Commentary
Cheney and Halliburton hold title of top earners In Iraq
By Evelyn Pringle
Online Journal Contributing Writer


Mar 31, 2006, 20:34

There has never been an investigation into Cheney's involvement in awarding Halliburton no-bid contracts, making the company the number one war profiteer in Iraq. Apparently people have forgotten about the March 5, 2003, e-mail between the Army Corps of Engineers and a Pentagon employee that stated the contract "has been coordinated w VP's office."

People also seem to have forgotten that Cheney continues to own stock in Halliburton. Stock that has risen in leaps and bounds since its former CEO moved into the White House and developed the most prolific war profiteering scheme of all time.

A study released in June 2005, originating from the Defense Contract Audit Agency (DCAA), revealed that overall Halliburton had received roughly 52 percent of the $25.4 billion that has been paid out to private contractors since the war in Iraq began.

Halliburton was the top profiteer when it came to funds belonging to the citizens of Iraq as well. A March 18, 2004, audit report by the Department of Defense Office of the Inspector General, titled “Acquisition: Contracts Awarded by the Coalition Provisional Authority by the Defense Contracting Command-Washington," determined that the CPA and its predecessor, the Office for Reconstruction and Humanitarian Assistance had circumvented federal contracting procedures since the early days of the occupation.

The audit found that federal procurement rules were not followed in 22 of 24 contracts awarded by the Defense Contracting Command and that defense department personnel conducted “inadequate surveillance” on more than half of the contracts; did not “perform or support price reasonableness determinations” and allowed activity that was “out-of-scope” of the original contracts.

An analysis of the data released in August 2004, showed the CPA had awarded 85 percent of the contracts to US and UK firms and that Iraqi companies received a mere 2 percent of the contracts paid for with Iraqi funds. Halliburton received 60 percent of all contracts paid for with Iraqi money.

Halliburton's contracts are "cost-plus" deals and according to Peter Singer, author of "Corporate Warrior," when the government gives out cost-plus contracts, "essentially it rewards firms when they add to costs rather than rewarding them for cost savings," he said.

Halliburton employees told Knight Ridder about a scam where the company ran up costs by having employees drive empty trucks back and forth across Iraq.

"There was one time we ran 28 trucks, one trailer had one pallet (a trailer can hold as many as 26 four-foot square pallets) and the rest of them were empty," said David Wilson, who was the convoy commander on more than 100 runs. Four other drivers who were with Wilson confirmed his account for Knight Ridder.

Halliburton's contract allows the company to pass on the cost of the truck runs and add between 1 percent and 3 percent for profit. "Trucking experts estimate that each round trip costs taxpayers thousands of dollars," according to Knight Ridder.

But if you listen to Cheney, people are just picking on Halliburton because they don't like him. Not so. I would be mad at any company that billed me for driving empty trucks across the desert, but it just so happens that Halliburton is the company at the wheel.

Other whistleblowers described 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 purchase new trucks with taxpayer dollars.

People must have been picking on Halliburton long before Iraq because, under Cheney's watch, the company was caught ripping off the government time and time again. In 1997, the GAO caught the company charging $85.98 for a sheet of plywood that only cost $14.06. In a 2000 follow-up investigation, Halliburton was caught billing taxpayers for cleaning the exact same office space four times a day.

So what happened as a result of these expensive drawn-out investigations? In 2002, Halliburton paid a $2 million fine for defrauding the government. The investigation probably cost more than $2 million.

In January 2004, two Halliburton employees were caught red-handed taking $6.3 million in kickbacks from a subcontractor in Iraq. The company gave the $6.3 million back, claimed it fired the employees, and went on like nothing ever happened.

I guess Cheney would have us believe that two guys stuffed $6.3 million in their back pockets without Halliburton's knowledge. Well, call me cynical or whatever, but I don't buy it.

This time around, the Bush team not only ignored the blatant misconduct, it gave Halliburton another $1.2 billion contract, a move that even upset Republicans. Rep Tom Davis, chairman of the House Committee on Government Reform stated, "It's incomprehensible that the [Bush] administration could give Halliburton another billion-dollar contract without fully investigating such serious criminal wrongdoing."

And that ain't all. In June 2004, the Pentagon's Defense Contract Audit Agency completed a review that found Halliburton had billed for 36 percent more meals in Iraq than it had served to the troops, resulting in an overcharge estimated to be as high as $186 million.

In July 2004, the GAO reported that when Halliburton acted as a middleman for the operation of dining halls, costs were over 40 percent higher.

So what kind of punishment did this misdeed bring? The DCAA told Halliburton to send all bills to their agency for approval before submitting them for reimbursement.

In an August 16, 2004, memorandum, the DCAA "identified significant unsupported costs" submitted by Halliburton and said "while contingency issues may have had an impact during the earlier stages of the procurements, clearly, the contractor should have adequate supporting data by now."

When DCAA examined seven task orders with a combined proposed value of $4.33 billion, its auditors identified unsupported costs totaling $1.82 billion.

On September 16, 2004, the Pentagon found that $34.2 million of the costs associated with KBR's task order of the Iraqi oil infrastructure contract were unreasonable, including $14.9 million in overcharges and $17.7 million in "unsupported" costs.

On March 14, a Pentagon audit discovered $108 million in overcharges by KBR for delivering gasoline to Iraq. The minority staff of the House Government Reform Committee later determined that the total overpayment through April 1, 2004, was $167 million

And that still ain't all. In another case of fraud, government auditors found Halliburton claimed to have lost over $60 million worth of government property in Iraq, including trucks, office furniture and computers.

Stuart Bowen, auditor of the now-disbanded Coalition Provisional Authority, said that 6,975 of 20,531 items on Halliburton's ledgers were unaccounted for.

"This occurred because KBR did not effectively manage government property," his report said. "As a result," Bowen said, "we projected that KBR could not account for 6,975 property items from an inventory of 20,531 valued at $61.1 million."

The June 2005 DCAA study revealed new evidence of Halliburton fraud to include the company: (1) overcharged or presented questionable bills for close to $1.5 billion; (2) lost 12 pre-fabricated bases worth over $75; (3) billed $152,000 to provide a movie library for 2,500 soldiers; and (4) submitted inconsistent billings, e,g., video cassette players $300 in some instances, and $1,000 in others; $2.31 for towels one day and $5 on another.

If Cheney is to be believed, the conspiracy to pick on Halliburton is a global effort because as of July 2004, the French, British, Nigerian and US governments were all investigating Halliburton's activities while Cheney was CEO, for paying over $180 million in bribes to Nigerian officials in exchange for a $6 billion contract to build a natural gas plant in Nigeria.

In this investigation, former Halliburton employees are ratting out Cheney himself. Ex-Halliburton consultant and attorney Jeffrey Tesler testified under oath in May 2004 that he made bribery payments to Jack Stanley, while Stanley was president of Halliburton subsidiary KBR, and also made payments to Halliburton executive William Chaudran. His testimony was backed up by banking records and Tesler said CEO Cheney approved the payments.

Cheney had better not get too comfortable because his criminal empire may soon come crashing down around him. If Democrats take back the House and the Senate next November, I think its safe to say that investigations will follow.