Halliburton whistleblowers gagged

WASHINGTON Democrats have reacted angrily to a refusal by the Republicans to allow whistleblowers to testify at today's Congressional committee into how vice president Dick Cheney's old firm, Halliburton, has handled its billion-dollar Iraq contracts.

Their anger follows the release of an internal Pentagon audit that found 'deficiencies' with Halliburton's billing system.

The report, compiled a month ago, centres on how Halliburton keeps track of its bills from smaller contractors.

Democrat congressman Harry Waxman attacked the committee, saying that by not hearing what whistleblowers from within Halliburton have to say, it is 'not fulfilling its obligation to protect the taxpayer from waste, fraud and abuse'.

A spokesman for Tom Davis, the chairman of the Government Reform Committee, said it was simply a matter of timing, and once whistleblowers' claims are assessed there could be a follow-up hearing later in the summer.

The report by the Defence Contract Audit Agency says Halliburton-subsidiary Kellogg, Brown and Root had an 'inadequate' billing system, and KBR did not follow laws and regulations relating to spending and record-keeping.

Halliburton and KBR are facing a series of inquiries and the agency is looking at other issues such as the prices charged to the military for food delivered to troops and fuel imported to Iraq.

Halliburton brushed off the latestcriticism, with spokeswoman Wendy Hall saying it was working at improving systems.

'We have established a number of policies and procedures to ensure that the company's procurement process operates with integrity, efficiency and effectiveness,' she said.

But whistleblowers say that Halliburton overpaid on routine, small-ticket items such as soft drinks, laundry and hotels, but passed the inflated costs on to taxpayers.

They also claim the company lodged 100 workers at a five-star hotel in Kuwait for a total of $10,000 (£5500) a day while the Pentagon wanted them to stay in tents, abandoned $85,000 trucks because of minor problems and knowingly paid subcontractors twice for the same bill.

>Waxman says the claims' portray a company and a contracting environment that has run amok'.

The Pentagon report came just after the General Accounting Office released its assessment of contracting in Iraq.

That largely let Halliburton off the hook over how it won the contracts in the Gulf, finding that most of the no-bid work was legitimately awarded.