A rchive Date
[ 11-12-2003 ]
Category
[ International Relations ]
sub-Categoy
[ U.S ]
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[http://cnews.canoe.ca/CNEWS/World/2003/12/11/284199-cp.html
Investigation finds overcharging, other problems with Cheney's former company
By MATT KELLEY
Thu, December 11, 2003
WASHINGTON (AP) - Pentagon auditors found that Vice-President Dick Cheney's former company may have overcharged the army by as much as $61 million US for gasoline in Iraq, senior defence officials said Thursday.
Halliburton apparently didn't profit from the possible overcharges, the officials said, speaking on condition of anonymity. The problem, the officials said, was that Halliburton may have paid a subcontractor too much for the gasoline in the first place.
The officials said the Halliburton subsidiary involved in Iraq reconstruction work, Kellogg, Brown & Root, also submitted a proposal for cafeteria services that was $67 million too high. The officials said the Pentagon rejected that proposal.
They said they had no reason to believe the problems were anything other than "stupid mistakes" by Halliburton.
In an e-mail statement, Halliburton spokeswoman Wendy Hall denied the company had overcharged. She said Halliburton was responding to questions from Pentagon auditors and was "confident our responses will satisfy" them.
News of the problems came as President George W. Bush worked to justify his decision to limit Iraq reconstruction contracts to companies from the United States or countries that supported the war. The move angered governments whose firms were cut out of the bidding process, including France, Germany, Russia and Canada.
Many prominent Democrats also have criticized the Halliburton contracts specifically, suggesting they were a political payoff for a company with strong ties to the Republican party and whose executives gave generously to the Bush campaign.
Cheney and Pentagon officials deny any political motive for awarding the no-bid contracts to KBR, which has a long-standing relationship with the military as a major Pentagon contractor.
Routine audits by the Defence Contract Audit Agency uncovered the problems.
Pentagon officials said they were concerned about the problems with KBR's contracts, which were awarded without competitive bidding for up to $15.6 billion for rebuilding Iraq's oil infrastructure and assisting U.S. troops there. About $5 billion has been spent or obligated to spend on those contracts so far.
"Contractor improprieties and/or contract mischarging on department contracts will neither be condoned nor allowed to continue," Dov Zakheim, the Pentagon's budget chief, said Thursday.
The defence officials, who are involved in the audit of the contracts, said the Pentagon was negotiating with KBR over how to resolve the fuel-pricing issue. They declined to name the subcontractor that provided the fuel, saying that company may not have been notified of the inquiry's findings.
 World Fact Book (CIA)]
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