WASHINGTON -- Halliburton's own auditors warned of problems with the company's contract to deliver fuel in Iraq even before Pentagon investigators raised similar concerns, a Democratic presidential candidate said.
Senator Joseph I. Lieberman of Connecticut said a Pentagon official told him that Halliburton was refusing to turn over copies of the internal audit, which Defense Department investigators found but did not copy.
Halliburton spokeswoman Wendy Hall said that the internal audit was confidential and that a Pentagon auditor may have broken the law by reading it. Hall said the audit neither warned of excessive fuel charges nor pointed out possible violations of federal regulations.
Halliburton, which is Vice President Dick Cheney's former company, said Thursday it saved the Pentagon money and did not overcharge for gasoline it bought in Kuwait and distributed in Iraq.
The Houston-based oil services company said in a statement that it expected to be cleared by the Defense Department of the allegations of overcharging.
Pentagon auditors said last week that they suspected a Halliburton subsidiary, KBR, had overcharged the department by about $61 million on a no-bid contract to supply gasoline to Iraqi citizens.
Pentagon officials said the source of the overcharging was the high price charged by a Kuwaiti company that supplied the gas to Halliburton. Halliburton said the Kuwaiti company was the only one approved as a supplier by the US Army Corps of Engineers, which oversees the contract.
The Kuwaiti company was the only one approved by the Kuwaiti government to export gasoline from the oil-rich monarchy, Pentagon officials said. Lieberman identified the firm as the Altanmia Commercial Marketing Co.
The senator said his staff met with Michael Thibault, an official with the Defense Contract Audit Agency, or DCAA, which is investigating the Halliburton contract. Lieberman said Thibault told him that a DCAA auditor found a Halliburton draft audit warning that the Kuwaiti company was charging excessive prices and the procedures may have violated US contracting regulations.
Halliburton has refused to turn over copies of the draft audit, Lieberman said.
Hall said the Pentagon is not entitled to see the draft audit.
"The DCAA employee ignored identification on the internal document -- on each and every page -- that clearly states the document was proprietary and confidential for KBR internal use only, and this could be a violation of the law," Hall said in a statement. Thibault did not return a telephone message left at his office Thursday.