NEWS

WASHINGTON May 21, 2004 (Summary of Sydney Morning Herald Article) - A Halliburton employee approached an Australian catering company seeking kickbacks valued at $3 million, the Sydney Morning Herald reports. The employee demanded that Morris Corporation, based in Queensland, pay a kickback to him in exchange for awarding a $100 million Halliburton contract to supply meals to the troops in Iraq. Morris was awarded the contract in 2003, but a few weeks later Halliburton cancelled it. A Morris employee familiar with the kickback request said, "We're not talking about a paper bag. This guy was after a percentage of your sales every month." The Halliburton employee wanted a percentage of the catering contract in exchange for securing the contract for Morris. "They wanted kickbacks of 3 percent to 4 percent, which pushed up the prices because then the sub-contractors would add the price of the kickbacks to their costs," a person familiar with the contract said. There is no evidence that the kickbacks were ever paid. The kickback allegations were disclosed after Halliburton terminated the catering contract with Morris. Halliburton said it cancelled the contract because Morris failed to meet scheduling deadlines. It refused to discuss the kickback allegations.