Dick Cheney was Halliburton's CEO 1995-2000 before becoming US vice president and a leading advocate of the Iraq war. It was Halliburton subsidiary KBR (Kellogg Brown and Root) that a Pentagon official said Thursday charged 61 million dollars more than it should have for gasoline supplied to Iraq.

"If anybody has overcharged the government, the money has to be returned," President George W. Bush told reporters.

KBR hit back strongly at what it called "inaccurate media reports."

It said in a statement that the Defense Contract Audit Agency was "conducting a routine audit" and has requested additional information from the company.

"The audit found some overpricing on a few different occasions. It's not just a one-time finding," a Pentagon source said. "It's not just the oil that has been overpriced."

The source said that in November, KBR got two Pentagon contracts: one for seven billion dollars to restore Iraqi oil facilities, the other, for 8.6 billion, to provide logistical support to US troops in the Middle East and Central Asia.

Irregularities were found "in both contracts," the source said.

Another official, speaking on condition of anonymity, said the prices were based on those charged by a Kuwaiti subcontractor.

"I don't think it's a systematic problem of overcharging," the official said.

At any rate, Cheney's political profile, and the fact that the huge contracts to rebuild the Iraqi oil industry were awarded without bids, could make KBR the most scrutinized of Pentagon suppliers.

In September 2000, the General Accounting Office (GAO), the auditing and investigative arm of Congress, uncovered cases of overbilling by KBR, this time in the Balkans.

In 1992, the firm Brown and Root, later to become Halliburton subsidiary KBR, won an army contract under LOGCAP, the Logistics Civil Augmentation Program, to provide civilian employees for food, cleaning and maintenance tasks, freeing soldiers to be soldiers.

In the ensuing decade, KBR earned some three billion dollars in LOGPAC contracts, according to GAO and military sources quoted by Government Executive Magazine.

However, critics say the LOGPAC billing system invited overbilling, reimbursing KBR for its costs, plus up to nine percent in bonuses.

A 2000 GAO report pointed said KBR was charging 86 dollars for a sheet of plywood that the company had purchased stateside for 14.06 dollars. KBR said transport costs accounted for the difference.

The army also authorized Brown and Root to routinely supply standby power generators, although this type of safety feature is only needed in very specific headquarters and hospital facilities.

The GAO also faulted the army for its lack of effective controls.

In another case, Halliburton paid a two million dollar fine, while not admitting blame, to end a US Justice Department investigation.

Years earlier, Brown and Root was accused of cheating on a materials supply contract for work at Fort Ord, California. Again, Halliburton paid a fine without admitting guilt.

In its own defense, Halliburton, one of the world's biggest energy-sector service companies, said its employees risk their lives to serve the United States.

In August, a KBR employee was killed when his truck hit an anti-tank mine as he was moving the mail.

WAR.WIRE