Skip to main content

Sign in · Register 
Go to:   
Guardian Unlimited
Search:
Guardian Unlimited Web
Guardian UnlimitedIraq
Home UK Business Audio Guardian Weekly The Wrap News blog Talk Search
The Guardian World America Arts Special reports Podcasts News guide Help Quiz

Special report Iraq

  Search this site


Full coverage
Special report: Iraq

Iraq archived articles

Interactive guides on Iraq

More special reports
Britain's armed forces

The anti-war movement

Al-Qaida

United States

Iran

Israel & the Middle East

Nato

Turkey

Full index of our special reports




 In this section
David Smith's embed diary: The 'scenic route'

Bush commits troops to Iraq for the long term

Letter: Returned refugees still in danger in Iraq

Iraq proposes long-term US troop presence

US pledges long-term presence in Iraq

US troops surge ends as violence in Iraq falls

Desert turkey

'I believe in the war, but being here sucks'

Saudis make up 41% of foreign fighters in Iraq

Pet market bomb kills 13 in Baghdad

Defence secretary hits back at admiral's criticism

On the attack over record on armed forces

David Smith's embed diary: Godfathers of the nation

Iraqi refugees start to head home

The violence falls but the sewage continues to rise



UP

Cheney oil firm accused of overcharging $61m in Iraq



Julian Borger in Washington
Saturday December 13, 2003
The Guardian


A Pentagon audit has found that Halliburton, the company formerly run by the US vice-president, Dick Cheney, overcharged the government by $61m (about £35m) for delivering petrol to Iraq.

The Texan oil services company has denied the charges and defence officials said there was no evidence that it profited disproportionately from the overcharging, saying it simply passed on high prices charged by a sub-contractor.

However, Democratic critics have pointed to army figures showing Halliburton charged 24 cents a gallon for imported petrol - nearly a tenth of the selling price - as a "mark-up" over and above the sub-contractors' charges, significantly higher than the profit margin of other companies.

The audit also found that a Halliburton subsidiary had charged $67m too much for building army canteens in Iraq. The army refused to pay.

President George Bush said the company would have to pay back any money accrued from overcharging, and promised to show openly that taxpayers' money was being diligently spent in Iraq.

"If there's an overcharge, like we think there is, we expect that money be repaid," he said. "We're going to make sure that as we spend money in Iraq, it's spent well, it's spent wisely."

The preliminary audit has fanned a growing row over the division of Iraqi reconstruction contracts, which was aggravated earlier this week when the Pentagon excluded French, German, Russian and Canadian companies from bidding, because they were not coalition partners.

The debate over the spoils of war is fuelled by Halliburton's intimate link to the White House and by the fact that through its subsidiary, Kellogg, Brown & Root (KBR), it has been awarded a series of contracts without competitive bidding, potentially worth more than $15bn.

A Halliburton spokeswoman, Wendy Hall, said the company was cooperating fully with the Pentagon auditors. It has defended its prices, pointing to the risks involved in driving fuel from Kuwait to Iraq. Several KBR employees have been killed or wounded.

However, the per-gallon price charged to the government by KBR, $2.64, is more than twice what other suppliers were asking.

Michael Thibault, the deputy director of the Defence Contract Audit Agency, said initial evidence suggested that overcharging was "potentially very substantial".

Halliburton has until December 17 to respond. Pentagon officials did not name the sub-contractor which supplied the fuel.

Henry Waxman, a Democratic congressman leading the attack against Halliburton, said the audit confirmed it had been "gouging taxpayers", and that "the White House has been letting them get away with it".

He wrote to Condoleezza Rice, the national security adviser: "Independent experts we consulted called these charges a huge rip-off of the taxpayer. Hundreds of millions of taxpayer dollars are at stake. Despite the enormous costs, the White House has refused to address this issue."

The publicity surrounding the audit, however, failed to dampen investor enthusiasm for its stock. Its price has risen 85% in the past two years and rose again yesterday.




Special report
Iraq

Chronology
Iraq timeline

Interactive guides
Click-through graphics on Iraq

Key documents
Full text of speeches and documents

Audio reports
Audio reports on Iraq

More special reports
Politics and the war
Aid for Iraq
Iraq - the media war
The anti-war movement
Guide to anti-war websites

Useful links
Provisional authority: rebuilding Iraq
Iraqi-American chamber of commerce




Printable version | Send it to a friend | Save story





UP


Guardian Unlimited © Guardian News and Media Limited 2007