WSJ - Reuters
Wednesday 11 August 2004
New York - Pentagon auditors have concluded that Halliburton Co. failed to
adequately account for more than $1.8 billion of work in Iraq and Kuwait, the
Wall Street Journal said on Wednesday, citing a Pentagon report.
The amount represents 43 percent of the $4.18 billion that Houston-based
Halliburton's Kellogg Brown & Root unit has billed the Pentagon to feed and
house troops in the region, the newspaper said.
It said the findings in the 60-page Pentagon audit report, dated Aug. 4 but not
publicly released are likely to increase pressure on the U.S. government to
withhold hundreds of millions of dollars of payments to Halliburton.
This, it said, potentially threatens the services that KBR provides U.S. troops
and other personnel in Iraq and Kuwait.
Vice President Dick Cheney was Halliburton's chief
executive from 1995 to 2000.
No one at Halliburton was immediately available to comment on the report. But
the newspaper said KBR officials dispute the report's conclusions.
The officials say they have worked within the same Defense Department system for
more than 10 years without problems, and believe differences can be resolved
without the withholding of large payments, the newspaper said.
In a June securities filing Halliburton said a move by the Pentagon to withhold
substantial payments or demand refunds could ``materially and adversely affect
KBR filed for Chapter 11 bankruptcy protection last December under the weight of
According to the newspaper Halliburton has until Sunday, after two prior
extensions, to provide Army officials with all necessary cost information for
its logistical work in Iraq and other locales.
This could lead to the withholding of as much as $600 million of payments,
though KBR officials are confident the Army will again extend the deadline, and
the Army is considering doing so, it said.
Halliburton shares closed on Tuesday at $29.83 on the New York Stock Exchange.