on Friday that its KBR division, responsible for carrying out Pentagon contracts,
experienced a 284 percent increase in operating profits during the second quarter
of this year.
The increase in profits was primarily due to the Pentagon's payment of "award
fees" for what military officials call "good" or "very good"
work done by KBR in the Middle East for America's taxpayers and the troops.
Despite the scandals
that plague KBR's military contracts, the Pentagon awarded $70 million in "award"
fees to the company, along with four ratings of "excellent" and two
ratings of "very good" for the troop logistics work under the Army's
The Pentagon has provided preferential
treatment to Halliburton on a number of occasions, including the concealment
from the public of critical reports by military auditors.
conducted by the Pentagon's Defense Contract Audit Agency determined that KBR
had $1 billion in "questioned" expenses (i.e. expenses which military
auditors consider "unreasonable") and $442 million in "unsupported"
expenses (i.e. expenses which military auditors have determined contain no receipt
or any explanation on how the expenses were disbursed).
But the top Pentagon brass ignored these audits and rewarded KBR's work anyway.
Halliburton's earnings announcement comes on the heels of new reports showing
the Iraq and Afghan wars have already cost U.S. taxpayers $314
billion and that another ten years of war will cost $700
In another coup
for Halliburton, a federal judge this month decided that whistleblowers may
not sue U.S. companies for fraud if payment for services was made in Iraqi,
not U.S., money. Halliburton was paid over $1 billion in Iraqi oil money during
the first 15 months of the occupation. The judge's ruling means the False Claims
Act cannot be used to offer large rewards to corporate insiders who reveal wrongdoing
or overcharges for services. The law is considered America's most successful
deterrent against contractor fraud, but the judge's decision will help Halliburton
and other contractors avoid tough scrutiny in Iraq.