- WASHINGTON (Reuters) -- Pentagon
auditors took aim at Vice President Dick Cheney's old company Halliburton
on Tuesday and said they found "significant deficiencies" in
its handling of billions of dollars of work in Iraq.
- In testimony at a hearing on Iraq contracts on Capitol
Hill, the head of the Pentagon's audit agency cited problems with the Texas-based
firm's billing system and sub-contracts and potential over-charging for
meals served to troops.
- Halliburton subsidiary Kellogg Brown and Root has the
potential to earn more than $18 billion under two major contracts in Iraq,
one to handle logistics for U.S. troops and another to restore Iraq's oil
- "DCAA has identified significant deficiencies in
KBR's estimating practices related to the award of subcontract costs,"
said William Reed, director of the Defense Contract Audit Agency, in prepared
- He said these deficiencies led to potential overpricing
at dining halls in Kuwait and Iraq for U.S. troops and that the military
was holding back on paying $186 million for meals.
- The company's own internal analysis found KBR probably
over-estimated meal charges by about 19 percent but military auditors said
this could be as high as 36 percent, Reed told the House of Representatives
Committee on Government Reform.
- Halliburton, which is being investigated by several government
departments for its contracts in Iraq, has vigorously defended its work
- The company is a popular target of criticism by Democrats
during this presidential election year, a focus the Republicans say is
driven by a bid to damage the credibility of the Vice President, who ran
Halliburton from 1995-2000.
- Democratic Rep. Henry Waxman of California told Cheney
in a letter last weekend that one of Cheney's key staffers, Lewis Libby,
and other senior administration officials were briefed about the Defense
Department's plan to award Iraq deals to Halliburton.
- Cheney's office denies any wrongdoing and says the vice
president did nothing improper and played no role in getting his former
company lucrative Iraq business.
- Waxman was expected at Tuesday's hearing to blast the
committee's chairman, Rep. Tom Davis of Virginia, for not allowing former
Halliburton employees to give testimony about alleged overspending and
waste by the company in Iraq.
- A report by the General Accounting Office, which was
presented at the hearing, found some problems with the use of Halliburton's
logistics contract to do work in Iraq.
- "We found the use of the LOGCAP contract in Kuwait
and Iraq was not adequately planned, nor was it planned in accordance with
applicable Army guidance," said David Walker, comptroller general
of the GAO, which conducts investigations at Congress's request.
- He said work plans, or task orders, were frequently revised
which made oversight difficult. For example, a task order supporting troops
in Iraq was revised seven times in less than a year. Another for logistical
support for troops in Kuwait was changed 18 times between September 2002
and December 2003.
- Auditors also found problems with other contracts in
Iraq including billing issues in a $420 million deal given to San Diego-based
Titan Corp . to provide translators.
- One of Titan's employees and a subcontractor were named
in a prison abuse scandal in Iraq and Reed said the company had told the
government it would "adjust" previously billed work done by these
people amounting to over $178,000.
- Auditors are also looking at a contract held by CACI
International, which provided interrogators for Iraq and which has been
named in the prison abuse scandal.
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