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Pentagon Opens Halliburton Criminal Probe

Boss Hog

TRIBE Member
Pentagon Opens Halliburton Criminal Probe
Mon Feb 23, 8:26 PM ET Add Business - Reuters to My Yahoo!

By Sue Pleming

WASHINGTON (Reuters) - The Pentagon said on Monday it opened a criminal investigation of fraud allegations against a unit of Vice President Dick Cheney's old company Halliburton Co. , including possible overpricing of fuel delivered to Iraq.

The investigation was focused on Halliburton subsidiary Kellogg Brown and Root, the U.S. military's biggest contractor in Iraq, which has become a lightning rod of Democratic criticism during this presidential election year.

"The Defense Criminal Investigative Service, the criminal investigative arm of the Inspector General's office is investigating allegations on the part of KBR of fraud, including the potential overpricing of fuel delivered to Baghdad by a KBR subcontractor," said a Pentagon spokeswoman.

Halliburton spokeswoman Wendy Hall said the company had not received any notification of the alleged fraud probe, adding it was important to understand the "difference between fact and allegation."

"In the current political environment, it is to be expected," Hall said of the latest development. "The facts show KBR delivered fuel to Iraq at the best value, best price and at the best terms," she said.

There was no immediate comment from the White House.

Halliburton, a Houston-based oil services company, has more than $8 billion in deals in Iraq, covering everything from doing laundry, building bases and providing meals to helping rebuild the oil industry.

The contracts have drawn sharp comment from Democrats because of the firm's ties with Cheney, who ran the company from 1995 to 2000.


Potential overpricing of fuel was first raised in a draft audit by the military last year that found evidence the company might have overbilled by at least $61 million for fuel brought into Iraq by a Kuwaiti subcontractor.

The Kuwaiti authorities are also probing the fuel deal.

The allegations under investigation were included in a Jan. 13, 2004, referral to the Inspector General from the Defense Contract Audit Agency, the Pentagon spokeswoman said.

On Monday, Halliburton launched a new ad campaign to show off its work in Iraq and to "address misstatements put forward during the 2004 presidential campaigns."

Aside from military auditors' questions, the U.S. Treasury, the Justice Department (news - web sites) and the Securities and Exchange Commission (news - web sites) are all looking into a range of issues, from whether the company paid kickbacks in Nigeria to whether it broke U.S. laws by dealing with Iran via a foreign subsidiary.

The company has consistently said all its dealings have been in line with U.S. laws and has strongly denied wrongdoing, except in the case of one or two former employees who it said may have paid $6.3 million in kickbacks to a Kuwaiti subcontractor.

Two former Halliburton employees told Democratic lawmakers earlier this month the vice president's old company "routinely overcharged" for work it did for the U.S. military.

Examples of wasteful spending given by the ex-employees ranged from leasing ordinary vehicles for $7,500 a month to seeking embroidered towels at a cost of $7.50 apiece when ordinary ones would have cost about a third as much.

Alex D. from TRIBE on Utility Room


TRIBE Member
Hahaha.. that's like the Chicago mob heading an investigation on the New Jersey mob.

Maybe they should look for that 1 Trillion that went missing and give this job to someone else.