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Pentagon: Halliburton Oil Services Company Overcharged for Gas in Iraq - 2003-12-12

A Pentagon audit of the Halliburton oil services company has found overpricing and other irregularities involving fuel and additional supplies one of its subsidiaries provided for the Iraqi reconstruction effort.

Pentagon officials say the overpricing and other irregularities were uncovered in an audit of more than $15 billion in contracts awarded to a subsidiary of Halliburton, another U.S. firm called Kellogg, Brown and Root.

The officials provide no details but indicate the Pentagon is now seeking to recover the amount the company is accused of overcharging the Defense Department.

However a spokeswoman for Halliburton, a company formerly run by Vice President Dick Cheney, is quoted as denying there have been any improprieties in the handling of government contracts.

The contracts to Halliburton have been criticized by some Democratic Party officials, who have questioned whether the deals were a political reward to a firm with close ties to the Republican administration. But the Bush administration and Halliburton have denied politics were involved.

Still, analysts say the new allegations come at an inconvenient time for the White House, which is already under foreign criticism over the Pentagon's decision to restrict future Iraqi reconstruction contracts to U.S. and Iraqi firms along with companies from countries supporting the coalition that ousted Saddam Hussein.

The decision means firms from France, Germany, Russia and other countries that opposed the war will not be allowed to bid on the lucrative business deals.

Despite their exclusion, President Bush is sending a special envoy, former U.S. Secretary of State James Baker, next week to ask Russia, France and Germany to forgive Iraq's debts.

Defense sources tell VOA the White House was angered by the Pentagon's decision to announce the contract bidding restrictions before the special envoy's mission.