from "U.S. Should Repay Millions to Iraq, a U.N. Audit Finds"
An auditing board sponsored by the United Nations recommended yesterday that the United States repay as much as $208 million to the Iraqi government for contracting work in 2003 and 2004 assigned to Kellogg, Brown & Root, the Halliburton subsidiary.
The work was paid for with Iraqi oil proceeds, but the board said it was either carried out at inflated prices or done poorly.
Some of the work involved postwar fuel imports carried out by K.B.R. that previous audits had criticized as grossly overpriced. But this is the first time that an international auditing group has suggested that the United States repay some of that money to Iraq. The group, known as the International Advisory and Monitoring Board of the Development Fund for Iraq, compiled reports from an array of Pentagon, United States government and private auditors to carry out its analysis.
The monitoring board authority extends only to making recommendations on any reimbursement. It would be up to the United States government to decide whether to make the payments, and who should make them. But Louay Bahry, a former Iraqi academic who is now at the Middle East Institute in Washington, said the board's findings would stoke suspicions on the street in Iraq, where there had always been fears that the United States invaded the country to control its oil resources.
"Something like this will be caught in the Iraqi press and be discussed by the Iraqi general public and will leave a very bad taste in the mouth of the Iraqis," Mr. Bahry said. "It will increase the hostility towards the United States."
The audits may also come at a bad time for the Bush administration, since Vice President Dick Cheney's former role as chief executive of Halliburton has led to charges, uniformly dismissed by Mr. Cheney and the company, that it received preferential treatment in receiving the contracts. The early Kellogg, Brown & Root contracts in Iraq were "sole sourced," or bid noncompetitively.
"The Bush administration repeatedly gave Halliburton special treatment and allowed the company to gouge both U.S. taxpayers and the Iraqi people," Representative Henry A. Waxman, a California Democrat who is the ranking minority member of the House Committee on Government Reform, said in a statement on the new audits. "The international auditors have every right to expect a full refund of Halliburton's egregious overcharges."
Some of those contracts were paid for with American taxpayer money, but others were financed by Iraqi oil proceeds. Because the monitoring board was created to oversee those proceeds, its audits focus only on the work that was financed with Iraqi money.
Other entries suggest the existence of $600,000 in ghost payrolling in the Electricity Ministry and additional evidence of bribes.
The K.P.M.G. audits also show ample evidence of the chaos that permeated the early reconstruction effort in Iraq, with paperwork on hundreds of millions of dollars of contracts won by firms other than K.B.R. that were lost or never completed, making it difficult or impossible to tell if the work was carried out properly.
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