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Pentagon Audit Questions Halliburton's Costs in Iraq
[FINAL Edition]
The Washington Post - Washington, D.C.
Subjects: Audits; Postwar reconstruction; Fuels; Defense contracts
Author: Witte, Griff
Date: Mar 15, 2005
Start Page: A.04
Section: A SECTION

The audit summary, written in October 2004 but withheld from public release, covers one out of 10 sections from a $2.5 billion contract under which Halliburton was tapped to deliver fuel, fight oil well fires and repair oil facilities in Iraq after the U.S.-led invasion in the spring of 2003. Of the $2.5 billion, approximately $1.6 billion came from Iraqi oil proceeds and the rest was funded by U.S. taxpayers.

Halliburton, where Vice President Cheney served as chief executive from 1995 to 2000, has come under persistent criticism for its handling of several Iraqi reconstruction contracts. For example, auditors turned up $1.8 billion in "unsupported costs" in a $10.5 billion Army logistics contract that KBR won on a competitive bid. Despite those findings and a recommendation to withhold some of the payments, the Army decided last month to continue paying Halliburton in full, plus performance bonuses.

On Capitol Hill yesterday, Richard Jones, a former U.S. ambassador to Kuwait, acknowledged sending an e-mail in which he pushed for KBR to sign a deal quickly with Altanmia to meet a rising demand for fuel in Iraq. Jones also testified the embassy had received reports from Altanmia officials that Halliburton executives were demanding kickbacks. Jones said those reports were passed along to Pentagon investigators.

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