The Telegraph
Since 1st March, 1999
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Balloon-bill egg on Bush contract policy

Washington, Dec. 12: The Bush administration’s Iraq policy has fallen from the proverbial frying pan into the fire.

Even as the White House tried to defuse a growing tide of criticism over its decision to ban countries like India from contracts in Iraq, the effort was neutralised yesterday by an auditor’s finding that the US defence conglomerate, Halliburton, had overcharged the Pentagon by at least $61 million for fuel supplied to Iraq since the war.

Halliburton was headed by vice-president Dick Cheney until he became George W. Bush’s running mate in the November 2000 election and it was awarded Iraqi contracts worth several billion dollars without competitive bidding soon after the war.

Pentagon auditors revealed that in a second case, a Halliburton subsidiary, Kellogg, Brown and Root, submitted a proposal for cafeteria services in Iraq that was inflated by a whopping $67 million, but the mismatch was discovered and the proposal was rejected. The revelations have come at the worst possible time for President Bush: there is allround surprise here that even Republican leaders are coming out openly against the Pentagon’s latest policy of barring countries which did not support the war from undertaking rebuilding work in Iraq.

Yesterday, Bill Frist, the Republican leader in the Senate, who was hand-picked by Bush for the job, publicly disagreed with the policy.

Appearing on CNBC’s Capital Report, Frist said: “We have to remember that many of these countries that are being denied these contracts are supporting us elsewhere in the world, maybe fighting HIV-AIDS in Africa, maybe in Afghanistan, and that is why I hope that there will be some moderation of the policy as we go forward.”

Speaking for the Democrats, Congressman Henry Waxman said the audit report “confirms what we have known for months: Halliburton has been gouging taxpayers and the White House has been letting them get away with it.”

He said in a statement that “it is deplorable and we need to put an immediate end to it. There needs to be a top-to-bottom review of all the Iraqi contracts.”

Auditors found that Kellogg, Brown and Root was overcharging the US government $1.09 per gallon of fuel delivered to Iraq. About 57 million gallons of fuel was delivered at inflated prices.

Yesterday, Senator Frank Lautenberg, a Democrat, demanded Senate hearings on the auditor’s findings. Responding to the findings, Dov Zakheim, the Pentagon’s budget chief, assured that “contractor improprieties or contract mischarging on department contracts will neither be condoned nor allowed to continue.”

Halliburton, meanwhile, went on the offensive arguing that the risks involved in transporting oil to Iraq made it necessary to charge high prices.

Wendy Hall, a spokeswoman for the company, was quoted by news agencies as saying that more than 20 of the Halliburton’s trucks had been damaged or stolen and that nine of its drivers had been injured and one killed while executing the fuel supply contracts.

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