WASHINGTON, July 22 (HalliburtonWatch.org) -- A former Army chaplain who later worked for Halliburton's KBR unit today told Congress about KBR's abuse of U.S. taxpayer funds in the middle east. Marie deYoung, who worked as a logistics specialist for KBR said, "There was no regard for spending limits." In a sharp attack on her former employer, she said, "KBR came first, the soldiers came second." She also lamented that, "Soldiers don't really get treated that well in the Army."

Ms. deYoung is in a position to know about contracting abuses since her duties at KBR included ensuring the troops were properly equipped and supplied. She was an assistant to one of KBR's 350 subcontract administrators in the middle east. Subcontract administrators fulfill Halliburton's duties under the Army's LOGCAP contract to feed the troops, do their laundry, transport supplies around Iraq and Kuwait and construct military housing. The contract was awarded to Halliburton in 2001 after former CEO Dick Cheney became vice president. It is Halliburton's most lucrative government contract and the largest contract awarded by the Army.

Ms. deYoung's testimony was given to the House Committee on Government Reform along with two other former KBR employees who also describe company abuse of contracts in Iraq and Kuwait.

According to deYoung, KBR often sends invoices to the government even if no service is actually delivered. "I was verbally chastised," she said, when KBR executives found out she was giving "too much information" to Army personnel seeking justification for expenses. "The first example [of being chastised] was the laundry incident," she said, referring to the $100 laundry bags KBR's subcontractor had charged the military. In addition, when she informed Halliburton officials that the company charged the government $45 per case of soda, "They made it look like they didn't know how to do these things," she said.

Ms. deYoung also complained that Halliburton's manual accounting system is inadequate and often results in accidental and sometimes fraudulent overcharges of U.S. taxpayers. "There's no reason in the world why Halliburton can't do real time data management," she said.

Former KBR truck driver and convoy commander, David Wilson, also testified before the committee. He said six months into the war KBR failed to "have the right personnel and equipment in place." He said "KBR had virtually no facilities in place to do maintenance on the trucks. It was like their whole preparation was to buy the trucks, hire the drivers, and let the rest take care of itself."

KBR executives admitted at the hearing that contingency planning for protecting Iraq's oil wells from sabotage began in the summer of 2002, but that contingency planning for protecting the troops and KBR employees began in May 2003, two months after the U.S.-led invasion of Iraq began. The troops have complained that they were not given adequate body or vehicle armor to protect themselves.

KBR also failed to provide simple vehicle parts like oil filters. It declared oil changes were "out of the question." As a result, KBR employees were forced to forever abandon brand new $80,000 trucks in the middle of the desert whenever a minor equipment problem occurred. Wilson testified that KBR once removed all the spare tires on his truck so that when he acquired a flat tire he was forced to abandon the truck. "In my time on the road," he said, "I saw disabled trucks -- or what was left of them -- abandoned on the side of the road on a daily basis."

Wilson also described situations where KBR would transport trucks without any cargo inside. "One time, we ran 28 trucks and only one had anything on it," he said. "Nobody knew why we were hauling around empty trucks, but it definitely caused extra wear and tear, which just made maintenance a bigger problem."

KBR terminated Wilson's employment after accusing him of failing to report trucks in his convoy that had run-down civilians. But he said "KBR and the military made clear to everyone that this was what we were supposed to do" if convoys were attacked by insurgents.

Another KBR convoy truck driver, James Warren, testified that "KBR didn't seem to care what happened to its trucks." He said KBR would strip the spare tires from brand new Mercedes and Volvo trucks. As a result, flat tires meant abandonment, not repair, of the trucks. He said "it was common to torch trucks that we abandoned ... even though we all carried chains and could have towed them to be repaired."

Warren agreed with Wilson that basic maintenance of the trucks was non-existent in Iraq and Kuwait.

Both Wilson and Warren said Army soldiers would regularly steal items from the trucks at night. Since there was no manifest showing the contents of the trucks, it was impossible for KBR to indicate how many items were stolen. Warren's convoy commander said, "Don't worry about it. It's the Army stealing from the Army." Warren called KBR head, Randy Harl, to complain. Harl expressed dismay, but never took action. Instead, KBR fired Warren a few weeks later, saying he violated company policy by running civilians off the road. "I felt like I was being pushed out the door because they just wanted me gone," he said.

Halliburton executives also testified at the hearing today. "Never before has any contractor worked in as difficult and dangerous a situation as we do in Iraq," said Alfred V. Neffgen, in charge of all U.S. government contracts for KBR. "We have performed, and performed well, for our soldiers and our country," he said. He added that, "While we have undoubtedly made some mistakes, we are confident that KBR has delivered and accomplished its mission at a fair and reasonable cost."

The company says its high costs are caused by the extraordinary conditions of war.

Contrary to the statements from the former employees, KBR's executives said trucks were routinely supplied with oil filters and spare tires and that no trucks had been abandoned due to maintenance problems. They said only the military, not KBR, could order the abandonment of trucks.

The committee voted down a proposal from Rep. Henry Waxman (D-CA) to subpoena Vice President Cheney's office for all records regarding Halliburton and its $7 billion no-bid contract awarded by the Pentagon in March 2003. The subpoena was voted down 23 to 19 on a strict party line vote.

"The administration's approach to the reconstruction of Iraq is fundamentally flawed," Waxman said. "It's a boondoggle that's enriching private contractors."

More Information:

Testimony

Logistics specialist, Marie deYoung (pdf)

Convoy commander, David Wilson (pdf)

Truck driver, James Warren (pdf)