Haliburton and war profiteering.

#1
There is a fascinating article in this months Vanity Fair about how Haliburton and its subsidiaries have done very nicely out of the Iraq war.

Link.

This excerpt deals with the activities of Haliburton Subsidiary Kellog, Brown, Root, which has a rather loosely defined and policed contract to provide catering services to US forces worldwide.

Now in his early 60s, Godfrey has 18 years' experience as a contract-management executive in Saudi Arabia's oil industry. When he joined KBR, in the summer of 2004, concerns had already begun to surface in Washington about overcharging from KBR's troop dining facilities—known in the trade as "D-Facs." Hoping to allay those concerns, KBR set up a "tiger team"—a group that operated outside the normal chain of command—and tasked it with negotiating new D-Fac contracts and cleaning up the existing ones. Godfrey was assigned to the unit.

The team's boss, Jill Pettibone, was another beneficiary of KBR's revolving-door relationship with the Pentagon. Until 2000 she had been executive director for operations at the Defense Contract Management Command, which had been responsible for overseeing KBR's very expensive work in the Balkans. (The body has since been renamed the Defense Contract Management Agency.)

Like most service facilities in Iraq, the D-Facs were staffed by T.C.N.'s. They were paid a bit better than the laundry workers observed by Linda Warren. Depending on their skills and seniority, they earned between $300 and $400 a month.

Unlike most qui tam plaintiffs, Godfrey managed to retain documentary records, and they reveal just how huge the margins on subcontracts can be. For example, a Kuwaiti subcontractor named ABC International Group was in charge of providing D-Fac labor at H4, a base near Mosul. Between March and November of 2004, ABC sent KBR monthly bills ranging from $756,000 to $1.38 million. Godfrey discovered that the facility employed precisely 137 people, all of them T.C.N.'s. On the most generous assumption, that they were all making $400 a month, the true amount being paid to the workers was no more than $54,800. The markup, therefore, was between 1,500 and 2,500 percent.

Until February 2004, H4's D-Fac had been staffed by a Turkish company named Serka. Actually, that continued to be the case. The only difference now was that Serka had become a sub-subcontractor to ABC. "All ABC did was take their slice of the profit. There was no change to the operation at all," Godfrey says.

Godfrey's documents show that margins well in excess of 1,000 percent were to be found at other D-Facs, which Grayson says is unexceptional among contractors in Iraq. "A thousand percent is common, 500 percent routine. I have never seen a markup of less than 100 percent." Back in the U.S., "the average markup under government contracts is 10 percent, and anything more than 12 percent will usually be rejected when the government conducts audits. If your profit margin on a government contract conducted outside Iraq is more than 10 percent, you may well be accused of committing fraud."

Huge labor markups were not the only irregularities Godfrey says he found in the ABC invoices he processed. He also came across blatant accounting inflation of the kind Linda Warren had seen in Fallujah. According to his qui tam complaint, there was a period in 2004 when the D-Fac at H4 was serving 1,000 to 2,000 people a day but billing as if there were 5,400: "At three meals a day, this was billing for almost 10,000 meals a day that were not served at H4."

Godfrey made repeated attempts to force ABC to reduce its bills. All of them, he says, were blocked inside KBR. That December, Godfrey went on leave. When he came back, his cell phone and computer had been stolen. Meanwhile, ABC's C.E.O. was writing to Tom Quigley, the KBR chief of Iraq contracts, who had once been Bunnatine Greenhouse's colleague at the Army Corps of Engineers, claiming that Godfrey was "treating ABC unfairly." Godfrey was suspended for 10 days and told by another KBR executive, "We can't have subcontractor C.E.O.'s complaining about subcontract administrators."

As a result of KBR's inaction, his complaint says, "ABC's overbilling continued through the completion of its first contract period in June 2005, and through the filing of this complaint, and beyond. The amount that ABC overbilled to KBR, and KBR overbilled to the government, exceeded $10 million." This figure covered just one of about a hundred D-Facs spread across Iraq.
 
#2
These organisations have been at it for years. I worked for S**** for a while and whilst they weren't perfect they got embarrased by being anywhere near these parasites. They make Dracula look like a minimalist when it comes to gorgeing.
 
#3
bernoulli said:
There is a fascinating article in this months Vanity Fair about how Haliburton and its subsidiaries have done very nicely out of the Iraq war.

Link.

This excerpt deals with the activities of Haliburton Subsidiary Kellog, Brown, Root, which has a rather loosely defined and policed contract to provide catering services to US forces worldwide.

Now in his early 60s, Godfrey has 18 years' experience as a contract-management executive in Saudi Arabia's oil industry. When he joined KBR, in the summer of 2004, concerns had already begun to surface in Washington about overcharging from KBR's troop dining facilities—known in the trade as "D-Facs." Hoping to allay those concerns, KBR set up a "tiger team"—a group that operated outside the normal chain of command—and tasked it with negotiating new D-Fac contracts and cleaning up the existing ones. Godfrey was assigned to the unit.

The team's boss, Jill Pettibone, was another beneficiary of KBR's revolving-door relationship with the Pentagon. Until 2000 she had been executive director for operations at the Defense Contract Management Command, which had been responsible for overseeing KBR's very expensive work in the Balkans. (The body has since been renamed the Defense Contract Management Agency.)

Like most service facilities in Iraq, the D-Facs were staffed by T.C.N.'s. They were paid a bit better than the laundry workers observed by Linda Warren. Depending on their skills and seniority, they earned between $300 and $400 a month.

Unlike most qui tam plaintiffs, Godfrey managed to retain documentary records, and they reveal just how huge the margins on subcontracts can be. For example, a Kuwaiti subcontractor named ABC International Group was in charge of providing D-Fac labor at H4, a base near Mosul. Between March and November of 2004, ABC sent KBR monthly bills ranging from $756,000 to $1.38 million. Godfrey discovered that the facility employed precisely 137 people, all of them T.C.N.'s. On the most generous assumption, that they were all making $400 a month, the true amount being paid to the workers was no more than $54,800. The markup, therefore, was between 1,500 and 2,500 percent.

Until February 2004, H4's D-Fac had been staffed by a Turkish company named Serka. Actually, that continued to be the case. The only difference now was that Serka had become a sub-subcontractor to ABC. "All ABC did was take their slice of the profit. There was no change to the operation at all," Godfrey says.

Godfrey's documents show that margins well in excess of 1,000 percent were to be found at other D-Facs, which Grayson says is unexceptional among contractors in Iraq. "A thousand percent is common, 500 percent routine. I have never seen a markup of less than 100 percent." Back in the U.S., "the average markup under government contracts is 10 percent, and anything more than 12 percent will usually be rejected when the government conducts audits. If your profit margin on a government contract conducted outside Iraq is more than 10 percent, you may well be accused of committing fraud."

Huge labor markups were not the only irregularities Godfrey says he found in the ABC invoices he processed. He also came across blatant accounting inflation of the kind Linda Warren had seen in Fallujah. According to his qui tam complaint, there was a period in 2004 when the D-Fac at H4 was serving 1,000 to 2,000 people a day but billing as if there were 5,400: "At three meals a day, this was billing for almost 10,000 meals a day that were not served at H4."

Godfrey made repeated attempts to force ABC to reduce its bills. All of them, he says, were blocked inside KBR. That December, Godfrey went on leave. When he came back, his cell phone and computer had been stolen. Meanwhile, ABC's C.E.O. was writing to Tom Quigley, the KBR chief of Iraq contracts, who had once been Bunnatine Greenhouse's colleague at the Army Corps of Engineers, claiming that Godfrey was "treating ABC unfairly." Godfrey was suspended for 10 days and told by another KBR executive, "We can't have subcontractor C.E.O.'s complaining about subcontract administrators."

As a result of KBR's inaction, his complaint says, "ABC's overbilling continued through the completion of its first contract period in June 2005, and through the filing of this complaint, and beyond. The amount that ABC overbilled to KBR, and KBR overbilled to the government, exceeded $10 million." This figure covered just one of about a hundred D-Facs spread across Iraq.

Someone profiteering from war.. GASP! Say it isn't so!


The problem with Haliburton is that unfortunately there are no other companies able to do what they do.
 
#4
bernoulli said:
There is a fascinating article in this months Vanity Fair about how Haliburton and its subsidiaries have done very nicely out of the Iraq war.

Link.

This excerpt deals with the activities of Haliburton Subsidiary Kellog, Brown, Root, which has a rather loosely defined and policed contract to provide catering services to US forces worldwide.

Now in his early 60s, Godfrey has 18 years' experience as a contract-management executive in Saudi Arabia's oil industry. When he joined KBR, in the summer of 2004, concerns had already begun to surface in Washington about overcharging from KBR's troop dining facilities—known in the trade as "D-Facs." Hoping to allay those concerns, KBR set up a "tiger team"—a group that operated outside the normal chain of command—and tasked it with negotiating new D-Fac contracts and cleaning up the existing ones. Godfrey was assigned to the unit.

The team's boss, Jill Pettibone, was another beneficiary of KBR's revolving-door relationship with the Pentagon. Until 2000 she had been executive director for operations at the Defense Contract Management Command, which had been responsible for overseeing KBR's very expensive work in the Balkans. (The body has since been renamed the Defense Contract Management Agency.)

Like most service facilities in Iraq, the D-Facs were staffed by T.C.N.'s. They were paid a bit better than the laundry workers observed by Linda Warren. Depending on their skills and seniority, they earned between $300 and $400 a month.

Unlike most qui tam plaintiffs, Godfrey managed to retain documentary records, and they reveal just how huge the margins on subcontracts can be. For example, a Kuwaiti subcontractor named ABC International Group was in charge of providing D-Fac labor at H4, a base near Mosul. Between March and November of 2004, ABC sent KBR monthly bills ranging from $756,000 to $1.38 million. Godfrey discovered that the facility employed precisely 137 people, all of them T.C.N.'s. On the most generous assumption, that they were all making $400 a month, the true amount being paid to the workers was no more than $54,800. The markup, therefore, was between 1,500 and 2,500 percent.

Until February 2004, H4's D-Fac had been staffed by a Turkish company named Serka. Actually, that continued to be the case. The only difference now was that Serka had become a sub-subcontractor to ABC. "All ABC did was take their slice of the profit. There was no change to the operation at all," Godfrey says.

Godfrey's documents show that margins well in excess of 1,000 percent were to be found at other D-Facs, which Grayson says is unexceptional among contractors in Iraq. "A thousand percent is common, 500 percent routine. I have never seen a markup of less than 100 percent." Back in the U.S., "the average markup under government contracts is 10 percent, and anything more than 12 percent will usually be rejected when the government conducts audits. If your profit margin on a government contract conducted outside Iraq is more than 10 percent, you may well be accused of committing fraud."

Huge labor markups were not the only irregularities Godfrey says he found in the ABC invoices he processed. He also came across blatant accounting inflation of the kind Linda Warren had seen in Fallujah. According to his qui tam complaint, there was a period in 2004 when the D-Fac at H4 was serving 1,000 to 2,000 people a day but billing as if there were 5,400: "At three meals a day, this was billing for almost 10,000 meals a day that were not served at H4."

Godfrey made repeated attempts to force ABC to reduce its bills. All of them, he says, were blocked inside KBR. That December, Godfrey went on leave. When he came back, his cell phone and computer had been stolen. Meanwhile, ABC's C.E.O. was writing to Tom Quigley, the KBR chief of Iraq contracts, who had once been Bunnatine Greenhouse's colleague at the Army Corps of Engineers, claiming that Godfrey was "treating ABC unfairly." Godfrey was suspended for 10 days and told by another KBR executive, "We can't have subcontractor C.E.O.'s complaining about subcontract administrators."

As a result of KBR's inaction, his complaint says, "ABC's overbilling continued through the completion of its first contract period in June 2005, and through the filing of this complaint, and beyond. The amount that ABC overbilled to KBR, and KBR overbilled to the government, exceeded $10 million." This figure covered just one of about a hundred D-Facs spread across Iraq.


Bunnatine Greenhouse........................there's a blast from the past. She was an early scalp taken by Cheney and KBR and it taught a lot of people a lesson. Look the other way and never cross KBR or The Office Of The Vice-President.

Link >
http://www.iht.com/articles/2005/08/29/news/army.php

RM
 
#5
Just wondering,Halliburton don't by any chance hold any British government contracts?.

Be interesting to see if they are ripping off British taxpayers as well as American ones.
 
#6
Le_addeur_noir said:
Just wondering,Halliburton don't by any chance hold any British government contracts?.

Be interesting to see if they are ripping off British taxpayers as well as American ones.
Well, they own DML, the company that runs Plymouth dockyard., and my personal experience of that particular outfit has been rather unhappy.

As for Haliburton being the only company capable of providing these services, there does seem to be at least one other firm that can:

logcap is also an "indefinite-delivery, indefinite-quantity" contract, which means that the Pentagon can go on commissioning whatever it wants from KBR whenever it wants. Instead of being subject to competitive bids, fresh items can be added to the contract at will: all officials have to do is issue a "task order." These can be worth hundreds of millions of dollars—even billions, in the case of Task Order 59, which put KBR in charge of supporting the 130,000 U.S. troops in Iraq.

The first logcap contract dates back to 1992, when Secretary of Defense Dick Cheney paid Brown and Root, as KBR was then known, to devise a contract for providing overseas support services to the military. Under federal law, a firm that designs a contract is prohibited from bidding for it, but this regulation was ignored, and B&R bid for and won logcap 1. (More than a decade later, the rules were breached again when Halliburton designed and then won the $2 billion contract to restore Iraq's oil industry.) Three years after logcap 1 was awarded, Cheney, who had no business experience, became C.E.O. of B&R's parent company, Halliburton, where he would collect some $44 million in earnings.

logcap 1 expired in 1997, and Halliburton lost its bid for logcap 2 to DynCorp. By this time, however, B&R was so deeply embedded in Bosnia and Kosovo, where U.S. forces were then concentrated, that the region was exempted from logcap 2 altogether. DynCorp was left fuming on the sidelines while Halliburton remained in the Balkans, reaping a harvest that eventually reached $2.2 billion.
 
#8
chokinthechicken said:
They do a hell of a lot of work in the North Sea, I think there HQ is in France.


CTC
Correctamundo - including oil rig repair and breakdown using explosives. They used to have a mini explosives depot near Aberdeen IIRC.
 
#9
chokinthechicken said:
They do a hell of a lot of work in the North Sea, I think there HQ is in France.


CTC
Their French HQ is at La Defense but it was rapidly down-sized after the French Fraud Squad came knocking on their doors in 2003. Voila :-

Published on Saturday, October 11, 2003 by the Guardian/UK
French Sleaze Inquiry Targets US Oil Subsidiary
by Jon Henley in Paris

PARIS — The public prosecutor's office in Paris said yesterday it was opening a formal judicial inquiry into alleged corruption by a French engineering firm and the American oil services giant Halliburton, which was headed until two years ago by Dick Cheney, the vice-president of the United States.

Also See:
Cheney Firm Paid Millions in Bribes to Nigerian Official
Guardian/UK 5/9/2003


The investigation is the first of its kind in France under laws introduced as part of an international convention on cross-border corruption signed in 1997 by some 35 countries, including the US.

The financial crimes squad in Paris believes a French oil and gas engineering firm, Technip, and particularly the Halliburton subsidiary KBR were jointly involved during the 1990s in the payment of up to $200m (£120m) of under-the-counter "commissions" in relation to a huge gas contract in Nigeria.

The convention, under the auspices of the Organization for Economic Cooperation and Development, aims to fight corporate attempts to buy the favors of public authorities abroad.

It allows the police forces of signatory countries to investigate any company suspected of offering commercial sweeteners of any kind to elected or unelected public officials anywhere in the world.

According to Le Figaro newspaper, French police believe KBR was behind a web of off-shore companies and bank accounts set up to "facilitate" the work of TSKJ, a joint venture between four engineering companies that had won a lucrative contract from international oil companies to build a large liquefied natural gas plant on Bonny Island in the eastern Niger delta.

TSKJ, in which KBR was the leading player, allegedly paid a second off-shore company at least $180m in commissions - most of which was transferred to a score of different off-shore bank accounts - for "mediating" with the Nigerian authorities. It is alleged that much of that money wound up in the pockets of public officials.

The French judicial investigation into "corruption of foreign public officials, abuse of funds, complicity and receiving misappropriated monies" targets KBR but will inevitably involve Halliburton, KBR's parent company, which recently won around $1.7bn worth of contracts from the Bush administration to help rebuild Iraq's oil industry.
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Main HQ is on Clinton Drive, Houston, Texarse in the United States of Amnesia BUT they are getting ready to rapidly de-camp and move the legal entity of the Corporation to Dubai, UAE. Can't think why.

RM
 
#10
I apologize for appearing contrary but:-

Now in his early 60s, Godfrey has 18 years' experience as a contract-management executive in Saudi Arabia's oil industry. When he joined KBR, in the summer of 2004, concerns had already begun to surface in Washington about overcharging from KBR's troop dining facilities—known in the trade as "D-Facs." Hoping to allay those concerns, KBR set up a "tiger team"—a group that operated outside the normal chain of command—and tasked it with negotiating new D-Fac contracts and cleaning up the existing ones. Godfrey was assigned to the unit.
My bold.

Surely, the blame lies therefore at the feet of the government itself. If they had hired competent contract negotiators then the resulting contracts might have been a little more "equitable".
 
#11
Wow! That's all I can say about that article bernoulli, Wow!
I knew already about the fraud but to see it so blatant and actually enabled by the contracts themselves was still an eye opener. Cost plus indeed!
One day this whole 'War on Terror' game is going to be seen for what it always was. The fastest and largest illegal transfer of public funds into private hands in the whole of American history.

And all this fraud is also enabled by a now well corrupted DoJ dept. that keeps everything under seal blocking further examination. (Same with Jack Abramoff who keeps offering to sing but the DoJ keeps cocking a deaf one.)

And then there is this:

Qui tam cases from Iraq are investigated by an F.B.I. unit in Rock Island, Illinois. According to Grayson, the unit has a "standing order" to get approval from the attorneys at Vinson & Elkins before questioning anyone at Halliburton or KBR. "F.B.I. agents are not supposed to politely ask permission," he says. "The most common interview technique by the F.B.I. is a knock on your door at nine o'clock at night. They're not allowed to do that when it comes to Halliburton and KBR employees." (In its e-mailed statement, the D.O.J. said it cannot comment on how any Iraq case has been investigated; Vinson & Elkins did not respond to a request for comment.)
And its no coincidence that Gonzales the former Attorney General got his break with the law firm Vinson & Elkins.
 
#12
onNeedless to say in future historians will describe the Bush administration as the most corrupt GOP since independance in 1776.

And "the land of the free" lecture others on good governance!!.

Even Bliar wasn't that bad,but close.
 
#13
onNeedless to say in future historians will describe the Bush administration as the most corrupt GOP since independance in 1776.

And "the land of the free" lecture others on good governance!!.

Even Bliar wasn't that bad,but close.
 
#16
Le_addeur_noir said:
onNeedless to say in future historians will describe the Bush administration as the most corrupt GOP since independance in 1776.
...
Up against some pretty stiff competition there. Greedily raping the brimming pork barrel has been a motor of American political life since the beginning. A war always provides great opportunities for grubby partisan patronage and that's what US politics is all about. It's essentially a system of trading favors amongst the elite.

Bush junior often compares himself with Truman whose politically brave and far sighted policies made him a similarly unpopular POTUS. Unlikely.
He (or perhaps Cheney) has the dictatorial tendencies of FDR without the old Machiavellians mastery of the political black arts. Like LBJ he is a fine hard school political campaigner who was lead into unwise foreign adventures by a radical domestic agenda. He has a touch of JFK's idealistic and arrogantly reckless Yankee patrician about him but none of the luck. Then there is Carter's awful piety and sure footed dithering. But I'd look back further to find his administration out matched on corruption.

I'm thinking of the administration of reconstruction under Ulysses S. Grant a spectacular example of the American way of graft. The era of the carpetbagger.

If the stench of corruption lingers anywhere in public memory it will be around Cheney's office. I don't think by 2050 Bush will be remembered as a complete fool in the US. He'll eventually be a tragic figure like the last Czar forever trapped in the institutional delusion of the unipolar moment. It's Hillary "the destroyer" Clinton who will be reviled for her failure to arrest the decline Bush set in motion.

You can see the future in the popularity of impotent Dem dominated Congress 11% v Bush's appalling 24%.

Incidentally 25% of Germans still think the Nazis had their good points. Only 15% of those who actually lived through the war years did.
 
#17
The Vanity Fair article appears to show that the US Government is not too keen to investigate some fraud and waste in Iraq,and does not wish to investigate any frauds on the US taxpayer by Iraqi companies and government departments!

However,before we all crow about it,the UK SFO(Serious Fraud Office) has ,so far ,declined to investigate an apparent large fraud by British companies and individuals.Unfortunately some of the the individuals are former British Army members.

http://www.guardian.co.uk/Iraq/Story/0,,2038097,00.html
 
#18
Halliburton has nothing in the UK.

The subsidiary, KBR, which was floated off on an IPO last year and finalised in April 2007 does. KBR owned a large share of DML but had to sell it under UK government pressure for what I thought was a lower than market price. Asset stripping the port prior to selling off DML would have brought more money into the KBR coffers. This happened around March of this year.

KBR does some UK defence work in Iraq.

The part of KBR which serviced the platforms in the North Sea was sold off last year as part of the overall break up. It's now done by the company in Aberdeen which was split from KBR.

The deaths of people working for Halliburton and KBR prior to the split are higher than UK fatalities. This is a combination of staff and contractors.

It was announced to staff by the CEO of KBR that the plan is to withdraw from almost all operations outside the USA. This will leave MW Kellogg to pick up whatever slack is left in Europe and Africa. MWKL is an owned subidiary of KBR. Or at least it still was in May this year.

I don't mind people sticking it to a business for whatever their reasons but please get it right.
 
#19
You do not mention the Fasttrax consortium,jointly with Deutsche Bank,which operates in the armoured vehicle transport field for UK MoD!
 

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