US: Justice Department to Examine Halliburton Subsidiary

Whistleblower's Iraq claims to be investigated
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WASHINGTON -- A whistleblower's claims that reconstruction in Iraq has been rife with waste, fraud and abuse -- particularly in regard to a division of Halliburton -- will be turned over to the Justice Department, a U.S. senator said Friday.

Sen. Byron Dorgan, D-North Dakota, has championed the cause of whistleblower Bunnatine H. Greenhouse, a former high-ranking civilian employee of the U.S. Army Corps of Engineers.

Greenhouse has testified that the contracts awarded to Kellogg, Brown and Root represent "the most blatant and improper contract abuse I have witnessed during the course of my professional career." (Read about a U.N. report on KBR's work in Iraq)

Dorgan attempted unsuccessfully to persuade Congress to hold hearings on the allegations, and when they declined he conducted unofficial hearings before the Senate Democratic Policy Committee. (Read how Democrats attacked Halliburton before last year's presidential election)

At those hearings, witnesses, including Greenhouse, testified that waste, fraud and abuse were rampant, Dorgan said. One example given was the torching of new $85,000 trucks because of easily reparable deficiencies, such flat tires and clogged fuel pumps.

"The stories go on and on," Dorgan said. "It's long past the time for people to be held accountable for the stories that I've heard in these hearings."

Halliburton has declined to comment because of the ongoing investigation, but the company said in a written statement to CNN that its Kellog, Brown and Root division is cooperating with the investigation.

"KBR will continue to work with our customers and the appropriate government agencies to demonstrate, once and for all, that KBR delivered vital services for the U.S. troops and the Iraqi people within the appropriate bounds of government contracting and at a fair and reasonable cost, given the circumstances," the statement said.

In regard to Greenhouse's allegation about improprieties in awarding contracts, Halliburton replied that the Government Accountability Office found in 2004 that contracts were "properly awarded" to the only contractor that could perform the work.

The Pentagon's inspector general has reviewed the allegations Greenhouse leveled against Kellogg, Brown and Root and referred the matter to the Justice Department, Dorgan said.

"The DOJ is in the process of considering whether to pursue the matter," Assistant Inspector General John R. Crane wrote in a letter to Dorgan. In that letter, Crane dubbed the matter a "criminal investigation."

"I'm encouraged," Dorgan told reporters Friday. "At long, long last, finally someone seems to understand that when you have this kind of gross waste and negligence -- and I think in some cases fraud -- that the American taxpayer deserves answers and someone needs to be held accountable."

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