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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: MKTBUZZ who wrote (512624)	12/18/2003 6:53:18 PM
From: jackhach	Respond to of 769667

Pentagon Says Halliburton Withheld Internal Audit By NEIL KING JR. Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- Pentagon auditors have accused Halliburton Co. of refusing to turn over documents that show the company was aware of "significant internal control weaknesses" in an Iraq fuel contract that has allegedly overcharged taxpayers nearly $100 million. The dispute is laid out in a previously undisclosed Dec. 10 letter from the Defense Contract Audit Agency to a top official at Kellogg Brown & Root, the Halliburton subsidiary handling more than $5 billion of work in Iraq. The letter says that KBR's refusal to turn over the internal audit "is not in the spirit of open communication, trust and cooperation." Vice President Dick Cheney ran the company until 2000, and it won both of its two contracts in Iraq without competition. Defense officials say a DCAA auditor stumbled upon the audit last month while looking through unrelated KBR files in Kuwait. The government auditor took notes but was not allowed to keep a copy of the internal report, an official said. The Pentagon last week announced it had opened a wide-ranging investigation of Halliburton's Iraq work, and confirmed that a preliminary audit found that KBR may have overcharged the government through September by as much as $61 million for gasoline in Iraq. That sum, officials say, continues to increase by around $20 million a month under a running contract Halliburton has with the Army Corps of Engineers. Halliburton, in a lengthy statement Thursday, said it expected to be vindicated in its claim that it did not overcharge for millions of gallons of gasoline trucked into Iraq from Kuwait since early summer. KBR replied to the Defense Department draft audit on Wednesday, and U.S. officials said it could take several weeks to sift through the documents and determine whether to demand the company reimburse the government for alleged overcharges or not. --Chip Cummins and Susan Warren contributed to this article. Write to Neil King Jr. at neil.king@wsj.com Updated December 18, 2003 5:45 p.m.