Halliburton Loses $$2B, Shrugs


Halliburton, the Veep’s former corporate incubator, appears to have simply lost almost $$2Bil that it can’t account for–$$$1.8BIL$$$ to be precise, almost exactly 10% of the $18.2 Bil it has in contracts for work in Iraq, and–get this–almost half the $4.2Bil they collected so far. This corporation has lost not a tenth or a quarter or even a third of what it’s been paid. They lost HALF OF IT.

WASHINGTON — Pentagon auditors have found that Halliburton Co. cannot properly document more than $1.8 billion worth of work done under its contracts in Iraq and Kuwait, Army officials said Wednesday.The latest setback for the Houston oil services company came in an audit by the Defense Contract Auditing Agency, which also found that the firm’s system for generating cost estimates used in negotiations with the government was “inadequate.”

The agency recommended that government contracting officials demand fixes within 45 days and seek more detailed information during negotiations with Halliburton, which has contracts worth as much as $18.2 billion in Iraq to feed and house troops and restore the country’s oil infrastructure.

Army contracting officials said they were studying the auditors’ recommendations but had not decided how to proceed, leaving open the question of how the audit would affect the bottom line of Halliburton, which was run by Vice President Dick Cheney from 1995 to 2000.

“What the final outcome will be, I can’t speculate. It’s under review now,” said Dan Carlson, a spokesman for the Army Field Support Command in Rock Island, Ill., which oversees Halliburton’s largest contract in Iraq and Kuwait.

The cost estimate system is used to come up with a price that the government agrees to pay Halliburton as it performs work in Iraq. Later, auditors try to reconcile the estimates with actual costs and determine whether the government has paid too much or too little.

It is important because the government does not want to pay too much to a contractor and have to seek reimbursement later. The audit found that Halliburton’s estimating systems suffered from “a lack of current, accurate and complete cost and pricing data.”

Halliburton defended its system and said it disagreed with the results of the audit, which were first reported Wednesday in the Wall Street Journal.

Oooo, that’s a good one.

So kids, in BushAmerica when you flunk a math test because you’re hopelessly unprepared, you can just tell the teacher you ‘disagree with the results’ of the test. After all, the questions ‘What does 2+2 equal?’ or ‘How much is $18.2 Bil minus $1.8Bil?’ are subject to interpretation. They’re not cut and dried at all. Why, there may be several answers, depending on whether or not the principal of the school used to work for your parents and may want to work for them again.

Company officials said they were working with the government to address issues raised in the report, including the inadequate accounting for work done under the so-called Logcap contract, which supplies logistics aid for U.S. troops.The $1.8 billion amounts to about 42% of the $4.3 billion the company has billed to the U.S. government under the contract. In the past, the company has acknowledged that its work in a war zone has made paperwork difficult.

And for you kids who may live in gang-infested areas where drive-by shootings are a common occurrence and you wake up to gunfire every morning, just say it’s too much for anyone to expect you to keep accurate figures when you’re scrunched down in the bathtub or laying on the floor to do your homework in order not to get hit by stray bullets. Finally, point out that the teacher is really just ‘an advisor’.

Halliburton said it did not expect its financial liquidity to be affected by concerns about the estimating system, or by the possibility that the government could withhold as much as 15% of its payments because of problems with arriving at fixed prices within the contract.The Pentagon audit “is just an opinion,” said Wendy Hall, a Halliburton spokeswoman. “The [auditing agency] is advisory only. They do not have the authority to make final decisions.”

You can always go over the teacher’s head and appeal directly to the principal, who actually secretly still does work for your parents and won’t want to do anything to jeopardize that.

Remember: a failing grade is just a basis for negotiation. Try that–it works for the Vice President’s friends and it will work for you, too.

It’s ‘Morning in America’. Be optimistic. Steal the lunch money from the cafeteria cash register while you’re at it–we’ve got lots more excuses where those came from.

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