Halliburton told federal securities regulators on Monday that it expects a formal Pentagon inquiry into alleged deficiencies in its procurement procedures in Iraq and Kuwait. The company told the Securities and Exchange Commission it has credited $36 million to the Defense Department and delayed billing the Pentagon for an additional $141 million because of the problem.
The Defense Department has launched a separate, criminal investigation into whether Vice President Dick Cheney's former company overcharged by $61 million last year for importing gasoline from Kuwait to Iraq for subsidized sales to Iraqi civilians. The military recently gave that contract to another Texas-based petroleum broker.
Halliburton also has acknowledged it fired two employees and reimbursed the Pentagon $6.3 million because of kickbacks allegedly paid to a Kuwaiti subcontractor on a different contract. The company's KBR subsidiary has reimbursed $27.4 million for alleged overcharging for meals served to troops in the Iraq area. Those two reimbursements alone account for $33.7 million of the $36 million Halliburton acknowledged reimbursing.
Houston-based Halliburton has repeatedly denied any wrongdoing, saying its own auditors discovered the kickback scheme and the high gasoline prices were charged by a Kuwaiti subcontractor approved by the Army. The company has been running television commercials saying it proudly serves American troops in Iraq and dismissing criticism as politically motivated.
"We are disappointed, once again, that selective portions of audit reports have been released publicly even before KBR and the Army have made final reviews of the information," Halliburton spokeswoman Wendy Hall said in a statement released yesterday evening. "Releases of partial reports are inappropriate because the true and complete story cannot be conveyed."
