June 16, 2008

As a rule, you’d think that military officials who question dubious contracts and protect the interests of taxpayers would be rewarded. Not in this administration.

The Army official who managed the Pentagon’s largest contract in Iraq says he was ousted from his job when he refused to approve paying more than $1 billion in questionable charges to KBR, the Houston-based company that has provided food, housing and other services to American troops.

The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Mr. Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Mr. Smith refused to sign off on the payments to the company. “They had a gigantic amount of costs they couldn’t justify,” he said in an interview. “Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that.”

Smith wasn’t, but his successors were. Army officials not only quickly removed Smith from his position, they also went outside the Army to consider KBR’s claims and then approved the payments with which Smith was uncomfortable.

Army officials told the NYT that they did reverse Smith’s decision, but they felt it was necessary to provide basic services to U.S. troops. “You have to understand the circumstances at the time,” Jeffrey Parsons, executive director of the Army Contracting Command, said. “We could not let operational support suffer because of some other things.”

So, the only way to provide services to the troops was to approve $1 billion in payments for a Halliburton subsidiary that the company couldn’t substantiate?

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