Now who do you suppose leaned on the Army to pay up to Halliburton...?
Cheney? Rumsfeld? Bush himself?

bc-iraq-halliburton-time
(ATTN: News editors)
//Army Reverses Decision to Withhold Halliburton
Payment// (Washn)
By John Hendren
(c) 2004, Los Angeles Times

WASHINGTON - The Army on Tuesday abruptly reversed itself
and decided to pay all of Halliburton Co.'s fees to house
and feed U.S. troops in Iraq and Kuwait after the company
threatened to legally challenge the effort to penalize it.

The Houston oil-and-service company announced early
Tuesday that the Army had decided to pay 85 percent for
services in the war zone following a dispute over how the
company calculated its bills. Hours later, a spokeswoman
for the Army Field Support Command in Rock Island, Ill.,
said the 15 percent penalty for the company's Kellogg
Brown and Root subsidiary - amounting to an estimated $60
million a month - would not be levied.

``I just got a phone call putting on hold the 15
percent withhold clause implementation, and I don't know
why or any of the particulars,'' Linda Theis, a
spokeswoman for the Army Field Support Command in Rock
Island, Ill., told Reuters news service.

Halliburton, run from 1995 through 2000 by Vice
President ***** Cheney, said earlier in the day that it
would challenge the decision in court because there was
``no legal justification'' for withholding the fees.

The penalty would have withheld 15 percent of future
payments on Iraq-related contracts valued at up to $18
billion. An audit by the Defense Contract Auditing Agency
found that the firm's system for generating cost
estimates used in negotiations with the government was
``inadequate.''

In response, the company said in a statement that
Halliburton would cut some payments to its many
subcontractors in Iraq and Kuwait by 15 percent.

Under the contract to feed, house and deliver oil and
mail to U.S. troops, Halliburton is paid for its expenses
plus a 2 percent profit. While the Army usually pays only
85 percent of ongoing costs before it makes a final
accounting, the nation's oldest military service waived
that provision for Halliburton. The initial decision that
was reversed Tuesday would have ended the waiver.

The cost-estimate system criticized by the military 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.

``Generally, when the government makes `progress' or
partial payments on a contract, they only pay 85 cents on
the dollar anyway,'' said Steven L. Schooner, co-director
of the Government Procurement Law Program at George
Washington University Law School. ``That's the normal
payment progress rate. And that's so the government
doesn't overpay on a contract. ... Because we depend so
much on the KBR contract, we have waived the withholding
rate so far.''

The company's billing practices have come under
intense scrutiny at the Pentagon and on Capitol Hill,
where Democrats have suggested the company has benefited
from its ties to the vice president. Pentagon auditors
found that Halliburton did not properly document more
than $1.8 billion of work in Iraq and Kuwait. Halliburton
faces numerous investigations, including an FBI inquiry
into whether two of its employees received as much as
$6.3 million in kickbacks and whether the company
improperly billed for $186 million in meals never served
at dining halls in Iraq.

The company recently agreed to pay a $7.5 million fine
to the Securities and Exchange Commission to settle an
investigation of an accounting practice that appeared to
boost the company's revenue while Cheney was chief
executive.



AP-NY-08-17-04 2214EDT