cheney
      by repost/Jackson Thoreau 8:31am Fri Jun 21 ’02 (Modified on 6:34pm Sun Jun 23 ’02)

      Dick Cheney is evil. There is a bit of evil in most human beings, but in Cheney it is easy to spot, although most people don’t have the guts to say it.

      I have mixed feelings about attempts to impeach Dubya Bush. Sure, I want to see this liar/thief/hypocrite exposed as the traitor he is and driven from office as Nixon was, never again to utter a simplistic "dead or alive" comment in public again.

      But then, we’d be officially stuck with Dick Cheney as the main man in the White House, although many believe he already is. And that would be worse than having Bush in that position. My dream scenario would be a re-enactment of Watergate, where the vice president is forced to resign before the president follows suit. Add to that the resignation of Scalia, Ashcroft and Rumsfeld, and I’d start believing that God does have more than a superficial effect on our political process. Thank you, Jesus, thank you, Lord.

      Cheney’s list of sins is as long as any Republican’s transgressions. As CEO of Dallas-based Halliburton Co. from 1995 until 2000, Cheney did little about cleaning up asbestos in his buildings, leading to multimillion-dollar legal judgments against Halliburton. He presided over several rounds of job cuts, including about 11,000 workers in 1999, a year that Halliburton showed a $438 million profit. Since those layoffs, Halliburton’s profits rose to $501 million in 2000 and $809 million in 2001.

      Halliburton also raked in big bucks from dubious deals with Iraq under Cheney’s tenure, according to the Washington Post and other sources. From 1997 through 2000, Cheney’s Halliburton sold $73 million worth of oil equipment and services to Iraq through subsidiaries Dresser-Rand and Ingersoll Dresser Pump Co. to help rebuild Iraq’s Gulf War-damaged infrastructure. That was more business than any other U.S. company, and Cheney later lied about his Iraqi connection to media types like Sam Donaldson. Talk about corporate hypocrisy. Companies like Halliburton could make big profits on such oil deals, but human rights groups could not ship life-saving medicine to Iraqi children because of UN sanctions. And now, Cheney the Major League Hypocrite is standing in line to nuke Hussein after he profited - big time - from Iraq. Halliburton also did business with dictatorships that have committed human rights abuses, such as in Burma, Libya and Iran. In fact, Houston-based Kellogg Brown & Root, a Halliburton subsidiary, was fined $3.8 million for exporting U.S. goods to Libya in violation of U.S. sanctions. Cheney did nothing to stop such fraud.

      Brown & Root also had to pay a hefty fine after being accused of defrauding the U.S. military by submitting false claims for delivery orders between 1994 and 1998. Again, Cheney did nothing to stop such fraud. Halliburton was a corporate welfare hog under Cheney, obtaining at least $3.8 billion in federal contracts and taxpayer-insured loans, according to the Center for Public Integrity. All the while, Cheney blasted welfare mothers.

      Then there is Halliburton’s Enron-like accounting scheme under Cheney’s watch. The dishonest accounting policies, adopted in 1998, were obviously designed to make it appear that Halliburton had more revenues than the firm actually did. Specifically, Halliburton labeled unresolved claims against some clients as revenue, even though the money was still disputed, including $234 million in 2001 and $89 million in 1998. And who was Halliburton’s accountant? Andersen, of course- the same firm embroiled with Enron. Cheney was even featured in an Andersen video, saying "I get good advice, if you will, from their people based upon how we’re doing business and how we’re operating - over and above just the sort of normal by-the-books auditing arrangement." Sounds like a confession to me. Even with such phony accounting, Halliburton’s stock nose-dived below $10 in early 2002 after being as high as $49 last year. The stock has since gone up slightly. The SEC is investigating, but do you really expect anything to come of that?

      There is a wide trail of lies told by Cheney. There is the Iraqi connection, the Enron ties, the India deal, the so on and so on. Cheney also lied about not living in Texas as late as November 2000 in apparent violation of the 12th Amendment to the U.S. Constitution. He didn’t sell his Dallas-area mansion to a major Republican donor until Nov. 30, 2000, according to deed records. I have been by that $2.7 million home several times since Cheney sold it and have never seen any evidence anyone occupying it. The owner, Dianne T. Cash, owns another million-dollar home in Highland Park, one of the wealthiest suburbs in the country. So, she needs two mansions in the same tiny suburb, huh? From Sept. 2000 until June 2001, Cash - an appropriate name for a Republican, right? - gave a whopping $229,433 to national Republican organizations, in addition to buying Cheney’s house, according to federal records. Interestingly, she also gave $1,000 to Democrat Bill Bradley in 1999 - her only contribution to a Democrat since then. Was that a ploy to foil Gore? Surely, this staunch Republican did not embrace Bradley’s proposals, which were more liberal than Gore’s.

      Another lie concerns another basic piece of public information with a paper trail: Cheney’s Texas driver’s license. Dick’s license is still active but lists his address as 500 N. Akard Street in Dallas, which is where he worked at Halliburton, not his home on Euclid Avenue in Highland Park. Lynne Cheney’s driver’s license lists the same Akard address. Texas law requires residency addresses to be placed on licenses. Even someone as paranoid as billionaire H. Ross Perot - remember his weird reason for getting out of the 1992 presidential election because the Bush campaign supposedly planned to disrupt his daughter’s wedding? - has his home address, not work address, on his Texas driver’s license. Even Bush listed the Texas governor’s mansion - which was where he lived and goofed off, er, worked - on his license. Other high profile politicians - such as former Dallas Mayor Ron Kirk, who is running as a Democrat for U.S. Senate, and his Republican challenger, Attorney General John Cornyn - list their home addresses, not work. Why were both Cheneys allowed to be above the law, once again?

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  • I certainly think there should be an audit. Every company goes through one each year to resolve any questions. As for Bunny Greenhouse, one does have to wonder where she’s coming from since she brings Cheney into it. The Secretary of Defence is Rumsfeld and I don’t think Rumsfeld has a relationship with Halliburton.

  • I wonder about America here we ahave a blatant example of a vice president profiting from a false war on WMD and terrorism through his former position on the board of directors of Haliburton and still a majority share holder and they cant see through it and they the American public toddle off to war dying for rich scum like this Dick Cheney and his moron boss (in figure head only) president Bush

    And what gets me even more us British are dying and we dont get bugger all for it accept higher petrol prices at the petrol pumps.