You told the Democrats that Halliburton purchased expensive embroidered towels for the Army rather than standard towels -- tell me about those.

I had placed an order for 2,500 towels with a vendor, and the vendor could not meet the due date so I canceled the order. [When I tried to place the order with another vendor] the manager wanted to change the order to have them embroidered and to have a higher-grade towel. The towels they settled on were gold with the [words "MWR Baghdad" embroidered] on them. I left before the order was placed, but I'm assuming they awarded it to the next lowest bidder.

What does MWR mean?

"Morale, Welfare, Recreation." [MWR is a unit of the Army; the towels were to be used in an MWR exercise facility.]

So did the military ask for the embroidery?

I don't think the military insisted they have MWR embroidered on them. It was not to their advantage -- all they wanted was their exercise facilities running smoothly, to make sure that the GIs had sufficient equipment, in this case towels. I don't think it matters to the military whether their towels had MWR on it or U.S. Army on it. They're not into embroidery.

So whose idea was it?

The MWR manager's.

And he's a Halliburton employee?

Yes, he works for Halliburton. For him it was ego. He said, "Geez, we want it to be a nice facility. It's a showplace, so we'll have embroidered towels." It was just like the polo shirts and other things he ordered with the embroidery. It was an ego thing.

So how much more did they pay for the embroidered towels?

It added $3.50 to $4 U.S. to the price of each towel.

[Halliburton rejected these figures. "These towels were ordered at a cost of approximately US$3 each, not the $7.50 that the former employees are alleging," Hall wrote in an e-mail. She added that there was a legitimate reason for embroidering the towels -- to "prevent pilferage." The military approved the monogramming "because it was estimated that such action would result in approximately one-third fewer towels being permanently removed from the facilities," Hall wrote. "When towels are clearly marked and easily recognizable, they are more frequently returned to the correct facility (either by patrons or by laundry staff), thereby reducing the need to constantly reorder to replenish the supply. Apparently, however, this anti-theft device is not completely fool-proof as Mr. Bunting proved that he was in possession of one of these towels without proper authorization when he presented it at the Senate Democratic Committee Hearing." Asked again about the price of the towels, Bunting said he could not provide any documentation showing that they cost more than $7. But he said Halliburton's $3-per-towel price seemed low. Halliburton did not respond to a request for documentation on the price of the towels in time for publication. Bunting denied Hall's suggestion that he'd stolen any towels. The towel he showed to the Democrats was a sample provided by the manufacturer, he said. Bunting also questioned Halliburton's theory that the towels were embroidered to prevent theft. Indeed, he speculated that that the fancy towels might make a more attractive target. "A GI going into a workout area with an embroidered towel, he says, 'I got a good souvenir to go home with.' Why would anybody take a plain unembroidered towel?"]

Why did you decide to come forward?

When I left I said to my supervisor that this was the worst-run procurement office I'd ever seen. And I planned before I left that I was going to speak up and indicate to people this was not the way you run a purchasing function. I had so little faith in the supervisors that I kept copies of all the reqs I made. I did that electronically -- I have electronic copies of 95 percent of the purchase orders.

And what do they show?

I think they would substantiate that the bulk of my orders were for under $2,500. It would show that in the purchase order logs we would skip requisition numbers to make it look like we weren't using the same vendor over and over.

What purpose did that serve?

Well, the logs maintained all of the purchase orders in a sequence. Now, I don't come to the table with clean hands, I am as guilty as anybody else. So for example we were buying PVC pipe, plumbing fixtures. We would have four or five [requests] going to the vendor, he would send back a quote. We would group two or three items together, keeping the order under $2,500. Then you would go into the log and pick a number that was 10 or 15 different from the first one, then do the rest of the orders. So it looked like the orders were done at two different times. [If all of the orders were combined into a single purchase, Bunting explained, the price would have exceeded $2,500, forcing Halliburton to seek competitive bids on the items; therefore, buyers were encouraged to combine orders only if they didn't exceed $2,500.]

Tell me more about why they wanted you to keep your orders under $2,500.

Because the more money Halliburton spends the greater their commission. The higher their costs, the more money they make. If they would have gone out and competitively bid, you probably would have gotten a lower cost. I'm sure you would have gotten a lower cost.

[Halliburton denied Bunting's claim that buyers were encouraged to keep their orders under $2,500 to avoid seeking competitive bids. Hall wrote, "Purchases under $2,500 may be made without securing competitive prices if and only if the buyer is able to determine that the price is reasonable and maintains this price reasonableness determination as part of the file." But Bunting disputed that assessment. "That was never said to us. They weren't concerned about cost -- never once did they say the price is too high. Sometimes we [the buyers] would look at something and say, 'Gee, that looks out of line,' but not at the urging of the supervisor."]

For instance I used one vendor for stationery. The guy would show up at night -- he'd show up at 6 p.m. every day looking for orders. Because it was easy I'd give him the stationery orders. Every time that I sent him a request for a quote, he was always higher. He always gave me a higher price. But he never once got any order if we put it up for competitive bidding.

We were talking about why you decided to come forward.

Yes, I wanted to point out there's a need to look at Halliburton's poor business practices and the raping of the U.S. Treasury based on how they're doing business. You know, they're spending my money and they're making a helluva buck from it.

And in Kuwait, the buyers were told not to talk to the auditors, not to talk to the press, not to talk to anybody about the buying practices we had. They would tell us that the auditors were coming and they said don't speak to them -- and if you do speak to them make sure that you put KBR in the best light possible.

Did they ask you to lie?

Well, I said to one supervisor, "You're asking us to lie to the auditors?" She didn't say no and she didn't say yes. I said I'm not going to lie to government auditors to make KBR look good. I don't need a job bad enough to lie.

But why did you go to the Democrats? Was this a political thing?

I sent a letter to Waxman because I had read his letter to the Department of Defense requesting specific information about contracts in Iraq. I said you should look at KBR's poor business practices. Somebody from his office gave me a call and said, "Tell me about Halliburton's poor business practices." I got another phone call from the Democratic policy representative. He said, "Would you mind coming to Washington to talk about this?" I said, "No, I have no problem with that." And I would be more than happy to appear at any other hearing.

I have to ask you -- are you a Democrat or a Republican?

I think I'm registered as Republican, but I have voted for as many Democrats as I have Republicans. When I'm voting I look for the best candidate that can do the job. Did I vote for Bill Clinton? Absolutely I did not, I thought he was a jerk. Did I vote for Bush? Yes, I did vote for Bush. But I think Bush is doing a poor job in Iraq. If it continues, Bush will not be the president in 2005.

I don't think politics enters into good business. I don't think Cheney has influence over this whatsoever, he's gone. You look at the current people running Halliburton, this is a deep-seated culture we're talking about.

But do you think that what happened was deliberate -- was Halliburton trying to keep the costs high? Or were they just poor business people?

I don't think they're poor business people at all. Halliburton has been very successful. Did they know about what was happening in Kuwait? A manager from Halliburton spent four or five weeks in Kuwait in the June-July period. Certainly he knew what good purchasing practices were, and he had the opportunity to put things right. By their failure to correct it, they condoned it.

Has Halliburton contacted you since you came forward?

I have not heard from Halliburton. If you're asking whether I'm afraid that I'm going to be taken to court -- I gave that a lot of thought. If that happens it happens, it's beyond my control. But then everything that I have will be on the table. If I were any company I wouldn't want public view of my business practices, even if I had the best business practices.

Say what you want, Halliburton is servicing the military. They have done this for a while so they're good at it. Anybody could do the same job. There are lots of companies that can manage very large projects and do it as well.

How have other people reacted to your testimony?

A couple people said I was nuts for speaking up. Some folks have said, "I really admire you for having the courage to stand up." The reason I have no problem with you using my name is, if there's a problem and you're not willing to stand up and be counted -- if you want to hide behind "anonymous" or "reliable source" -- then you may as well not say anything. If anybody wants to talk to me I'd be more than happy to talk to them. I have nothing to hide and I recognize that, because I participated in this, I'm as guilty as the guys doing it.

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