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Auditors Uncover Deficiencies in Iraqi Contracts by Firm Once Run by US Vice President - 2004-03-12

Pentagon auditors have uncovered what they describe as significant deficiencies in the handling of billions of dollar of Iraq contracts by a firm once run by Vice President Dick Cheney.

According to defense auditors, the deficiencies involve contracts awarded by the Pentagon to Brown and Root Services, a subsidiary of the Texas-based Halliburton company.

These were for the provision of food services for U.S. troops. Pentagon documents released Thursday say the deficiencies resulted in an overcharge of $67-million. The documents also questioned the firm's ability to negotiate fair and reasonable prices.

Halliburton is also under investigation for alleged overcharges in the provision of fuel imported from Kuwait into Iraq for subsidized sales to Iraqi citizens.

At a Congressional hearing Thursday, Representative Henry Waxman, a California Democrat, called the auditors' findings a scathing indictment of Halliburton.

But Mr. Waxman charged the Bush administration with ignoring the problem. "The policymakers in this administration don't seem to care about the pattern of waste, fraud and abuse that is coming to light," he said.

Pentagon officials attending the Congressional hearing claimed they are closely monitoring the billions of dollars in contracts awarded in connection with the U.S. invasion and occupation of Iraq.

Chief Pentagon financial officer Dov Zakheim noted defense officials are the ones who uncovered and reported irregularities involving Halliburton. He said punitive action will be taken as merited.

Overall, though, Mr. Zakheim defended the performance of most contractors. "Contract performance in Iraq has not been perfect but it has not been terrible," he said.

Under questioning by lawmakers, Mr. Zakheim and other defense officials repeatedly denied that Vice President Cheney's association with Halliburton played any role in the awarding of contracts to the firm or its subsidiaries.