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IRAQ: Halliburton Lost U.S. property, auditors say

The giant reconstruction contractor Halliburton misplaced millions of dollars in government trucks, generators, and computers.


by Seth BorensteinKnight Ridder Newspapers
October 28th, 2004

WASHINGTON - It's not just missing explosives that have U.S. military officials searching high and low in Iraq. They're also trying to figure out how the giant reconstruction contractor Halliburton misplaced millions of dollars in government trucks, generators, computers and, strangely, a port-a-potty.

In a report released Thursday on the management of U.S. property, the inspector general for the now-defunct Coalition Provisional Authority estimated that at least $1.1 million in government property entrusted to Halliburton was lost or unaccounted for in the staging area of Kuwait. About 43 percent of the inventory items that auditors looked for appeared lost.

The findings come after a July report concluded that the contractor couldn't account for $18.6 million in U.S. property it was responsible for in Baghdad.

"You've got to try really hard" to lose some of the items, said Keith Ashdown, vice president of the fiscal watchdog group Taxpayers for Common Sense. "It gives new meaning to government waste or new meaning to flushing taxpayers' money down a toilet."

In the latest report, auditors listed 30 items they couldn't find in Kuwait that Halliburton's subsidiary, Kellogg Brown & Root, was supposed to safeguard. The list includes seven small trucks, three portable generators, a laptop computer, four printers, a 119-gallon water heater, four bulletproof vests, a couple bulletproof helmets, a microwave and a portable toilet worth $438.

The IG examined a small percentage of the government's inventory that was under Halliburton's control. Based on that sample, it estimated the value of the missing goods.

Missing from Baghdad, according to the July report, were two armored trucks, 15 other trucks, a $735,000 generator, a smaller generator, six laptops, office chairs, filing cabinets and a 3-inch sewage pump.

"It's amazing in the federal government how often things are lost," even on the tranquil mainland, said Angela Styles, the former administrator of federal procurement policy for the Office of Management and Budget.

Both Halliburton and the Defense Contracting Management Agency, which oversees the company contract, faulted the inspector general for using a small random sample of inventory searches.

The firm "operates an approved government property control system that has stood the test of time, even under the stresses of supporting the U.S. troops in Iraq and Kuwait, and the challenges of property control in a war zone," Halliburton spokeswoman Wendy Hall said. "The projections contained in this audit were based on an extremely limited sample of 30 items, and we do not believe such a small sample can be used to make such broad generalizations."

Hall said some of the items were never U.S. property - a point disputed by the IG - and other items were given to the Iraqi government. She had no information on the latest whereabouts of the port-a-potty.





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