Busted? Halliburton accused of overcharging $61m

President Bush has indicated to reporters that he expects a refund if Halliburton has, in fact, overcharged the U.S. military some $61 million for gasoline.

In ... Iraq ... a nation that--how did Wolfowitz say it? In a nation that "swims on a sea of oil," auditors have found a potential overcharge of $1.09 per gallon on 57,000,000 gallons of gasoline?

According to Matt Kelley (http://www.washingtonpost.com/wp-dyn/articles/A60025-2003Dec12.html), of the Associated Press, But the company apparently didn't profit from the discrepancy, according to officials who briefed reporters Thursday on condition of anonymity. The problem, the officials said, was that Halliburton may have paid a Kuwaiti subcontractor too much for the gasoline in the first place.CNN's Jamie McIntyre (http://www.cnn.com/2003/WORLD/meast/12/11/sprj.irq.halliburton/) reports:The audit questions if Halliburton paid above-market rates to a Kuwaiti subcontractor when it paid $2.27 per gallon for the gas. Another supplier bought gas at $1.18 per gallon from Turkey.So ... somebody please help me define the issue a little better. Is there a potential for kickback-related corruption? Is this just a condition of the theatre created by the Bush strategy? Is there an issue of idiocy afoot on Halliburton and its subsidiary, Kellogg, Root, and Brown?

I mean, this is Halliburton, the same Halliburton that lost some Americium (http://www.bizjournals.com/houston/stories/2003/03/03/daily43.html) in December, 2002.

I well understand Bush's concern, and the coming political fallout, but ... why exactly will people be pointing fingers? What, specifically is the outrage? Yes, there's the idea of the cost, but what are the implications of paying a Kuwaiti subcontractor too much for the fuel?

Strange, strange, strange.

Notes:

• Kelley, Matt. "Bush Expects Halliburton to Refund Money." Associated Press (WashingtonPost.com), December 12, 2003. See http://www.washingtonpost.com/wp-dyn/articles/A60025-2003Dec12.html
• McIntyre, Jamie. "Bush: If Halliburton overcharged the government, it will have to repay." CNN.com, December 12, 2003. See http://www.cnn.com/2003/WORLD/meast/12/11/sprj.irq.halliburton/

See also:

• "Halliburton says radioactive material was stolen." Houston Business Journal, March 6, 2003. See http://www.bizjournals.com/houston/stories/2003/03/03/daily43.html

The fact that Halliburton got these contracts without competition shows that this is not an isolated oversight in my opinion, however, since that didn't result in a scandal, this won't either.

Bush's just trying to look good, "look Halliburton spending to much money, I'm busting them, see see I'm not on their side" time will tell if Haliburton pays back and Bush is not giving us lip service.

• Ivanovich, David. "Halliburton asked for details on Iran." HoustonChronicle.com, December 15, 2003. See http://www.chron.com/cs/CDA/ssistory.mpl/business/2298577

This is one of those stories that can either be the tip of the iceberg--and a potential Oscar-winning dramatization with Affleck and Damon ten years down the line--or an absolute dud--and a potential Oscar-nominated dramiatization with Affleck and Damon fifteen years down the line ....

At any rate .... New York City's comptroller is prodding Houston-based Halliburton Co. to release more details about its business dealings in Iran.

William Thompson Jr., who manages the New York police and fire department pension funds, has been agitating for months for Halliburton's board to reconsider doing business in Iran because of that country's links to terrorism.

Federal law bars American citizens from doing business in Iran, but independent foreign subsidiaries of U.S. firms can operate there.

The two New York funds have about $31 million invested in Halliburton.

"If we are trying to eradicate terrorism, we must ensure that companies in our portfolio are not using offshore subsidiaries to legally evade United States sanctions against terrorist-sponsoring states," Thompson said.

Halliburton spokeswoman Wendy Hall responded: "We hope that the (comptroller's) office is not playing politics with pension funds." (Ivanovich)Anyway, take that for what it's worth: a story about Halliburton coming out of Texas. (Actually, it made Forbes via Reuters (http://www.forbes.com/business/energy/newswire/2003/12/15/rtr1181370.html). And Crain's (http://www.crainsny.com/news.cms?newsId=7046).) We'll see what comes of it.

In the meantime, more from around the news wires:

• Krugman, Paul. "Patriots and Profits." NYTimes.com, December 16, 2003. See http://www.nytimes.com/2003/12/16/opinion/16KRUG.html?ex=1072155600&en=57d2d0b0431458f9&ei=5062 (Free registration required - NY Times links are temporary and will self-destruct)
• Cornwell, Rupert. "Halliburton adds fuel to charges of cronyism." Independent Online, December 14, 2003. See http://www.iol.co.za/index.php?click_id=22&art_id=ct20031214121134661H416747&set_id=1
Some Americans still seem to feel that even suggesting the possibility of profiteering is somehow unpatriotic. They should learn the story of Harry Truman, a congressman who rose to prominence during World War II by leading a campaign against profiteering. Truman believed, correctly, that he was serving his country.

On the strength of that record, Franklin Roosevelt chose Truman as his vice president. George Bush, of course, chose Dick Cheney. (Krugman)

Why do I feel like I am in Peter Pan with this administration?

Of course, now that Saddam has been captured, we know that whatever boring stuff happend between Bush and these corporations doesn't matter and we'll hear no more about it.

And if pesky scandal rears it boring head again, they can unearth Usama.

This story breaks Friday and it begins to heat up Saturday.

Sunday: Saddam is found.

The rest is history.

Sound familiar? That's right 9/11 saved Bush from the then-brewing corporate scandals.

Originally posted by hypewaders
And if pesky scandal rears it boring head again, they can unearth Usama.
Maybe he'll be caught just in time to bring to the RNC in shackles as a surprise, thereby officially turning the massive protests outside from anti-bush protests to free usama protests.

Ok journalists, be a patriot, keep digging up the dirt shoved under that corporate carpet, the best way to fight terrorism!

I bet the syrians must be pretty worried for any new breaking corporate scandals because suddenly the American government will get new info that Osama is sighted in Damascus and that a surgical strike is imminent...