WASHINGTON (Reuters) - Officials overseeing an Iraqi fuel contract with Halliburton Co. have sent Pentagon auditors documents the auditors have said will show the company did not overcharge for fuel shipped into Iraq.

From The Houston Chronicle - Halliburton charged the government $2.27 a gallon for importing fuel from Kuwait but only $1.18 a gallon from Turkey… Calling the corps’ actions “incomprehensible,” Rep. Henry Waxman, D-Calif., and Rep. John Dingell, D-Mich., argued the memo effectively “sabotages” the government’s investigation.
“At the very moment that serious questions are raised by federal auditors about Halliburton, the administration intervenes to excuse Halliburton from its obligation to justify its costs or pricing,” the lawmakers wrote…

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Curious as to how paying double for Kuwaiti fuel is an example of “fair prices,” I called Halliburton. Actually, I’m kinda surprised that nobody else in the media thought to do this, but there you have it. As I am in no way a reporter, I’ll simply supply you with a transcript of the call:

HALLIBURTON P.R. GUY: Hello! Halliburton Public Relations. How can I help you?

ADAM: Hi, this is Adam Felber. Who am I speaking to?

H.P.R.G: This is Halliburton Public Interface Unit #415b. But you can call me “Hal.”

ADAM: Great.. Hal, I was just curious about the whole charging the army $2.27 a gallon for oil from Kuwait thing.

HAL: Oh, yeah, hey. Well, you have to understand that it costs a lot of money to ship oil in that part of the world.

ADAM: But most of our oil comes from there.

HAL: Right. It’s the roads.

ADAM: The roads?

HAL: Iraq’s roads are in terrible shape. Travel takes time, and time is money.

ADAM: But you guys charged half that price for oil from Turkey.

HAL: Did I say Iraq’s roads? I meant Kuwait’s roads. Terrible condition. You’re basically paving it as you go.

ADAM: Then why didn’t you just get all the oil from Turkey?

HAL: Ummm - because their roads are …too skinny?

ADAM: No.

HAL: Okay, forget the road thing. That’s not true at all. What’s true is this: The army needed lots of oil, so we had to get it from both places, and…

ADAM: Yes?

HAL: …and …and …and the proximity of Kuwait to southern Iraq made the oil transport more cost effective.

ADAM: But you charged twice as much.

HAL: Right, I see where you’re going with that.

ADAM: Why didn’t you buy from the Saudis instead, or from anyone who was willing to charge a competitive price? Or, at the very least, threatened to do so as a bargaining tactic.

HAL: Well, Kuwaiti fuel is better.

ADAM: What?

HAL: Yeah, it’s top-quality stuff! Why, you can get, like, four times more per gallon out of Kuwaiti fuel. Easily.

ADAM: No you can’t.

HAL: Right. You’re right. When you’re right, you’re right.

ADAM: So…

HAL: So, the real reason is that the Kuwaiti’s oil is more… secure.

ADAM: How does that work?

HAL: It doesn’t, does it?

ADAM: No.

HAL: Okay, see, the thing is that it was all the Kuwaiti’s fault.

ADAM: Their fault.

HAL: Yep. they stifled competition, only allowed one company to bid, wouldn’t bargain, you know, they were awful.

ADAM: Once again, there’s that idea of getting the oil from elsewhere.

HAL: Ri-i-i-i-ght. Well, we couldn’t.

ADAM: No?

HAL: No. There were time constraints. Like when you really need a pack of smokes and you know the corner deli overcharges but you don’t have time to get in the car and drive down to the place with the good prices. That ever happen to you?

ADAM: Sure.

HAL: That’s what happened to us. Bastards. Twice the Turkish price, can you imagine? Geez.

ADAM: So that’s your explanation?

HAL: Um, yes?

ADAM: Yes?

HAL: Yes. Of course it is. What else could it be?

ADAM: Well, there’s a part of me that suspects that because of Halliburton’s long-standing relationship with the Kuwaitis, they were overly willing to accept outrageous prices because they knew that the US government was ultimately paying for it. Part of me thinks that the whole thing was done with a nudge and a wink and full knowledge that a better deal could have been arranged, and that if Kuwait was indeed gouging you, it would have taken only a single phone call to get the Bush administration to apply sufficient diplomatic pressure that would have saved the American taxpayer millions of dollars.

HAL: Right, well, it’s not like they were gouging, per se.

ADAM: Okay, then, what was it?

HAL: See, it’s the roads -

[*CLICK*]