Halliburton a liability for Bush?!
BusinessWeek is carrying a story detailing how much credibility Halliburton has earned this year with all its displays of integrity and good military-industrial citizenship. Oh, wait:
Questions about Halliburton are piling up rapidly -- and they won't go away soon. The Pentagon Inspector General has asked the Defense Criminal Investigative Service to probe allegations by Representatives Henry Waxman (D-Calif.) and John Dingell (D-Mich.) that the outfit inflated the price of fuel it supplied in war-torn Iraq.
Also under scrutiny: Allegations that Halliburton overcharged for meals at a base in Kuwait and might have wildly overstated estimated costs for food services in Iraq. On Feb. 16, Halliburton announced that it was holding on to subcontractors' bills totaling $174.5 million until the amounts it should bill Uncle Sam are resolved. "We did this to take the issue off the table from a political standpoint," says Wendy Hall, Halliburton's director of public relations in an e-mail.
Separately, Halliburton has acknowledged that employees took $6.3 million in kickbacks from a Kuwaiti subcontractor. And the Justice Dept., Securities & Exchange Commission, and French authorities are probing accusations that a Halliburton joint venture paid $180 million in bribes in connection with a Nigerian natural gas plant in the 1990s -- while Cheney was Halliburton's CEO.
AVOIDING COMPETITIVE BIDS. There's plenty more to come. The General Accounting Office is studying Iraq reconstruction contracts and troop-support services -- two reports in which Halliburton should figure prominently. The first is due out in March. Democrats also want a thorough review of the Pentagon's plan to award monopoly, cost-plus contracts for services in Iraq.
Halliburton is feeling the heat from all this and is defending its Iraq activities, which accounted for 40% of its $5.5 billion in fourth-quarter revenue and 30% of its $146 million income. It has denied wrongdoing in its Iraq contracting and has hired outside lawyers, whom it won't identify, to probe the Nigerian payments.
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