Corruption stench as company loses Iraq contract (cont)

Not Real Happy, John

Continued from

But the Herald has been told that the Halliburton employee involved in the alleged kickbacks had made similar approaches to other big contractors working for Halliburton supplying the military.

The insider said that the demand for kickbacks was widely known among the catering contractors. "It was too blatant, the corruption that was going on, not to be caught."

The problems between the Australian-Kuwaiti joint venture and Halliburton were first raised in a report by Pentagon auditors that was released to a congressional committee in March.

The audit accused Halliburton's subsidiary Brown & Root Services, which was responsible for the catering, of massive over-billing for the meals it was supplying to US troops in Iraq and Kuwait.

In the report, the Pentagon noted with concern that Halliburton had failed to inform the military it had cancelled the Morris-KCPC contract to supply meals last July, six weeks after it was granted. Despite this, Halliburton continued to use the contract to estimate costs of more than $US1 billion for catering sites all over Iraq and Kuwait.

The Pentagon was forced to release the audit report after a Democratic congressman, Henry Waxman, called for hearings to investigate corruption and over-billing in Iraq contracting.

The hearings investigated Halliburton's involvement in a kickback scandal over contracts to supply fuel to the US military in Iraq. The company has admitted two employees are under criminal investigation over $6 million in payments believed to be related to those contracts.

Asked about allegations of corrupt approaches to his catering joint venture, Mr McVicker said he would not discuss the claims. "Morris has never been involved in any corrupt dealings in Iraq and sometimes to the detriment of winning work. It's just not part of our Australian culture. If that's what it takes, someone else can do it."

After months examining Halliburton over billing for meal contracts, the Pentagon's Defence Contract Audit Agency this week told the firm that it was suspending payment on $US159.5 million in charges it had submitted.

The company says the bulk of the billing was justified and that it was continuing to work with the Pentagon auditors.


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