US to repay Iraq up to $208m

2005-11-06 17:29

Amman - A UN auditing board has recommended that the US reimburse Iraq up to $208m for work carried out by the US-based Kellogg, Brown & Root, in the last two years.

The International Advisory and Monitoring Board of the Development Fund for Iraq said in a report that the work, paid for with Iraqi oil proceeds, was either overpriced or poorly done by the Halliburton subsidiary.

The report was announced in a press statement on Friday.

Compiled from an array of Pentagon, US government and private auditors, the report didn't specify how or what work has been done poorly.

"IAMB recommends that the US government seek resolution with the Iraqi government concerning the use of resources of the DFI which might be in contradiction with UN Security Council Resolution 1483," the report said.

That resolution transferred authority for expenditures from Iraq's oil revenue from the UN to the Development Fund for Iraq, and created an international body - IAMB - to monitor the expenditures.

Halliburton said its subsidiary had cooperated with the auditing process and that questions raised had to do with documentation rather than the costs incurred by the company. It pointed to findings by the Pentagon's Defense Contract Audit Agency.

The Iraqi government said it will pursue such funds identified by the IAMB report as part of its policy to recoup money squandered during the Saddam Hussein regime or by international bodies following the 2003 invasion of the country.

"We have a policy to go after Iraqi funds whether they were abused by members of the former government or spent by international bodies," said Laith Kubba, a spokesperson for Iraqi Prime Minister Ibrahim al-Jafaari.

A US military official in Baghdad declined comment.

Work on oil pipelines involved

Some of the work involved postwar fuel imports carried out by KBR that previous audits had criticised as grossly overpirced, The New York Times reported on Saturday.

The contracts that drew fresh scrutiny also cover building and repairing oil pipelines and installing emergency power generators, the newspaper reported.

The IAMB report said because the audits were continuing, it was premature to specify how much of the $208 491 382 must ultimately be paid back.

But it added that once its analysis was completed, the board "recommends that amounts disbursed to contractors that cannot be supported as fair be reimbursed expeditiously."

The IAMB can only make recommendations and whether the US pays would be up to the government, The New York Times reported.

In Washington, Henry Waxman of California, one of the leading Democratic critics of Halliburton, said the international auditors "have every right to expect a full refund of Halliburton's egregious overcharges".

"For more than a year, administration officials concealed Halliburton's overcharges from international auditors responsible for monitoring the use of Iraqi funds.

"The Bush administration repeatedly gave Halliburton special treatment and allowed the company to gouge both US taxpayers and the Iraqi people."

Kubba said Iraqis have been complaining for months about projects that should have cost $5 000, such as painting schools, that ended up costing $100 000.

He said the waste of Iraqi money would be an issue in elections slated for December 15.

- Dow Jones