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Halliburton Fraud Lawsuit Details Super Bowl Party

September 09, 2006|T. Christian Miller | Times Staff Writer

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

The Houston-based company also defrauded the government by double- and triple-billing for Internet, food and gym services for soldiers, according to the lawsuit by a former employee for KBR, the Halliburton subsidiary that runs 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, filed under the False Claims Act. Designed to prevent war profiteering, such lawsuits allow citizens to sue on behalf of the government and recover a portion of any damages.

The company did not deny ordering the TV and the food; it set up snack buffets and screenings at military bases throughout Iraq for the 2005 Super Bowl. But KBR noted that its contract allowed the firm to provide recreation and morale-boosting services for its employees and for American soldiers.

"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," Halliburton spokeswoman Melissa Norcross said.

The accusations in the lawsuit are the latest involving Halliburton's controversial multibillion-dollar contract to feed and house American soldiers in Iraq. Democrats have been quick to criticize the company, which was run by Vice President Dick Cheney from 1995 to 2000.

In June, a KBR subcontractor was indicted on kickback charges involving the dining halls, which feed tens of thousands of soldiers a day in camps throughout Iraq and Kuwait. The U.S. Army Corps of Engineers has withheld $55.1 million out of a total of $13.7 billion in payments on the contract as a result of disputed costs.

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

Grayson accused the department of shirking its duties in the middle of a 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.

Grayson is best known for having won another fraud case, which Justice officials also passed up, against a private security company named Custer Battles. That decision was recently overturned by a federal judge and is now on appeal.

Grayson, who recently lost a primary race for a House seat in Florida running as a Democrat, denied any political motivations in pursuing the case against Halliburton, noting that he had filed it before deciding to run for office.

He said that the whistle-blower in the case, Julie McBride, came forward only after KBR officials ignored her complaints. McBride said in the lawsuit that she was placed under armed guard and then fired after she raised questions about Halliburton's billing practices. She could not be reached for comment Friday.

Justice Department officials "are stonewalling and keeping these cases under seal unnecessarily," Grayson said.

Rep. Henry A. Waxman (D-Los Angeles), who has been the leader in Congress in attacking Halliburton, said that the charges were further proof of war profiteering by the oil services giant.

"One former Halliburton employee after another tells the same story of outrageous and intentional overcharging," Waxman said in a statement. "Yet no one in the Bush administration seems to care."

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t.christian.miller@latimes.com

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