Report Singles Out Halliburton in Iraq Mismanagement

The fraud, manipulation and waste combined with the inept planning is beyond contempt. This administration is so corrupt AND with a Vice President that makes profits off the war! Only the John Kerry Broom will do this coming election. Time to sweep these bums out of office and then prosecute them for their criminal acts, negligence and immoral behavior.


Report Singles Out Halliburton in Iraq Mismanagement

Wed Jun 16, 7:55 AM ET

By T. Christian Miller Times Staff Writer

WASHINGTON -- The Pentagon may have wasted billions of dollars in Iraq because of a lack of planning and poor oversight, top congressional and Defense Department investigators said Tuesday.

David M. Walker, head of the General Accounting Office, told a congressional panel that Defense Department planners had failed to determine adequately the needs of U.S. soldiers in Iraq or effectively oversee the billions of dollars' worth of contracts they had issued.

While Pentagon officials defended their efforts by blaming any mistakes on the pressure of the war's early days, the investigators said that they had found ongoing waste in the contracting process a year after the invasion began.

In remarks to reporters, Walker speculated that the total losses due to waste could amount to "billions."

"There are serious problems, they still exist and they are exacerbated in a wartime climate," Walker told members of the House Government Reform Committee, which is charged with preventing waste, fraud and abuse in the government.

Tuesday's testimony by the GAO, Congress' investigative arm, and the Defense Contract Audit Agency, the Pentagon's auditors, was the most complete picture to date of the U.S. military's decision to pay private contractors billions of dollars to help wage the war and rebuild Iraq.

While much of the contracting was done well, the two agencies said, U.S. military contract managers and the companies they oversaw were frequently overwhelmed by the magnitude of the tasks in Iraq.

The two agencies singled out the contract awarded to Halliburton Co. -- the Houston-based oil services giant that supplies food, housing and other logistics services to the military -- as a particularly egregious example of poor oversight by the government and overcharging by the company.

The U.S. military, for instance, did not develop adequate plans to support its troops in Iraq until May 2003, two months after the invasion, when Halliburton was ordered to supply more dining facilities and housing, a GAO report said. Since then, Halliburton's contract to supply the troops in Kuwait and Iraq has been adjusted by the Army more than 176 times, or more than once every two days.

In addition, at one point reservists with no more than two weeks' training were overseeing the Halliburton contract, said Neal Curtin, the GAO director charged with investigating Halliburton and other companies with logistics contracts. Even now, the Pentagon only has twice as many overseers monitoring contracts in Iraq as it did in Bosnia, though it is spending 15 times as much money.

"What you saw was a real thin layer of oversight capability," Curtin said.

Other U.S. government actions also came under fire Tuesday.

The GAO found that most of the biggest contracts awarded without bidding in the early days of the war were justified by their emergency nature. But in some instances, the investigators said, Pentagon officers "overstepped" their authority by issuing billion-dollar jobs under existing contracts, without putting the work out to bid as required by law.

Pentagon procurement officials said significant progress has been made in Iraq, with new bridges, water systems and power stations up and running. But they acknowledged that mistakes were made, especially in the aftermath of the invasion.

"Have we accomplished this tremendous mission without missteps? No, we have not," said Tina Ballard, the Army's head of contracting.

As for Halliburton, which has total contracts in Iraq worth up to $18.2 billion, Pentagon auditors believe that the company has been billing U.S. taxpayers for millions of meals never served to U.S. troops. While Halliburton has objected, the auditors have recommended that the government withhold $186 million in payments until the dispute is settled.

In a related development, the Army recently renegotiated a contract that Halliburton had with a Kuwaiti company to provide meals. By contracting directly with the Kuwaiti company instead of going through Halliburton, the Army knocked 40 percent off the cost of the contract.

"Halliburton is a company whose business base expanded extremely rapidly" after they won contracts for work in Iraq, said Bill Reed, the head of the audit agency. "They were not adequately prepared to keep pace."

The findings by unbiased sources add fuel to Democrats' efforts to draw attention to Halliburton, which was run by Vice President Dick Cheney from 1995 to 2000.

Rep. Henry A. Waxman, D-Calif., who as one of Halliburton's fiercest critics has issued more than 35 news releases about the company since last year, demanded that the committee probe more deeply into the links between Halliburton and Cheney.

While the investigators testified that there has been no evidence that Cheney influenced the award of any contracts to his former company, Waxman said more investigation was necessary.

He pointed to recent revelations that a Pentagon political appointee had informed Cheney's chief of staff about a decision that led to a Halliburton subsidiary, KBR, winning a $7 billion contract to restore Iraq's oil infrastructure.

"Halliburton is gouging the taxpayer, and the Bush administration doesn't seem to care," Waxman said.

But Halliburton officials defended their actions in Iraq, saying that they "strongly" disagree with the auditors' contention on overbilling for meals.

"We expected there would be attempts before the end of June to deflect attention from the progress being made in Iraq, but we didn't think so much of it would originate here at home," Wendy Hall, a Halliburton spokeswoman, said in a prepared statement. "It is one thing to learn through experience, as we have, that war is difficult, but another to find that critics are using the war for purely political purposes."

Halliburton was not the only company singled out. San Diego-based Titan Corp., which employed two people identified in the investigation into the Abu Ghraib prison abuse scandal, also came under fire.

Auditors found that Titan was failing to keep track of its workers' hours and recommended withholding up to $4.9 million from the company's $402 million contract to supply translators to coalition forces in Iraq.

Titan also recently refunded the government $178,000 paid for the services of two workers involved in the prison scandal. Titan officials said that although the company has yet to be informed of problems, it made the refund in case the government investigation turns up wrongdoing.

"We don't know what the investigation will entail, so we took the measure to be conservative," said Ralph "Wil" Williams, a Titan spokesman.