Citing a senior Justice official, the Journal said the department was ?expected? to take up the case, but that it was unclear which division would look at it because allegations involved both civil and criminal violations.

The paper also cited Halliburton spokeswoman Wendy Hall as saying the referral to the Justice Department was ?to be expected ... in the current political environment.?

It was ?a method of further studying the issue and not a condemnation? of the company?s business practices she said, according to the story. Wendy Hall was not immediately available to comment.

Halliburton, the Texas oil services company once run by Vice President Dick Cheney, is under investigation by the US military?s inspector general for overcharging for fuel taken into Iraq.

Halliburton unit Kellogg Brown and Root has more than $6 billion worth of work in Iraq, including a major logistical contract to support US troops which involves tasks from serving meals to doing laundry.

In Washington on Wednesday, a Democratic lawmaker said Pentagon auditors found major problems with how Halliburton drew up cost estimates for billions of dollars of work in Iraq.

California Rep. Henry Waxman sent a memorandum to his colleagues disclosing new information from defense auditors he said showed ?significant and systemic? deficiencies in Halliburton?s cost estimates.

Citing examples, Waxman said a Dec. 31 ?Flash Report? by the Defense Contract Audit Agency said the company submitted a $2.7 billion proposal that did not contain ?current, accurate and complete data regarding subcontract costs.?

?For example, DCAA found that Halliburton did not disclose the termination of two subcontracts ... that were the basis for over $1 billion of projected food costs,? wrote Waxman, citing examples from the DCAA audit.

Earlier this year the company said it would hold back on billing for tens of millions of dollars in meals while it established with auditors whether it had charged too much.

Waxman sent his memo on the eve of a hearing of a House of Representatives committee on the Iraq contracting issue at which Pentagon Comptroller Dov Zakheim is expected to answer questions over Halliburton and other issues, including charging for meals and ongoing audits.

?We are disappointed, once again, that selective portions of audit reports have been released publicly even before KBR and the Army have made final reviews of the information,? said Randy Harl, president and chief executive officer of Halliburton unit Kellogg Brown and Root.

?Once again, we have not been given a chance to respond to accusations before they are released publicly. We believe that every point in Mr. Waxman?s letter has a reasonable explanation or could be refuted outright,? said Harl.