Civilians testify to Halliburton fraud, coercion

June 28, 2005 The Democratic Party held a public committee, aired on C-SPAN 3, at which former civilian employees based in or administering operations in Iraq, testified to specific instances of waste, fraud, and other abuses and irregularities by Halliburton and its subsidiary Kellogg, Brown and Root (KBR).

Allegations of fraud by Halliburton, specifically with regard to its operations in Iraq, have persisted since before the Iraq War. The associations between U.S. Vice President Dick Cheney and Halliburton, have been the basis for repeated speculation over possible political improprieties and business profiteering from the war.

Among the senators and representatives present at the hearing were Byron Dorgan (presiding), Henry Waxman, Frank Lautenberg, and Mark Dayton.

Among those testifying were Bunny Greenhouse, former Chief Contracting Officer of the U.S. Army Corps of Engineers, Rory Mayberry, former Food Program Manager for Halliburton subsidiary, and Allan Waller, of the Lloyd-Owen International security and operations firm.

Greenhouse, who provided the bulk of testimony, spoke for several minutes about her involvement in the evaluation and crafting of government Army contracts, and how explaining how superiors undermined and dismissed her concerns of illegal business practices. "Ultimately my main concern was the repeated insistence that the Rio contract be awarded to KBR without competitive bidding," Greenhouse said. She testified to have been given misinformation in answer to her complaints, and being "overtly misled" by KBR managers.

Mayberry, still in Iraq, testified by video from questions prepared by the committee. He said that KBR routinely sold expired food rations to the Army. The interviewer asked, "Are you saying that Halliburton deliberately falsified the number of meals they prepared and then submitted false claims for reimbursement and that they did this to make up for past amounts auditors had disallowed?" Mayberry firmly answered "Yes." He said that serving expired food ration was "an everyday occurrence, sometimes every meal." He explained that Halliburton systematically overcharged for the number of meals as well, saying, "they were charging for 20,000 meals and they were only serving 10,000 meals." Dorgan later commented, "obviously there's no honor here, by a company that would serve outdated food to our troops in Iraq."

Mayberry also claimed would-be whistleblowers were threatened "to be sent to Falluja" and other "places under fire" if they talked to media or governmental oversight officials. In 2003 and 2004, Falluja had been well known as dangerous for foreign troops and civilians. "I personally was sent to Falluja for three weeks. The manager told me that I was being sent away until the auditors were gone, because I had talked to the auditors," Mayberry said.

"The threat of being sent to a camp under fire was their way of keeping us quiet. The employees who talked to auditors were sent to camps under more fire than other camps, and Anaconda." This report led Dorgan and others to voice considerable outrage that U.S. citizens would be personally threatened with harm for talking to oversight officials or media.

Allan Waller testified to specific examples of how KBR officials had conspired in blocking Lloyd-Owen fuel transports, and using other coercive means against its competitor. The British Lloyd-Owen has a direct contract with the Iraq government to provide fuel to various parts of the country.

In his introductory remarks, Dorgan explained that Senate Republicans had blocked or ignored any requests by Democrats to have a formal bipartisan hearing, resulting in the need for an independent committee.