CBS and CNN Distort Audit to Hype Halliburton
“War Profiteering”
Smearing Halliburton and Vice President Dick Cheney. A Pentagon audit found that a subsidiary of Halliburton, Kellog, Brown and Root, overpaid a Kuwaiti firm for gasoline that it trucked into Iraq, but CBS and CNN on Friday night distorted the revelation into a tale of “war-profiteering” by the firm once headed by Cheney, implying some kind of administration malfeasance.
Over a full screen graphic of Cheney’s head next to video of Halliburton trucks and employees with “Halliburton” emblazoned on outfits, inside a video frame in the shape of the United States, the text at the top of Friday’s CBS Evening News declared, “Follow the Dollar,” as Dan Rather demanded: “Tonight, did politically-connected Halliburton gouge U.S. taxpayers with war profits? CBS will follow your dollars.”
Rather proceeded to charge that “Pentagon auditors have found evidence of possible price-gouging and unusual war profiteering by the Halliburton company in Iraq drew swift reaction today,” including “stinging criticism from Democrats critical of no-bid, multibillion-dollar contracts awarded to Halliburton for rebuilding Iraq.”
But, only after David Martin pointed out how “the appearance of price-gouging on Pentagon contracts awarded to a firm once headed by the Vice President has given the President’s Democratic opponents what the military would call a high-value target,” were CBS viewers informed by Martin that Halliburton did not profit from what occurred, thus undermining Rather’s “war-profiteering” premise. Martin explained: “The audit found that Halliburton’s subsidiary was charging $2.27 for a gallon of unleaded gas trucked into Iraq from Kuwait while the same gallon shipped in from Turkey cost $1.18. The audit attributes the $1.09 difference to the high price charged by the Kuwaiti oil company which sold the gas to Halliburton and says Halliburton did not pocket any of the $61 million.”
"War Profiteering?" read the on-screen chyron throughout a story on Friday’s NewsNight with Aaron Brown. After Jamie McIntyre’s piece was finished, Brown demonstrated he had no comprehension of the facts, though his show was making a reckless allegation about “war profiteering.” Incredibly, he asked McIntyre: “In trying to figure this out today it is not clear to me, maybe it is to you, it is not clear to me how in this scenario where Halliburton's paying $2.00 plus for a gallon of gas and selling it for four, six, 15 cents, how it is profiting from this deal. Is that clear to you?”
Then why paste “war profiteering” on screen if you have no idea how there was any war profiteering?
McIntyre explained to Brown: “Well, one of the things that the auditors determined was that Halliburton had not profited any more from the deal than they would have if they had bought the gas at a lower price. They got a fixed percentage of the contract with a ceiling and they didn't profit anymore.”
In other words, no big scandal. Just a pricing dispute.
Indeed, NBC figured this out and delivered a rationale story without the inaccurate “war profiteering” allegations. Nightly News anchor Tom Brokaw announced: “Now to the controversy over the oil-services giant Halliburton. And the Pentagon audit released last night that found the company is over-charging taxpayers for fuel deliveries in Iraq. President Bush addressed the issue head-on today in a question and answer session with reporters.”
David Gregory noted: “With the Halliburton investigation threatening to become a political problem for the Bush White House, today the President took a tough stand against the company his Vice President used to head.” Gregory explained: “Pentagon officials say the problem may have been that Halliburton paid a Kuwaiti subcontractor for the gasoline in the first place, meaning Halliburton didn't profit from the discrepancy.”
That matches what both the New York Times and Washington Post reported on Friday, stories both CBS and CNN producers had plenty of time to read.
In a New York Times story, “U.S. Sees Evidence of Overcharging in Iraq Contract,” Douglas Jehl reported:
“Military officials said the Pentagon was negotiating with K.B.R. over how to resolve the fuel charges. But Michael Thibault, deputy director of the Defense Contract Audit Agency, said in a telephone interview that a draft report by the agency had recommended that the Army Corps of Engineers seek reimbursement.
“The officials said Halliburton did not appear to have profited from overcharging for fuel, but had instead paid a subcontractor too much for the gasoline in the first place.
“Halliburton has also said that one reason it needed to charge a high price for fuel was that it must be delivered in a combat zone. Several K.B.R. workers have been killed or wounded in attacks by Iraqis.”
“Halliburton Unit Probed for Possible Overbilling of U.S.,” read the Washington Post headline over a story by Jackie Spinner and Thomas E. Ricks which got Cheney into the second paragraph. An excerpt from the top:
Defense Department auditors have discovered that a Halliburton Inc. subsidiary may have overcharged the government $61 million on a contract to supply fuel for Iraq, a Pentagon official said at a hurriedly called news conference last night.
In another contract to operate U.S. military mess halls, Halliburton, which was headed by Dick Cheney before he became vice president, would have been overpaid $67 million if auditors hadn't questioned the arrangement, officials said, citing findings of a draft audit.
While Halliburton isn't being accused of wrongdoing, and the government isn't yet seeking reimbursement, this is the first instance the Pentagon has said it believes that major contracts for the war in Iraq and its reconstruction have been mishandled.
"We have found some issues of concern that are worthy of immediate attention and we're making sure that that kind of aggressive action is taken so that we resolve these issues as expediently as possible,” said William H. Reed, director of the Defense Contract Audit Agency.
On the gas contract, Halliburton subsidiary KBR has been charging the U.S. government $2.27 a gallon to deliver gasoline from Kuwait, while a similar contract for gas from Turkey sets the price at only $1.18, the official said.
Halliburton didn't profit from that differential, officials said. "This isn't money that went to the company," said Larry DiRita, the Pentagon's top spokesman. Rather, he said, the money the Pentagon believes was overcharged went to a private Kuwaiti company that is a subcontractor on the contract. He declined to identify that company. He also noted that during last spring's war, the Kuwaiti government provided fuel to the United States and its allies at no charge...
END of Excerpt
For the article in full: www.washingtonpost.com
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