UNITED NATIONS -- The
administration of U.S. President George W. Bush is withholding
information from UN-sanctioned auditors examining more than $1
billion in contracts awarded to Halliburton and other
companies in Iraq without competitive bidding, the head of an
international auditing panel said.
Jean-Pierre Halbwachs, the chairman
of the International Advisory and Monitoring Board, said that
the United States has repeatedly rebuffed his requests since
March to turn over internal audits, including one that covered
three contracts valued at $1.4 billion that were awarded to
Halliburton, a Texas-based oil services firm. It has also
failed to produce a list of other companies that have obtained
contracts without having to compete.
The IAMB, which includes
representatives from the United Nations, the World Bank and
the International Monetary Fund, was established by the UN
Security Council in May 2003, to ensure that Iraq's oil
revenues were managed responsibility during the U.S.
occupation. Its mandate have been extended by the council so
that it could continue to monitor the use of Iraq's oil
revenue after the U.S. transferred political authority to the
Iraqis in June.
KBR, Halliburton's engineering and
construction arm, holds contracts that could eventually be
worth $18 billion for rebuilding Iraq's oil infrastructure and
providing services to U.S. military personnel.
The dispute comes as the board
released an initial audit by the accounting firm KPMG Thursday
that sharply criticized the U.S.-led coalition's management of
billions of dollars in Iraqi oil revenue. The audit also
raised concerns about lax financial controls within some Iraqi
ministries, citing poor bookkeeping and duplicate payments of
salaries to government employees.
The Pentagon did not specifically
answer questions about withholding of information to auditors.
The audit, which covers the period
from May 2003 to December 2003, asserts that the coalition's
management of Iraq's oil was plagued by "inadequate"
bookkeeping practices and accounting systems, a high turnover
rate among coalition finance officials and a disregard for
procedures designed to ensure competitive bidding for
contracts. KPMG is planning to produce a second audit that
covers coalition's management of the program through June
2004.
The IAMB concluded that more than
$10 billion in Iraq's oil proceeds and frozen assets had been
"properly and transparently accounted for" after they were
deposited in the U.S.-controlled Development Fund of
Iraq.
