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Suit alleges fraud by Halliburton over Iraq services

Los Angeles Times | September 12, 2006
By T. Christian Miller

WASHINGTON Halliburton executives ordered a big-screen TV and 10 large tubs of tacos, chicken wings and cheese sticks delivered to Iraq for last year's Super Bowl and then billed U.S. taxpayers for their party, according to a lawsuit unsealed Friday.

The Houston company also defrauded the government by double- and triple-billing for Internet, food and gym services to troops, according to the lawsuit by a former employee for Kellogg, Brown & Root, or KBR, the Halliburton subsidiary that ran dining halls for troops in Iraq.

"The administration is not enforcing the laws against fraud when it comes to contractors in Iraq," said Alan Grayson, the attorney who filed the suit. "When it comes to seeing that the law is executed, the Bush administration is a no-show."

Halliburton denied the allegations of fraud, which were filed under the False Claims Act last year in U.S. District Court in Washington, D.C., by former KBR employee Julie McBride. Such lawsuits, designed to prevent war profiteering, allow citizens to sue on behalf of the government and recover a portion of any damages.

McBride was hired by KBR in 2004 as a "morale, welfare and recreation" coordinator at Camp Fallujah, about 35 miles west of Baghdad. She was fired the next year after making several complaints about KBR's accounting practices, the suit says, and was kept under guard until she was escorted to an airplane and flown out of the country.

The company did not deny ordering the television and the food; it set up snack buffets and special screenings at military bases throughout Iraq for the 2005 Super Bowl, which began at 2:30 a.m. local time. But KBR noted that its contract allowed the company to provide recreation and morale-boosting services for its own employees in addition to U.S. troops.

"The claims included in this lawsuit clearly demonstrate a complete misinterpretation of facts as well as a lack of understanding of KBR's contractual agreements with its customer, the U.S. Army," said Melissa Norcross, a Halliburton spokeswoman.

The accusations in the lawsuit are the latest involving Halliburton's controversial, multibillion-dollar contract to feed and house U.S. troops stationed in Iraq. Democrats have been quick to criticize the company, which was run by Dick Cheney from 1995 until he became vice president in 2000.

In June, a KBR subcontractor was indicted on kickback charges involving the dining halls, which feed tens of thousands of troops a day throughout Iraq and Kuwait.

The U.S. Army Corps of Engineers has withheld $55.1 million of a total $13.7 billion on the contract as a result of disputed costs.

The Department of Justice chose not to join the lawsuit against Halliburton after an investigation. Justice officials declined to elaborate Friday, but such a decision usually is taken in legal circles as indicating a weak case.

Grayson, however, accused the department of shirking its duties in the middle of a heated political season. Several dozen lawsuits alleging fraud in Iraq are believed to have been filed, but they remain under seal until the department completes its investigations.

McBride could not be reached for comment Friday.


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