In 2004, the UN’s International Advisory and Monitoring Board (IAMB) — the international group that oversees the use of Iraqi money on Iraqi reconstruction — wanted to know more about Halliburton. Specifically, they wanted to conduct an audit of Halliburton subsidiary Kellog Brown & Root’s single-source, oh-so-lucrative Iraq contract, $1.6 billion of which came straight from Iraqi coffers. After much foot dragging, the White House finally complied, sending the IAMB heavily redacted versions of audits the Pentagon’s Defense Contract Audit Agency (DCAA) had conducted into Halliburton’s use of the money.
Blacked out of the redacted report was the fact that Halliburton may have bilked the U.S. military out of about $100 million. Also blacked out were statements critical of KBR like “KBR was unable to reconcile the proposed costs to its accounting records” and “KBR did not always provide accurate information.”
Here’s where it gets really interesting. Wondering why the extensive redactions blocked all of the negative findings, the crack researchers in Rep. Henry Waxman’s office looked into the matter. It turns out the White House gave Halliburton a copy of the negative audit and let the company scrub out all of the negative stuff itself before it was sent to the UN group. A letter from KBR dated 9/28/04 to the Army Corps of Engineers states “we have redacted the statements of DCAA that we believe are factually incorrect or misleading and could be used by a competitor to damage KBR’s ability to win and negotiate new work.”