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USA: Halliburton Stops Billing U.S. for Meals Served to Troops

by Eric SchmittNew York Times
February 17th, 2004

Seeking to defuse a growing election-year issue, the Halliburton Company said Monday that it had stopped billing the Pentagon for the cost of feeding American troops in Iraq and Kuwait until a dispute over the number of meals served is resolved.

The Houston-based company said in a statement that its Kellogg Brown & Root subsidiary was withholding bills totaling $174.5 million for meal planning, food purchase and meal preparation costs incurred by subcontractors.

The company said it would also defer further billing to the Defense Department for meal costs until the Army and Kellogg Brown & Root resolved their differences. The company has not disclosed the amount of its weekly or monthly bills to the Pentagon for meal costs.

Halliburton's actions on Monday come two weeks after the company agreed to repay the government for overcharges estimated at $27.4 million for meals served to American troops at five military bases in Iraq and Kuwait last year. Pentagon auditors are also reviewing the 53 remaining dining facilities in Kuwait and Iraq operated by Kellogg Brown & Root.

Kellogg Brown & Root's president and chief executive, Randy Harl, said the company's decision on Monday to suspend its billings should not be interpreted as a sign of wrongdoing.

"This is not any sort of `admission,' " Mr. Harl said in the statement. "As a responsible government contractor, it is the right thing to do. K.B.R. is a good steward of the taxpayers' dollars."

The meal-billing issue follows two other disagreements between the Pentagon and Halliburton.

Last month, the company disclosed that two employees had taken kickbacks from a Kuwaiti subcontractor who was providing services to American troops in Kuwait. The company reimbursed the government $6.3 million.

Kellogg Brown & Root has also been involved in a debate over whether it overcharged for gasoline shipments to Iraq under a military contract. While military officials cleared the company of any wrongdoing, the Pentagon inspector general is investigating the matter.

Democrats have said they will use the company's ties to the Bush administration as a campaign issue, and Halliburton has recently responded in advertisements on television, suggesting that it is being unfairly singled out. Vice President Dick Cheney is a former chief executive of Halliburton.

A Halliburton spokeswoman, Wendy Hall, said Monday that suspending the billings was part of the effort to make the company less of a political target.

"We are doing this to take the issue off the table from a political standpoint," Ms. Hall said in an e-mail response to a reporter's question. "We understand it is an election year, and the war will be an important part of that election. But worrying about election coverage doesn't feed soldiers. That is our job, and that is what we are concerned about."

Kellogg Brown & Root said it had served more than 50 million meals to soldiers in the last year. The dispute centers on a discrepancy between the number of troops the company estimated it would feed and the number of meals actually served.





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