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Halliburton bills millions to taxpayers for nonexistent recreational activities in Iraq
8 Sept., 2006

WASHINGTON, Sept. 8 (HalliburtonWatch.org) -- Halliburton's KBR subsidiary in Iraq billed millions to U.S. taxpayers for nonexistent recreational activities, a company whistleblower revealed in a lawsuit filed last year, the Associated Press reported today.

The whistleblower, Julie McBride, worked for KBR in 2004 as a "morale, welfare and recreation" coordinator at a Marine base in Fallujah, Iraq.

McBride's lawsuit says the military was billed according to the number of Marines that used KBR's recreation facility, but that the company deliberately and falsely inflated the number of Marines that had been using it. For example, a person who used a computer in the recreation center was counted as one customer, but if that person subsequently used the weight room, he would be counted as two customers. The center included a weight room, video games, Internet cafe, a library and phone bank.

"It wasn't double-dipping, but triple dipping or even quadruple billing," the suit claims.

Attorney Alan Grayson, who represents McBride, told the AP that "millions of dollars have been submitted by Halliburton for recreational services" not provided.

McBride was fired for lodging several complaints about KBR's accounting practices and was kept under guard until she was escorted to an airplane and flown out of the country, the lawsuit says.

McBride also claims KBR charged U.S. taxpayers for a 2005 Super Bowl party meant for the troops, but that KBR employees absconded with the food and widescreen television and launched their own private football party. "McBride witnessed a large amount of food that was ordered specifically for a Super Bowl party for the military," the suit says. "About 10 large metal tubs full of tacos, chicken wings, (and) cheese sticks were taken from the military party site to a KBR camp for a KBR Super Bowl Party for KBR employees."

The lawsuit, known as "qui tam," was filed under the False Claims Act, a federal law giving employees authority to sue employers who defraud the government. The plaintiff-employee may receive a percentage of any damages awarded.

The U.S. Justice Department has the option of joining lawsuits based on the False Claims Act, but declined to join this one.

Halliburton has repeatedly been accused of overestimating or fraudulently inflating the number of items it needs for the war in Iraq. For example, HalliburtonWatch first reported that auditors in the Pentagon's Defense Contract Audit Agency (DCAA) found KBR overestimating the number of trucks it needed, billing taxpayers millions for brand new $85,000 Mercedes trucks that sat idle or unused in Iraq's desert. DCAA also found KBR overestimating by 36 percent the number of meals it needed for the troops. Halliburton admitted it had overestimated, but by 19 percent. The army later renegotiated the contract directly with a Kuwaiti company instead of going through Halliburton, which knocked 40 percent off the cost of the contract. Once the Pentagon dealt directly with the Kuwaiti-owned company, known as Timimi Co., the cost per-meal dropped from about $5 to about $3, according to Government Accountability Office Comptroller David Walker.

The Pentagon announced last month it was terminating its logistics contract with Halliburton, but the company will be allowed to re-bid for the contract again, so it's unclear whether the company is truly being let go. The new contractor will be announced in November after the U.S. elections.

More Information:

U.S. pays millions to Halliburton for excess trucks sitting idle in Iraq

Former Army chaplain says KBR places profits before soldiers

Halliburton bills taxpayers $45 per case of soda, $100 per bag of laundry

Protecting troops is secondary to protecting the oil fields