Wonder What Kind of Gift Haliburton Will Give Cheney For These Great Contracts?

[catch&release]

DOD Comptroller Criticizes Halliburton
Thu Mar 11, 2:00 PM ET Add Business - Reuters to My Yahoo!


By Sue Pleming

WASHINGTON (Reuters) - The Pentagon (news - web sites)'s outgoing chief financial officer criticized Vice President Dick Cheney (news - web sites)'s old company Halliburton (NYSE:HAL - news) on Thursday and said "significant" problems were found with its cost estimates in Iraq (news - web sites).



Halliburton unit Kellogg Brown and Root is the U.S. military's biggest contractor in Iraq, holding contracts that could eventually total nearly $18 billion.


It also has become a lightning rod of Democratic criticism during this presidential election year because of its former ties to Cheney, who ran the company from 1995-2000.


"DCAA (military auditors) has identified significant deficiencies in KBR's estimating practices related to the award of subcontract costs," said Pentagon Comptroller Dov Zakheim, referring to the Defense Contract Audit Agency.


In prepared testimony to a congressional hearing, Zakheim said on Jan. 13 -- three days before the company was given a new $1.2 billion contract in Iraq to repair its southern oil fields -- auditors told the Army to inform them before the negotiation of any future contract awards.


Zakheim, said that earlier this year military auditors returned two major work order estimates totaling more than $3 billion to KBR because they were "inadequate for the purposes of negotiating a fair and reasonable price."


He said the company later submitted one of the work orders for $700 million less than the original proposal but even this was later withdrawn by KBR due to continuing pricing issues.


DEFICIENCIES


Zakheim said the company's "deficiencies" in estimating sub-contracts was the catalyst for the DCAA's review of potential gasoline overpricing.


The Pentagon's inspector general's office has opened a criminal investigation into whether the Texas-based company overcharged for fuel delivered to Iraqi civilians via a Kuwaiti subcontractor.


Military auditors found in a draft audit last December that KBR may have overcharged by $61 million for fuel through Sept. 2003. On Tuesday, the U.S. military appointed new contractors to bring in fuel to Iraqi civilians.


Halliburton has consistently denied any wrongdoing for its work in Iraq and launched an advertising campaign this year to improve the company's image after a slew of negative reports.


In a statement on Thursday, KBR President Randy Harl once again defended his company's work in Iraq and said cost estimates often changed because the scope of work requirements were "dynamic and ever-changing."


Harl said the company had fully cooperated with military auditors and other regulatory agencies overseeing their work and stressed all government procurement procedures had been closely followed.


"Oversight of the public's money is important -- especially during times of war," Harl added.


Under a logistics contract with the U.S. military to support troops in Iraq and other conflict zones, auditors are also looking into the company's pricing for meals to troops.


"In DCAA's opinion, the billed number of meals appears to exceed significantly the actual meals served," said Zakheim.





The company has agreed to withhold $176.5 million in billing for food while KBR prepares a response to issues reported by the DCAA.

California Rep. Henry Waxman, one of the fiercest Democratic critics of Halliburton and its work in Iraq, sent a memorandum on Wednesday to his colleagues disclosing additional information from defense auditors, which was set to be discussed at the hearing of the House of Representatives Government Reform Committee.

The Republican chairman of the committee, Virginia Rep. Tom Davis, said in his prepared opening remarks that oversight of taxpayer money used in Iraq was important but urged members to take politics out of the hearing.

"We are not interested in simply repeating demagogic and disingenuous sound bites," said Davis, adding that many of the disputes indicated contract oversight was working.

[Fish Factor]

March 3, 2004

As published in The Washington Post on March 3, 2004.

PILING ON HALLIBURTON

THE WASHINGTON POST

By: DAVE LESAR – Groucho Marx once said that "politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." That may overstate the case some, but right now Groucho looks less like a comic and more like a political analyst.

Compliance with government contracting is a daunting task replete with potential points for differing interpretation. Halliburton has been working with the military since World War II and understands the process as well as anyone. In the best of circumstances, auditors are going to ask very specific questions and companies are going to respond with answers to those questions. The two sides do not always agree, but the process ensures that everyone understands both the questions and the answers. We have always worked with the auditors and we will continue to work with them. At times we have disagreed on issues that were subject to audit, but we have always been able to work through these issues. The process normally works well because it balances the government's need to deliver products and services at the best value and the company's need to be fairly paid for its work.

In the 2004 campaign season, Halliburton apparently is no longer entitled to answer questions before being accused of mismanagement, profiteering or misuse of funds. Halliburton is under the most intense public scrutiny of any corporation in America today. The primary reason for the attacks on our integrity seems to be that the vice president of the United States used to hold my job. Some of these critics are not content to rage about the Iraq war. They are intent on creating a new and continuing war against Halliburton, even ignoring the truth about our work supporting the troops in Iraq and around the world.

Examples include a very public charge of "war profiteering" on fuels shipped into Iraq from Kuwait. Missing in the first headlines, and generally unreported since, is the fact that the contracts were approved by our client, the U.S. Army Corps of Engineers. Meanwhile, Halliburton actually suggested that Turkey be used as an alternative fuel source, a recommendation that saved millions in taxpayer dollars. Numerous investigations have been launched following the media reports. We are confident that it will be proven that Halliburton delivered the fuel at the best price on the best terms, even under emergency wartime conditions.

Another report addressed the possibility that two former Halliburton employees received kickbacks from a Kuwaiti contractor. Missing from the debate on that subject is the fact that the activities of one or two rogue employees were caught by Halliburton internal auditors. As a result, taxpayers didn't lose a penny.

Recently two other former employees said that Halliburton has engaged in a variety of overcharging practices that are costing the taxpayers millions of dollars. If the goal of their statements and news events was anything more than political grandstanding, we could have again demonstrated why the "facts" they used to make these claims were wrong -- not just misinterpreted, but wrong.

One phone call to Halliburton would have eliminated their incorrect statement that we bought monogrammed towels in Iraq for $7.50 each. Some monogrammed towels were used at one site to limit the disappearance of towels. They cost $3 each. In another claim, critics say Halliburton paid $7,500 per month for lease vehicles. Our records indicate no such lease payment for any one vehicle. Indeed, every example cited in their public statement has a logical factual explanation or can be refuted outright. So please, in the future, make that call to us.

We support aggressive government oversight, and our approach is to not pick fights with elected officials. We have served both Democratic and Republican administrations for more than 60 years. We are proud of our record and of our employees who serve the military. We receive contracts to make omelets and build infrastructure because of our unique skill sets. In short, we get government contracts because of what we know, not who we know.

When we are operating in a war zone under intense time pressures we will of course make some mistakes. But our commitment at Halliburton is that when we make a mistake, we say so and we fix it. Our hope is that we take politics out of the equation. I can assure you, however, that regardless of how political the field becomes, Halliburton will continue to deliver what our soldiers need to feel a little closer to home.

The writer is chairman and CEO of Halliburton C

[Fish Factor]

March 3, 2004

As published in The Washington Post on March 3, 2004.

PILING ON HALLIBURTON

THE WASHINGTON POST

By: DAVE LESAR – Groucho Marx once said that "politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." That may overstate the case some, but right now Groucho looks less like a comic and more like a political analyst.

Compliance with government contracting is a daunting task replete with potential points for differing interpretation. Halliburton has been working with the military since World War II and understands the process as well as anyone. In the best of circumstances, auditors are going to ask very specific questions and companies are going to respond with answers to those questions. The two sides do not always agree, but the process ensures that everyone understands both the questions and the answers. We have always worked with the auditors and we will continue to work with them. At times we have disagreed on issues that were subject to audit, but we have always been able to work through these issues. The process normally works well because it balances the government's need to deliver products and services at the best value and the company's need to be fairly paid for its work.

In the 2004 campaign season, Halliburton apparently is no longer entitled to answer questions before being accused of mismanagement, profiteering or misuse of funds. Halliburton is under the most intense public scrutiny of any corporation in America today. The primary reason for the attacks on our integrity seems to be that the vice president of the United States used to hold my job. Some of these critics are not content to rage about the Iraq war. They are intent on creating a new and continuing war against Halliburton, even ignoring the truth about our work supporting the troops in Iraq and around the world.

Examples include a very public charge of "war profiteering" on fuels shipped into Iraq from Kuwait. Missing in the first headlines, and generally unreported since, is the fact that the contracts were approved by our client, the U.S. Army Corps of Engineers. Meanwhile, Halliburton actually suggested that Turkey be used as an alternative fuel source, a recommendation that saved millions in taxpayer dollars. Numerous investigations have been launched following the media reports. We are confident that it will be proven that Halliburton delivered the fuel at the best price on the best terms, even under emergency wartime conditions.

Another report addressed the possibility that two former Halliburton employees received kickbacks from a Kuwaiti contractor. Missing from the debate on that subject is the fact that the activities of one or two rogue employees were caught by Halliburton internal auditors. As a result, taxpayers didn't lose a penny.

Recently two other former employees said that Halliburton has engaged in a variety of overcharging practices that are costing the taxpayers millions of dollars. If the goal of their statements and news events was anything more than political grandstanding, we could have again demonstrated why the "facts" they used to make these claims were wrong -- not just misinterpreted, but wrong.

One phone call to Halliburton would have eliminated their incorrect statement that we bought monogrammed towels in Iraq for $7.50 each. Some monogrammed towels were used at one site to limit the disappearance of towels. They cost $3 each. In another claim, critics say Halliburton paid $7,500 per month for lease vehicles. Our records indicate no such lease payment for any one vehicle. Indeed, every example cited in their public statement has a logical factual explanation or can be refuted outright. So please, in the future, make that call to us.

We support aggressive government oversight, and our approach is to not pick fights with elected officials. We have served both Democratic and Republican administrations for more than 60 years. We are proud of our record and of our employees who serve the military. We receive contracts to make omelets and build infrastructure because of our unique skill sets. In short, we get government contracts because of what we know, not who we know.

When we are operating in a war zone under intense time pressures we will of course make some mistakes. But our commitment at Halliburton is that when we make a mistake, we say so and we fix it. Our hope is that we take politics out of the equation. I can assure you, however, that regardless of how political the field becomes, Halliburton will continue to deliver what our soldiers need to feel a little closer to home.

The writer is chairman and CEO of Halliburton C

[Chris_Davis]

I wonder what kind of gift President Clinton got for giving contracts to Haliburton to rebuild Kosovo?

[Swamp Monster]

Chris, I think they sent a box of cigars and an intern!