Are you suggesting that acts like this are justified under capitalism or is it just capital greed Halliburton Co.(NYSE:HAL), under close scrutiny for its work in Iraq, has promised to pay $27.4 million to the U.S. military to cover potential overbilling for meals served to troops, the Pentagon said on Tuesday.
The planned reimbursement followed a refund to the Army by the Texas-based company last month for $6.3 million after Halliburton admitted its employees took kickbacks from a Kuwaiti subcontractor.
A Pentagon official said potential overbilling for food served at bases in Iraq and Kuwait was identified by defense auditors during a routine evaluation of contract costs submitted by Halliburton subsidiary Kellogg Brown and Root.
"We are pleased that KBR is willing to step forward to offer reimbursement in advance of any findings," said the official, who asked not to be identified.
Halliburton spokeswoman Wendy Hall said the company had agreed to withhold from future billing its subcontractor's charges for food while KBR worked with the government to improved its method of counting meals.
"KBR has a responsibility to clients and it is important to understand that this is not any sort of 'admission'," said Hall in an e-mail reply to questions about the refund.
She added that KBR and military auditors had disagreed on issues that were subject to audit in the past but that these had always been resolved.
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Halliburton, which was run by Vice President Dick Cheney until he joined President George W. Bush as his running mate in 2000, has become a lightning rod for Democratic criticism of Iraq contracts during the current presidential year.
Democratic Sen. Frank Lautenberg said it was time for Halliburton to be "reined in."
"At this point, it seems that no matter what misconduct Halliburton engages in, the Bush Administration continues to turn a blind eye to it and issue more contracts," said the New Jersey senator.
ALL OTHER DINING HALLS UNDER SCRUTINY
The suspected overcharges took place at five military bases in Kuwait and Iraq over nine months last year under a logistics contract that KBR has with the Army.
The official said auditors were now evaluating costs at 53 other dining halls in Iraq and Kuwait where KBR served food to troops to ensure there had not been any overcharges there.
Auditors found "discrepancies" that indicated the company had overcharged by more than $16 million for meals at a single military base in Kuwait.
Last Friday, KBR notified the Pentagon it would reimburse for these potential overbillings and then on Monday, it told the military it would pay back an additional $11.4 million to cover possible overcharges at four other bases, the Pentagon said.
The Pentagon said auditors were closely scrutinizing "all activities" done by KBR, adding that the military had been informed KBR had its own "Tiger team," or investigators, to evaluate and respond to these issues.
KBR is the biggest contractor for the U.S. military in Iraq and has more than $8 billion in contracts that cover tasks such as doing laundry, building bases, serving meals and helping to restore Iraq's oil industry.
The company has also been in the spotlight over whether it overcharged for fuel delivered to Iraq. That issue is being examined by the Pentagon inspector general's office.
The inspector general's office is also looking into the case of alleged kickbacks paid to KBR employees from a Kuwaiti subcontractor who was providing services to U.S. troops in Kuwait.
The Pentagon official said the latest issue involving meals had nothing to do with the possible inquiry into fuel charges or the kickbacks.