Audit doubles scale of Halliburton’s overcharge

Halliburton, the Houston-based oil services company, may have overcharged the US government by $212m (£113m, €165m) for work in Iraq, according to portions of Pentagon audits released yesterday.

KBR, a subsidiary of Halliburton formerly run by Vice-President Dick Cheney, came under fire last year following allegations that it had overcharged the government $62m in "unreasonable costs" for importing fuel from Kuwait to Iraq.

Yesterday Henry Waxman, the top Democrat on the House committee for government reform, released parts of additional Pentagon audits showing that the alleged overcharging for Iraq-related business was more than $200m.

"In these reports, DCAA [Defense Contract Audit Agency] auditors identify overcharges and question costs of $212.3, doubling the amount of known overcharges under Halliburton’s oil contract," Mr Waxman said.

In one case, Mr Waxman wrote in a letter to Christopher Shays, the Republican chairman of the house subcommittee on national security, emerging threats and international relations, that Halliburton appeared to overcharge the government by 47 per cent of the value of one portion of its contract.

Halliburton, which in the past has accused Mr Waxman of targeting the company for political reasons, denied any charges of wrongdoing. A company spokeswoman also pointed to a recent decision by the Defense Contract Management Agency to approve the company’s estimating and purchasing systems as evidence that it was following the rules.

"Halliburton has been a good steward of the taxpayer’s dollars," the spokeswoman said. "KBR has responded on numerous occasions to the allegations contained in the recent letter released by Representative Waxman. This is simply recycled language."

Halliburton also came under scrutiny late last year following allegations that the former US ambassador to Kuwait pressed the company to direct lucrative fuel contracts to Altanmia, a Kuwaiti company. An e-mail released by Mr Waxman revealed that Richard Jones, the former US ambassador, pressed KBR to give a fuel contract to Altanmia.

Mr Waxman, who has aggressively investigated Halliburton over its Iraq contracts, called for congressional investigations into the Development Fund for Iraq, from which Halliburton was the biggest beneficiary.

Separately, the Pentagon said yesterday it was investigating two more contracts negotiated by Darleen Druyun, the former senior air force procurement official who was sentenced last year to nine months in prison for holding illegal job talks with Boeing.

In addition to eight other contracts already under investigation, the Pentagon inspector-general is now looking at the Joint Primary Aircraft Training System awarded to Raytheon and the Joint Surveillance and Target Attack Radar system led by Northrup Grumman, the Pentagon said yesterday.