FOR IMMEDIATE RELEASE: June 17, 2004
New Halliburton Miscues Revealed: $45 Cases Of Coke, "$85,000 Oil Filters", Employees Paid Not To Work
Whistleblowers' statements confirm: Halliburton gouging the federal government at every turn - from laundry service to supply truck repairs; Haliburton defying Army orders and inflating prices by up to 300%
US Senators Charles E. Schumer and Richard Durbin and Congressman Henry Waxman today revealed shocking examples of jaw-dropping price gouging and extraordinary waste by Halliburton and its subsidiaries that have put our men and women in uniform at risk and cost Americans billions in misspent tax dollars. Pointing to Halliburton's equivalents of the famed "$600 toilet seats", including $45 dollar cases of coke and "$85,000 oil filters". Based on these reports Schumer, Durbin and Waxman called for a full investigation by the GAO into every Halliburton contract and requisition.
"Waste, neglect, lack of oversight–these are exactly the things we do not need in a situation as volatile as the one in the Iraq," said Schumer, pointing to an incredibly overpriced can of soda. "These blatant examples of price gouging are reminiscent of the famed "$600 toilet seat" and are exactly what we do not need when our troops are in harms way and wanting for the resources they need and we are so squeezed for funding here at home for such vital needs as health care and education."
"The statements of the six individuals...portray a company and contracting environment that has run amok," wrote Waxman in a recent letter.
“The reports of fraudulent and atrocious behavior on the part of Halliburton and its subsidiaries are stunning – driving empty trucks back and forth while billing the federal government for each trip; charging the taxpayers for 240,000 cases of soda instead of the 240,000 cans they actually delivered; abandoning $85,000 vehicles by the side of the road when they got flat tires rather than making repairs because each truck was just another cost-plus item on a federal contract,” said Durbin. “When you consider the fact that we have 138,000 of our finest men and women risking their lives in Iraq, how can we possibly turn our backs on this type of outrageous profiteering? Why would Congress or the Administration even hesitate about getting to the bottom of a situation that may have cost the taxpayers millions so far and may cost us more in the future?”
Recent statements by Halliburton whistleblowers have revealed a pattern of waste, negligence and lack of proper oversight. The statements also pointed to a concerted effort within the company to hide out of control costs. Procurement supervisors told employees to break down large requisitions so they cost less than $2,500 each -- the level below which they would not be scrutinized. According to a whistleblower, it didn't matter how unreasonably high a bid was, if it was broken up into segments of under $2,500 it was virtually guaranteed to be accepted. The most egregious whistleblower revelations include:
$45 cases of Coke: Halliburton subcontracted with La Nouvelle, a Kuwaiti company, to provide 37,200 cases of soda and ice per month for the remarkable price of $45 for a 30 can case. In one La Nouvelle delivered 37,200 only cans of soda–even though 37,200 cases had been order.
"$85,000 Oil Filters": A former Halliburton "convoy commander" revealed that Halliburton refused to perform even the most basic maintenance on their trucks, such as replacing oil filters, performing oil changes or replacing flat tires. Once a truck got a flat or the filter stopped working, the truck would be abandoned and replaced by a brand new $85,000 truck. One employee drove a truck 59,000 miles without an oil change before it had to be abandoned. Another of the whistleblowers actually cleaned his filter with gasoline to keep his truck working. One truck was abandoned because of a $25 hydraulic line needed to assist the clutch. The line from the mechanics was, "We may not have any filters, but Iraq has plenty of oil."
$100 for 15 lbs Bags of Laundry: Another contract with La Nouvelle for laundry services had a fixed price of between $1 million and $1.2 million per month. Because so little laundry was being done, Halliburton was paying approximately $100 per 15-pound bag of laundry. Under a separate subcontract with the same company, Halliburton was paying on $28 per bag. When a whistleblower brought this to her superiors' attention and recommended renegotiating the million dollar contract, she was told to discontinue her analysis and cease her attempts to fix the problem.
Embroidered Hand Towels: Halliburton ordered embroidered hand towels at 3 times the cost of unembroidered hand towels.
Empty Convoys: Convoys would routinely run with several empty trucks. One convoy ran with 28 empty trucks. These trucks weren't decoys for security purposes -- in fact, they undermined security since some convoys would be as much as two miles long with only three security vehicles protecting them.
Falsified Time Sheets: Employees who had no work to do were told to submit false time sheets claiming 12 hours of work per day and to walk around and "look busy."
Such price gouging was designed to allow Halliburton to maximize the profit from their no bid, plus cost contracts. Given the number and seriousness of these revelations a full investigation by the GAO into every contract secured by Halliburton and its subsidiaries is clearly required. Only by understanding how widespread these outrageous actions are will the proper steps be able to be taken to end such waste, fraud and abuse and insure that America's men and women in uniform are provided with the highest quality services and support at the best cost.