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CORPORATISM -
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Iraq Contract Oddities

Posted in the database on Thursday, May 05th, 2005 @ 23:31:55 MST (1562 views)
from Contra Costa Times  

Untitled Document THE WAR IN IRAQ has been very good for Halliburton, the Texas-based military contractor. In the last two years, the Bush administration has awarded Halliburton's Kellogg, Brown and Root subsidiary $10.5 billion in contracts to do everything from providing meals to the troops to repairing Iraqi oil wells.
But over the last several months, report after report has come out alleging that KBR has overcharged the Pentagon by hundreds of millions of dollars. There is also deepening suspicion that Halliburton -- whose former CEO is Vice President Dick Cheney -- got preferential treatment because of political connections.

The nonpartisan Government Accounting Office was the first to raise questions about billing irregularities when it found that KBR had charged $88 million for 3.4 million meals that it never served. Then, the Defense Contract Audit Agency, which monitors all Pentagon contracts, said it had identified overbillings and questionable costs totaling $213 million for fuel that KBR had shipped to Iraq from Kuwait.

In one outrageous example, KBR allegedly billed $27.5 million to deliver liquefied petroleum gas that had been purchased in Kuwait for $82,000. The government auditors called the huge mark-up "illogical" -- the understatement of the century.

The Justice Department has launched its own probe. And federal investigators are looking into allegations that the Pentagon showed improper favoritism in awarding no-bid contracts to KBR. A high-ranking civilian whistleblower at the U.S. Army Corps of Engineers has alleged that KBR was allowed to write the specs for a $2.5 billion oil-repair contract. Not surprisingly, it was the only company qualified to do the work and won a no-bid contract.

The company's performance, however, left a lot to be desired, according to a recent State Department report that called KBR's work "poor." California Democratic Rep. Harry Waxman, the ranking minority member of the House Government Reform Committee, says, "The Bush administration gave Halliburton a blank check, and the taxpayer has been stuck with the bill."

A lot of the money that the U.S. government used to pay Halliburton came out of Iraqi oil revenues. Waxman alleges that KBR and the Pentagon hid the overbillings from U.N. auditors who monitor the Iraq oil fund by sending them a copy of the Pentagon audit with large sections blacked out.

Halliburton officials deny any wrongdoing. They say they wanted to protect "proprietary information" and remove things that were "factually inaccurate or misleading." True, there is no proof that the military contractor did anything wrong. But the government reports raise serious questions.

The Pentagon has ignored the findings of its own auditors, and the contracts keep on rolling in. In the case of the phantom meals, the Army at first refused to pay, then relented, dubiously claiming that most soldiers probably ate more than a normal- sized portion.

This kind of twisted logic is simply not acceptable. It is time for a broad inquiry into the U.S. government's involvement with KBR.



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