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Audit of KBR Iraq Contract Faults Records For Fuel, Food    [

    The Banality of Greed
    By Robert Scheer
    Truthdig

    Tuesday 26 June 2007

    As the Iraq war that Vice President Dick Cheney created continues to shred American - and many more Iraqi - lives, further documentation has emerged proving that, even during failed wars, the merchants of death profit. No company has profited more from the carnage in Iraq than Halliburton, which Cheney headed before choosing himself as Bush's running mate. One shudders at the blissful arrogance of this modern Daddy Warbucks, who sees no conflict of interest over the blood-soaked profits garnered by the once-bankrupt division of the company that left him rich.

    This week's evidence of the continuing corruption of Halliburton and its subsidiaries profiteering from contracts costing American taxpayers an unbelievable $22 billion stems from a report by the special inspector general for Iraq reconstruction. The report, only one of many about Halliburton's recently severed subsidiary KBR, focuses on work done in Baghdad's super-secure Green Zone. While parent company Halliburton insults U.S. taxpayers by relocating its headquarters to the tax shelter of Dubai, subsidiary KBR has been spun off to focus more directly on the American military contracts that form the core of its operations.

    Those operations have already produced a litany of condemnation by congressional and administration oversight bodies, and the June 25 report hardly details the company's most egregious activities. However, the Green Zone, the site of this latest instance of taxpayer fleecing, is instructive because, safely removed from the risks of battle, it deprives these war profiteers of their favorite excuse: that construction in a battle zone is inherently more costly. While KBR's Green Zone shenanigans covered by this report may seem small in comparison with the enormous waste attendant to the U.S. reconstruction program in Iraq, they are illustrative of the feeding frenzy that has fueled the American effort.

    The corrupt reconstruction project has left a wasteland of failed energy, water, educational and political reform plans. As report after report details, garbage is not collected, hospitals are not staffed, schools close soon after they are opened and factories sit idle in shocking refutation of the vaunted efficiency of the United States' political economic model.

    KBR's role in this fiasco is easily exposed by a basic Google search, beginning with a stop at the website of Henry Waxman, the California congressman who heads up the House Committee on Oversight and Reform. Waxman deserves a Medal of Freedom for trying to figure out what happened to those $22 billion that KBR received but are now lost to U.S. taxpayers, as well as to the once hopeful but now bitterly disillusioned Iraqi people. Indeed, six months ago, the inspector general for Iraq reconstruction, Stuart W. Bowen Jr., termed the high level of official corruption in Iraq the "second insurgency," stating that the siphoning-off of U.S. dollars is a major source of funds for the anti-American fighters in the country. It was estimated that last year upward of $100 million in stolen oil funds went directly to the insurgents. In the context of that horrid record of waste and corruption amid the destruction of Iraqi society in which "democratic nation building" transmogrified into fascist mayhem, KBR's antics in the Green Zone seem petty.

    But the fact that KBR played loose with our tax dollars even in the safety of the Green Zone is evidence of the company's contempt for the sacrifice of U.S. taxpayers. For example, concerning KBR's mismanagement of the fuel distribution program, the inspector general wrote: "We found weaknesses in KBR's fuel receiving, distributing and accountability processes of such magnitude that we were unable to determine an accurate measure of the fuel services provided." Yet, it was paid for by American taxpayers.

    Or, take the extra $4.5 million spent on the company's food service and the cost of billeting 90 percent of KBR personnel in single quarters, as opposed to the doubling-up practiced by regular Army folks.

    That was chicken feed compared with other examples of taxpayer rip-offs, as revealed in one case by the Army reducing payments to KBR by $19.5 million following Waxman's first "fraud, waste, and abuse hearings." It is hoped that there will be other efforts at forcing accountability for the billions of dollars that have been spent to advertise the efficiency of the United States' free-enterprise model to a skeptical Mideast public.

    It is claimed by American officials that KBR's accountability issues are being addressed. In one instance cited, the U.S. Embassy in Baghdad - a spiraling enterprise well on its way to becoming a nation-within-a-nation akin to the Vatican in Italy - announced that, as a means of avoiding food theft, its personnel would no longer be allowed to bring large bags into the eating halls. Such sacrifice for the mission of securing Iraqi freedom.

 

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    Audit of KBR Iraq Contract Faults Records For Fuel, Food
    By Dana Hedgpeth
    The Washington Post

    Monday 25 June 2007

US says it will increase monitoring in Baghdad.

    KBR, the government contracting firm formerly under Halliburton, did not keep accurate records of gasoline distribution, put its employees in living spaces that may be larger than warranted and served meals that appeared to cost $4.5 million more than necessary under a contract to perform work in Iraq, according to an audit by a government oversight agency.

    The report, to be released today by the special inspector general for Iraq reconstruction, addresses a sliver of a $22.5 billion contract that KBR won to provide services for the U.S. military. The inspector general's office focused on four services that KBR was paid to provide in Baghdad's heavily fortified Green Zone: supplying gasoline, food services, and housing and various morale and recreation services.

    The inspector general faulted the U.S. government for not closely monitoring KBR. As a result, the report said, "KBR's operations may have resulted in excessive government costs and high risk that government resources could have been used improperly."

    Both the State Department and the Defense Contract Management Agency, two oversight bodies, disputed the notion that oversight was inadequate.

    The inspector general said that despite both improper procedures and record-keeping, KBR provided adequate fuel, food and housing. A KBR spokeswoman said in an e-mail that the company had not seen the audit and that "it would be inappropriate for us to comment at this time."

    The inspector general and other audit agencies have pointed out previous shortcomings of KBR and the government in overseeing the logistics contract. In November 2004, KBR didn't provide details of the costs it spent on a contract. In October, the inspector general's office criticized KBR for labeling costs, labor rates and internal processes as proprietary information when it was needed to ensure competition and oversight.

    As part of its contract, KBR provides gas for vehicles and generators in the Green Zone. In today's report, auditors wrote, "we found weaknesses in KBR's fuel receiving, distributing and accountability processes of such magnitude that we were unable to determine an accurate measurement of the fuel services provided."

    KBR didn't use "totalizers," an internal meter in gas pumps that tracks how much fuel is used, according to the report. The contractor used "homemade gauge sticks" to figure out how much fuel was in storage tanks and kept insufficient records of how much fuel was coming in and out, the report said.

    The fuel database kept by KBR also revealed flaws. More fuel had been sent out than generators could hold. When auditors looked at the database in September 2006, it showed that 12,622 liters had been issued for December 2006 - "a future date and an obvious impossibility," the audit said.

    KBR managed its housing at its Camp Hope inside the Green Zone, resulting in most of its employees living in more spacious quarters than those they support, according to the report. Ninety percent of KBR employees were assigned to trailer spaces without roommates, meaning KBR employees appeared to have better housing than Army captains.

    KBR also did not keep accurate records of when people moved in and out of trailers, making it difficult to figure out what housing was being used.

    The inspector general's office found that contractual language was vague as to who could control KBR's housing and said "we found no fault with KBR's actions."

    "We found a number of problems in reviewing both procedures and records with respect to accountability of food, fuel and billeting," said Stuart W. Bowen Jr., the inspector general. "But the good news is the government and KBR have aggressively responded in the course of the audit to address these problems."

    During Bowen's audit, the Defense Contract Management Agency appointed 18 contracting officer's technical representatives. The U.S. Embassy in Baghdad also said that it wouldn't allow backpacks and large bags into dining halls to keep people from taking extra food.

    The DCMA said the inspector general had a "misunderstanding" of the housing requirements and that the agency had taken "immediate action . . . to resolve the cited deficiencies" in the fuel service.

    Bowen said his office will look at the other services that KBR was to provide in the Green Zone under the $243 million task order. He would not say whether he was concerned about other KBR services. "I can't speak to those yet," he said. He expects to release another report on those services in October.