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Halliburton Denies Subsidiaries Overcharged US for Iraq Oil Deliverys - 2003-12-18

Vice President Dick Cheney's former company has strongly denied allegations that one of its subsidiaries overcharged the Pentagon millions of dollars to supply fuel to Iraq.

The Texas-based Halliburton firm says its subsidiary, Kellogg, Brown and Root, delivered fuel to Iraq at what a company official terms "the best value, the best price and the best terms."

In a statement, it denies overcharging the U.S. government $61 million on the fuel supplies and goes on to insist the Pentagon approved the delivery of fuel from Kuwait, knowing it cost more than fuel from Turkey.

The firm says it actually recommended the purchase of fuel from Turkey because it would save U.S. taxpayers over $100 million. It also says deliveries from Turkey would involve a less hazardous and closer route to Baghdad than fuel from Kuwait.

But the Halliburton statement says the U.S. Army Corps of Engineers directed that a fuel source be found in Kuwait.

Pentagon officials acknowledge Department of Defense auditing authorities have received Halliburton's responses and say these are now being analyzed. But these officials are declining any comment, saying it is premature to predict the outcome of the contract dispute.

Pentagon officials earlier this month indicated the company had overcharged for fuel and other supplies. They said the government would seek to recover the amount the company was accused of overcharging the Defense Department.

Halliburton has won billions of dollars worth of contracts in connection with the U.S.-led intervention in Iraq. But these deals have been criticized by some Democratic Party officials, who have questioned whether they were a political reward to a firm with close ties to the Republican administration.

The Bush administration and Halliburton have denied politics were involved.