Iraq needed fuel. Halliburton Co. was ordered to get it there — quick. So the Houston-based contractor charged the Pentagon $27.5 million to ship $82,100 worth of cooking and heating fuel.
In the latest revelation about the company's oft-criticized performance in Iraq, a Pentagon audit report disclosed Monday showed Halliburton subsidiary KBR spent $82,100 to buy liquefied petroleum gas, better-known as LPG, in Kuwait and then 335 times that number to transport the fuel into violence-ridden Iraq.
What sort of sweetheart deal does Halliburton have with the Kuwaitis, anyway? Late in 2003 it turned out Halliburton had been paying a Kuwaiti company $2.65 per gallon to import gasoline into the country with the planet's second-largest proven reserves. Furthermore, gas is subsidized in Iraq, so we got to pay even more to sell it to the Iraqis -- who, as you may or may not have heard, have some pretty sizable oil reserves -- for 5¢ per gallon (scroll down near the bottom of the link -- that is not a typo. Five cents.).
It may be helpful to recall the obnoxious pre-invasion sentiments expressed by pro-war acolytes, that this thing would pay for itself quite handily. "In case you haven't heard, they've got some oil", was a frequent snotty rejoinder employed by many a trooper from the Fightin' Keyboarders Battalion.
Yeah. How's that been workin' for us, smartass?
Pentagon auditors combing through the company's books were mystified by this charge.
"It is illogical that it would cost $27,514,833 to deliver $82,100 in LPG fuel," officials from the Defense Contract Audit Agency noted in the report.
No, Mr. Spock, it is entirely logical that this would occur, once you stop and remind yourself that you're talking about war profiteers. It's not like Halliburton hasn't already been fined several times for this sort of thing.
Halliburton spokeswoman Wendy Hall said the figures were taken out of context.
"The implication is definitely misleading," Hall said. "Transporting fuel into Iraq was a mission fraught with danger, which increased the prices that firms were willing to offer for transportation."
Okay, then. Suppose you provide us rubes with more specific "context" for a 33,500% markup, than just the obvious. We know Iraq is "fraught with danger", even though we turn a corner every couple months. So share with us which firms jacked up the prices the most. Humor us, Wendy. We're customers looking at receipts, and we've already caught you burning us several times, so you could say we're a tad curious.
Company officials point out the firm's estimating and purchasing systems have recently received a nod of approval from the Pentagon's Defense Contract Management Agency.
In all, Halliburton submitted bills to the U.S. Army Corps of Engineers totaling $875 million for supplying Iraq with fuel from May 2003 through March 2004.
Pentagon auditors questioned $108 million or about 12 percent of those costs.
That's substantially higher than the $61 million in possible fuel overcharges Pentagon auditors had previously identified. But that figure only covered the first five months of Halliburton's fuel supply assignment.
If Halliburton really believes that this is some sort of ringing endorsement, they're either stupid or huffing some industrial-grade solvents. Twelve percent is an unacceptable error rate for any organization. We wouldn't accept a 12% error rate from the IRS, or the SSA, or any other government body. Considering the endless gospel of the efficiencies of the free marketplace, it is maybe even less acceptable here.
Tell ya what, guys. Take 12% off Cheney's annual deferred bonus, just for shits and giggles, and see if that don't raise a high stink.
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