Whistleblowers Detail Corruption and Fraud at Halliburton during Senate Hearing

Senator Byron Dorgan convened a hearing to shed light on the recent revelations of contractor corruption in Iraq. Democratic Senators were fired up about the blatant fraud and theft from the American taxpayers. And since Bush’s new budget cuts education again, it is truly a theft from our children. No Republicans attended the hearing.

Senator Dorgan: "To see this kind of waste and this kind of corporate culture say, ’What the hell, it’s just the American taxpayer- stick it to ’em...’ Shame on them, shame on them. And shame on those who refuse to investigate... if we’re paying $2.60 today for gasoline [in Iraq], it ought to stop this afternoon."

Details of the corruption:

-Halliburton has reportedly overcharged us $100 million dollars for fuel. They charged the US taxpayers $2.64 per gallon to import gasoline from Kuwait to Iraq, $1 more than the going rate. (Note- before the war, Iraqis bought gas for about a nickel per gallon.)
-Halliburton charged for 42,000 meals per day when it only delivered 14,000 per day. "That’s not a snafu, that’s cheating," said Dorgan.
-Buyers were instructed to purchase from ’preferred suppliers’ using purchase orders less than $2,500. (because these were not audited)
-Instructed not to use spreadsheets to avoid generating any kind of electronic trail.
-KBR managers frequently used phrases like, "don’t worry about the price, it’s cost plus"
-Cost Plus contracts gave no motivation to keep costs down since the higher the price, the more $$ they made.
-Halliburton has ’earned’ $9 billion in Iraq thus far.

Senator Dorgan was clearly furious at this information, "We want the truth and we want it now. We are determined to shut down this waste and abuse."


One example of waste was a contract for embroidered towels. The original batch of plain towels was returned for the higher priced towels embroidered with KBR’s logo- higher price translated to more profit for KBR. If this practice was used for all purchasing in Iraq, Halliburton may be forced to repay billions of dollars.

Senator Lautenberg, "When you have a business that says- the more money you spend, the more you make- there is something unholy about that."

Senator Durbin hit the nail on the head: "Why are we here on Capitol hill, if it’s not to serve as an oversight of these activities. Historically Congress has done that." During WWII a Democratic President and a Democratic Congress launched the Truman Committee and uncovered the truth. "And yet we find with a Republican President and a Republican Congress, no Republican is willing to step forward and ask the hard questions. Why? How can we explain this? I don’t think there is an explanation."

Sen. Boxer sent a letter to Rumsfeld asking him to begin disbarrment proceedings, "Halliburton should be banned immediately from bidding on any federal contract for a number of years."

Representing Rep. Waxman, William Hartung said that this corruption is also harming our troops. They don’t have the supplies they need while money is being wasted through this corruption. Hartung said, "I have never seen this level of corruption and cronyism."

Steve Ellis of Taxpayers for Common Sense called for a War Profiteering Committee to be formed. During World War II the Truman Committee was launched with $15,000, it uncovered the same system of cost-plus contracts and saved $15 billion. Sen. Lautenberg has tried to get hearings on this for 9 months (he wrote three letters), but the Republicans won’t even respond to his request. Note to Sen. Lautenberg- perhaps it’s time to move beyond letter writing.

Senator Dorgan, "Clearly we’re being cheated, clearly we’re being ripped off- Why doesn’t the DoD say, ’End of this game, we’re not going to put up with this.’ "

Senator Durbin’s final thoughts, "If the American people follow this hearing and what we have said, they are going to respond with an outrage. Their money is being wasted and our soldiers are being endangered because of this situation.... Where is the accountability? ... This hearing is the beginning..."

here is the C-span video of the hearing
http://c-span.org/search/basic.asp?ResultStart=1&ResultCount=10&BasicQueryText=contracting+abuses&image1.x=0&image1.y=0&image1=Submit