Halliburton Co. has fired two employees in Iraq for allegedly accepting more than $6 million in kickbacks from a Kuwaiti company while working on a contract to supply and service U.S. troops in Iraq. As a result of an internal audit, Houston-based Halliburton discovered the alleged corruption, notified the Defense Dept. and fired the unnamed employees, and has announced that it will immediately cut a check to the government for $6.3 million, "just in case the overbilling charge bears out," said Halliburton in a statement.

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"It was the LOGCAP contract. It was not, it was not the fuel contract," says Richard Dowling, spokesman for Task Force RIO in Baghdad. "It was not the humanitarian purchase of fuel." LOGCAP is one of at least two separate Halliburton contracts in Iraq. Under LOGCAP, a Defense Dept. contract, Halliburton provides support services to U.S. troops in the Middle East. The other contract, with the Army Corps of Engineers, is for reconstruction of the Iraqi oil industry. Under that contract, Halliburton's KBR subsidiary is part of Task Force RIO (Restore Iraqi Oil).

The contractor has been under fire since September, when the Corps' auditor said it appeared KBR had overcharged the government $61 million for the fuels it was importing at Task Force RIO's direction for the Iraqi consumer market. "Task Force RIO had nothing to do" with the kickbacks for which Halliburton fired the two employees, says Dowling.