Evelyn Pringle February 2005
As of June 2004, the Government Accounting Office estimated that more than $1 billion in taxpayer money had been wasted due to illegal overcharges by contractors in Iraq, since the onset of the war. Furthermore, experts say that once the total is calculated correctly, the losses could very well add up to billions more.
According to GAO Comptroller General, David Walker, the $1 billion represents about 2% of the $60 billion spent in Iraq between March 2003 and June 2004. To no one's surprise I'm sure, Walker listed Halliburton's overbilling for meals as the kind of typical overcharging that is occurring.
Last summer, 5 whistleblowers, who were past employees of Halliburton, came forward to tell tax payers what was really going on in Iraq. They specifically described how the company was robbing tax payers blind with apparently not a care in the world about discovery or punishment.
Marie deYoung, is a former Army chaplain who worked for Halliburton, and then spent 5 months inside its Kuwaiti operation, said the Iraq operation: "it’s just a gravy train." She claims there is no effort to hold down costs because the company knows that all costs will be passed down to taxpayers. When she complained to her higher ups, they told her, "We can be as dumb and stupid as we want in the first year of a war, nobody’s going to care."
And they were half-right. Republicans don’t care but none of Democrats who do care have been able to do one thing about it. A Vice President in the back pocket is seemingly priceless.
DeYoung revealed documents that proved that Halliburton had billed tax payers $50,000 a month for pop, and $1 million a month to clean clothes at $100 per bag.
Her allegations were validated on June 30, 2004, with the release of a report from an investigation of the US controlled Coalition Provisional Authority of Iraq, that found the CPA had failed to adequately control over $9 billion in international aid, including Halliburton's hotel costs in Kuwait.
The CPA Inspector General, Stuart Bowen, claimed the CPA had participated in Halliburton's overcharging by failing to stop unauthorized personnel from staying at the $700 per night Hilton in Kuwait City, which was only authorized to house senior government officials.
Billing documents showed that over a 3 month period, Halliburton had billed tax payers $1 million to house 100 employees at a the Kuwaiti hotel. However, by the time the Inspector General’s report was released, Halliburton had charged $2.85 million for hotel costs, the report noted.
The CPA, and its leader Paul Bemmer, controlled the governing processes in Iraq from May 2003 to June 29, 2004. So how’s this for a coincidence? Bowen released the report on June 30, 2004, one day after the CPA was disbanded, and its authority was turned over to Iraqi citizens.
Americans Forced To Risk Death To Boost Halliburton Profits
Twelve former truckers who made the 300 mile resupply run from Camp Cedar in southern Iraq to Camp Anaconda near Baghdad told Knight Ridder that they risked their lives driving empty trucks while Halliburton billed the government for hauling what they sarcastically called "sailboat fuel."
At the time of the disclosure by the truckers, Knight Ridder found Defense Department records that showed Halliburton had been paid $327 million for "theater transportation" of war materiel and supplies and was earmarked to be paid $230 million more.
In addition to interviewing the drivers, Knight Ridder viewed records of the empty trips, dozens of photographs of empty flatbeds and a videotape that showed 15 empty trucks in one convoy.
"There was one time we ran 28 trucks, one trailer had one pallet (a trailer can hold as many as 26 pallets) and the rest of them were empty," David Wilson, who was the convoy commander on more than 100 runs, told Knight Ridder. Four other drivers who were with Wilson confirmed his account, Ridder added.
The lives of the National Guard and Army escorts who provided security for the truckers were also put in danger during these trips. So why would Halliburton risk the lives of American soldiers and truckers by forcing them to drive empty trucks 300 miles in a war zones? $$$
Halliburton's contract allowed the company to pass on the cost of the transportation and to also tack on a 1 to 3% for profit. According to Knight Riddeer, trucking "experts estimate that each round trip costs taxpayers thousands of dollars."
Peter Singer, author of "Corporate Warrior," a book on privatization of the military, says the use of empty trucks to boost profits demonstrates how the contracting system is broken. The government gives out large cost-plus contracts in which "essentially it rewards firms when they add to costs rather than rewarding them for cost savings," Singer said.
Other whistleblowers came forward to describe how employees were instructed to abandon or torch new trucks, worth $80,000, if they got a flat tire or had some other minor problems, so that Halliburton could then purchase new trucks with taxpayer dollars, according to a letter penned by Congressman Henry Waxman.
NBC News obtained Pentagon documents that support these charges. They showed where Halliburton was buying hundreds of high-end SUVs and pickup trucks with options like CD players that employees don‘t need, and duplication in purchases of computers and other high-tech equipment.
DeYoung said employees were paid even if they didn‘t work. Her charge was verified by Mike West, another ex-Halliburton employee, who was paid $82,000 a year to be a labor foreman, although he had no workers to supervise, "They said just log 12 hours a day and walk around and look busy," West said.
Just think what we could have done in this country with the billions of dollars that Halliburton has ripped off. According to the Feb 4, 2005 Houston Chronicle, as of Dec 31, 2004, the Army has paid Halliburton ... $5.9 billion for the operations in Iraq and Kuwait, Army officials said.
$5.9 billion went right down the drain.
Halliburton Does Not Discriminate
Halliburton does not discriminate when it comes to robbing people. As it turns out, American tax dollars were not the company’s only source of fraudulent income.
According to the May 21, 2004, the Sidney Morning Herald, "One of Australia's largest postwar contracts in Iraq has collapsed, with the partners embroiled in a multi-million-dollar legal battle and allegations of corruption in the awarding of contracts by a leading Pentagon supplier," it reported.
The Herald revealed the "Morris Corporation, a catering company was dumped last year by the US contractor Halliburton, losing a $100 million contract to supply meals to US troops in Iraq."
Morris was awarded a contract in partnership with KCPC, a Kuwaiti company, to feed 18,000 troops. But Halliburton cancelled the deal 6 weeks later, claiming Morris and its Kuwaiti partner had not met their obligations.
However, according to the Herald, an insider involved in the deal alleged that the companies involved were approached by a Halliburton employee seeking kickbacks worth up to $3 million during contract negotiations.
"We're not talking about a paper bag. This guy was after a percentage of your sales every month," the insider said. "They wanted kickbacks of 3 per cent to 4 per cent, which pushed up the prices because then the sub-contractors would add the price of the kickbacks to their costs."
Confidential Halliburton documents leaked to the Herald showed the employee who was accused of soliciting the bribe was involved in awarding millions of dollars worth of Halliburton work in Kuwait to supply the military with services.
The Herald maintained that it had been told that the same employee had made similar propositions to other contractors. In fact, the insider claimed the demand for kickbacks was widely known. "It was too blatant, the corruption that was going on, not to be caught," he said.
The problems with the contract first became public when a report by Pentagon auditors was released to a congressional committee in March, 2004, after Rep Henry Waxman called for hearings to investigate the over-billing in Iraq. The report accused Halliburton of massive over-billing for the meals it served to troops in Iraq and Kuwait.
The investigation determined that not only had Halliburton failed to inform the military that it had cancelled the Morris-KCPC contract in July, 2003, it had continued to use the contract to estimate costs of more than $1 billion for meal facilities in Iraq and Kuwait.
At about the same time, Halliburton was forced to admit that two employees were under criminal investigation for accepting over $6 million in bribes related to those contracts.
Halliburton Fraud - No End In Sight
In addition to the stonewalling of investigations in this country, the International Advisory and Monitoring Board, established by the UN to monitor US control of Iraq's oil revenue, is complaining because the administration refuses to release documents relating to the money paid to Halliburton from the Iraq oil revenue fund under the no-bid contracts.
The IAMB includes representatives from the World Bank, the International Monetary Fund, the United Nations and the Arab Fund for Social and Economic Development.
According to a letter from Rep Waxman, "the [Bush] Administration has failed to comply with numerous IAMB requests for U.S. government reports about the payment of approximately $1.5 billion in DFI funds to Halliburton," who is the "single largest private recipient of Iraqi oil proceeds."
Waxman also quoted minutes from an IAMB meeting which said "some contracts using DFI funds were awarded to Halliburton without competitive bidding." As a result of this discovery, the IAMB instructed the KPMG accounting firm "to pay special attention" to this issue during its audit of CPA documents.
However, the Bush administration and Halliburton have stonewalled this investigation as well, as the company remains open for business.
Despite the massive increase in contracts due to the war in Iraq, Bush as not increased the number of officials who supervise contractors at all. Only 180 Army officials monitor defense contracts and only a little more than a handful of them are in Iraq, Peter Singer told Knight Ridder.
Halliburton Gets Away With Grand Theft
On Feb 4, 2005, the Washington Post reported that “the Army said yesterday it will not withhold future payments to Halliburton Co., despite audit reports last summer that said the giant logistical contractor had not properly accounted for a wide variety of work in Iraq and Kuwait.”
“The decision comes months after Army auditors recommended withholding 15 percent of payments, about $60 million a month, from Halliburton ... the largest government contractor in Iraq,” the Post noted.
Democrats were outraged and said “senior Pentagon officials have ignored audit reports documenting allegations that Halliburton overcharged the government and mismanaged tax dollars,” the Post reported.
“Critics complained the Pentagon has given the company special treatment by twice waiving deadlines for imposing the 15 percent withholding,” it noted.
Rep Waxman, who has spent years investigating the fraud, was furious. "This action is incomprehensible," he said. "Once again, the Bush Administration is putting Halliburton's interests above those of the taxpayers," Waxman said in a written statement.
"Halliburton is busting the Army's budget, yet Administration officials continue to ignore rampant overcharging and the recommendations of their own auditors," he added.
When is somebody going to say enough already? Halliburton has been caught ripping off tax payers time and time again. Which begs the question of how many more billions of dollars has this corrupt company made off with for all the times it wasn't caught?
Halliburton has proven one fact beyond any doubt. If a company is engaged in the war profiteering business, having an American Vice President to cover your ass is priceless.