Examining Halliburton's 'Sweetheart' Deal in Iraq : NPR - 0 views
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Iraq has become an important profit center — contracts there netted the company $900 million for the quarter, 15 percent of its operating budget. The Iraq contracts are cost-plus: the government reimburses the company for its costs, then adds on a profit of 2 percent to 7 percent. Critics say this creates a perverse incentive: the more you spend, the more you make. The Pentagon says this type of flexible contract is necessary in a war zone.
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In the mid-1990s, a whistleblower revealed that the company, then known as Brown & Root, had overcharged the government on a contract to convert military bases to civilian uses. Halliburton subsidiary Brown & Root agreed to pay a $2 million dollar fine, but admitted no wrongdoing.
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Despite the current controversy, Halliburton does not have a reputation of defrauding the government, says Jim Moorman, president of Taxpayers Against Fraud.