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Former Halliburton employees testify about contract abuses

WASHINGTON—Three whistleblowers Thursday charged—and top executives strongly denied—that spending by Defense contractor Halliburton in Iraq was reckless and wasteful. They said the company's KBR unit charged the government $45 for cases of soda, submitted $100 bills for laundry, put up personnel in five-star hotels and abandoned $85,000 trucks on roadsides because of flat tires.

At the end of contradictory testimony about Halliburton's performance, the House Government Reform Committee defeated by a party line vote a request by committee Democrats to subpoena top Bush administration officials. Democrats wanted correspondence on the decision to give a no-bid secret $2.5 billion oilfield restoration contract to Vice President Dick Cheney's former firm.

The vote on the subpoena and Thursday's testimony showed starkly how politically polarizing an issue the performance of Halliburton—whose KBR subsidiary has the two largest contracts in Iraq—has become.

In the hearing, Democrats acted as prosecutors, praising whistleblowers and cross-examining Halliburton officials, while Republicans acted like defense attorneys and tried to discredit the whistleblowers.

Among the whistleblowers were two truck drivers who first told Knight Ridder about the abandoned trucks and reported that empty trucks hired by KBR crisscrossed Iraq at taxpayer expense.

"It seemed like there was no end in sight for the money being spent," said truck driver James Warren of Rutherfordton, N.C., a former driver for KBR in Iraq. He was fired for reasons that he and the company dispute.

"Luxuries, KBR came first, soldiers came second," testified former KBR logistics specialist Marie DeYoung of Philadelphia.

Alfred Neffgen, KBR's chief operating officer for the Americas, called the whistleblowers' charges' "mistaken and misinformed."

He said 42 Halliburton employees had been killed and 93 injured in Iraq, where the company has set up more than 60 camps for soldiers, restored Iraq's oil flow to prewar levels three months early, served nearly 500,000 meals to troops daily and provided them with more than 2.3 million gallons of water.

"Despite all of the challenges, KBR has constantly delivered on its promises to feed and house the soldiers and fuel and supply the military," Neffgen said.

KBR government compliance director William Walter assured lawmakers: "KBR takes seriously the matters of controlling costs and providing the fiscal accountability that taxpayers expect."

Truckers Warren and David Wilson of Venus, Fla., said KBR did almost no routine maintenance on its vehicles, which at times meant trucks had to be abandoned when they broke down.

KBR transportation chief Keith Richard denied those charges, saying regular maintenance was performed every two weeks.

Ten other current and former KBR truckers who spoke with Knight Ridder sided with Wilson and Warren, however.

"I never got a truck maintenanced the whole time I was there," former driver Shane Ratliff of Ruby, S.C., told Knight Ridder in April.

KBR officials and whistleblowers also squared off over the lavish—or not so lavish—government-paid accommodations provided to contractor personnel.

DeYoung, a former Army captain, operations officer and chaplain, said many KBR officials checked into the five-star Kempinski Julaia Resort in Kuwait City, a KBR staging and administrative hub, at a cost she put at $110 per person per day. By comparison, she said, troops stayed in tents at a cost of $1.39 per soldier per day. Rep. Henry Waxman, D-Calif., brandished photos of the Kempinski's large pool, lush rooms and cavernous hallways.

KBR's Neffgen countered with photos of lines of tents, and cramped makeshift housing in prefab containers. He said 87 percent of KBR employees in the region live in tents and prefabs like troops. Because its employees in hotels often double up, the cost at the Kempinski is closer to $45 a person.

Waxman said Pentagon and other federal auditors had found excessive hotel costs on KBR's bills to the government.


(c) 2004, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): HALLIBURTON


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