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To: John Sladek who wrote (1890)	1/25/2004 12:24:06 PM
From: John Sladek	Read Replies (1) \| Respond to of 2171

23Jan04-FT-Halliburton wins Iraq deal despite price gouging By Demetri Sevastopulo in Washington Published: January 23 2004 19:14 \| Last Updated: January 24 2004 0:48 The Bush administration knew that Halliburton had overcharged the US government on an Iraq reconstruction contract before it awarded the company a separate lucrative contract last week to repair Iraqi oilfields. Halliburton - the oil services company formerly run by vice-president Dick Cheney - informed the Pentagon inspector-general on January 15 that its Kellogg Brown & Root subsidiary overcharged the US government by $6m on a contract to supply US troops. But the following day, the Army Corps of Engineers gave the company another contract worth up to $1.2bn to rebuild southern Iraq's oil industry. The Houston-based company on Friday repaid the government $6.3m. KBR has also dismissed two employees in Kuwait who may have colluded with a Kuwaiti subcontractor to overcharge KBR for services that were paid for with US taxpayer money. "One, perhaps two former KBR employees may have accepted improper payments from a Kuwaiti subcontractor as part of the potential $6m overcharge," said Wendy Hall, Halliburton spokeswoman. Halliburton has become a lightning rod for Democrats' criticism of the White House's handing of reconstruction in postwar Iraq. Critics accuse the Bush administration of doling out contracts to companies with close White House ties. "When the American people hear that much of that money may now be under a cloud, it is all the more imperative we act to remove that cloud, to provide the confidence, the transparency, the oversight, and certainly the corrective actions required," said Tom Daschle, Senate minority leader, who called on Congress to investigate the matter. Halliburton yesterday emphasised that it informed the Pentagon inspector-general of irregularities as soon as they were discovered. In December, Pentagon auditors found that KBR had overcharged the US government by $61m for importing fuel into Iraq. Later that month the Army Corps of Engineers, which administers the contract, concluded that Halliburton's prices had been reasonable. Earlier this month, however, the auditors asked the Pentagon inspector-general to launch a full investigation into potential unlawful activities by the company. Henry Waxman, top Democrat on the House reform committee and leading critic of Halliburton's Iraq deals, on Friday sought a committee hearing into the contracts. "It is my understanding that the Halliburton officials involved in the kickbacks may have had responsibility for administering hundreds of millions of dollars in federal contracts," he wrote to Tom Davis, Republican committee chairman. "The administration should have understood the full extent of the procurement problems at Halliburton before rewarding the company with another billion-dollar contract." The Pentagon yesterday appointed Stuart Bowen, a former counsel to Mr Bush, as new inspector-general at the Coalition Provisional Authority in Baghdad. news.ft.com