dutchie
Dec 16th, 2004, 4:20 AM
Article on Washington Post (http://www.washingtonpost.com)
U.N. Board Cites U.S. Contractor in Iraq
Pentagon Audits Found Halliburton Subsidiary 'Overstated Costs,' Report Says
By Colum Lynch
Washington Post Staff Writer
Wednesday, December 15, 2004; Page A27
UNITED NATIONS, Dec. 15 -- Pentagon auditors concluded that Kellogg Brown & Root, a subsidiary of Halliburton Co., charged "unsupported" and "overstated costs" in more than $800 million in U.S.-administered projects financed by Iraqi oil revenue, according to a report issued Tuesday by a U.N.-appointed financial oversight board.
The chairman of the International Advisory and Monitoring Board (IAMB), Jean-Pierre Halbwachs, said that it was impossible to determine the extent of alleged overcharges because the figures had been redacted from a series of five Pentagon audits presented to the board last month. But he said that he had agreed to a U.S. proposal to appoint an independent auditor to conduct a "special audit" of all contracts awarded to Kellogg Brown & Root (KBR) and other companies without competitive bidding.
The international board was created by the U.N. Security Council in May 2003 to monitor the U.S.-led coalition's management of Iraq's oil revenue. It had been pressing the Pentagon for months to release the audits of KBR as part of a broad effort to ensure that Iraq's oil revenue has been properly spent. The U.S. company had been awarded at least $1.4 billion from Iraqi revenue to repair the country's oil facilities and to import fuel for domestic uses, according to Halbwachs.
A Pentagon spokeswoman, Lt. Col. Rose-Ann L. Lynch, declined to release an estimate of the overcharges cited in the audit, calling the information "proprietary in nature." She said that the United States and KBR both approved the redacted versions of the audits presented to the IAMB.
Lynch said that the KBR contracts had been administered by the Army Corps of Engineers and noted that the Government Accountability Office stated in a June report that the Army Corps had "properly awarded" a sole source contract to rebuild Iraq's oil infrastructure. Iraq's oil revenue "will continue to be used in a transparent manner to meet the humanitarian needs of the Iraqi people," she said.
Halliburton spokeswoman Wendy Hall declined to discuss the conclusions of the Pentagon audit. But she wrote in an e-mail that the company has addressed the auditors' assertions "directly with the Army, and we will continue to work with our customer to prove that KBR is delivering services at the best value at a time when few other companies could or would."
The U.N. report issued Tuesday comes as the United Nations, which monitored Iraq's oil exports before the U.S.-led invasion, confronts allegations of corruption and mismanagement in that oil-for-food program. Some U.S. lawmakers have called for the resignation of U.N. Secretary General Kofi Annan as a result of the allegations, but Bush administration officials have said they do not seek Annan's ouster and are working well with him. Annan plans to meet Thursday in Washington with Secretary of State-designate Condoleezza Rice, officials said.
The IAMB first raised concerns in March that contracts financed by Iraqi revenue had been awarded to KBR without competitive bidding. The Pentagon's initial refusal to release internal audits on the contracts fueled criticism among Democratic lawmakers about the U.S.-led coalition's management of Iraq's oil revenue.
The board, which includes representatives from the United Nations, the World Bank and the International Monetary Fund, has sharply criticized the U.S.-led coalition's handling of billions of dollars in Iraqi oil revenue. It has also drawn attention to lax financial controls of Iraqi ministries, citing poor bookkeeping and duplicate payments to government workers.
A series of audits commissioned by the board, covering May 2003 to June 2004, found that the deposits and disbursements of billions of dollars in oil sales were accounted for by the U.S. led-coalition. But the audits, which were carried out by the accounting firm KPMG, have noted that the "financial controls" were insufficient to ensure the money was properly spent.
"There were a number of weaknesses in the overall financial management system that are of concern," the IAMB report stated. "There was an absence of control over oil extraction . . . the execution of the accounting function was often inadequate . . . proper contracting procedures were not always adhered to, in particular the use of single-source contracting."
Article here (http://news.bbc.co.uk/1/hi/business/3746340.stm)
US agrees to Halliburton inquiry
Halliburton's Iraq contracts are an election issue
The US government will set up an inquiry into the no-bid Iraq contracts given to Halliburton, the company once run by Vice President Dick Cheney.
The move is the latest embarrassment for the firm, which faces losing its Iraq contracts with the US Army.
Halliburton's Iraq deals had been criticised by the International Advisory Monitoring Board, a UN group monitoring the use of Iraq's resources.
Meanwhile, a Halliburton affiliate faces a probe by Nigeria's parliament.
Portugal-registered TSKJ comprising Technip of France and Snamprogetti Netherlands faces allegations of bribery.
Halliburton acquired the firm in 1998.
Election issue
The special audit of Halliburton's Iraq contracts will investigate:
the extent of no-bid contracts funded by Iraqi oil revenue;
previous US government audits relating to the company;
and whether any of Halliburton's contracts have not yet been audited.
Halliburton has denied any wrongdoing.
News of the investigation was made public by the International Advisory Monitoring Board, set up by the UN to oversee the use of Iraq's resources during the occupation of the country by US-led coalition forces.
The board also released an audit of Iraq's oil accounts during the final six months of the US occupation.
Accountants KPMG, who carried out the review on behalf of the board, expressed concern about the occupation authority's recording of cash receipts and oil export revenue.
The board previously had accused the Coalition Provisional Authority of inadequate management of Iraqi oil money, and failure to safeguard against corruption.
Halliburton has been criticised for alleged overcharging for its services as well as winning the reconstruction contracts as a result of contacts with the Iraq administration.
Mr Cheney led the firm between 1995 and 2000, and Halliburton's operations in Iraq have become an issue in the presidential election campaign.
article here (http://news.bbc.co.uk/1/hi/business/4040993.stm)
Halliburton faces 'payment cut'
Kellogg Brown & Root provides logistics and construction services
A US government auditor has backed a Pentagon recommendation to withhold payments to controversial US giant Halliburton over its work in Iraq.
Stuart Bowen, who is reviewing US spending in Iraq, says he supports proposals for the army to hold back 15% of monthly payments on future invoices.
It follows a dispute over bills which officials say lack proper records.
The move could cost Halliburton, the largest US civilian contractor in Iraq, up to $60m (£32m) a month.
"We agree with US Army Materiel Command and DCAA [Defense Contract Audit Agency] positions," Mr Bowen said in a memo, referring to an audit by the DCAA in August.
That recommended cuts of 15% after finding flaws in the accounting system used by Halliburton subsidiary Kellogg Brown & Root.
Meal bills
Halliburton, once run by US Vice-President Dick Cheney, said it was not aware of any plan to implement the cuts.
"We will continue to work directly with our client regarding resolution for this issue," spokeswoman Cathy Gist said.
The company has said it would pass on any cutbacks to its suppliers.
Part of the dispute is believed to centre on the way KBR bills for meals.
The Pentagon wants to be charged for exactly how many meals are actually eaten, while Halliburton's systems are said to be based on estimates.
The army has not yet implemented the cuts.
It has opted to give Halliburton more time to resolve the ongoing dispute, fearing punitive action could disrupt supplies to US troops.
I guess corruption is a fast spreading virus, eh?!? Spoils of war?!?
U.N. Board Cites U.S. Contractor in Iraq
Pentagon Audits Found Halliburton Subsidiary 'Overstated Costs,' Report Says
By Colum Lynch
Washington Post Staff Writer
Wednesday, December 15, 2004; Page A27
UNITED NATIONS, Dec. 15 -- Pentagon auditors concluded that Kellogg Brown & Root, a subsidiary of Halliburton Co., charged "unsupported" and "overstated costs" in more than $800 million in U.S.-administered projects financed by Iraqi oil revenue, according to a report issued Tuesday by a U.N.-appointed financial oversight board.
The chairman of the International Advisory and Monitoring Board (IAMB), Jean-Pierre Halbwachs, said that it was impossible to determine the extent of alleged overcharges because the figures had been redacted from a series of five Pentagon audits presented to the board last month. But he said that he had agreed to a U.S. proposal to appoint an independent auditor to conduct a "special audit" of all contracts awarded to Kellogg Brown & Root (KBR) and other companies without competitive bidding.
The international board was created by the U.N. Security Council in May 2003 to monitor the U.S.-led coalition's management of Iraq's oil revenue. It had been pressing the Pentagon for months to release the audits of KBR as part of a broad effort to ensure that Iraq's oil revenue has been properly spent. The U.S. company had been awarded at least $1.4 billion from Iraqi revenue to repair the country's oil facilities and to import fuel for domestic uses, according to Halbwachs.
A Pentagon spokeswoman, Lt. Col. Rose-Ann L. Lynch, declined to release an estimate of the overcharges cited in the audit, calling the information "proprietary in nature." She said that the United States and KBR both approved the redacted versions of the audits presented to the IAMB.
Lynch said that the KBR contracts had been administered by the Army Corps of Engineers and noted that the Government Accountability Office stated in a June report that the Army Corps had "properly awarded" a sole source contract to rebuild Iraq's oil infrastructure. Iraq's oil revenue "will continue to be used in a transparent manner to meet the humanitarian needs of the Iraqi people," she said.
Halliburton spokeswoman Wendy Hall declined to discuss the conclusions of the Pentagon audit. But she wrote in an e-mail that the company has addressed the auditors' assertions "directly with the Army, and we will continue to work with our customer to prove that KBR is delivering services at the best value at a time when few other companies could or would."
The U.N. report issued Tuesday comes as the United Nations, which monitored Iraq's oil exports before the U.S.-led invasion, confronts allegations of corruption and mismanagement in that oil-for-food program. Some U.S. lawmakers have called for the resignation of U.N. Secretary General Kofi Annan as a result of the allegations, but Bush administration officials have said they do not seek Annan's ouster and are working well with him. Annan plans to meet Thursday in Washington with Secretary of State-designate Condoleezza Rice, officials said.
The IAMB first raised concerns in March that contracts financed by Iraqi revenue had been awarded to KBR without competitive bidding. The Pentagon's initial refusal to release internal audits on the contracts fueled criticism among Democratic lawmakers about the U.S.-led coalition's management of Iraq's oil revenue.
The board, which includes representatives from the United Nations, the World Bank and the International Monetary Fund, has sharply criticized the U.S.-led coalition's handling of billions of dollars in Iraqi oil revenue. It has also drawn attention to lax financial controls of Iraqi ministries, citing poor bookkeeping and duplicate payments to government workers.
A series of audits commissioned by the board, covering May 2003 to June 2004, found that the deposits and disbursements of billions of dollars in oil sales were accounted for by the U.S. led-coalition. But the audits, which were carried out by the accounting firm KPMG, have noted that the "financial controls" were insufficient to ensure the money was properly spent.
"There were a number of weaknesses in the overall financial management system that are of concern," the IAMB report stated. "There was an absence of control over oil extraction . . . the execution of the accounting function was often inadequate . . . proper contracting procedures were not always adhered to, in particular the use of single-source contracting."
Article here (http://news.bbc.co.uk/1/hi/business/3746340.stm)
US agrees to Halliburton inquiry
Halliburton's Iraq contracts are an election issue
The US government will set up an inquiry into the no-bid Iraq contracts given to Halliburton, the company once run by Vice President Dick Cheney.
The move is the latest embarrassment for the firm, which faces losing its Iraq contracts with the US Army.
Halliburton's Iraq deals had been criticised by the International Advisory Monitoring Board, a UN group monitoring the use of Iraq's resources.
Meanwhile, a Halliburton affiliate faces a probe by Nigeria's parliament.
Portugal-registered TSKJ comprising Technip of France and Snamprogetti Netherlands faces allegations of bribery.
Halliburton acquired the firm in 1998.
Election issue
The special audit of Halliburton's Iraq contracts will investigate:
the extent of no-bid contracts funded by Iraqi oil revenue;
previous US government audits relating to the company;
and whether any of Halliburton's contracts have not yet been audited.
Halliburton has denied any wrongdoing.
News of the investigation was made public by the International Advisory Monitoring Board, set up by the UN to oversee the use of Iraq's resources during the occupation of the country by US-led coalition forces.
The board also released an audit of Iraq's oil accounts during the final six months of the US occupation.
Accountants KPMG, who carried out the review on behalf of the board, expressed concern about the occupation authority's recording of cash receipts and oil export revenue.
The board previously had accused the Coalition Provisional Authority of inadequate management of Iraqi oil money, and failure to safeguard against corruption.
Halliburton has been criticised for alleged overcharging for its services as well as winning the reconstruction contracts as a result of contacts with the Iraq administration.
Mr Cheney led the firm between 1995 and 2000, and Halliburton's operations in Iraq have become an issue in the presidential election campaign.
article here (http://news.bbc.co.uk/1/hi/business/4040993.stm)
Halliburton faces 'payment cut'
Kellogg Brown & Root provides logistics and construction services
A US government auditor has backed a Pentagon recommendation to withhold payments to controversial US giant Halliburton over its work in Iraq.
Stuart Bowen, who is reviewing US spending in Iraq, says he supports proposals for the army to hold back 15% of monthly payments on future invoices.
It follows a dispute over bills which officials say lack proper records.
The move could cost Halliburton, the largest US civilian contractor in Iraq, up to $60m (£32m) a month.
"We agree with US Army Materiel Command and DCAA [Defense Contract Audit Agency] positions," Mr Bowen said in a memo, referring to an audit by the DCAA in August.
That recommended cuts of 15% after finding flaws in the accounting system used by Halliburton subsidiary Kellogg Brown & Root.
Meal bills
Halliburton, once run by US Vice-President Dick Cheney, said it was not aware of any plan to implement the cuts.
"We will continue to work directly with our client regarding resolution for this issue," spokeswoman Cathy Gist said.
The company has said it would pass on any cutbacks to its suppliers.
Part of the dispute is believed to centre on the way KBR bills for meals.
The Pentagon wants to be charged for exactly how many meals are actually eaten, while Halliburton's systems are said to be based on estimates.
The army has not yet implemented the cuts.
It has opted to give Halliburton more time to resolve the ongoing dispute, fearing punitive action could disrupt supplies to US troops.
I guess corruption is a fast spreading virus, eh?!? Spoils of war?!?