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U.S. Military Contractors Ring Up $11 million in Charges
 at the Kuwait Hilton; Congressional Probe Continues

By David Ivanovich, Houston Chronicle
Knight Ridder/Tribune Business News

June 30, 2004 - WASHINGTON -- Auditors looking into hefty charges rung up by Halliburton Co. and others at a beachfront hotel in Kuwait chastised the Coalition Provisional Authority for failing to better control costs. The authority's inspector general, examining $11 million in charges being incurred annually at the five-star Kuwait Hilton, said the Provisional Authority "did not apply adequate oversight to ensure that operating costs were minimized."

According to an inspector general's audit report made available Tuesday, the auditors proposed cost-saving measures they calculate would save about $3.6 million a year.

The hotel was supposed to be used by "executive personnel" being deployed to the region.

Lower-ranking employees were supposed to stay at less expensive villas.

But the authority failed to "provide clear guidance" as to who was eligible to stay at the hotel, the report said.

And as a result, Halliburton subsidiary KBR allowed lower-level workers to stay there as well.

That pushed up costs by some $2.85 million a year, the report said.

The government could have saved $191,000 for laundry service alone if it had installed washers and dryers in the villas for workers to use, rather than allow them to use the hotel laundry service.

Halliburton spokeswoman Cathy Gist said the company assigned living accommodations for its workers "as approved by the military."

The military, Gist added, also approved the use of the hotel laundry service.

Rep. Henry Waxman of California, the ranking Democraton the House Government Reform Committee who has pushed for a congressional probe into the government contracts, called the report "another instance of Halliburton overcharging."

"Three independent auditors have now looked into Halliburton's billing practices...

"They have all reached the same conclusion: The administration has given Halliburton a blank check to overcharge the taxpayer," Waxman said.

Gist called that characterization "an affront to all of our many employees who are currently working in the Middle East."

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