A Defense Department review of Halliburton Co. invoices for $655 million in Iraq reconstruction expenses has found no questionable billing, the Army Corps of Engineers says. The review by the corps, which oversees Iraqi building projects, is part of a continuing audit of expenses submitted under the no-bid contracts that the Pentagon awarded to rebuild Iraq following the U.S.-led invasion. Contracts for Halliburton’s Kellogg, Brown & Root unit have been under particular scrutiny because of concerns raised by California’s Rep. Henry Waxman and other Democrats that the company got the job because of its political connections. Vice President Dick Cheney was chief executive at Halliburton, the world’s second-largest oilfield-services company, from 1995 to 2000.
"So far nothing untoward has been found," the corps said in a statement. "With the amount of publicity on this contract, auditors and contracting officers are being especially careful in reviewing all claim submissions." The Pentagon’s Defense Contract Audit Agency said in a statement that it’s devoting "substantial" resources to the contracts that have been awarded to Halliburton to make sure the expenses are valid and the price was appropriate. "The audits haven’t found anything to date to red-flag," said Scott Saunders, a corps spokesman.
Kellogg, Brown & Root was awarded a contract March 8 to put out oil-well fires, repair pipelines and supply fuel. Through Nov. 18, it has orders worth $1.7 billion under a cost-plus-type contract that reimburses the company for all allowable costs and pays a base profit of 2 percent. The $655 million in invoices being audited include $13 million in profit, said Lu Christie, a corps spokesman. One portion of the contract is to deliver gasoline from Kuwait and Turkey. Waxman, in a letter released Nov. 5, contended Halliburton is charging $2.65 per gallon to deliver more than 60 million gallons - "more than double the price experts have said would be reasonable, which is $1 per gallon." The Army Corps of Engineers has defended those prices, saying they reflect the danger of theft and attack that impede fuel deliveries. Four types of fuel are involved: gasoline, kerosene, liquid petroleum gas and diesel. The fuel is distributed to sites designated by the Iraqi Oil Ministry, which, in turn, distributes the products for use in ambulances, firetrucks and civilian automobiles as well as for heating and cooking, said Wendy Hall, a Halliburton spokeswoman. |