JUNE 17, 2008
The veteran military official in charge of the government’s biggest Iraq contract was fired for refusing to pay more than $1 billion in questionable charges from a politically connected company that provides U.S. troops with food, housing and other services.
There have been numerous reports of the same company, Houston-based KBR, repeatedly gouging taxpayers through Iraq contracts but this is the first time a high-ranking military official confirms the allegations, offering details of how the company’s political connections have protected it over the years.
Up until last year KBR was a subsidiary of Halliburton, the mega oil services company once headed by Vice President Dick Cheney. In fact, Cheney still owned more than $10 million in Halliburton stock well into his vice presidency. When the U.S. invaded Iraq in March 2003, he made sure Halliburton got a no-bid Pentagon contract worth $7 billion.
The company has since earned billions more and just recently the Pentagon awarded it an additional 10-year, $150 billion Iraq contract. The deals have been scrutinized by congressional investigators and have been publicly criticized by numerous lawmakers.
Now the chief of the Army’s Field Support Contracting Division, a 31-year civilian Army employee, is revealing that KBR’s Iraq operations are a mess and that the company’s cost estimates are not credible and therefore some of the money—at least $1 billion—should not be paid.
In an interview with a national newspaper, Charles Smith said he pushed for months to force KBR to provide data to justify the hefty bill, including about $200 million for food services. However, his bosses at the Pentagon pressured him to ease up and pay the company. This despite the fact that Army auditors had determined that KBR lacked credible data records for more than $1 billion in spending.
Smith refused to back off and was suddenly replaced with an outside contractor that immediately approved the KBR claims he had tried to block. The Pentagon followed up by awarding KBR the mega, $150 billion contract.
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