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Bush administration intentionally concealed Halliburton overcharges
15 March 2005

WASHINGTON, March 15 (HalliburtonWatch.org) -- The Bush administration intentionally concealed evidence of Halliburton's overcharges on gasoline imported into Iraq in violation of United Nations Security Council Resolution 1483, a congressman revealed today. Rep. Henry Waxman (D-CA) said the Bush administration, "acting at the request of Halliburton," intentionally concealed evidence from the International Advisory Monitoring Board (IAMB), an international body responsible for auditing Iraq's oil finances.

Waxman said the evidence concealed by the Bush administration showed Halliburton's KBR subsidiary had overcharged the Development Fund for Iraq (DFI), which in May 2003 became the successor to the U.N.'s Oil-for-Food Program. The now-defunct U.S. Coalition Provisional Authority (CPA) was responsible for managing the DFI and had given KBR a total of $1.6 billion from the fund.

In October 2004, after stonewalling for months, the Pentagon finally sent the IAMB redacted copies of the audits of Iraq's oil money. But Waxman found an unredacted audit of Task Order 5 - which required KBR to import gasoline into Iraq -- and compared it to the redacted version given to the IAMB. He said there were "striking differences" between the two. The redacted copy did not show KBR's $108 million in gasoline overcharges while the unredacted copy did show it. The redacted copy did not show an additional $62 million in "unreasonable costs" for importing gasoline into Iraq, but the unredacted copy did show it. The unredacted copy of the audit concludes: "KBR did not demonstrate the prices for Kuwaiti fuel and transportation were fair and reasonable." The redacted audit sent to the IAMB deleted this sentence.

The redacted audit also deleted these sentence: "KBR was unable to demonstrate the proposal was based on actual costs"; "We consider KBR's estimating system to be inadequate"; "KBR was unable to reconcile the proposed costs to its accounting records"; "KBR did not always provide accurate information"; "KBR has failed to demonstrate adequate competition in its procurement decision"; "KBR did not comply with the stated terms and conditions of its own subcontract clauses"; and "We found significant purchasing system deficiencies."

According to Waxman, "The extensive redactions in the audit were apparently made at the specific request of Halliburton." He cited a Halliburton letter written to an Army official which states, "[W]e have redacted the statements of [auditors] that we believe are factually incorrect or misleading and could be used by a competitor to damage KBR's ability to win and negotiate new work."

More Information:

Rep. Henry Waxman's letter (pdf)

Pentagon audit of Task Order 5 (unredacted version)(pdf)

Letter from Halliburton/KBR requesting deletion of damaging info in audit (pdf)

IAMB's request for audit documents (pdf)

U.S. conceals documents on $1.5 billion in Iraqi oil revenues paid to Halliburton, auditor finds oil funds prone to fraud

The Guardian: Pentagon 'hid' damning Halliburton audit