Reconstruction Corruption Watch Part II

Reconstruction Corruption Watch Part II

Reconstruction Corruption Watch Part II

Yesterday, I reported on the current controversy surrounding Halliburton’s poor performance and cover-up on its water treatment contract in Iraq. Now add oil to the mix.

In the Washington Post Wednesday, Griff Witte writes of overcharges and obfuscation by Halliburton subsidiary–you guessed it–Kellog Brown and Root on a $1.2 billion contract to restore oil services in southern Iraq.

The competitive contract awarded in 2004 followed a $2.4 billion no-bid deal in 2003. Prior to settling on the newer contract, the Defense Contract Audit Agency requested that the Army Corps of Engineers speak with its auditors about "significant deficiencies in KBR’s ability to estimate its costs"–the DCAA had challenged $200 million in fuel delivery charges on the first contract–but the Corps failed to do so.

Facebook
Twitter
Email
Flipboard
Pocket

Yesterday, I reported on the current controversy surrounding Halliburton’s poor performance and cover-up on its water treatment contract in Iraq. Now add oil to the mix.

In the Washington Post Wednesday, Griff Witte writes of overcharges and obfuscation by Halliburton subsidiary–you guessed it–Kellog Brown and Root on a $1.2 billion contract to restore oil services in southern Iraq.

The competitive contract awarded in 2004 followed a $2.4 billion no-bid deal in 2003. Prior to settling on the newer contract, the Defense Contract Audit Agency requested that the Army Corps of Engineers speak with its auditors about "significant deficiencies in KBR’s ability to estimate its costs"–the DCAA had challenged $200 million in fuel delivery charges on the first contract–but the Corps failed to do so.

Rep. Henry Waxman released a statement saying, "Halliburton has pulled off the impossible: it has actually done a worse job under its second Iraq oil contract than it did under the original no-bid contract. This new round of overcharges and dismal performance would have been avoided if the Bush Administration had listened to its own auditors."

KBR’s profit in the newer contract is determined as a percentage of its costs. In challenging $45 million of the $365 million in reviewed costs, Pentagon auditors cited instances such as KBR’s "paying a supplier more than it was due"; cutting cost estimates in half when "pressed on its true expenses"; and billing "for work performed by the Iraqi oil ministry."

As questions about costs and performance were raised, "federal officials in Iraq reported KBR was being ‘obstructive’ towards officials trying to investigate what had gone wrong." One contracting officer described "…numerous attempts to work with KBR to bring their cost reporting procedures into minimal acceptable standards." And the New York Times reports of an officer writing to the company, "you have universally failed to provide adequate cost information as required."

William Nash, a retired Army General and senior fellow at the Council on Foreign Relations, summarizes, "This a continuing example of the mismanagement of the Iraq reconstruction from the highest levels down to the contractors on the ground."

It is also an example of why only an independent, bipartisan commission will get to the bottom of the waste, mismanagement and corruption related to the Iraqi war effort.

Thank you for reading The Nation!

We hope you enjoyed the story you just read. It takes a dedicated team to publish timely, deeply researched pieces like this one. For over 150 years, The Nation has stood for truth, justice, and democracy. Today, in a time of media austerity, articles like the one you just read are vital ways to speak truth to power and cover issues that are often overlooked by the mainstream media.

This month, we are calling on those who value us to support our Spring Fundraising Campaign and make the work we do possible. The Nation is not beholden to advertisers or corporate owners—we answer only to you, our readers.

Can you help us reach our $20,000 goal this month? Donate today to ensure we can continue to publish journalism on the most important issues of the day, from climate change and abortion access to the Supreme Court and the peace movement. The Nation can help you make sense of this moment, and much more.

Thank you for being a supporter of independent journalism.

Ad Policy
x