(Reuters) -- A Democratic lawmaker Wednesday
accused Halliburton, the Texas oil services
company once run by Vice President Dick Cheney,
of overcharging the U.S. government for gasoline
the firm imports into Iraq.
subsidiary Kellogg Brown & Root, which defends
its pricing as fair, has a contract with the
U.S. Army Corps of Engineers to rebuild Iraq's
oil sector. This has included importing gasoline
products which are in short supply to the oil-rich
of Americans want to help Iraqis but they don't
want to be fleeced [by Halliburton]," Rep.
Henry Waxman, of California, told a news conference.
said army documents showed that as of Sept.
18, the United States had paid Halliburton $300
million to import about 190 million gallons
(719 million liters) of gasoline into Iraq.
billed the government an average price of $1.59
per gallon (3.7 liters), excluding the company's
fee of 2 percent to 7 percent, said Waxman.
said the average wholesale cost of gasoline
during that period in the Middle East was about
71 cents a gallon, a figure an oil industry
source told Reuters was accurate. That meant
Halliburton was charging more than 90 cents
a gallon to transport fuel into Iraq from Kuwait
we checked with independent experts to see if
this fee was reasonable, they were stunned,"
said Waxman, adding a reasonable transport cost
would be 10 to 25 cents per gallon, especially
as the U.S. military was providing security.
to comment on the claims, a Halliburton spokeswoman
defended the pricing as fair and said KBR had
to transport gasoline through a "hostile
environment" into Baghdad.
use a sound procurement process which has been
approved by the government for procurement activities,"
said spokeswoman Wendy Hall. "KBR continues
to negotiate fair and competitive prices to
provide fuel to the Iraqi people," she
sent a letter on Wednesday to the White House
Office of Management and Budget complaining
KBR was overcharging for petroleum products.
overcharging by Halliburton is so extreme that
one expert privately called it 'highway robbery,"'
Corps of Engineers spokesman Bob Faletti said
military auditors were closely monitoring work
done by KBR and making sure the U.S. taxpayer
was not being overcharged.
far there have not been any red flags,"
said Faletti. "They have not found any
material errors. There are always small errors
but there has been no defective pricing or anything
untoward," he added.
has so far received more than $1.4 billion in
work in Iraq to repair and restore the country's
oil industry under a no-competition contract
issued in March. In another contract providing
logistical support, more than $1.6 billion has
been clocked so far, with more in the works.
no-bid contract is set to be replaced after
the military announces the winners to two new
tenders amounting to no more $1 billion.
said the winners for those two contracts, one
for the north and the other for the south of
Iraq, would be announced by the end of October.
a related development, New Jersey Sen. Frank
Lautenberg, a Democrat, suggested an amendment
to the $87 billion Iraq spending bill in Congress
that would prevent firms with ties to senior
administration officials from getting Iraq contracts.
said the amendment would take effect 90 days
after the bill became law which gave officials
ample time to divest themselves from financial
interests in a company.
has strongly denied any favoritism in the Halliburton
deal in Iraq and says he has no financial interest
in the company.
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