New US military contractor overbilling scandal in Iraq looms

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

WASHINGTON, June 18, 2008 (AFP) – A civilian Pentagon official in charge of the largest US military contract in Iraq was removed from his job in 2004 after refusing to pay one billion dollars to KBR Inc. because the company was unable to credibly justify its expenses, the New York Times reported Tuesday. KBR is an engineering, construction and services company that until April 2007 was a subsidiary of the Houston-based energy firm Halliburton, which was formerly led by Vice President Dick Cheney.

“They had a gigantic amount of costs they couldn’t justify,” the official, Charles Smith, told The New York Times. “Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that.”

According to Smith, the funds were released to KBR (formerly Kellogg Brown & Root), the main US company in charge of providing food and housing for US forces in Iraq.

The US army denied that Smith was removed because of the dispute, the newspaper reported.

Democratic Senator Hillary Clinton on Tuesday called for a congressional probe into contracts allocated by the US administration to KBR.

“This is the latest in a series of staggering reports that the (George W. Bush) administration has turned a blind eye while private contractors run amok in Iraq,” Clint

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