Two Halliburton Co. employees in Iraq received kickbacks for allowing a Kuwaiti subcontractor to overbill more than $6 million on a contract to supply and service U.S. troops in Iraq, the company has told the Dept. of Defense. As a result of an internal audit, Houston-based Halliburton discovered the alleged corruption and notified DOD. The company will immediately cut a check to the government for $6.3 million, "just in case the overbilling charge bears out," said Halliburton in a statement. The unnamed employees have left the company, a spokeswoman says. The Kuwaiti subcontractor has not been identified.


"It was the LOGCAP contract. It was not, it was not the fuel contract," says Richard Dowling, spokesman for Task Force RIO in Baghdad. "It was not the humanitarian purchase of fuel." LOGCAP is one of at least two separate Halliburton contracts in Iraq. Under LOGCAP, a Defense Dept. contract, Halliburton provides support services to U.S. troops in the Middle East. The other contract, with the Army Corps of Engineers, is for reconstruction of the Iraqi oil industry. Under that contract, Halliburton's KBR subsidiary is part of Task Force RIO (Restore Iraqi Oil).

The contractor has been under fire since September, when the Corps' auditor said it appeared KBR had overcharged the government $61 million for the fuels it was importing at Task Force RIO's direction for the Iraqi consumer market. "Task Force RIO had nothing to do" with the kickbacks allegedly taken by the two Halliburton employees, says Dowling.