(Dean) Statement on Halliburton Audit

[Khephra]

Statement on Halliburton Audit


BURLINGTON--Democratic presidential candidate Governor Howard Dean, M.D., issued the following statement today on reports that a Pentagon audit has found that Halliburton overcharged the government: "We've recently learned what many Americans have suspected for a long time -- special interest contributor Halliburton is overcharging the American taxpayers. Now this President is preventing entire nations from bidding on contracts in Iraq so that his campaign contributors can continue to overcharge the American taxpayers. For the safety of our troops, we need to make sure every penny in Iraq is spent wisely and efficiently."

http://www.deanforamerica.com/site/News2?page=NewsArticle&id=10951&JServSessionIdr004=ycahs2mtt1.app196a&news_iv_ctrl=1301

[leetrisck]

1. bush - that's our money

too. You know that hard earned money you want us to have more of - well, I would like to have it.

[acmavm]

2. If they are overcharging the government, then why are they getting new

contracts? Why in the hell are we giving them $15 billion dollars? Apparently that isn't enough for Cheney and his greedy thug friends. This is most certainly illegal. It is also war profiteering, in it's most disgusing, obscene form. They are looting our country. They are traitors in my opinion.

[rman]

4. because, in effect they are (part of) the government

-

[lfairban]

3. Nothing new in this,

a significant fraction of the $400B defense budget disappears without anyone knowing where it went.

[UpInArms]

5. more information on Hell-a-burnin' can be found here

http://www.cooperativeresearch.org/corporation/profiles/halliburton.html

A 1997 investigation by the General Accounting Office (GAO) revealed Halliburton has repeatedly overcharged the government for its services. For example, in one case, Halliburton charged the U.S. government $85.98 per sheet of plywood delivered to a location outside the U.S. In another instance, the company attempted to bill the Army for the income taxes that its employees were liable for while working in Hungary. (Chatterjee 5-2-2002a; Gerth and Van Natta 7-14-2002)

In 2000, the GAO discovered that Brown and Root had grossly mismanaged its expenditures at the army's facilities in Kosovo. For example, contract labor working in the Balkans on the U.S. taxpayers' clock were encouraged to work extra hours doing redundant tasks. The report explained that at Camp Bondsteel laborers often cleaned offices and bathrooms over and over again - up to four times a day. (Chatterjee 5-2-2002a; Hennessey 5-23-2002) Additionally, it revealed that Brown and Root had ordered so much furniture ($5.2 million worth) that the army had great difficulty finding room for it all. Processing the order alone cost U.S. taxpayers $377,000. (Hennessey 5-23-2002)

The former Brown and Root contract manager, Dammen Grant Campbell, blew the whistle on his ex-employer, revealing that the Halliburton subsidiary had purposefully inflated its invoices by exaggerating the quantity and quality of the supplies its used on government contracts. In the span of about 4 years, between 1994 and 1998, the company sent the government these fraudulent bills for 224 projects. (Chatterjee 5-2-2002a)

KBR charged the U.S. Army $750,000 for electrical repairs that had cost them only about $125,000 at a base in California. Commenting on the incident, A KBR lawyer explained, "The company happened to negotiate a couple of projects we made more money on than others. On some projects the contractor may make a large or small profit, while on others it may lose money, as KBR sometimes did on this contract." (Gerth and Van Natta 7-14-2002)

The Securities and Exchange Commission (SEC) is currently investigating Halliburton for possible fraudulent accounting in 1998 and 1999. The company is accused of booking $100 million in reimbursement income for cost overruns on construction contracts before its customers actually agreed to pay these extra costs. The New York Times reported that according to a former Dresser Industries executive Halliburton claimed the income "to obscure large losses on several important construction contracts." Halliburton's auditor, Anderson Accounting, is assumed to have approved of the misleading financial statements. (Berenson and Bergman 5-22-2002; Harrington and Toedtman 5-30-2002) According Halliburton's current CEO, David Lesar, Cheney had been aware the projected cost-overrun payments were being recorded as revenues. (PRNewswire 7-14-2002) While much of the complacent public seems content that Cheney's former company is not being overlooked by the SEC, more critical observers are calling attention to the apparent conflict of interest between Harvey Pitt, the current SEC chairman, and the allegations he is charged with investigating. (Coile 7-1-2002; Fields 7-9-2002) Pitt at one time was a top lobbyist and attorney for several major Wall Street brokerage and accounting firms. Even Al Gore has raised his voice. In a speech on June 29, he complained: "They picked the principal lawyer and lobbyist for the big five accounting firms who, before coming to the government, went and pleaded with the SEC to open up loopholes for the accounting companies." (Coile 7-1-2002) Another conflict of interest is that the SEC reports to the Vice President. (Harnden 5-7-2002)

In May of 2003, Halliburton admitted to having paid $2.4 million to an official posing as a tax consultant in exchange for tax concessions from that country. According to Halliburton, the bribes, which took place between 2001 and 2002, did not involve senior company officers. The SEC is investigating the issue and Halliburton may ultimately be liable for some $5 million in back taxes in Nigeria.

...more...

[pinto]

6. Rummy on CSPAN this morning took one question about this.

Speaking to the National Conference of State Legislatures, Rummy was asked about Halliburton overcharges. Rummy denied any knowledge whatsoever of any overcharges - never said "Halliburton" - but said there may be "disagreements" between the DOD and contractors about how much to charge....Moved on pretty quickly, refused follow-up question.