Auditors fault Halliburton

US Defence Department auditors have questioned more than $108 million in costs claimed by Halliburton on its $875 million contract to provide fuel in Iraq.

    The US firm has made a profit of $2.5 billion from Iraqi contracts

    The Defence Contract Audit Agency (DCAA) also faulted Halliburton subsidiary KBR on Tuesday for failing to provide the records necessary to evaluate spending on the contract.

    The data KBR gave the auditors did not match the company's internal accounting records, the agency said.

    The charges auditors questioned included a payment of $27.5 million to transport $82,000 worth of propane.

    Halliburton spokeswoman Wendy Hall said on Monday the company gave the auditors all the necessary records. She repeated the company's position that it did not overcharge for fuel delivered in Iraq.

    "The facts show that KBR delivered fuel critical to the Iraqi people when failure was not an option," Hall said in a statement.

    Outraged Democrats

    Congressional Democrats critical of Halliburton's work in Iraq released the executive summary of the DCAA audit on Monday. The audit was advisory and did not require the Defence Department to take action against Halliburton.

    The Pentagon has awarded huge
    contracts to Halliburton in Iraq

    The Defence Department has rejected calls for it to cut off its current contracts with Halliburton because of the controversy.

    US Vice-President Dick Cheney headed Halliburton from 1995 to 2000. The Bush administration denies that Cheney had any role in the corporation getting large defence contracts.

    KBR got more than $875 million to provide petrol, kerosene and other fuel in Iraq between May 2003 and January 2004. The Defence Department gave that work to KBR under an existing logistics contract without asking for bids from other firms.

    Huge profits

    Overall, Halliburton has made more than $2.5 billion from various government contracts in Iraq since the March 2003 invasion.

    The auditors questioned $108,409,622 in costs KBR claimed on the fuel contract. The largest part of that - more than $62 million - involved charges for fuel delivered to KBR in Kuwait by a government-approved subcontractor called Altanmia.

    Preliminary reports from DCAA auditors in 2003 questioned $61 million of those charges for fuel from Altanmia, saying it may have been too expensive.

    The charges auditors questioned included a payment of $27.5 million to transport $82,000 worth of propane

    KBR has said it was forced to use Altanmia by the Kuwaiti government and could not get a better price.

    "The report fails to take into account the fact that KBR performed an urgent mission at the army's request and that the mission took place in a wartime environment," Hall said.

    But the audit faulted KBR for not attempting to get a better deal in the months after the fuel contract began in May 2003.

    "It is not reasonable to use prices negotiated in only a few days, under extremely difficult circumstances, for the entire period of performance which extends for almost a year," the auditors said.

    The auditors wrote it was "illogical" for KBR to spend more than $27.5 million to send $82,000 worth of propane from Kuwait into neighbouring Iraq.

    SOURCE: Agencies


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