The Master Builder

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"We do not tolerate this kind of behavior by anyone at any level in any Halliburton company," insists spokeswoman Cathy Gist. It's hard to find facts among the rumors. No one wants to talk, because there's too much business to be lost. Earlier this year Halliburton acknowledged that it had found $6 million in overbilling on its catering contracts, and it is investigating whether one or two of its former employees took kickbacks.

Robert McVicker, CEO of Morris Corp., a catering company based in Brisbane, Australia, spent nine months in Iraq last year, and he says he knew from other contractors who had been approached in Iraq that catering contracts could be secured by making payments to intermediaries. McVicker notes that Morris never paid kickbacks but says these middlemen typically asked for 3% to 4% of sales. His company was approached, he says, but not by Halliburton employees. "Many people in Iraq had their hand out," he says. "The corruption was in places where you would never expect it to be. What disturbed me is that Westerners began taking that concept beyond the simple paper-bag deal, asking for a percentage of your sales." The Morris contract with KBR was terminated and is under dispute by the two companies. Halliburton declined to comment.

A prominent businessman in Jordan says gatekeepers for Halliburton contracts would demand up to 10% at the point of signing and then offer guaranteed returns. "I had people coming to me and saying 'Just choose the margin you want, and you'll get it,'" he says. A Halliburton spokeswoman said the company had not heard this complaint but would investigate it. "Management has never instructed our employees to do this," she said. "If that happened, it would be against our policy."

Halliburton employs intermediary companies to provide electronic equipment and other goods in order to fill its orders quickly, and one such arrangement has already run into trouble. KBR used Altanmia Commercial Marketing, a Kuwaiti firm with ties to the country's ruling family, rather than the Kuwaiti national oil company, to fill some of its initial fuel orders. That deal is now the subject of an investigation by the Kuwaiti government and is also being looked into by the Pentagon, which says Altanmia's markup — about $1 per gal.--resulted in a $61 million overcharge. Halliburton says it used Altanmia only for fuel orders that had to be filled quickly, and then only with the approval of the U.S. military. Altanmia did not respond to a request for comment. Rex Wempen, co-founder of the U.S. Chamber of Commerce in Iraq, sees a political motive in the U.S. order. "It was part of the Kuwaitis' diplomatic price for supporting the war," he says.

Whistle-blowers say inefficiency is encouraged by the nature of Halliburton's cost-plus contract, which ensures that the company will be repaid for expenses. Henry Bunting, 59, a former Army staff sergeant in Vietnam, handled procurement contracts for Halliburton from a base in Kuwait. He says he was actively discouraged from bidding. "We were not looking for the best price," Bunting told TIME. "The supervisors said time and again, 'Don't worry about the price. Halliburton will get reimbursed.'" Disgusted, Bunting quit and went home last summer. He testified before Congress in February on Iraqi contract practices. A Halliburton spokeswoman denied overcharging by the company and said there is no record that Bunt-ing called the firm's hotline to register his concerns.