NEWS MEDIA UPDATE · WASHINGTON, D.C. · Freedom of Information · June 28, 2005
U.S. war contractors redact hundreds of documents
June 28, 2005 · Information on how millions of dollars handed out by the U.S.-led Development Fund for Iraq have been spent remains a secret despite the program’s initial goal of transparency, government officials testified at a hearing Wednesday before the House Government Reform Committee’s Subcommittee on National Security, Emerging Threats, and International Relations.
During the Coalition Provisional Authority’s tenure in Iraq, the Development Fund was authorized by the United Nations to administer Iraq’s oil revenues and manage food and reconstruction efforts. The U.N. resolution creating the fund expressly stated it should be run in a “transparent manner,” and committed the United States to what subcommittee chairman Christopher Shays ( R-Conn.) called “an extraordinary level of disclosure” in its required reports to the U.N. International Advisory Monitoring Board.
The subcommittee called the hearing to inquire how and why the transparency had failed after Stuart Bowen Jr., special inspector general for Iraq reconstruction, conducted an audit and reported nondisclosure and fraud problems in the fund’s management.
Rep. Henry Waxman (D-Calif.) testified that he and his staff conducted numerous interviews and reviewed 14,000 pages of Federal Reserve Bank documents and 15,000 pages of Defense Department records to investigate Development Fund management problems. Waxman said the investigation revealed that Halliburton, the largest single recipient of the Development Fund money, redacted 463 items from its accounting documents, claiming the redactions were necessary to protect “proprietary information.” Waxman said Halliburton overcharged for its oil services in Iraq by more than $200 million.
The Department of Defense did not challenge any of the redactions, and DOD lawyers threatened department officials with criminal charges if they disclosed any unredacted documents without Halliburton’s permission, Waxman said.
The U.N. monitoring board still has not received unredacted documents explaining the use of the Development Fund money.
“In effect, U.S. officials inverted the proper roles of government and contractor, giving Halliburton unprecedented authority to withhold key parts of Defense Department audits,” Waxman said in prepared remarks.
The Department of Defense had not responded by Wednesday to the subcommittee’s requests for explanations as to why the department concealed the overcharges from U.N. auditors, prompting discussion of a possible congressional subpoena for an explanation.
Officials from the Department of Defense and the Army testified that the transparency problem is being addressed aggressively. They blamed the lack of transparency and documentation on personnel shortages, unpredictable costs and the size of the project.
Shays suggested that U.S. contractors like Halliburton should have been required during contract negotiations to acknowledge that all information, including proprietary information, would be released to the U.N. monitoring board.