Or Does It?
I wonder how many customers McDonald's Corp. would keep if instead
of including a Coke with a Happy Meal, as the menu promised, the company charged
for it twice.
That's what Halliburton Co. did to Uncle Sam, billing $45 for soda by the case
and billing for it again when served by the glass at meals.
It's all part of the cost-plus, no-bid life of Halliburton and its subsidiary,
Kellogg, Brown & Root, the sole source of just about everything the U.S.
Army needs to supply troops in Iraq. For three years, the U.S. government kept
paying double for soda and many other things with nary a complaint.
But last week, all that ground to a screeching halt when the Pentagon announced
the end of no-bid contracts -- or did it?
Not really. That's like saying to the outlaw Jesse James, ``We'll no longer
hand over the money. You have to ask nicely.''
Which is not to compare Halliburton to a common criminal.
There's nothing common about what Halliburton did and a heist of $1.4
billion, an estimate of Halliburton's overcharges by Pentagon auditors.
Two sets of hearings by Representative Henry Waxman and Senator Byron Dorgan,
using the Pentagon's own information, exposed Halliburton's deceitful billing
practices: charging for twice as many employees as actually hired and always
choosing the most expensive vendor. Instead of paying 80 cents a pound for bacon,
Halliburton paid $6. Instead of $450,000 for ice, Halliburton paid $3.4 million,
blaming transportation costs. Where did it come from, Alaska?
For 2,500 soldiers, KBR billed $152,000 for videos, and $617,000 for extra
soft drinks for MWR (``morale, welfare and recreation''). How's $100 per bag
of dirty laundry and $1.5 million for ``tailoring, seamstress service and textile
repair'' sound? Need towels for the gym? Halliburton's happy to supply 'em at
prices you won't believe.
At one hearing, former Halliburton employee Henry Bunting held up an ordinary
towel made extraordinary after KBR insisted on embroidering a logo on it saying
``MWR Baghdad.'' That jacked the price up from $1.60 each to $7.50.
Halliburton charged for ``surge capacity'' for extra meals long after there
was no chance 5,000 extra mouths would be passing through base camp to be fed.
When Halliburton food manager Rory Mayberry noted the discrepancy, his superiors
told him to keep quiet about it or face reassignment.
It would be bad enough if this awful behavior claimed no victims, but Halliburton's
greed put soldiers already in harm's way at greater risk. Rather than purify
the water, KBR ignored regulations so that soldiers bathed and brushed their
teeth in water with E. coli bacteria floating in it. Rather than fix new but
poorly maintained trucks, KBR abandoned or torched them, leaving soldiers stranded
along roads mined with explosive devices, according to an eyewitness at Dorgan's
Food long past its sell-by date was served, along with food spoiled by insufficient
refrigeration. Imagine coming home from a hard day at war trying not to get
killed and being presented with rancid meat.
While soldiers were afraid to shower for fear of getting nasty bacterial infections,
KBR managers charged the Pentagon for luxurious rooms with crystal clear water
at the Kempinski Hotel on the ``unpolluted azure coastline'' of Kuwait for $10,000
a month, according to former Halliburton employee Marie DeYoung.
How could the Bush administration stand by and pay up while the troops were
so poorly treated? The same way L. Paul Bremer, the U.S.'s former top official
in Iraq, could get a Medal of Freedom even as a draft audit of the Coalition
Provisional Authority shows that $8.8 billion went unaccounted for on his watch.
At the same time, for telling auditors about those 5,000 daily meals not served
(adding up to over $200 million), poor Rory Mayberry was banished to a hardship
posting in Fallujah.
Life Is a Breeze
And consider what happened to Bunnatine Greenhouse, the highest-ranking civilian
in the Army Corps of Engineers. She added a handwritten note that couldn't be
missed to the Halliburton contract the Secretary of Defense had to see when
he signed off advising the contract be limited to one year. She had already
criticized the Defense Department for letting Halliburton attend confidential
Greenhouse was ignored, sidelined and lost her job. She later testified before
Congress to ``the most blatant and improper contract abuse'' she'd ever witnessed.
For Halliburton, life is still a breeze. The Pentagon ignored its own auditors
and paid most of Halliburton's bills, including hundreds of millions for gas
from Kuwait. To justify paying for double meals, it upped Halliburton's take
to 3 percent of costs and every individual meal was counted as 1.3 meals.
Letting Halliburton continue, much less bid on government logistics contracts
again, sends a terrible message. It says, If I catch you bilking the government,
I'll suggest you knock it off. But I'll still pay you, and require only that
you compete for the opportunity to do so again -- and likely win because of
experience gained from three years on the job, more information than anyone
but the Army itself, and an infrastructure already in place. Halliburton could
lose if federal procurement officials took into account ``past performance,''
as required, although their pathetic performance in the past makes this unlikely.
In March, Waxman tried to amend the defense appropriations bill to deny contracts
to any firm the Pentagon found billed more than $100 million in unreasonable
costs. Republicans blocked it.
With their tax cuts and sweetheart contracts, Republicans have asked mostly
what their country could do for them even while the country is at war. Halliburton
is just the lucky bidder. Dick Cheney, Halliburton's chief executive during
the second half of the 1990s, should be ashamed of his former company.
(Margaret Carlson, author of ``Anyone Can Grow Up: How
George Bush and I Made It to the White House'' and former White House correspondent
for Time magazine, is a Bloomberg News columnist. The opinions expressed are
To contact the writer of this column:
Margaret Carlson in Washington at email@example.com
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