Firm’s Oversight of U.S. Property Criticized

A third or more of the government property Halliburton Co. was paid to manage for the U.S.-led Coalition Provisional Authority in Iraq cannot be located by auditors, investigative reports to Congress show.

Halliburton subsidiary KBR “did not effectively manage government property” and auditors cannot locate hundreds of CPA items worth millions of dollars in Iraq and Kuwait this summer and fall, Inspector General Stuart W. Bowen told Congress in two reports.

Halliburton, once led by Vice President Dick Cheney, is also the focus of a criminal investigation into alleged fuel price gouging and an FBI inquiry into possible favoritism from the Bush administration.

FBI agents have extensively interviewed an Army contracting officer who last month alleged that the administration was improperly awarding contracts to Halliburton without competitive bidding.

Halliburton and the Pentagon deny wrongdoing and say they are cooperating in all investigations.

Company spokeswoman Cathy Gist said Friday that KBR had recently conducted a “wall-to-wall” review of all property it was managing for the Pentagon in war zones, including Iraq and Afghanistan, and produced results far better than Bowen’s findings.

“We are pleased to report that this total inventory review confirmed 99.4% accountability of all property,” she said. “The facts show that KBR has adequately managed property for this mission by aggressively monitoring its property management functions -- above and beyond what is required.”

Bowen reported that an audit this summer found KBR had lost track of more than $18 million worth of equipment in Iraq. Investigators could not track down 52 of 164 randomly selected items in an inventory of more than 20,000 items overseen by KBR, including two electric generators worth nearly $1 million, 18 trucks or SUVs and six laptop computers, he said.

Pentagon and Halliburton officials have been searching since summer for the missing items and have tracked down many of them. Some were in the hands of “unauthorized users” and 111 vehicles had not been returned for required check-in, they said.