WASHINGTON – The Army should withhold nearly $90 million in payments to Halliburton because the politically connected firm can’t justify what it charged America’s temporary government in Iraq, a third team of government auditors recommended Wednesday.

In a stinging three-page memo, Stuart Bowen, the special inspector general for Iraq reconstruction, said “weakness in the (Halliburton) cost reporting process” was such a problem that his team couldn’t complete a standard audit of the bills Halliburton charged to the now-defunct Coalition Provisional Authority.

The CPA administered Iraq following the fall of Saddam Hussein’s regime until the interim Iraqi government took power. Bowen’s recommendation revived calls by two Pentagon audit agencies for the Army to withhold 15 percent of its payments to Halliburton.

Earlier this year, the Defense Contract Audit Agency – which examines bills before they’re paid – and the U.S. Army Audit Agency also recommended that money be withheld from future payments to Halliburton subsidiary Kellogg Brown and Root.

The Army hasn’t acted on those recommendations and is still paying the Halliburton bills in full. Halliburton spokeswoman Cathy Gist said the company is working with the Army to resolve the issues raised by the auditors.

In a related investigation, the top contracting official for the U.S. Army Corps of Engineers, Bunnatine Greenhouse, spent nine hours on Nov. 17 detailing her complaints about Halliburton contracts to investigators from the FBI and the Pentagon’s criminal investigation division, said Greenhouse’s attorney, Michael Kohn, on Wednesday.

The Army Corps oversaw a multibillion-dollar contract awarded to Halliburton to restore oil services in Iraq. Greenhouse, who asked for whistleblower protection last month, told the investigators that Halliburton improperly received Iraqi oil contracts and was overpaid for services, Kohn said.

Vice President Dick Cheney was Halliburton’s chief executive from 1995-2000. The Bush administration gave the oil-services company an open-ended contract in 2001 to perform tasks worldwide for the Army. Called LOGCAP III, the contract is now worth $8.9 billion. Bowen looked at one $588.8 million task – helping set up the temporary government in Iraq – and found poor recordkeeping. His recommendation for withholding money applies only to the $588.8 million.

In August, a report from the Defense Contract Audit Agency said Halliburton couldn’t provide proper cost justifications for more than $1 billion in charges to the U.S. government. It “strongly” urged the Army to withhold some payment from Halliburton because of recordkeeping problems.

That same month, the Army Audit Agency recommended withholding 15 percent of logistics spending from Halliburton because “cost proposals weren’t requested in a timely manner and they weren’t submitted in a timely manner.”

The big issue is the “definitization” of Halliburton’s cost-plus contract, a process that puts a limit on bills passed on to taxpayers, justifies costs and closes the financial books. Two-thirds of Halliburton’s LOGCAP contract hasn’t been definitized and that’s a problem, Army auditors concluded. Halliburton spokeswoman Gist said the company is working on it.

In August, the U.S. Army Field Support Command, which oversees the LOGCAP contract, talked to Halliburton about withholding money, but didn’t do it. The issue is still pending, with top Army brass in Washington yet to decide, Army Field Support Command spokeswoman Linda Theis said Wednesday.

“Because it is operational concerns in taking care of people in harm’s way, it’s a very complex issue,” she said.

Experts in government contracting say the issue is simple: Halliburton isn’t justifying its costs, and federal acquisition rules allow the government to withhold 15 percent of payment until the company gets its books straight.

“Three out of three auditors say something was shaky,” said Peter W. Singer, who studies U.S. policy in the Middle East and government contracts at the Brookings Institution, a center-left think tank in Washington. “It shows that several different sets of auditors have found that (money) is not being spent efficiently and have raised deep question marks about it.”

In the past, Halliburton claimed that criticism of its accounting was politically motivated. But Singer noted that Bowen’s memo came out after the presidential election and that Bowen worked for the current President Bush in the White House and in the Texas governor’s office before being named inspector general.

Keith Ashdown, the vice president of Taxpayers for Common Sense, a fiscal watchdog group, said the issue raises bigger questions.

“There’s billions of dollars going to this one company and we don’t know how they’re spending the money,” Ashdown said. “The question is, who’s minding the store?”