Weapons of Mass Destruction (WMD)

DATE=12/12/03

TYPE=CORRESPONDENT REPORT

TITLE=PENTAGON /IRAQ (S/L UPDATE)

NUMBER=2-310805

BYLINE=NICK SIMEONE

DATELINE=WASHINGTON

CONTENT=

VOICED AT:

INTRO: President Bush says the Pentagon is investigating whether a subsidiary of a company once run by Vice President Dick Cheney overcharged the government for work it performed in Iraq. Correspondent Nick Simeone reports an investigation is under way after a Pentagon audit found that a firm associated with the Texas-based Halliburton company may have overcharged the government by more than 60 million dollars for fuel delivered to Iraq.

TEXT: Halliburton has already been handed several billion dollars worth of contracts for work in Iraq that were not competitively bid. Critics have long suggested the energy company has been given preference because, until 2000, it was headed by Vice President Dick Cheney.

Now, a preliminary audit has found Halliburton subsidiary Kellogg, Brown and Root may have overcharged the government by as much as 61 million dollars for fuel delivered to Iraq from Kuwait. Halliburton denies any overcharge. But President Bush told reporters Friday a Pentagon investigation is under way to find out whether it did.

/// BUSH ACT ///

Their investigation will lay the facts out for everybody to see. And if there is an overcharge, like we think there is, we expect that money to be repaid.

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But while saying he is not intimately knowledgeable about the matter, Defense Secretary Donald Rumsfeld did say he believes there was no deliberate effort to overcharge the government.

/// REST FOR LONG ///

/// RUMSFELD ACT ///

What you're reading about in the paper is not an overpayment at all. It may be a disagreement between the company and the Department of Defense and possibly between the company and subcontractors.

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Military officials say the overcharge may have originated with a fuel supplier in Kuwait.

Still, Halliburton -- because of the billions of dollars in non-competitive contracts it has been awarded in Iraq - has become a target for anti-war critics who believe only companies with connections to the White House are landing lucrative contracts.

Charles Lewis is director of the Center for Public Integrity, a group that monitors government ethics.

/// LEWIS ACT ///

There is a stench of political favoritism and cronyism surrounding the contracting process in both Iraq and Afghanistan. We found numerous instances in which companies with thin or no credentials landed major multi-million dollar contracts.

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But Bush administration officials as well as outside contracting experts say very few companies exist with the type of experience that Halliburton has, namely the ability to provide everything from supplying meals, and housing to troops, to repairing Iraq's damaged oil infrastructure.

The allegation of contracting overcharges comes just a day after President Bush angered European nations by saying countries that did not send troops to Iraq will not be allowed to bid on billions of dollars worth of U-S financed reconstruction work. (SIGNED)

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