Company accused of gouging on gasoline
WASHINGTON -- A Democratic lawmaker yesterday accused Halliburton, the Texas oil services company once run by Vice President Dick Cheney, of overcharging the US government for gasoline the firm imports into Iraq.
Kellogg Brown & Root, a Halliburton subsidiary, has a contract with the US Army Corps of Engineers to rebuild Iraq's oil sector, which has included importing gasoline products in short supply to the oil-rich nation.
"Millions of Americans want to help Iraqis but they don't want to be fleeced [by Halliburton]," Representative Henry Waxman of California said at a news conference.
Waxman said Army documents showed that as of Sept. 18, the United States had paid Halliburton $300 million to import about 190 million gallons of gasoline into Iraq. Halliburton charged an average price of $1.59 per gallon, excluding the company's fee of 2 percent to 7 percent, said Waxman.
He said the average wholesale cost of gasoline during that period in the Middle East was about 71 cents a gallon, a figure an oil industry source told Reuters was accurate. That meant Halliburton was charging more than 90 cents a gallon to transport fuel into Iraq from Kuwait.
"When we checked with independent experts to see if this fee was reasonable, they were stunned," said Waxman, saying a reasonable transport cost would be 10 to 25 cents per gallon.
Waxman sent a letter yesterday to the White House Office of Management and Budget, complaining about the alleged overcharging.
"The overcharging by Halliburton is so extreme that one expert privately called it `highway robbery,' " he wrote.
Bob Faletti, a spokesman for the Army Corps of Engineers, said military auditors were closely monitoring work done by Kellogg Brown & Root and making sure US taxpayers were not being overcharged.
"So far there have not been any red flags . . . there has been no defective pricing or anything untoward," Faletti said. A spokeswoman for Halliburton had no immediate comment on Waxman's claims, but said she would respond later.
Cheney has strongly denied any favoritism in the Halliburton deal in Iraq and says he has no financial interest in the company.
Halliburton has so far received more than $1.4 billion in work in Iraq to repair and restore the country's oil industry under a no-bid contract issued in March. In another contract providing logistical support, more than $1.6 billion has been clocked so far, with more in the works. 