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US: Lawmakers seek Halliburton internal documents

by David IvanovichHouston Chronicle
February 27th, 2004

Washington - Two key Democratic lawmakers want Halliburton to turn over internal documents that reportedly identified significant deficiencies in the company's cost controls.

Company officials would not say Friday whether they would agree to hand over the report to the lawmakers. Halliburton turned down a Houston Chronicle request for the documents Friday.

A team of 80 company managers and auditors, known as the Tiger Team, concluded that the cost controls at Halliburton subsidiary KBR, formerly known as Kellogg Brown & Root, were antiquated and inadequate, the Wall Street Journal reported Friday.

The team also characterized the company's procurement system as disorganized and plagued by weak internal controls.

KBR President Randy Harl, in a prepared statement, said the company's "contracts in Iraq and our performance in a war zone are undergoing an unprecedented level of scrutiny."

"The Tiger Team was formed to ensure that all our operations fulfill the KBR promise to delivery quality results for our clients," Harl said. "That's what we are doing, even with the unprecedented barrage of inquiries, accusations and political innuendos."

In a letter to Halliburton Chief Executive Dave Lesar, Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., asked the company to turn over a copy of the 18-page report by next Friday.

"This report is relevant to our oversight activities regarding Halliburton's reconstruction work in Iraq," the lawmakers wrote.

Waxman is the ranking Democrat on the House Government Reform Committee, while Dingell is the top Democrat on the House Energy and Commerce Committee.

Harl excoriated the Wall Street Journal for publishing a story about the report.

"It is unimaginable that a business news publication would publish an internal proprietary working draft document that involves war operations, security, legal and competitive issues for KBR," he said. "The document says: For discussion purposes only. That certainly didn't mean discussion in the media."

Halliburton pointed out it has shown it can cope with some challenging assignments. In June, for instance, the company was serving meals for 50,000 troops. In July, it needed to feed 130,000.

More recently, the Pentagon decided to move all U.S. soldiers out of tents and into "hard-sided" living quarters. In December, KBR procured $300 million worth of shelters, essentially mobile homes, for the troops.

At times, KBR's out-of-pocket expenses have reached $800 million.

"There are very few companies in the world that could or would adapt this quickly while, at the same time, finance the operation," Harl said. "KBR pays for the equipment, supplies and manpower and is reimbursed much later."





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