Halliburton's 5-finger discount

Much has been said about the famed Halliburton "no-bid contracts." The public's interest in these contracts has been, in a word, cyclical. Since before the invasion of Iraq, Halliburton has sporadically appeared on front pages throughout the country. Yet, until this past week, Halliburton was able to escape a public lashing from the government that lavishly butters its bread.

Last week, the "Democratic Policy Committee" held a hearing based on a report prepared for Sen. Byron Dorgan and Representative Henry Waxman that shows Halliburton has fraudulently overcharged the taxpayers $1.4 billion (over $1 billion discovered by government auditors and $442 million in "unsupported" charges).

TRENDING: Public school has failed American kids: Student with 0.13 GPA ranks near top half of class

This hearing was unique in that it was convened by a small group of concerned legislators vs. the committees charged with overseeing government contracts. Each committee member stated in opening remarks that he had formally and informally requested hearings on Halliburton's alleged fraudulent practices for several months. Yet the Republican-led committees refused to bring Halliburton and its subsidiary, Kellogg, Brown and Root in for questioning.

One would think the fact that Vice President Cheney still gets paid by Halliburton through the year 2007 is cause enough for men and women of integrity to want to clear the air, but not so in this case. It is better for the Republicans to avoid, deny and delay than act against their own interests or the interests of their friends.

The individuals who testified did so at great personal risk. The lead testimony came from Ms. Bunnatine "Bunny" Greenhouse, a 20-year career contract specialist at the U.S. Army Corps of Engineers. She detailed the highly unusual and unprecedented manner in which Halliburton obtained the no-bid contract in Iraq before the war began. One of the most lucrative contracts was called "RIO," Reconstruction of Iraqi Oil. Ms. Greenhouse objected to the Army Corps of Engineers having anything to do with this contract because they lacked professional competencies in this area. She mentioned that the Corps had nothing to do with oil reconstruction in Kuwait after the first Gulf War and that it was strange that the secretary of Defense would have total control over an oil contract.

It gets better. Ms. Greenhouse testified that Halliburton accomplished the cost estimate for the project and then was awarded the contract. She again mentioned the word, "unprecedented." She said normally the company that does the cost estimate is excluded from being awarded the contract in order to guard against having a "conflict of interest."

She also went so far as to hand write her objection to an anti-competitive contract extension clause in Halliburton's RIO contract next to her signature. This objection ultimately cost Ms. Greenhouse her job as it was discovered by a journalist who got a copy of the contract by filing a Freedom Of Information Act request. Ms. Greenhouse became a political liability to the Army Corps of Engineers and she was removed from her post.

Rory Mayberry, a former KBR Food Manager, testified via video tape (since he is currently in Iraq) that he was ordered to serve expired food to our troops. He was also required to order more food than necessary in order to make it look like they were serving more troops. When Mr. Mayberry reported these fraudulent practices to visiting auditors, he was shipped out to Fallujah, which was, at the time, the most dangerous post. His convoy was attacked enroute.

Allen Waller and Gary Butters of Lloyd-Owen International, a transportation and security company that supplies fuel to the Iraqi people, detailed Halliburton's deliberate attempt to sabotage Lloyd-Owen by preventing them from using the military checkpoint between Kuwait and Iraq. They also stated that the cost they charge the Iraqi government for fuel transportation exceeded the price the U.S. government is paying Halliburton by several times.

Speaking of Halliburton's overcharging for fuel, remember all the hoopla over this issue last year? Ms. Greenhouse told the committee that the major-general in charge of the Army Corps of Engineers "waived" the penalty for overcharging. Halliburton skated.

The Bush administration and the Republican-led House and Senate are enabling Halliburton's "five-finger discount" practices. They are doing so at a time when six out of seven Marine Corps humvees have no armor. In addition, Jim Nicholson, the secretary of Veteran Affairs testified the day after Sen. Dorgan's Halliburton hearing that our veterans are under-funded by $1 billion for 2006. Ironically, this is the same amount of money government auditors discovered Halliburton overcharged.

Sen. Dorgan's hearing was not a partisan attempt to splash egg on the Bush administration's face, but a last ditch attempt to hold a favored company accountable and put money back into the business of saving and caring for the lives of our troops and veterans.