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USA: Halliburton‘s Iraq deals contract abuse
Date: 6/28/05 at 12:44PM
Reuters reports:
Halliburton’s Iraq deals described as contract abuse
Mon Jun 27, 2005
By Sue Pleming
WASHINGTON (Reuters) – A top U.S. Army procurement official said on Monday [US Vice President Dick Cheney’s] Halliburton‘s deals in Iraq were the worst example of contract abuse she had seen as Pentagon auditors flagged over $1 billion of potential overcharges by the Texas-based firm.
Bunny Greenhouse, the Army Corps of Engineers’ top contracting official-turned whistle-blower, said in testimony at a hearing by Democrats on Capitol Hill that “every aspect” of Halliburton‘s oil contract in Iraq had been under the control of the Office of the Secretary of Defense.
“I can unequivocally state that the abuse related to contracts awarded to [Halliburton’s] KBR (Kellogg Brown and Root) represents the most blatant and improper contract abuse I have witnessed during the course of my professional career,” said Greenhouse, a procurement veteran of more than 20 years.
Her blistering criticism came as Democrats released a new report including Pentagon audits that identified more than $1.03 billion in “questioned” costs and $422 million in “unsupported” costs for Halliburton‘s work in Iraq.
See also here.
And here.
And here.
And here.
And here.
And here.
And here.
Ex employees of Halliburton in Iraq: here.
US Big Oil and oil for food in Iraq: here.
Audits find flaws in U.S. handling of Iraq deals
WASHINGTON (Reuters) – The United States has carelessly, and possibly
fraudulently, handled some Iraqi money meant for rebuilding and poorly
managed billions of dollars of U.S.-funded contracts, said U.S. audits
released on Wednesday.
In one area of Iraq alone, nearly $100 million in cash used for
rebuilding was unaccounted for. Incompetence by U.S. procurement staff
ranged from contractors being paid twice to files being misplaced.
Two audits by the U.S. Special Inspector General for Iraq Reconstruction
found flaws in how U.S. government and military officials ran contracts
paid for by the Development Fund for Iraq, Iraqi money entrusted to the
United States after the 2003 invasion.
A third audit looked at a small sample of U.S.-funded projects paid for
with $18.4 billion appropriated by Congress to rebuild Iraq and found
sloppy and disorganized administration of some of those deals.
“There was no assurance that fraud, waste and abuse did not occur,” all
three audits said.
The most scathing criticism was in audits of the development fund, made
up of proceeds from Iraqi oil sales, frozen assets from foreign
governments and surplus from the U.N. Oil for Food program. Handling of
that fund has already come under fire by previous U.S.- and
U.N.-mandated audits.
An audit released by the Iraq reconstruction inspector in January
concluded the U.S. had not properly safeguarded about $8.8 billion of
Iraq’s own money in the development fund.
Of concern in the new audits was poor oversight of hundreds of millions
of dollars of cash used to pay contractors.
One audit looking at about $119.9 million in DFI cash paid out in
south-central Iraq, the account manager could not properly account for
over $96.6 million in cash.
FRAUD SUSPECTED
“During this audit we found indications of potential fraud and referred
these matters to the Assistant Inspector General for Investigations (for
reconstruction),” the report said.
Examples of sloppiness included 645 transfers of more than $23 million
in cash using the wrong form; one contractor being paid twice for the
same work, and 10 payments amounting to $324,500 were submitted for
canceled contracts.
Two payment officers with cash account balances of $777,050 and $715,000
left Iraq without clearing their balances with the account manager. An
attempt was made to remove the outstanding balances by “simply washing
accounts,” the report said.
Democratic Sen. Russ Feingold (news, bio, voting record) of Wisconsin
criticized the “disorganized, sloppy management” of Iraq rebuilding deals.
“Billions of dollars, the success of the stabilization mission and U.S.
credibility are at stake,” Feingold said.
The military agreed with most of the recommendations made in the cash
audit, and Col. Thomas Stefanko said in a written response that
“extensive corrective actions” have been taken in the past four months
to resolve problems raised by the audit.
Another audit looked at how DFI contracts were administered by the Iraq
Project and Contracting Office, which is responsible for most of the
contracts paid for by $18.4 billion.
Auditors said they could not identify the total value of contracts
financed by the fund and said the contracting office lacked the
necessary controls and adequate documentation to effectively perform its
responsibilities.
In its written response, the contracting office acknowledged confusion
in the early management of DFI contracts but said new controls were now
in place.
“We have taken many corrective actions and will continue to do so,” said
Maj. Gen. Daniel Long, head of the office.
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