An analysis of the data released in August 2004, showed that the CPA had awarded 85% of the contracts to US and UK firms. By contrast, Iraqi companies received a mere 2% of the contracts paid for with Iraqi funds.

A March 18, 2004 audit report by the Department of Defense Office of the Inspector General, titled, “Acquisition: Contracts Awarded by the Coalition Provisional Authority by the Defense Contracting Command-Washington," determined that the CPA and its predecessor, the Office for Reconstruction and Humanitarian Assistance (ORHA), had circumvented federal contracting procedures since the early days of the occupation.

The audit found that federal procurement rules were not followed in 22 of 24 contracts awarded by the Defense Contracting Command and that defense department personnel conducted “inadequate surveillance” on more than half of the contracts; did not “perform or support price reasonableness determinations;” and allowed activity that was “out-of-scope” of the original contracts.

The audit said that the DoD cannot be assured that it either “provided the best contracting solution or paid fair and reasonable prices for the goods and services purchased” during the reconstruction process.

However, not only did the CPA fail to follow DoD reporting rules, it failed to follow its own rules. CPA regulation Number 2 required the CPA to retain an independent certified public accounting firm to ensure that the Development Fund of Iraq was being used transparently and for the benefit of the Iraqi people.

But instead of hiring a certified public accounting firm, the CPA awarded a $1.4 million contract to North Star Consultants, a financial services firm, to review its internal controls for the DFI.  In the end, neither North Star, nor any other firm, ever performed a review, because the Comptroller “verbally modified the contract and employed the contractor to primarily perform accounting tasks in the Comptroller’s office,” the report said.

In response to the report, the CPA claimed the reason that North Star did not perform a review was because the contract was not signed until shortly before the CPA was dissolved.  Although it acknowledged that the contract “should have been modified to reflect the change,” the CPA did not bother to explain why it would award a contract to review its control of the DFI if the organization was about to be dissolved.

The truth is, that the CPA' shabby accounting procedures left all doors open to fraud, waste, bribery, and the misappropriation of funds, and nobody will ever be able to figure out what exactly happened to the Iraqi money.

But the fact remains that Halliburton received 60% of all contracts paid for with Iraqi money, even after it was proven time and time again that its projects involved fraud on every front, from paying over $6 million in kickbacks to a Kuwaiti contractor; to charging for three times as many meals as the company actually served to soldiers; to spending millions on laundry and monogrammed towels; to running up costs by driving empty trucks back and forth across Iraq; to leasing overpriced vehicles from Kuwaiti purchasing offices.

In 2003, Halliburton was delivering gasoline, through the Kuwait subcontractor, Altanmia Commercial Marketing Company, for an average price of $2.65 per gallon. In the spring of 2004, the contract was canceled and the new Iraqi Interim government gave an identical contract to Lloyd Owens International, a British company that manages 700 trucks from 7 separate subcontractors, which left Halliburton resentful toward the new company because of losing the contract.

LOI and its partners, Geotech Environmental Services of Kuwait, only charged 18 cents a gallon to haul the gasoline to the same sites.

An oversight hearing on "Waste, Fraud, and Abuse in U.S. Government Contracting in Iraq" was held on June 27, 2005, conducted by Senator Byron Dorgan of North Dakota, chairman of the Democratic Policy Committee.

Alan Waller, CEO of Lloyd Owens International, and his business partner, Gary Butters, flew to the US to testify at the hearing.

Waller said that over the past year while working in southern Iraq, he had encountered only one Halliburton worker and that every fuel station set up to provide gasoline to the Iraqis was in bad shape, including those that Halliburton was supposed to have repaired.

"As Lloyd-Owen delivers fuel to nearly every refinery or depot in southern Iraq, we find ourselves frequently encountering examples of poor equipment, no equipment or complaints from Iraqi staff," Waller said.

Waller and Butters told lawmakers at the hearing that every morning the drivers of 120 trucks who line up at the Kuwait-Iraq border to deliver gasoline have to cross the border at dawn because if they wait too long, KBR employees who patrol the border during the day, will subject them to far-reaching inspections and effectively shut down the operation.

The LOI also reported that on June 9th, 2005, a convoy of LOI trucks that was on its way to deliver construction materials for a Halliburton dining facility at an army base near Fallujah, came under attack and 3 drivers were presumed dead and six trucks had to be abandoned.

The surviving drivers limped to a military base, expecting to get help from the Halliburton staff running the facility, but instead got the cold shoulder. When the drivers tried to leave Iraq, they hit a roadside bomb and another man was killed.

Waller said Halliburton employees were instructed not to help the drivers and that the company had failed to warn LOI that two other convoy had been attacked in the same area the previous week.

At the start of the hearing, Congressman, Henry Waxman, (D-CA), introduced a new study based mostly on confidential reports originating from the Defense Contract Audit Agency (DCAA).

The study revealed that overall, Halliburton had received roughly 52% of the $25.4 billion that has been paid out to private contractors in Iraq. The 52% was divided between two different contracts. The first, known as LOGCAP, was to provide logistical support like cooking and cleaning for the troops, and was outsourced to civilian workers, for which Halliburton had been paid $8.6 billion.

On the LOGCAP contract, the company was paid for its actual costs, plus an additional commission of between 1 to 3 percent, depending on its performance.

The "Restoring Iraq Oil" contract covered the repair of Iraqi oil fields in the immediate aftermath of the 2003 invasion and imports of consumer fuel. The RIO contract is now complete and ended up costing $2.5 billion. A second RIO contract is now underway.

New evidence of fraud and contract abuse, was released right before the hearing and showed that KGB:

1)  Had overcharged or presented questionable bills for close to $1.5 billion, almost four times the previous amount disclosed.

2)  Had lost 12 pre-fabricated bases worth over $75 million which could have housed as many as 6,60 soldiers.

3)  Had billed $152,000 to provide a movie library for 2,500 soldiers

4)  Had billed inconsistently across the board. Eg, Video cassette players cost $300 in some instances, and $1000 in others; the company charged $2.31 for towels on one day and $5 for the same towels on another.