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Halliburton Subsidiary Sorts Out Meal Overcharges

Associated Press
Published | Updated

WASHINGTON – A Halliburton Co. subsidiary has agreed to stop billing the government for feeding U.S. troops in Kuwait until the two sides settle what the company says is an accounting dispute. Pentagon auditors are raising the possibility of overcharging.

Halliburton said in a statement Monday that its Kellogg Brown & Root (search) subsidiary agreed to suspend billing "while the company works with the government to improve the counting method" for meals served.

The company had been charging the government for the projected number of meals instead of the actual number served. Pentagon auditors are questioning whether that amounted to overcharging, since the projected number of meals was significantly higher than the number served.

Halliburton said, however, that the issue was how to improve meal planning, not how much was charged.

The Kellogg Brown & Root decision to stop billing for meals until the matter is resolved is "not any sort of admission" of wrongdoing, Halliburton's statement said. "It is an agreement to temporarily delay billing while KBR and the government jointly determine the best way to estimate how many meals to prepare."

The Wall Street Journal, which first reported the matter Monday, said Pentagon auditors are questioning more than $16 million in alleged overcharges by Kellogg Brown & Root for meals at Camp Arifjan, a huge U.S. military logistics base south of Kuwait City.

Wendy Hall, a Halliburton spokeswoman, said she could not confirm the $16 million figure.

The Journal reported that rather than repay the $16 million directly, Kellogg Brown & Root agreed to deduct the sum from future bills to the government.

The Pentagon already has in progress a criminal inquiry into possible overcharging involving another Halliburton contract: the company's deal to supply gasoline to Iraqi civilians.

Last month Kellogg Brown & Root reimbursed thePentagon (search) $6.3 million after disclosing that two employees had taken kickbacks from a Kuwaiti subcontractor in return for work providing services to U.S. troops in Iraq.

Houston-based Halliburton has complained repeatedly that criticism of its work in Iraq is politically motivated, in part because of its past ties with Vice President Dick Cheney, the company's chairman from 1995 to 2000.