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Lawmakers: Halliburton Overcharging for Iraq Service

Two Democratic lawmakers say Vice President Dick Cheney's (searchformer company, Halliburton (search), is gouging U.S. taxpayers while importing gasoline into Iraq. The Houston-based company contends it is paying the best price possible.

Reps. Henry Waxman (searchof California and John Dingell (searchof Michigan complained to the Bush administration that Halliburton's KBR subsidiary is billing the Army between $1.62 and $1.70 per gallon, while the average price for Middle East gasoline is 71 cents.

They also complained that Iraqis are charged between 4 cents and 15 cents at the pump for the imported gasoline.

"Although Iraq has the second largest oil reserves in the world, the U.S. taxpayer is, in effect, subsidizing over 90 percent of the cost of gasoline sold in Iraq," the lawmakers said in the latest Democratic attacks against the Houston company that received a no-bid contract.

The charges cover the purchase and transportation of the petroleum from Kuwait and other countries.

Halliburton, originally hired to extinguish oil fires, has received the expanded role of restoring Iraq's oil industry. The company has been paid $1.4 billion through September for its work.

"KBR is not responsible for establishing the price Iraqi motorists pay for gasoline at the pump," Halliburton spokeswoman Wendy Hall said.

She said the company negotiates "fair and competitive prices" with suppliers outside Iraq and must transport the gasoline in a hostile environment.

The U.S. Army Corps of Engineers, which chose Halliburton, has received bids for a replacement contract that could be awarded this month.

Corps spokesman Robert Faletti said he could not confirm the figures that Waxman and Dingell cited in a letter to Joshua Bolten, director of the Office of Management and Budget.

He said, however, that the contract is being audited by Congress and the Army.

In a further move against Halliburton, Sen. Frank Lautenberg, D-N.J., announced Wednesday he would propose barring the government from awarding Iraq reconstruction contracts to companies that maintain close financial ties to the president, vice president or members of the president's Cabinet.

Lautenberg wants the measure added to an $87 billion reconstruction bill for Iraq and Afghanistan.

Cheney receives deferred payments from Halliburton and also has stock options.

Cheney's office has said the vice president had no role in the contract and that the deferred payments were for his services while he headed the company. He has said he would give the proceeds to charity should he profit from the exercise of stock options.