Iran Focus
Tehran, Iran, Jul. 29 – Iran’s judiciary has arrested several executives of a privately-owned oil drilling company over their dealings with the U.S.-based oil giant Halliburton and one of the country’s top nuclear negotiators is facing charges of involvement in an oil scam, a semi-official news agency reported.
Fars News Agency said Mehrdad Safdari, chairman of the Board of Directors of Oriental Oil Kish, and several of his collegues are being interrogated over the company’s trading.
A senior member of Iran’s nuclear negotiations team, Sirus Nasseri, is the vice-chairman of the Board of Directors of the oil company. The news agency said “a well-informed source” close to the investigation sharply criticized Iran’s “security and political agencies” for their “blatant weakness” in preventing Nasseri from dealing with Halliburton.
“The authorities must be particularly vigilant about the extensive economic activities of some of the country’s officials”, he said. The source noted that “Nasseri had access to the country’s most secret information as a member of Iran’s nuclear negotiations team and was at the same time dealing directly with the American company, Halliburton, which used to be run by Dick Cheney”.
Oriental Oil Kish, one of Iran’s largest private oil companies, was set up in 2003 with an initial capital of 10 million tomans. In a few weeks, the company’s capital rose to 200 million dollars and soon jumped to seven billion tomans, a startling 700 percent rise in less than a year.
“The judiciary has been investigating this company for six months and after the collection of sufficient information and completion of inquiries, prosecution has begun”, Fars news agency, which is close to Supreme Leader Ayatollah Ali Khamenei, reported.
Other senior executives of the oil company facing charges include managing director Mohammad Madani, Chief Executive Officer Ali Matin Nejati, and operations director Ahmad Salari.
The Tehran-based daily Kayhan reported that investigators had discovered one million dollars in cash at the home of one of the detained oil executives. “Powerful figures have been exerting pressure to secure his release, but Judiciary Chief Ayatollah Mahmoud Shahroudi has insisted that the case be prosecuted”, the daily wrote, adding that it would uncover “a chain of corruption and embezzlement scams”.
Oriental Oil Kish first blipped on the international media’s radar screen in January, when it was announced that the company had subcontracted parts of the South Pars drilling project to Halliburton Products and Services registered in the Cayman Islands.
“Nasseri, a senior Iranian diplomat negotiating with Europe over Iran's controversial nuclear programme is at the heart of deals with US energy companies to develop the country's oil industry”, the Financial Times wrote.
The next day Halliburton announced the South Pars gas field project would be its last in Iran. The BBC reported that Halliburton, which took in $30-$40 million from Iranian operations in 2003, "was winding down its work due to a poor business environment."
But the controversy over a key nuclear negotiator signing up big oil contracts with a U.S. oil giant did not die down in Iran. Hard-line members of Iran’s parliament demanded to question Nasseri over his oil deals and an influential Tehran daily reported that the Ministry of Oil was handing over multi-million-dollar contracts to Oriental Oil Kish while much of the company’s operations exist only on paper.
“This company has won contracts worth more than 500 million dollars from the Oil Ministry in the past three years, while it is not even registered in Iran”, the daily Kayhan wrote in an editorial on January 20, 2005.
Evidence shows that Oriental Oil Kish was set up by entrepreneurs and officials close to ex-President Ali-Akbar Hashemi Rafsanjani. Nasseri himself is a long-time protégé of Rafsanjani.
Investigators have pointed out that the company’s operational centre in Dubai is a small office with seven, mostly Indian, employees. Its two offices in Tehran’s Vali-Asr and Africa streets have no signboard and have a staff of about 15 persons. The company’s letterhead has no address and only provides one telephone number.
While there is a strong case for the prosecution of the senior executives of Oriental Oil Kish, Iran analysts see the crackdown on the company as a frontal assault by the ultra-conservative camp on the oil businesses of Rafsanjani and his allies. The new hard-line President-elect Mahmoud Ahmadinejad’s top election pledge was to “purge the country’s oil industry of Mafia-like influence and corruption”. This was widely seen as a thinly-veiled allusion to election rival Rafsanjani’s involvement in privately-owned oil companies in Iran.
“By targeting the private oil companies run by the Rafsanjani clan, Khamenei is going for the ex-President’s jugular”, said Ahmad Nassehi, a Dubai-based financial analyst. “Rafsanjani has lost much of his political clout in the elections. If his economic power is undermined, too, he’ll be out of the game for good”.
Analysts say the prosecution of Oriental Oil Kish executives will provide an indication as to how far, and how high, the incoming hard-line government is going to pursue the anti-corruption campaign.
Friday, July 29, 2005
Wednesday, July 27, 2005
Halliburton announces 284 percent increase in war profits
WASHINGTON, July 25 (HalliburtonWatch.org) -- Halliburton announced on Friday that its KBR division, responsible for carrying out Pentagon contracts, experienced a 284 percent increase in operating profits during the second quarter of this year.
The increase in profits was primarily due to the Pentagon's payment of "award fees" for what military officials call "good" or "very good" work done by KBR in the Middle East for America's taxpayers and the troops.
Despite the scandals that plague KBR's military contracts, the Pentagon awarded $70 million in "award" fees to the company, along with four ratings of "excellent" and two ratings of "very good" for the troop logistics work under the Army's LOGCAP contract.
The Pentagon has provided preferential treatment to Halliburton on a number of occasions, including the concealment from the public of critical reports by military auditors.
Audits conducted by the Pentagon's Defense Contract Audit Agency determined that KBR had $1 billion in "questioned" expenses (i.e. expenses which military auditors consider "unreasonable") and $442 million in "unsupported" expenses (i.e. expenses which military auditors have determined contain no receipt or any explanation on how the expenses were disbursed).
But the top Pentagon brass ignored these audits and rewarded KBR's work anyway.
Halliburton's earnings announcement comes on the heels of new reports showing the Iraq and Afghan wars have already cost U.S. taxpayers $314 billion and that another ten years of war will cost $700 billion.
In another coup for Halliburton, a federal judge this month decided that whistleblowers may not sue U.S. companies for fraud if payment for services was made in Iraqi, not U.S., money. Halliburton was paid over $1 billion in Iraqi oil money during the first 15 months of the occupation. The judge's ruling means the False Claims Act cannot be used to offer large rewards to corporate insiders who reveal wrongdoing or overcharges for services. The law is considered America's most successful deterrent against contractor fraud, but the judge's decision will help Halliburton and other contractors avoid tough scrutiny in Iraq.
The increase in profits was primarily due to the Pentagon's payment of "award fees" for what military officials call "good" or "very good" work done by KBR in the Middle East for America's taxpayers and the troops.
Despite the scandals that plague KBR's military contracts, the Pentagon awarded $70 million in "award" fees to the company, along with four ratings of "excellent" and two ratings of "very good" for the troop logistics work under the Army's LOGCAP contract.
The Pentagon has provided preferential treatment to Halliburton on a number of occasions, including the concealment from the public of critical reports by military auditors.
Audits conducted by the Pentagon's Defense Contract Audit Agency determined that KBR had $1 billion in "questioned" expenses (i.e. expenses which military auditors consider "unreasonable") and $442 million in "unsupported" expenses (i.e. expenses which military auditors have determined contain no receipt or any explanation on how the expenses were disbursed).
But the top Pentagon brass ignored these audits and rewarded KBR's work anyway.
Halliburton's earnings announcement comes on the heels of new reports showing the Iraq and Afghan wars have already cost U.S. taxpayers $314 billion and that another ten years of war will cost $700 billion.
In another coup for Halliburton, a federal judge this month decided that whistleblowers may not sue U.S. companies for fraud if payment for services was made in Iraqi, not U.S., money. Halliburton was paid over $1 billion in Iraqi oil money during the first 15 months of the occupation. The judge's ruling means the False Claims Act cannot be used to offer large rewards to corporate insiders who reveal wrongdoing or overcharges for services. The law is considered America's most successful deterrent against contractor fraud, but the judge's decision will help Halliburton and other contractors avoid tough scrutiny in Iraq.
Tuesday, July 26, 2005
Former Bush aide turns critic as Iraq inspector
Tuesday, July 26, 2005
By Yochi J. Dreazen, The Wall Street Journal
During a routine audit last summer of an American office in charge of doling out reconstruction funding in Hillah, Iraq, U.S. government investigators made a series of startling discoveries.
The office had paid a contractor twice for the same work. A U.S. official was allowed to handle millions of dollars in cash weeks after he was fired for incompetence. Of the $119.9 million allocated for regional projects, $89.4 million was disbursed without contracts or other documentation. An additional $7.2 million couldn't be found at all.
To many officials in both Baghdad and Washington, the only thing more surprising than the problems was the identity of the man who had uncovered them: Stuart Bowen, the special inspector general for Iraq reconstruction.
Mr. Bowen is a Texas lawyer who parlayed a job on George W. Bush's first gubernatorial campaign into senior posts in Austin and Washington. He began the Iraq war lobbying for an American contractor seeking tens of millions of dollars in reconstruction work. Last October, California Democratic Rep. Henry Waxman singled him out in a report on "The Politicization of Inspectors General" in the Bush administration. The report suggested that such auditors wouldn't be "independent and objective."
Instead, Mr. Bowen has become one of the most prominent and credible critics of how the administration has handled the occupation of Iraq. In a series of blistering public reports, he has detailed systemic management failings, lax or nonexistent oversight, and apparent fraud and embezzlement on the part of the U.S. officials charged with administering the rebuilding efforts.
White House officials declined to comment on Mr. Bowen. But he has drawn harsh criticism from other quarters.
Aides at both the State Department and the Defense Department have tried to curb the independence of his office. L. Paul Bremer, head of the Coalition Provisional Authority until June 2004, has criticized Mr. Bowen for "misconceptions and inaccuracies" and for expecting the occupation authority, amid postwar chaos, to follow accounting standards that "even peaceful Western nations would have trouble meeting." Newt Gingrich, the former House speaker, has called Mr. Bowen's staff "dramatically out of touch with the practical realities of waging war and setting up a new government in a war-torn country."
Mr. Bowen acknowledged in one report that "the CPA operated in a dangerous working environment under difficult conditions." But the report said the U.S. still should have "established controls and provided oversight over" reconstruction funds "precisely because there was no functioning Iraqi government."
In 1994, Mr. Bowen was a senior member of Mr. Bush's campaign team in his successful run for governor of Texas. After Mr. Bush took office, Mr. Bowen served as assistant general counsel in the governor's office and then deputy general counsel under Alberto Gonzales, now U.S. attorney general. Mr. Bowen crafted some of Gov. Bush's most controversial legal decisions, such as ousting a Democratic judge and dismissing widespread questions about the guilt of a death-row inmate.
When Mr. Bush ran for president, Mr. Bowen spent 35 days in Florida during the recount, and then served as deputy counsel to the Bush transition team. He rejoined Mr. Gonzales at the White House as associate counsel. In a 2002 ceremony marking the unveiling of Mr. Bush's official gubernatorial portrait in Austin, the president singled out Mr. Bowen as one of the aides who followed him to the presidency. "I truly believe America is better off as a result of the influx of Texans who showed up" in Washington, he said.
Mr. Bowen left the administration in March 2003 for a job at Patton Boggs, a prominent Washington law firm with a big lobbying operation. The U.S. launched the invasion of Iraq a few weeks later, and Mr. Bowen began lobbying for reconstruction work on behalf of URS Group Inc., a San Francisco-based company specializing in international construction planning and management. Mr. Bowen, one of three Patton Boggs attorneys on the account, says his only work for the company involved organizing an April 2003 meeting with a senior official at the U.S. Agency for International Development. URS didn't win any AID contracts as a result of that meeting, but the company ultimately won a series of CPA contracts valued at as much as $30 million to oversee reconstruction projects.
The effort to rebuild Iraq quickly became the largest U.S. reconstruction effort since the end of World War II. The funds eventually included $18.4 billion in U.S. money and more than $22 billion in seized Iraqi assets turned over to the U.S. by the United Nations.
In the fall of 2003, Congress created a CPA inspector general to oversee how the money was spent -- a post that eventually morphed into the job of inspector general for all Iraq reconstruction. The official would answer to Mr. Bremer, who headed the occupation authority, and present reports to Congress at least once every three months. The office was given a budget of $75 million.
At the request of the Bush administration, the job was created with many strings attached. Unlike other federal inspectors general, the new official was to be appointed by the secretary of defense, not the president, and wouldn't be subject to Senate confirmation. The White House also won the right to block the inspector general from releasing a report on national-security grounds -- though none have been blocked so far. Administration officials and many Congressional Republicans argued that the situation in Iraq was too chaotic to require normal oversight. They also cited the danger that an unfettered release of information could help insurgents plan more effective attacks against U.S. forces there.
Critics were skeptical that, under those conditions, the inspector general could offer real oversight. The skeptics weren't encouraged when, in January 2004, the White House tapped Mr. Bowen, perceived as a loyal Bush ally, to fill that position.
Mr. Bowen, 47 years old, has an athlete's build and the bearing of the Air Force captain he once was. He usually keeps packed bags in his office near the Pentagon, along with his bulletproof vest, handy for his frequent trips to Baghdad.
He traveled to Iraq for the first time in February 2004, riding from the airport to the heavily fortified Green Zone in an armored bus built to withstand direct hits from rockets and roadside bombs. He and his staff slept in trailers and crammed their entire operation into two small offices.
One of his flights out of Baghdad had to bank sharply and release flares to avoid an insurgent missile. An auditor on his staff resigned after seeing a friend decapitated in a rocket attack.
Mr. Bowen's arrival in Iraq coincided with a significant ramp-up in the pace of the American rebuilding effort. The U.S. had initially planned to maintain full control of Iraq for several years. But with violence raging and influential Iraqis expressing impatience with the American timetable, the Bush administration announced plans to turn over power to an interim Iraqi government by June 30.
Hoping to give the incoming government a public-relations boost, Mr. Bremer ordered American rebuilding officials to use captured Iraqi money to fund as many small-scale rebuilding projects as could be completed by the handover date.
Mr. Bowen's audits later found evidence that the push led contracting officials to take shortcuts that made it difficult to determine where the money actually went. In Hillah, for instance, a contracting officer told Mr. Bowen's investigators that he had been given $6.75 million in cash on June 21 with the expectation that he would spend the entire amount before the handover, which ultimately took place two days earlier than planned on June 28.
He soon found other examples of apparently lax oversight. An employee of the CPA comptroller in Baghdad, for example, kept the key to a safe containing more than $140,000 in cash in an unattended backpack.
In one of his most attention-grabbing reports, issued on Jan. 30, 2005, Mr. Bowen concluded that the American occupation authority failed to keep track of nearly $9 billion that it transferred to Iraqi government ministries, which lacked financial controls and internal safeguards to prevent abuse. One Iraqi ministry cited in the audit inflated its payroll to receive extra funds, claiming to employ 8,206 guards when it actually employed barely 600.
The report sparked harsh responses from both Mr. Bremer, the former occupation chief, and the Pentagon. Mr. Bremer chided the auditor for expecting conventional levels of accountability, saying that "given the situation the CPA found in Iraq at liberation, this is an unrealistic standard." The Pentagon also questioned Mr. Bowen's conclusions. Spokesman Bryan Whitman noted that "the CPA was operating under extraordinary conditions, from its inception to mission completion."
Mr. Bowen says that many of the management problems identified in his reports stem from structural failings in the broader reconstruction venture. He argues that the rebuilding effort has been understaffed. In one report, he noted that the central U.S. contracting office was unable to fill nearly a third of its authorized slots. That meant contracting personnel worked "13 to 15 hours each day, six days a week, with a shortened shift of six to 11 hours on the seventh day."
"An inspector general shouldn't play 'gotcha,' " he says. "My job is to help promote success in Iraq by identifying inefficiencies and helping correct them. I want to be part of the solution."
In a November 2004 report, Mr. Bowen took on the big contractor Halliburton Co. in two separate reports. He urged the Army to withhold nearly $90 million in payments to Halliburton because the company couldn't justify what it had charged the government. The report added that "weakness in the cost-reporting process" was such a problem that his investigators couldn't do a standard audit of Halliburton's bills to the CPA. Halliburton spokeswoman Cathy Mann says the Houston-based oil-services and contracting company is working with the Army to resolve the matter and "we expect to work through any remaining issues in a cooperative manner."
Mr. Bowen's audits have also described what appears to be outright criminal behavior by several government officials. In one case, an Army soldier serving as the assistant to an American boxing coach admitted to gambling away half the $40,000 he was given to cover the expenses of an Iraqi athletic team during a trip to the Philippines; his case was referred to the military's justice system for a court-martial. Mr. Bowen also recently gave the Justice Department information on possibly criminal behavior on the part of U.S. contracting officers in Hillah, the first time government officials have been implicated in potential fraud in Iraq. The officers left the country with no record of how they had spent nearly $1.5 million that couldn't be found by investigators.
With his caseload increasing, Mr. Bowen is hiring new investigators and lawyers in both Virginia and Iraq. He has numerous audits under way, including one looking at the efficiency of a military program that has allowed commanders to disburse hundreds of millions of dollars in cash without going through normal contracting channels. His aides recently began sending engineering teams to U.S.-funded reconstruction projects across the country to assess the actual quality of the work.
The future of Mr. Bowen's job has been embroiled in politics.
Shortly before the June 2004 handover of political sovereignty in Iraq, the State Department proposed folding Mr. Bowen's office into its own inspector-general system. Under heavy fire from Democrats, the plan was dropped.
Another bureaucratic fight erupted in the fall of 2004 as lawmakers debated a bill sponsored by Sen. Russell Feingold, Democrat of Wisconsin, that would convert Mr. Bowen into a standing special inspector general. The new job would probe the entire rebuilding effort while being only loosely overseen by the secretaries of defense and state. The Pentagon's inspector general warned Defense Secretary Donald Rumsfeld in a memo that such a bill would effectively leave Mr. Bowen "accountable to no one" and said he would prepare a directive tying him to the Pentagon's inspectors.
Nonetheless, the bill was signed into law on Oct. 29, 2004, expanding Mr. Bowen's role. Mr. Bowen assumed his new post immediately and currently has a staff of 32 in Baghdad and 70 in Arlington, Va.
Now defenders of Mr. Bowen's office are trying to keep it from being shut down next year. The bill that created Mr. Bowen's position empowered him to probe the rebuilding effort until 10 months after 80 percent of the reconstruction funds were contracted out. That point is likely to be reached this month, which means that the office will close next summer -- well before the money will actually have been spent. Earlier this month, Sen. Feingold introduced a bill extending the life of Mr. Bowen's office, but the measure's prospects are uncertain.
Despite endorsements from initially skeptical Democrats, Mr. Bowen insists that his work shouldn't be seen through the prism of partisan politics. He says he rarely hears from anyone in the White House these days -- either professionally or socially. He says he remains an admirer of President Bush. The only picture in Mr. Bowen's suburban Virginia office other than a photograph of his children is a framed shot of the two men at a White House dinner.
Close Inspection
Some findings of Stuart Bowen, the special inspector general for Iraq reconstruction:
A third of the $10 billion in contracts signed in fiscal 2003 were awarded without competition.
A contractor charged the U.S. $3.3 million for phantom employees assigned to an oil-pipeline repair contract.
Iraqi construction firms allegedly paid U.S. soldiers to help steal construction equipment from the interim government.
At least a third of the government-owned vehicles and equipment that Halliburton was paid to manage were believed lost.
The U.S. failed to keep track of nearly $9 billion it transferred to the new Iraqi government, much of which appears to have been embezzled.
By Yochi J. Dreazen, The Wall Street Journal
During a routine audit last summer of an American office in charge of doling out reconstruction funding in Hillah, Iraq, U.S. government investigators made a series of startling discoveries.
The office had paid a contractor twice for the same work. A U.S. official was allowed to handle millions of dollars in cash weeks after he was fired for incompetence. Of the $119.9 million allocated for regional projects, $89.4 million was disbursed without contracts or other documentation. An additional $7.2 million couldn't be found at all.
To many officials in both Baghdad and Washington, the only thing more surprising than the problems was the identity of the man who had uncovered them: Stuart Bowen, the special inspector general for Iraq reconstruction.
Mr. Bowen is a Texas lawyer who parlayed a job on George W. Bush's first gubernatorial campaign into senior posts in Austin and Washington. He began the Iraq war lobbying for an American contractor seeking tens of millions of dollars in reconstruction work. Last October, California Democratic Rep. Henry Waxman singled him out in a report on "The Politicization of Inspectors General" in the Bush administration. The report suggested that such auditors wouldn't be "independent and objective."
Instead, Mr. Bowen has become one of the most prominent and credible critics of how the administration has handled the occupation of Iraq. In a series of blistering public reports, he has detailed systemic management failings, lax or nonexistent oversight, and apparent fraud and embezzlement on the part of the U.S. officials charged with administering the rebuilding efforts.
White House officials declined to comment on Mr. Bowen. But he has drawn harsh criticism from other quarters.
Aides at both the State Department and the Defense Department have tried to curb the independence of his office. L. Paul Bremer, head of the Coalition Provisional Authority until June 2004, has criticized Mr. Bowen for "misconceptions and inaccuracies" and for expecting the occupation authority, amid postwar chaos, to follow accounting standards that "even peaceful Western nations would have trouble meeting." Newt Gingrich, the former House speaker, has called Mr. Bowen's staff "dramatically out of touch with the practical realities of waging war and setting up a new government in a war-torn country."
Mr. Bowen acknowledged in one report that "the CPA operated in a dangerous working environment under difficult conditions." But the report said the U.S. still should have "established controls and provided oversight over" reconstruction funds "precisely because there was no functioning Iraqi government."
In 1994, Mr. Bowen was a senior member of Mr. Bush's campaign team in his successful run for governor of Texas. After Mr. Bush took office, Mr. Bowen served as assistant general counsel in the governor's office and then deputy general counsel under Alberto Gonzales, now U.S. attorney general. Mr. Bowen crafted some of Gov. Bush's most controversial legal decisions, such as ousting a Democratic judge and dismissing widespread questions about the guilt of a death-row inmate.
When Mr. Bush ran for president, Mr. Bowen spent 35 days in Florida during the recount, and then served as deputy counsel to the Bush transition team. He rejoined Mr. Gonzales at the White House as associate counsel. In a 2002 ceremony marking the unveiling of Mr. Bush's official gubernatorial portrait in Austin, the president singled out Mr. Bowen as one of the aides who followed him to the presidency. "I truly believe America is better off as a result of the influx of Texans who showed up" in Washington, he said.
Mr. Bowen left the administration in March 2003 for a job at Patton Boggs, a prominent Washington law firm with a big lobbying operation. The U.S. launched the invasion of Iraq a few weeks later, and Mr. Bowen began lobbying for reconstruction work on behalf of URS Group Inc., a San Francisco-based company specializing in international construction planning and management. Mr. Bowen, one of three Patton Boggs attorneys on the account, says his only work for the company involved organizing an April 2003 meeting with a senior official at the U.S. Agency for International Development. URS didn't win any AID contracts as a result of that meeting, but the company ultimately won a series of CPA contracts valued at as much as $30 million to oversee reconstruction projects.
The effort to rebuild Iraq quickly became the largest U.S. reconstruction effort since the end of World War II. The funds eventually included $18.4 billion in U.S. money and more than $22 billion in seized Iraqi assets turned over to the U.S. by the United Nations.
In the fall of 2003, Congress created a CPA inspector general to oversee how the money was spent -- a post that eventually morphed into the job of inspector general for all Iraq reconstruction. The official would answer to Mr. Bremer, who headed the occupation authority, and present reports to Congress at least once every three months. The office was given a budget of $75 million.
At the request of the Bush administration, the job was created with many strings attached. Unlike other federal inspectors general, the new official was to be appointed by the secretary of defense, not the president, and wouldn't be subject to Senate confirmation. The White House also won the right to block the inspector general from releasing a report on national-security grounds -- though none have been blocked so far. Administration officials and many Congressional Republicans argued that the situation in Iraq was too chaotic to require normal oversight. They also cited the danger that an unfettered release of information could help insurgents plan more effective attacks against U.S. forces there.
Critics were skeptical that, under those conditions, the inspector general could offer real oversight. The skeptics weren't encouraged when, in January 2004, the White House tapped Mr. Bowen, perceived as a loyal Bush ally, to fill that position.
Mr. Bowen, 47 years old, has an athlete's build and the bearing of the Air Force captain he once was. He usually keeps packed bags in his office near the Pentagon, along with his bulletproof vest, handy for his frequent trips to Baghdad.
He traveled to Iraq for the first time in February 2004, riding from the airport to the heavily fortified Green Zone in an armored bus built to withstand direct hits from rockets and roadside bombs. He and his staff slept in trailers and crammed their entire operation into two small offices.
One of his flights out of Baghdad had to bank sharply and release flares to avoid an insurgent missile. An auditor on his staff resigned after seeing a friend decapitated in a rocket attack.
Mr. Bowen's arrival in Iraq coincided with a significant ramp-up in the pace of the American rebuilding effort. The U.S. had initially planned to maintain full control of Iraq for several years. But with violence raging and influential Iraqis expressing impatience with the American timetable, the Bush administration announced plans to turn over power to an interim Iraqi government by June 30.
Hoping to give the incoming government a public-relations boost, Mr. Bremer ordered American rebuilding officials to use captured Iraqi money to fund as many small-scale rebuilding projects as could be completed by the handover date.
Mr. Bowen's audits later found evidence that the push led contracting officials to take shortcuts that made it difficult to determine where the money actually went. In Hillah, for instance, a contracting officer told Mr. Bowen's investigators that he had been given $6.75 million in cash on June 21 with the expectation that he would spend the entire amount before the handover, which ultimately took place two days earlier than planned on June 28.
He soon found other examples of apparently lax oversight. An employee of the CPA comptroller in Baghdad, for example, kept the key to a safe containing more than $140,000 in cash in an unattended backpack.
In one of his most attention-grabbing reports, issued on Jan. 30, 2005, Mr. Bowen concluded that the American occupation authority failed to keep track of nearly $9 billion that it transferred to Iraqi government ministries, which lacked financial controls and internal safeguards to prevent abuse. One Iraqi ministry cited in the audit inflated its payroll to receive extra funds, claiming to employ 8,206 guards when it actually employed barely 600.
The report sparked harsh responses from both Mr. Bremer, the former occupation chief, and the Pentagon. Mr. Bremer chided the auditor for expecting conventional levels of accountability, saying that "given the situation the CPA found in Iraq at liberation, this is an unrealistic standard." The Pentagon also questioned Mr. Bowen's conclusions. Spokesman Bryan Whitman noted that "the CPA was operating under extraordinary conditions, from its inception to mission completion."
Mr. Bowen says that many of the management problems identified in his reports stem from structural failings in the broader reconstruction venture. He argues that the rebuilding effort has been understaffed. In one report, he noted that the central U.S. contracting office was unable to fill nearly a third of its authorized slots. That meant contracting personnel worked "13 to 15 hours each day, six days a week, with a shortened shift of six to 11 hours on the seventh day."
"An inspector general shouldn't play 'gotcha,' " he says. "My job is to help promote success in Iraq by identifying inefficiencies and helping correct them. I want to be part of the solution."
In a November 2004 report, Mr. Bowen took on the big contractor Halliburton Co. in two separate reports. He urged the Army to withhold nearly $90 million in payments to Halliburton because the company couldn't justify what it had charged the government. The report added that "weakness in the cost-reporting process" was such a problem that his investigators couldn't do a standard audit of Halliburton's bills to the CPA. Halliburton spokeswoman Cathy Mann says the Houston-based oil-services and contracting company is working with the Army to resolve the matter and "we expect to work through any remaining issues in a cooperative manner."
Mr. Bowen's audits have also described what appears to be outright criminal behavior by several government officials. In one case, an Army soldier serving as the assistant to an American boxing coach admitted to gambling away half the $40,000 he was given to cover the expenses of an Iraqi athletic team during a trip to the Philippines; his case was referred to the military's justice system for a court-martial. Mr. Bowen also recently gave the Justice Department information on possibly criminal behavior on the part of U.S. contracting officers in Hillah, the first time government officials have been implicated in potential fraud in Iraq. The officers left the country with no record of how they had spent nearly $1.5 million that couldn't be found by investigators.
With his caseload increasing, Mr. Bowen is hiring new investigators and lawyers in both Virginia and Iraq. He has numerous audits under way, including one looking at the efficiency of a military program that has allowed commanders to disburse hundreds of millions of dollars in cash without going through normal contracting channels. His aides recently began sending engineering teams to U.S.-funded reconstruction projects across the country to assess the actual quality of the work.
The future of Mr. Bowen's job has been embroiled in politics.
Shortly before the June 2004 handover of political sovereignty in Iraq, the State Department proposed folding Mr. Bowen's office into its own inspector-general system. Under heavy fire from Democrats, the plan was dropped.
Another bureaucratic fight erupted in the fall of 2004 as lawmakers debated a bill sponsored by Sen. Russell Feingold, Democrat of Wisconsin, that would convert Mr. Bowen into a standing special inspector general. The new job would probe the entire rebuilding effort while being only loosely overseen by the secretaries of defense and state. The Pentagon's inspector general warned Defense Secretary Donald Rumsfeld in a memo that such a bill would effectively leave Mr. Bowen "accountable to no one" and said he would prepare a directive tying him to the Pentagon's inspectors.
Nonetheless, the bill was signed into law on Oct. 29, 2004, expanding Mr. Bowen's role. Mr. Bowen assumed his new post immediately and currently has a staff of 32 in Baghdad and 70 in Arlington, Va.
Now defenders of Mr. Bowen's office are trying to keep it from being shut down next year. The bill that created Mr. Bowen's position empowered him to probe the rebuilding effort until 10 months after 80 percent of the reconstruction funds were contracted out. That point is likely to be reached this month, which means that the office will close next summer -- well before the money will actually have been spent. Earlier this month, Sen. Feingold introduced a bill extending the life of Mr. Bowen's office, but the measure's prospects are uncertain.
Despite endorsements from initially skeptical Democrats, Mr. Bowen insists that his work shouldn't be seen through the prism of partisan politics. He says he rarely hears from anyone in the White House these days -- either professionally or socially. He says he remains an admirer of President Bush. The only picture in Mr. Bowen's suburban Virginia office other than a photograph of his children is a framed shot of the two men at a White House dinner.
Close Inspection
Some findings of Stuart Bowen, the special inspector general for Iraq reconstruction:
A third of the $10 billion in contracts signed in fiscal 2003 were awarded without competition.
A contractor charged the U.S. $3.3 million for phantom employees assigned to an oil-pipeline repair contract.
Iraqi construction firms allegedly paid U.S. soldiers to help steal construction equipment from the interim government.
At least a third of the government-owned vehicles and equipment that Halliburton was paid to manage were believed lost.
The U.S. failed to keep track of nearly $9 billion it transferred to the new Iraqi government, much of which appears to have been embezzled.
Thursday, July 14, 2005
Democrats seek inquiry on expired food in Iraq
By DAVID IVANOVICH
Copyright 2005 Houston Chronicle Washington Bureau
WASHINGTON - Senate Democrats on Wednesday called for an investigation into allegations that Halliburton Co. served food that had passed its expiration date by as much as a year to U.S. troops in Iraq.
Rory Mayberry, a former food production manager for Halliburton subsidiary KBR, told lawmakers last month that when outdated food arrived, "we were told by KBR food service mangers to use these items anyway."
He also said food packages damaged in insurgent attacks were still used "after removing the bullets and any shrapnel from the bad food that was hit."
In a letter to Defense Secretary Donald Rumsfeld, 28 Democrats called for a formal probe, noting: "We trust you will find this testimony as alarming as we do."
Halliburton spokeswoman Cathy Mann noted that the Army's Preventive Maintenance Division inspects KBR's dining halls monthly, checking on expiration
dates.
"If at any point food is deemed unfit to serve, KBR follows the government-approved ... procedures to destroy it," Mann said.
Mann said KBR officials routinely receive positive comments throughout Iraq
on the quality of the food served.
Copyright 2005 Houston Chronicle Washington Bureau
WASHINGTON - Senate Democrats on Wednesday called for an investigation into allegations that Halliburton Co. served food that had passed its expiration date by as much as a year to U.S. troops in Iraq.
Rory Mayberry, a former food production manager for Halliburton subsidiary KBR, told lawmakers last month that when outdated food arrived, "we were told by KBR food service mangers to use these items anyway."
He also said food packages damaged in insurgent attacks were still used "after removing the bullets and any shrapnel from the bad food that was hit."
In a letter to Defense Secretary Donald Rumsfeld, 28 Democrats called for a formal probe, noting: "We trust you will find this testimony as alarming as we do."
Halliburton spokeswoman Cathy Mann noted that the Army's Preventive Maintenance Division inspects KBR's dining halls monthly, checking on expiration
dates.
"If at any point food is deemed unfit to serve, KBR follows the government-approved ... procedures to destroy it," Mann said.
Mann said KBR officials routinely receive positive comments throughout Iraq
on the quality of the food served.
28 senators call for formal Halliburton inquiry
Twenty eight Democratic U.S. Senators, led by U.S. Senator Byron Dorgan (D-ND), are calling for a formal Department of Defense investigation into what they described as “alarming” reports of fraudulent, wasteful and abusive practices by Halliburton in providing food to U.S. troops in Iraq, RAW STORY has learned.
In May, despite concerns by the Army's own auditors about billing practices, the firm received a $72.2 million performance bonuses for its work in Iraq. The bonus was the largest ever received by the firm.
Halliburton has billed the government more than $10.5 billion to date under a contract to provide aid for the military in Iraq, Afghanistan and elsewhere.
The Democrats' release, issued by Sen. Dorgan, follows.
#
In a letter to Rumsfeld released Wednesday, the Senators cited testimony received at a Democratic Policy Committee (DPC) hearing Dorgan chaired June 27, at which a range of abuses by Halliburton were cited, including:
• Serving food to American troops that was outdated by as much as a year or contaminated by bullets and shrapnel. When the food’s condition was called to the attention of Halliburton supervisors, witnesses said, workers were instructed to use it anyway.
• Serving 10,000 meals but deliberately billing the government for at least 20,000 meals, every day at one dining hall, at one base.
• Instructions from Halliburton managers that workers were not to speak to government auditors
“We trust you will find this testimony as alarming as we do,” the Senators wrote. “The testimony demands an immediate and full investigation.”
Witness Rory Mayberry, a former food production manager at Halliburton subsidiary KBR, testified that troops were given food that had expired as much as a year earlier. He described a scene in which, after a convoy was ambushed, he and other employees were instructed to remove the bullets and shrapnel from the food supplies and serve them to U.S. soldiers.
Halliburton also charged the U.S. government for tens of thousands of meals that were never served. Mayberry testified that Halliburton managers instructed employees not to speak to government auditors, and punished those who did by sending them to more dangerous camps.
“Our troops deserve to eat their dinner without worrying it is spoiled or contaminated with bits of shrapnel,” Dorgan said. “Halliburton was given a sweetheart deal here, and they’ve done nothing but take advantage of it. I implore Mr. Rumsfeld to look into this matter immediately.”
Senators signing the letter, in addition to Dorgan included: Carl Levin (D-MI), Dianne Feinstein (D-CA), Frank Lautenberg (D-NJ), Daniel Akaka (D-HI), Max Baucus (D-MT), Herb Kohl (D-WI), Ted Kennedy (D-MA), Patty Murray (D-WA), Jeff Bingaman (D-NM), Blanche Lincoln (D-AR), Jim Jeffords (I-VT), John Corzine (D-NJ), Tim Johnson (D-SD), Jack Reed (D-RI), Jay Rockefeller (D-WV), Debbie Stabenow (D-MI), Patrick Leahy (D-VT), Dick Durbin (D-IL), Paul Sarbanes (D-MD), Hillary Rodham Clinton (D-NY), Mark Dayton (D-MN), Mary Landrieu (D-LA), Ken Salazar (D-CO), Kent Conrad (D-ND), Joseph Lieberman (D-CT), Barbara Boxer (D-CA), and Charles Schumer (D-NY).
In May, despite concerns by the Army's own auditors about billing practices, the firm received a $72.2 million performance bonuses for its work in Iraq. The bonus was the largest ever received by the firm.
Halliburton has billed the government more than $10.5 billion to date under a contract to provide aid for the military in Iraq, Afghanistan and elsewhere.
The Democrats' release, issued by Sen. Dorgan, follows.
#
In a letter to Rumsfeld released Wednesday, the Senators cited testimony received at a Democratic Policy Committee (DPC) hearing Dorgan chaired June 27, at which a range of abuses by Halliburton were cited, including:
• Serving food to American troops that was outdated by as much as a year or contaminated by bullets and shrapnel. When the food’s condition was called to the attention of Halliburton supervisors, witnesses said, workers were instructed to use it anyway.
• Serving 10,000 meals but deliberately billing the government for at least 20,000 meals, every day at one dining hall, at one base.
• Instructions from Halliburton managers that workers were not to speak to government auditors
“We trust you will find this testimony as alarming as we do,” the Senators wrote. “The testimony demands an immediate and full investigation.”
Witness Rory Mayberry, a former food production manager at Halliburton subsidiary KBR, testified that troops were given food that had expired as much as a year earlier. He described a scene in which, after a convoy was ambushed, he and other employees were instructed to remove the bullets and shrapnel from the food supplies and serve them to U.S. soldiers.
Halliburton also charged the U.S. government for tens of thousands of meals that were never served. Mayberry testified that Halliburton managers instructed employees not to speak to government auditors, and punished those who did by sending them to more dangerous camps.
“Our troops deserve to eat their dinner without worrying it is spoiled or contaminated with bits of shrapnel,” Dorgan said. “Halliburton was given a sweetheart deal here, and they’ve done nothing but take advantage of it. I implore Mr. Rumsfeld to look into this matter immediately.”
Senators signing the letter, in addition to Dorgan included: Carl Levin (D-MI), Dianne Feinstein (D-CA), Frank Lautenberg (D-NJ), Daniel Akaka (D-HI), Max Baucus (D-MT), Herb Kohl (D-WI), Ted Kennedy (D-MA), Patty Murray (D-WA), Jeff Bingaman (D-NM), Blanche Lincoln (D-AR), Jim Jeffords (I-VT), John Corzine (D-NJ), Tim Johnson (D-SD), Jack Reed (D-RI), Jay Rockefeller (D-WV), Debbie Stabenow (D-MI), Patrick Leahy (D-VT), Dick Durbin (D-IL), Paul Sarbanes (D-MD), Hillary Rodham Clinton (D-NY), Mark Dayton (D-MN), Mary Landrieu (D-LA), Ken Salazar (D-CO), Kent Conrad (D-ND), Joseph Lieberman (D-CT), Barbara Boxer (D-CA), and Charles Schumer (D-NY).
Wednesday, July 13, 2005
The Enemy of Our Enemy May Still Be the Enemy of Democracy
July 13, 2005
By Paul Rogat Loeb
As right-wing religious leaders attack Alberto Gonzales for being insufficiently doctrinaire, it's tempting to accept him as the best we can get for the Supreme Court. In a recent Huffington Post blog, Rob McKay suggested we mute our opposition voices precisely because a Gonzales nomination would divide the political right and fracture their coalition.
But accepting someone with the track record and values of Gonzales would be a grievous mistake. We're in our current mess in large part because our culture has been unable to confront the profoundly destructive consequences of the choices made by our leaders. To equivocate about Gonzales's role in these choices is to accept a culture of lies.
Of course, we don't completely control the outcome in this fight. It depends on the Democrats showing enough spine and the half-dozen supposedly moderate Republicans placing democracy ahead of short-term partisan advantage, and refusing to eliminate the judicial filibuster. But when someone exhibits as much contempt for due process as Gonzales does, we have to challenge him, in every way we can.
Gonzales is not David Souter, a relative unknown. He's someone who's embraced the most radical extensions of presidential power and most radical contempt for human rights. He called the Geneva Conventions "quaint" and "obsolete." He chaired the 2002 meetings that that argued that interrogations were not torture unless they produced "injury such as death, organ failure, or serious impairment of body functions." He wrote the Presidential Order saying that terror suspects could be tried and sentenced to death by secret military tribunals.
Gonzales has also consistently promoted questionable corporate interests. While on the Texas Supreme Court, he accepted major donations from corporations, like Halliburton, with cases before the court (Halliburton had five separate cases). Then he consistently supported the positions of these companies while refusing to recuse himself. He similarly refused to recuse himself from the Bush administration's investigation of the Enron scandal, though he'd received $14,000 from the company of "Kenny Boy." When the Government Accountability Office asked who participated in Dick Cheney's secret energy policy meetings, Gonzales blocked release of the documents.
Maybe a Gonzales nomination would temporarily split the right. But he isn't someone to embrace, either morally or politically. And if we let his potential nomination go through without a fight, Bush can still heal the wounds in his coalition by nominating a "real" conservative to William Rehnquist's seat. Meanwhile we'll have raised the bar still further till we're unable to challenge anyone short of Attila the Hun or Vlad the Impaler, and then only if they've spoken too bluntly.
We may not win in challenging Gonzales, but at least we will make clear why giving him a lifetime appointment is an outrage to democracy. We can highlight the profound destructiveness of the values that he and this administration represent. We can challenge the Republican "moderates" to stay true to their word and maintain the option of the judicial filibuster.
If we do this successfully, we'll help define Bush's Republicans not just as captives to some vague notion of extremism, but to specific policies that assault our democracy, endanger the lives of its citizens, and plunder the planet that we inhabit. If swing Republicans still vote to eliminate the filibuster, or insist on the confirmation of Gonzales, we can and should hang this action around their necks, and brand them, come election time, not only for embracing legal torture and unalloyed giveaways to corporate interests, but also for annihilating 200 years of democratic checks and balances in the service of a raw power grab.
Those on the political right have split and reunited too often for us to count on their rupture over even something as consequential as a Supreme Court nomination. When election time comes, they'll cut their losses and work together to elect those who will give them the maximum power. Learning from this means not giving up on challenging reprehensible nominees before we start.
Paul Rogat Loeb is the author of The Impossible Will Take a Little While: A Citizen's Guide to Hope in a Time of Fear, winner of the Nautilus Award for best social change book of last year. He's also the author of Soul of a Citizen: Living With Conviction in a Cynical Time, and three other books. See http://www.theimpossible.org for more on Paul's work.
By Paul Rogat Loeb
As right-wing religious leaders attack Alberto Gonzales for being insufficiently doctrinaire, it's tempting to accept him as the best we can get for the Supreme Court. In a recent Huffington Post blog, Rob McKay suggested we mute our opposition voices precisely because a Gonzales nomination would divide the political right and fracture their coalition.
But accepting someone with the track record and values of Gonzales would be a grievous mistake. We're in our current mess in large part because our culture has been unable to confront the profoundly destructive consequences of the choices made by our leaders. To equivocate about Gonzales's role in these choices is to accept a culture of lies.
Of course, we don't completely control the outcome in this fight. It depends on the Democrats showing enough spine and the half-dozen supposedly moderate Republicans placing democracy ahead of short-term partisan advantage, and refusing to eliminate the judicial filibuster. But when someone exhibits as much contempt for due process as Gonzales does, we have to challenge him, in every way we can.
Gonzales is not David Souter, a relative unknown. He's someone who's embraced the most radical extensions of presidential power and most radical contempt for human rights. He called the Geneva Conventions "quaint" and "obsolete." He chaired the 2002 meetings that that argued that interrogations were not torture unless they produced "injury such as death, organ failure, or serious impairment of body functions." He wrote the Presidential Order saying that terror suspects could be tried and sentenced to death by secret military tribunals.
Gonzales has also consistently promoted questionable corporate interests. While on the Texas Supreme Court, he accepted major donations from corporations, like Halliburton, with cases before the court (Halliburton had five separate cases). Then he consistently supported the positions of these companies while refusing to recuse himself. He similarly refused to recuse himself from the Bush administration's investigation of the Enron scandal, though he'd received $14,000 from the company of "Kenny Boy." When the Government Accountability Office asked who participated in Dick Cheney's secret energy policy meetings, Gonzales blocked release of the documents.
Maybe a Gonzales nomination would temporarily split the right. But he isn't someone to embrace, either morally or politically. And if we let his potential nomination go through without a fight, Bush can still heal the wounds in his coalition by nominating a "real" conservative to William Rehnquist's seat. Meanwhile we'll have raised the bar still further till we're unable to challenge anyone short of Attila the Hun or Vlad the Impaler, and then only if they've spoken too bluntly.
We may not win in challenging Gonzales, but at least we will make clear why giving him a lifetime appointment is an outrage to democracy. We can highlight the profound destructiveness of the values that he and this administration represent. We can challenge the Republican "moderates" to stay true to their word and maintain the option of the judicial filibuster.
If we do this successfully, we'll help define Bush's Republicans not just as captives to some vague notion of extremism, but to specific policies that assault our democracy, endanger the lives of its citizens, and plunder the planet that we inhabit. If swing Republicans still vote to eliminate the filibuster, or insist on the confirmation of Gonzales, we can and should hang this action around their necks, and brand them, come election time, not only for embracing legal torture and unalloyed giveaways to corporate interests, but also for annihilating 200 years of democratic checks and balances in the service of a raw power grab.
Those on the political right have split and reunited too often for us to count on their rupture over even something as consequential as a Supreme Court nomination. When election time comes, they'll cut their losses and work together to elect those who will give them the maximum power. Learning from this means not giving up on challenging reprehensible nominees before we start.
Paul Rogat Loeb is the author of The Impossible Will Take a Little While: A Citizen's Guide to Hope in a Time of Fear, winner of the Nautilus Award for best social change book of last year. He's also the author of Soul of a Citizen: Living With Conviction in a Cynical Time, and three other books. See http://www.theimpossible.org for more on Paul's work.
Tuesday, July 12, 2005
Halliburton Fails Upward
Ari Berman
The Nation -- "Lawmakers, Including Republicans, Criticize Pentagon on Disputed Billing by Halliburton," read a New York Times headline on June 22. "Worries Raised on Handling of Funds in Iraq," the Los Angeles Times wrote the same day. It seemed clear that the Bush Administration's favorite war profiteer was again in hot water. Shortly thereafter, the Democratic Policy Committee released a report alleging that Halliburton subsidiary KBR overcharged the US government by as much as $1 billion, not even counting an additional $442 million in "unsupported" billing, for work in Iraq.
The headlines ceased over the next week. Then, In early July, KBR captured coverage in a decidedly more positive light: "Halliburton Gets More Iraq Work," Reuters reported on July 7. Once again, an Administration ally was/is failing upwards. Five billion dollars of new work, to be exact, on top of a contract that has brought KBR $9.1 billion, almost one sixth of what Bush promised the entire war effort would cost.
The military signed the $4.97 billion deal in May, but didn't reveal the details until this month, "because the Army did not consider it necessary," an Army spokesman told Reuters. Most of the money will go toward logistics--food, sanitation, laundry and other services for the troops--precisely the functions KBR has failed so spectacularly to properly administer thus far.
According to government reports and Army and KBR sources, Halliburton charged the government for 10,000 meals a day it never served, dished out food that had been expired for a year and provided its Turkish and Filipino staff with leftovers in trash bags. The Government Accountability Office concluded last year that the Army could save $43 million on food just by bypassing KBR and working with a different subcontractor. The $1.5 million tailoring fees, $560,000 in unnecessary heavy equipment, $152,000 for movie screenings, $45 cases of soda and exorbitant "cost-plus" contracts were just icing on the cake.
"I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper abuse I have witnessed during the course of my professional career," Bunnatine Greenhouse, the Army's top civilian contracting official, testified before the Democratic Policy Committee. (Republicans have blocked Democratic attempts to hold official hearings on Halliburton.)
Attempting to quash the mounting evidence of misconduct, Halliburton dispatched its own internal investigative units, dubbed "Tiger Teams" to the Gulf. The Tigers' promptly raked up a $1 million bill at Kuwait's five star Kempinski Hotel, journalist Ed Harriman reports, while Army troops were "sleeping in tents at a cost of $1.39 a day."
The Tigers', after much partying, subsequently recommended that the Army extend KBR's subcontracts.
It couldn't be more obvious that the entire company needs to be caged.
Like this article? Try 4 issues of The Nation at home (and online) FREE.
Copyright © 2005 The Nation
The Nation -- "Lawmakers, Including Republicans, Criticize Pentagon on Disputed Billing by Halliburton," read a New York Times headline on June 22. "Worries Raised on Handling of Funds in Iraq," the Los Angeles Times wrote the same day. It seemed clear that the Bush Administration's favorite war profiteer was again in hot water. Shortly thereafter, the Democratic Policy Committee released a report alleging that Halliburton subsidiary KBR overcharged the US government by as much as $1 billion, not even counting an additional $442 million in "unsupported" billing, for work in Iraq.
The headlines ceased over the next week. Then, In early July, KBR captured coverage in a decidedly more positive light: "Halliburton Gets More Iraq Work," Reuters reported on July 7. Once again, an Administration ally was/is failing upwards. Five billion dollars of new work, to be exact, on top of a contract that has brought KBR $9.1 billion, almost one sixth of what Bush promised the entire war effort would cost.
The military signed the $4.97 billion deal in May, but didn't reveal the details until this month, "because the Army did not consider it necessary," an Army spokesman told Reuters. Most of the money will go toward logistics--food, sanitation, laundry and other services for the troops--precisely the functions KBR has failed so spectacularly to properly administer thus far.
According to government reports and Army and KBR sources, Halliburton charged the government for 10,000 meals a day it never served, dished out food that had been expired for a year and provided its Turkish and Filipino staff with leftovers in trash bags. The Government Accountability Office concluded last year that the Army could save $43 million on food just by bypassing KBR and working with a different subcontractor. The $1.5 million tailoring fees, $560,000 in unnecessary heavy equipment, $152,000 for movie screenings, $45 cases of soda and exorbitant "cost-plus" contracts were just icing on the cake.
"I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper abuse I have witnessed during the course of my professional career," Bunnatine Greenhouse, the Army's top civilian contracting official, testified before the Democratic Policy Committee. (Republicans have blocked Democratic attempts to hold official hearings on Halliburton.)
Attempting to quash the mounting evidence of misconduct, Halliburton dispatched its own internal investigative units, dubbed "Tiger Teams" to the Gulf. The Tigers' promptly raked up a $1 million bill at Kuwait's five star Kempinski Hotel, journalist Ed Harriman reports, while Army troops were "sleeping in tents at a cost of $1.39 a day."
The Tigers', after much partying, subsequently recommended that the Army extend KBR's subcontracts.
It couldn't be more obvious that the entire company needs to be caged.
Like this article? Try 4 issues of The Nation at home (and online) FREE.
Copyright © 2005 The Nation
Monday, July 11, 2005
Timely terrorism: Death and destruction knock Bush's woes off the front pages
By Kéllia Ramares
Online Journal Associate Editor
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July 11, 2005—During the morning rush hour of July 7, London's transportation system was rocked by several explosions. Three blasts hit the Underground, London's subway system and a fourth hit a double-decker bus. More than 50 people have been confirmed killed and about another 700 were wounded. The death toll is expected to rise as more blown-up subway cars are evacuated.
British Prime Minister and current G-8 President Tony Blair has linked the explosions in London to the G-8 summit in Gleneagles, Scotland, which was temporarily interrupted while Blair attended to the emergency in his capital.
But is this "timely terrorism" perpetrated by criminals run by US and or British covert ops to distract attention from George W. Bush's political woes? In looking at major alleged terrorist attacks or threats of such attacks, it is critical to watch how Bush is fairing politically.
The Downing Street Memos indicate that Bush wanted war in Iraq well before September 11, 2001, and that "the facts were being fixed around the policy." A Zogby survey of likely voters, taken after Bush's "recruitment" speech at Ft. Bragg, shows that 42 percent of voters believe that Bush should be impeached if he lied to get us into war. (Margin of error was plus or minus 3.3 percent)
Bush's poll numbers are dropping like a stone. A CNN/USA Today/Gallup poll released on June 27 showed that 53 percent of the respondents disapproved of Bush's job performance. (Margin of error was plus or minus 3 percent) The 53 percent overall disapproval rating was the highest this poll has recorded since Bush took the oath of office in January 2001. But when individual issues are polled, Bush continues to score highest on his handling of the so-called "war on terror."
The war in Iraq has grown more deadly and expensive. The web site icasualties.org reports 1,751 dead American soldiers as of July 7, with an additional 90 UK soldiers and 100 other coalition troops killed since the invasion began. And that doesn't count wounded troops or dead Iraqi civilians. The National Priorities Project says that the cost of the Iraq war is over $179 billion dollars. Add in the cost of war in Afghanistan and appropriations requests for future operations and the cost of these wars is around $300 billion.
Remember being told that the Iraqis would greets us with flowers and sweets as liberators, and that the war was supposed to be over quickly? Remember Bush declaring major combat over on May 1, 2003? What else might we be able to do with $300 billion besides killing and maiming people, and spreading depleted uranium around?
Members of Congress and others are calling for an exit date. And Rep. Barbara Lee (D-CA) has introduced a bill attempting to codify the White House claim that the US does not intend a permanent military presence in Iraq.
The Zogby survey of likely voters taken after Bush's speech at Ft. Bragg showed that he did not get a bounce in popularity from his televised attempt to convince the nation that it's important to keep fighting in Iraq.
The Detroit News is reporting that the Army has ordered another $5 billion of work from Halliburton, even as questions linger over Halliburton's billing of previous work. Dick Cheney claims he has nothing to do with Halliburton getting so much war business, but does anybody with a functional brain really believe the former Halliburton CEO who quit that post to run for vice president? Secretary of War Donald Rumsfeld recently said that it could take 12 years to defeat the Iraqi insurgency. That would make Halliburton, Bechtel, and other Bush friends billions and billions more.
Twelve years? How about never? The truth is that standing armies don't defeat resistance fighters. The resistance knows the lay of the land and has popular support against foreign occupiers. Meanwhile, the US Army has missed its recruiting goals for 4 consecutive months, amid reports of hardball and even illegal tactics by recruiters trying to make quota. And then there are the torture scandals, from Attorney General, and possible Supreme Court nominee, Alberto Gonzales calling the Geneva Conventions "quaint," to the photographed goings-on at Abu Ghraib prison.
While the Pentagon has an open checkbook, domestic needs are being unmet as state and local budget deficits mean cuts in programs for schools, housing, transit and health. But people are seeing Bush's plan to rip off Social Security to benefit Wall Street for the reverse Robin Hood transfer of wealth that it is. His poll numbers are worse on Social Security than on any other individual issue.
Also, the nomination of John Bolton to be the anti-UN ambassador to the UN has run into trouble. The USA PATRIOT Act is up for reauthorization and that has met with a bit of resistance as the House narrowly agreed to the Sanders amendment which takes libraries and bookstores out of the purview of the infamous Section 215, allowing the FBI to gather personal records without a warrant.
Even the G-8 meeting was no picnic for Bush. The United States is the only G-8 nation not to ratify the Kyoto protocols on climate change. Bush is claiming that the protocols would have "wrecked" the US economy. Once again, here's the United States standing alone claiming special privileges. All the industrialized nations implementing the protocols, including Russia, Japan, France and England, would have to make some economic sacrifice in an effort to reduce global warming. But here's Bush, who has only recently and most reluctantly acknowledged the reality of climate change, acting as if the US economy, the world's No. 1 oil consumer, is the only thing on earth that matters.
Then there's perhaps the scariest thing of all for the neocons: Special Prosecutor Patrick Fitzgerald might be closing in on the identity of the senior White House official who outed CIA undercover operative Valerie Plame. She was named after her husband, former Ambassador Joseph Wilson, went to Niger and reported back that documents showing that Iraq wanted to purchase yellowcake uranium from the African country were crude forgeries. Was it White House Deputy Chief of staff Karl Rove who illegally leaked Plame's identity? Itﾒs been confirmed that Rove was a source for a July 2003 online story by Time Magazine reporter Matthew Cooper about Ambassador Wilson's trip to Niger. Cooper wrote: "Some government officials have noted to Time in interviews . . . that Wilson's wife, Valerie Plame, is a CIA official who monitors the proliferation of weapons of mass destruction." If "Bush's Brain" was the leaker, could he be forced to resign in disgrace and face criminal prosecution?
Cui Bono?
So now we have these mass murders knocking all of Bush's political woes off the front pages. How timely. How convenient. Now Bush can again pose as a war president before the government's lapdog corporate media and the American sheeple. And Tony Blair, who got a third term as British PM with a greatly reduced parliamentary majority, due largely to British discontent with the war in Iraq, can also strike a dramatic pose.
News reports say a hitherto unknown group called "Secret Organization of al-Q'aeda in Europe" has allegedly claimed responsibility. (A group called "al-Q'aeda in Europe" claimed responsibility for the Madrid bombings). Supposedly billions are being spent on security and intelligence; we've been warned that there are thousands of sleeper terrorist agents in Europe, and yet the acts were committed by an "unknown" group?
Yet, maybe there is no such group. An MSNBC translator, Jacob Keryakes, claimed that the message allegedly sent by the "Secret Organization of al-Q'aeda in Europe" contained an error in one of the Koranic verses cited in the message. The translator said this suggests the claim may be phony. "This is not something al-Q'aeda would do," he said. Al-Q'aeda itself is likely a straw man. While, no doubt, there are people on the ground in colonized nations who are willing to use violence in a bid for their people's freedom, "terrorist" organizations can be co-opted and run by the intelligence operatives of the terrorists' purported targets. Osama bin Laden himself has a long history with the CIA.
With the unpopularity of the war in Iraq growing, and with Bush's political troubles mounting, bombing London now makes no sense for "honest terrorists," i.e., terrorists not being run by the US, which has used terrorism as a tool of foreign policy for decades. Why risk increasing Bush's popularity when it is at an all-time low? The way to get European troops out of Iraq is to get the Americans out. Would Denmark stay if the US left? Attacks in Europe strengthen Bush's "resolve" to stay the course, and the few nations who have not joined "the coalition of the leaving" would stay with the Americans. (Conservative Italian Premier Silvio Berlusconi announced on July 8 that Italy would probably begin its withdrawal in September. Italy has been talking about a withdrawal for several months).
While it makes no sense for alleged extremists to attack now, it makes all the sense in the world for the neocons to order an attack, even on the soil of America's closest ally. There has to be an actual attack from time to time to keep the fear level up. And what's a few more lives taken when these war criminals have squandered so many thousands of others? If an attack distracts the press from Bush's political woes, ups the fear level in the American and British populace and makes increases in war spending and decreases in civil liberties easier for legislatures to vote for, so be it. You can't make an omelet if you don't break some eggs.
Copyright © 2005 Kéllia Ramares. For Fair Use Only.
Online Journal Associate Editor
Download a .pdf file for printing.
Adobe Acrobat Reader required.
Click here to download a free copy.
July 11, 2005—During the morning rush hour of July 7, London's transportation system was rocked by several explosions. Three blasts hit the Underground, London's subway system and a fourth hit a double-decker bus. More than 50 people have been confirmed killed and about another 700 were wounded. The death toll is expected to rise as more blown-up subway cars are evacuated.
British Prime Minister and current G-8 President Tony Blair has linked the explosions in London to the G-8 summit in Gleneagles, Scotland, which was temporarily interrupted while Blair attended to the emergency in his capital.
But is this "timely terrorism" perpetrated by criminals run by US and or British covert ops to distract attention from George W. Bush's political woes? In looking at major alleged terrorist attacks or threats of such attacks, it is critical to watch how Bush is fairing politically.
The Downing Street Memos indicate that Bush wanted war in Iraq well before September 11, 2001, and that "the facts were being fixed around the policy." A Zogby survey of likely voters, taken after Bush's "recruitment" speech at Ft. Bragg, shows that 42 percent of voters believe that Bush should be impeached if he lied to get us into war. (Margin of error was plus or minus 3.3 percent)
Bush's poll numbers are dropping like a stone. A CNN/USA Today/Gallup poll released on June 27 showed that 53 percent of the respondents disapproved of Bush's job performance. (Margin of error was plus or minus 3 percent) The 53 percent overall disapproval rating was the highest this poll has recorded since Bush took the oath of office in January 2001. But when individual issues are polled, Bush continues to score highest on his handling of the so-called "war on terror."
The war in Iraq has grown more deadly and expensive. The web site icasualties.org reports 1,751 dead American soldiers as of July 7, with an additional 90 UK soldiers and 100 other coalition troops killed since the invasion began. And that doesn't count wounded troops or dead Iraqi civilians. The National Priorities Project says that the cost of the Iraq war is over $179 billion dollars. Add in the cost of war in Afghanistan and appropriations requests for future operations and the cost of these wars is around $300 billion.
Remember being told that the Iraqis would greets us with flowers and sweets as liberators, and that the war was supposed to be over quickly? Remember Bush declaring major combat over on May 1, 2003? What else might we be able to do with $300 billion besides killing and maiming people, and spreading depleted uranium around?
Members of Congress and others are calling for an exit date. And Rep. Barbara Lee (D-CA) has introduced a bill attempting to codify the White House claim that the US does not intend a permanent military presence in Iraq.
The Zogby survey of likely voters taken after Bush's speech at Ft. Bragg showed that he did not get a bounce in popularity from his televised attempt to convince the nation that it's important to keep fighting in Iraq.
The Detroit News is reporting that the Army has ordered another $5 billion of work from Halliburton, even as questions linger over Halliburton's billing of previous work. Dick Cheney claims he has nothing to do with Halliburton getting so much war business, but does anybody with a functional brain really believe the former Halliburton CEO who quit that post to run for vice president? Secretary of War Donald Rumsfeld recently said that it could take 12 years to defeat the Iraqi insurgency. That would make Halliburton, Bechtel, and other Bush friends billions and billions more.
Twelve years? How about never? The truth is that standing armies don't defeat resistance fighters. The resistance knows the lay of the land and has popular support against foreign occupiers. Meanwhile, the US Army has missed its recruiting goals for 4 consecutive months, amid reports of hardball and even illegal tactics by recruiters trying to make quota. And then there are the torture scandals, from Attorney General, and possible Supreme Court nominee, Alberto Gonzales calling the Geneva Conventions "quaint," to the photographed goings-on at Abu Ghraib prison.
While the Pentagon has an open checkbook, domestic needs are being unmet as state and local budget deficits mean cuts in programs for schools, housing, transit and health. But people are seeing Bush's plan to rip off Social Security to benefit Wall Street for the reverse Robin Hood transfer of wealth that it is. His poll numbers are worse on Social Security than on any other individual issue.
Also, the nomination of John Bolton to be the anti-UN ambassador to the UN has run into trouble. The USA PATRIOT Act is up for reauthorization and that has met with a bit of resistance as the House narrowly agreed to the Sanders amendment which takes libraries and bookstores out of the purview of the infamous Section 215, allowing the FBI to gather personal records without a warrant.
Even the G-8 meeting was no picnic for Bush. The United States is the only G-8 nation not to ratify the Kyoto protocols on climate change. Bush is claiming that the protocols would have "wrecked" the US economy. Once again, here's the United States standing alone claiming special privileges. All the industrialized nations implementing the protocols, including Russia, Japan, France and England, would have to make some economic sacrifice in an effort to reduce global warming. But here's Bush, who has only recently and most reluctantly acknowledged the reality of climate change, acting as if the US economy, the world's No. 1 oil consumer, is the only thing on earth that matters.
Then there's perhaps the scariest thing of all for the neocons: Special Prosecutor Patrick Fitzgerald might be closing in on the identity of the senior White House official who outed CIA undercover operative Valerie Plame. She was named after her husband, former Ambassador Joseph Wilson, went to Niger and reported back that documents showing that Iraq wanted to purchase yellowcake uranium from the African country were crude forgeries. Was it White House Deputy Chief of staff Karl Rove who illegally leaked Plame's identity? Itﾒs been confirmed that Rove was a source for a July 2003 online story by Time Magazine reporter Matthew Cooper about Ambassador Wilson's trip to Niger. Cooper wrote: "Some government officials have noted to Time in interviews . . . that Wilson's wife, Valerie Plame, is a CIA official who monitors the proliferation of weapons of mass destruction." If "Bush's Brain" was the leaker, could he be forced to resign in disgrace and face criminal prosecution?
Cui Bono?
So now we have these mass murders knocking all of Bush's political woes off the front pages. How timely. How convenient. Now Bush can again pose as a war president before the government's lapdog corporate media and the American sheeple. And Tony Blair, who got a third term as British PM with a greatly reduced parliamentary majority, due largely to British discontent with the war in Iraq, can also strike a dramatic pose.
News reports say a hitherto unknown group called "Secret Organization of al-Q'aeda in Europe" has allegedly claimed responsibility. (A group called "al-Q'aeda in Europe" claimed responsibility for the Madrid bombings). Supposedly billions are being spent on security and intelligence; we've been warned that there are thousands of sleeper terrorist agents in Europe, and yet the acts were committed by an "unknown" group?
Yet, maybe there is no such group. An MSNBC translator, Jacob Keryakes, claimed that the message allegedly sent by the "Secret Organization of al-Q'aeda in Europe" contained an error in one of the Koranic verses cited in the message. The translator said this suggests the claim may be phony. "This is not something al-Q'aeda would do," he said. Al-Q'aeda itself is likely a straw man. While, no doubt, there are people on the ground in colonized nations who are willing to use violence in a bid for their people's freedom, "terrorist" organizations can be co-opted and run by the intelligence operatives of the terrorists' purported targets. Osama bin Laden himself has a long history with the CIA.
With the unpopularity of the war in Iraq growing, and with Bush's political troubles mounting, bombing London now makes no sense for "honest terrorists," i.e., terrorists not being run by the US, which has used terrorism as a tool of foreign policy for decades. Why risk increasing Bush's popularity when it is at an all-time low? The way to get European troops out of Iraq is to get the Americans out. Would Denmark stay if the US left? Attacks in Europe strengthen Bush's "resolve" to stay the course, and the few nations who have not joined "the coalition of the leaving" would stay with the Americans. (Conservative Italian Premier Silvio Berlusconi announced on July 8 that Italy would probably begin its withdrawal in September. Italy has been talking about a withdrawal for several months).
While it makes no sense for alleged extremists to attack now, it makes all the sense in the world for the neocons to order an attack, even on the soil of America's closest ally. There has to be an actual attack from time to time to keep the fear level up. And what's a few more lives taken when these war criminals have squandered so many thousands of others? If an attack distracts the press from Bush's political woes, ups the fear level in the American and British populace and makes increases in war spending and decreases in civil liberties easier for legislatures to vote for, so be it. You can't make an omelet if you don't break some eggs.
Copyright © 2005 Kéllia Ramares. For Fair Use Only.
Wednesday, July 06, 2005
Halliburton's Higher Bill
Rising Costs Reflect Growing Demand for Firm's Services
By Griff Witte
Washington Post Staff Writer
Wednesday, July 6, 2005; D01
The Army has ordered nearly $5 billion in work from Halliburton Co. to provide logistics support to U.S. troops in Iraq over the next year, $1 billion above what the Army paid for similar services the previous year.
The new order, which comes despite lingering questions about the company's past billing, replaces an earlier agreement that expired last June but had been extended through this spring to ensure a continuous supply of food, sanitation, laundry and other logistical services for the troops, according to Linda K. Theis, an Army spokeswoman.
The new order does not change the nature of Halliburton's work, but the higher price tag does reflect the growing demand for the company's services as U.S. forces continue to battle a stubborn insurgency two years after the fall of Saddam Hussein.
The increased bill parallels ballooning overall costs in Iraq. President Bush said in March 2003 that combat in Iraq would cost about $60 billion. But the cost for military operations alone had hit $135.3 billion as of March 2005, according to the Office of Management and Budget. The price tag would be far higher if the costs to fund the Coalition Provisional Authority, reconstruction projects and intelligence operations were included.
Halliburton subsidiary Kellogg Brown & Root has received more money from the U.S. involvement in Iraq than any other contractor. The company has been a lightning rod for criticism by administration foes who think Halliburton's high-level connections -- most notably its former chief executive, Dick Cheney, who is now vice president -- may have given it undue influence in winning sole-source business.
Under the Army's previous order for logistics support, Halliburton was paid $6.3 billion for work during the first two years of the occupation, including $3.98 billion between the beginning of May 2004 and the end of May 2005. Under the new deal, Halliburton will receive $4.97 billion to support U.S. troops in Iraq until May 2006.
Both orders stem from a 10-year contract known as LOGCAP, which KBR won in a competitive bid in 2001. As of the beginning of June, the Army had obligated nearly $12 billion to the company under the logistic contract, the vast majority of it for work in Iraq.
The new order took effect two months ago but had not been made public. Theis, the spokeswoman for the U.S. Army Field Support Command, which oversees the contract, said that there was "not a conscious decision" to keep the new deal quiet but that her office had simply been too busy with other news.
Rep. Henry A. Waxman (D-Calif.), a vocal critic of Halliburton, said the Army should not be giving the company orders for more work at the same time it is citing the company for unreasonable bills. "The accountability vacuum at the Defense Department is costing the taxpayer dearly," Waxman said in a statement.
The Pentagon last week confirmed a report by congressional Democrats saying that the Defense Contract Audit Agency has questioned more than $1 billion of Halliburton's bills for work in Iraq under LOGCAP and an energy contract called Restore Iraqi Oil. Among the costs that Pentagon auditors questioned were $152,000 for movie rentals, $1.5 million for tailoring and two multimillion-dollar transportation bills that appeared to overlap.
Pentagon spokeswoman Lt. Col. Rose-Ann L. Lynch said that the questioned costs are not necessarily overcharges and that contracting officials have either resolved, or are in the process of resolving, most of the discrepancies.
Halliburton has said that questioning costs is part of the normal contracting process and that the company is doing all it can to support U.S. troops in a dangerous environment.
About seven months ago, the Army gave Halliburton a list of the services it wanted under the primary task order for the LOGCAP contract, Theis said. But the company estimated the cost of those services would top $10 billion a year, far above what the Army had budgeted. Army officials ended up paring down their list, and they reached agreement with the company on the $4.97 billion figure this spring.
The Army would not provide a copy of the task order without a Freedom of Information Act request. But a draft of the order was provided to The Washington Post by David Phinney, a correspondent for CorpWatch.org, a Web site that monitors contractor involvement in Iraq.
The LOGCAP contract is not the only way the Army can buy logistical services, but it has received heavy use at a time when the Pentagon is outsourcing many of its non-war-fighting functions. Some have questioned whether such reliance on a single contractor makes sense. In a report issued last July, the Government Accountability Office found that the government could save $31 million -- or 43 percent -- on food services at six locations in Kuwait if it bypassed LOGCAP and KBR, working instead through a subcontractor.
Halliburton said in January that it would try to sell KBR, citing in part the controversy surrounding the company's work. Halliburton spokeswoman Jennifer W. Dellinger said in a statement yesterday that "no timeline has been set for a separation of KBR, nor has a decision been made on what form any potential separation might take."
© 2005 The Washington Post Company
By Griff Witte
Washington Post Staff Writer
Wednesday, July 6, 2005; D01
The Army has ordered nearly $5 billion in work from Halliburton Co. to provide logistics support to U.S. troops in Iraq over the next year, $1 billion above what the Army paid for similar services the previous year.
The new order, which comes despite lingering questions about the company's past billing, replaces an earlier agreement that expired last June but had been extended through this spring to ensure a continuous supply of food, sanitation, laundry and other logistical services for the troops, according to Linda K. Theis, an Army spokeswoman.
The new order does not change the nature of Halliburton's work, but the higher price tag does reflect the growing demand for the company's services as U.S. forces continue to battle a stubborn insurgency two years after the fall of Saddam Hussein.
The increased bill parallels ballooning overall costs in Iraq. President Bush said in March 2003 that combat in Iraq would cost about $60 billion. But the cost for military operations alone had hit $135.3 billion as of March 2005, according to the Office of Management and Budget. The price tag would be far higher if the costs to fund the Coalition Provisional Authority, reconstruction projects and intelligence operations were included.
Halliburton subsidiary Kellogg Brown & Root has received more money from the U.S. involvement in Iraq than any other contractor. The company has been a lightning rod for criticism by administration foes who think Halliburton's high-level connections -- most notably its former chief executive, Dick Cheney, who is now vice president -- may have given it undue influence in winning sole-source business.
Under the Army's previous order for logistics support, Halliburton was paid $6.3 billion for work during the first two years of the occupation, including $3.98 billion between the beginning of May 2004 and the end of May 2005. Under the new deal, Halliburton will receive $4.97 billion to support U.S. troops in Iraq until May 2006.
Both orders stem from a 10-year contract known as LOGCAP, which KBR won in a competitive bid in 2001. As of the beginning of June, the Army had obligated nearly $12 billion to the company under the logistic contract, the vast majority of it for work in Iraq.
The new order took effect two months ago but had not been made public. Theis, the spokeswoman for the U.S. Army Field Support Command, which oversees the contract, said that there was "not a conscious decision" to keep the new deal quiet but that her office had simply been too busy with other news.
Rep. Henry A. Waxman (D-Calif.), a vocal critic of Halliburton, said the Army should not be giving the company orders for more work at the same time it is citing the company for unreasonable bills. "The accountability vacuum at the Defense Department is costing the taxpayer dearly," Waxman said in a statement.
The Pentagon last week confirmed a report by congressional Democrats saying that the Defense Contract Audit Agency has questioned more than $1 billion of Halliburton's bills for work in Iraq under LOGCAP and an energy contract called Restore Iraqi Oil. Among the costs that Pentagon auditors questioned were $152,000 for movie rentals, $1.5 million for tailoring and two multimillion-dollar transportation bills that appeared to overlap.
Pentagon spokeswoman Lt. Col. Rose-Ann L. Lynch said that the questioned costs are not necessarily overcharges and that contracting officials have either resolved, or are in the process of resolving, most of the discrepancies.
Halliburton has said that questioning costs is part of the normal contracting process and that the company is doing all it can to support U.S. troops in a dangerous environment.
About seven months ago, the Army gave Halliburton a list of the services it wanted under the primary task order for the LOGCAP contract, Theis said. But the company estimated the cost of those services would top $10 billion a year, far above what the Army had budgeted. Army officials ended up paring down their list, and they reached agreement with the company on the $4.97 billion figure this spring.
The Army would not provide a copy of the task order without a Freedom of Information Act request. But a draft of the order was provided to The Washington Post by David Phinney, a correspondent for CorpWatch.org, a Web site that monitors contractor involvement in Iraq.
The LOGCAP contract is not the only way the Army can buy logistical services, but it has received heavy use at a time when the Pentagon is outsourcing many of its non-war-fighting functions. Some have questioned whether such reliance on a single contractor makes sense. In a report issued last July, the Government Accountability Office found that the government could save $31 million -- or 43 percent -- on food services at six locations in Kuwait if it bypassed LOGCAP and KBR, working instead through a subcontractor.
Halliburton said in January that it would try to sell KBR, citing in part the controversy surrounding the company's work. Halliburton spokeswoman Jennifer W. Dellinger said in a statement yesterday that "no timeline has been set for a separation of KBR, nor has a decision been made on what form any potential separation might take."
© 2005 The Washington Post Company
Audit questions $1.4b in Halliburton bills
Expenses at issue from Iraq contracts
By Rick Klein, Globe Staff | June 28, 2005
WASHINGTON -- Internal Pentagon audits have flagged about $1.4 billion in expenses submitted by Halliburton Co. for services the firm is providing in Iraq, charges that include $45 cases of soda, $100-per-bag laundry service, and several months preparing at least 10,000 daily meals for a US military base that the troops did not need and ultimately went to waste, according to a report released yesterday by congressional Democrats.
The Defense Contract Audit Agency, which reviews Pentagon contracting, identified $1.03 billion in Halliburton invoices that it questioned as excessive, and an additional $442 million in expenses the company reported that the agency deemed to be insufficiently documented, according to the report.
The report, which House and Senate Democrats made public yesterday, gives a broad overview of questionable costs racked up by the energy conglomerate once led by Vice President Dick Cheney. Federal officials have also probed allegations that Halliburton executives have run up costs by staying at top-of-the-line hotels in Kuwait, that they have paid too much to import fuel, and that they've prepared thousands more meals than they've served. The report categorizes allegations that previously had been anecdotal, and expands the scope of allegations of waste and financial malfeasance.
It's also the latest salvo in Democrats' long-running contention that Halliburton -- by far the largest private contractor working in Iraq -- has gotten favored treatment from the Bush administration despite overcharging the government.
''Whether the explanation is gross incompetence or deliberate malfeasance, the result is the same: The taxpayers are getting bilked," Representative Henry A. Waxman of California, the ranking Democrat on the House Government Reform Committee, said yesterday at a hearing Democrats held to highlight the report. ''This special treatment must end."
Cathy Mann, a spokeswoman for Houston-based Halliburton, said the $1.4 billion figure is a ''gross mischaracterization" of the expenses that are under review, since some of the discrepancies have already been resolved.
For example, Mann said, Halliburton and the Pentagon disagreed over a bill for food services, but resolved the matter in April. She said both sides ultimately agreed that Halliburton would get $145 million of $200 million that had been withheld over the dispute.
''The only thing that's been inflated is the political rhetoric, which is mostly a rehash of last year's elections," Mann said. ''Halliburton is taking care of our troops' needs so they can focus on the tasks at hand. . .Audits are part of the normal contracting process, and it is important to note that the auditors' role in the process is advisory only" to the other Pentagon agencies that award private contracts.
The audits surfaced in a joint report prepared by the Senate Democratic Policy Committee and the Democratic staff of the House Government Reform Committee. The audits were part of the Pentagon's normal contract review policy; Democratic lawmakers obtained them from whistle-blowers who thought the information should come to light, according to committee aides. The whistleblowers asked not to be identified.
Much of the money in question has not yet been paid to Halliburton, pending resolution of the concerns raised by auditors.
Halliburton has won a number of contracts -- some the Pentagon handed to them on a no-bid basis -- for military suppport, security and reconstruction work in Iraq, deals that could total as much as $18 billion. Divisions of the company are under contract to provide meals and logistical services for coalition troops, rebuilding Iraq's oil infrastructure, and purchasing equipment and supplies to help with the reconstruction of the country.
The contracts entitle the company to get full reimbursement for its costs from the government, in addition to a fee that is a percentage of those costs, an arrangement that critics say creates an incentive for the company to pad its bills.
Democrats cited numerous instances in the report of apparent double-charging for services and equipment, and seemingly excessive costs for basic materials like food, gasoline, and laundry.
A November report by the Army Audit Agency, another Pentagon review office, found that Halliburton contracts had nearly $10 million in ''duplicate costs" for cargo and freight equipment as well as instances where the company issued more paychecks for a project than the number of people working on it, and the purchase of $560,000 worth of unnecessary equipment. At one point, the company billed the government $152,000 to build a 10,000-title ''movie library," an expense auditors ultimately deemed excessive.
Rory Mayberry, a former food production manager for the Halliburton subsidiary Kellogg, Brown & Root, testified at the hearing that the company routinely overpaid for staples such as tomatoes and bacon by importing the food from Philadelphia instead of using local suppliers overseas and in the region. Mayberry said that in early 2004, the company ordered enough food to prepare 20,000 meals every day at one US base in Iraq even though it was serving only 10,000 of them a day.
''When I questioned these practices, the managers told me this needed to be done because KBR lost money in prior months, when the government suspended some of the dining-hall payments to the company," said Mayberry, who testified via videotape from Iraq, where he is now working for another private company.
Two employees of the fuel transport and security company Lloyd-Owen International, another private company, told lawmakers yesterday that while Halliburton paid a Kuwaiti company about $1.30 per gallon of gasoline to fill the tanks of its vehicles, other contractors paid as little as 18 cents per gallon.
Federal officials have launched investigations of portions of Halliburton contracts, most notably in a March indictment where the Justice Department accused a company official and a subcontractor of overcharging taxpayers by nearly $5 million.
Senate minority leader Harry Reid, Democrat of Nevada, said: ''The American taxpayers have simply been cheated. For every dollar that Halliburton gets in excess profits, these are jobs that cannot go to Iraqis who need them."
Rick Klein can be reached at rklein@globe.com.
© Copyright 2005 Globe Newspaper Company.
By Rick Klein, Globe Staff | June 28, 2005
WASHINGTON -- Internal Pentagon audits have flagged about $1.4 billion in expenses submitted by Halliburton Co. for services the firm is providing in Iraq, charges that include $45 cases of soda, $100-per-bag laundry service, and several months preparing at least 10,000 daily meals for a US military base that the troops did not need and ultimately went to waste, according to a report released yesterday by congressional Democrats.
The Defense Contract Audit Agency, which reviews Pentagon contracting, identified $1.03 billion in Halliburton invoices that it questioned as excessive, and an additional $442 million in expenses the company reported that the agency deemed to be insufficiently documented, according to the report.
The report, which House and Senate Democrats made public yesterday, gives a broad overview of questionable costs racked up by the energy conglomerate once led by Vice President Dick Cheney. Federal officials have also probed allegations that Halliburton executives have run up costs by staying at top-of-the-line hotels in Kuwait, that they have paid too much to import fuel, and that they've prepared thousands more meals than they've served. The report categorizes allegations that previously had been anecdotal, and expands the scope of allegations of waste and financial malfeasance.
It's also the latest salvo in Democrats' long-running contention that Halliburton -- by far the largest private contractor working in Iraq -- has gotten favored treatment from the Bush administration despite overcharging the government.
''Whether the explanation is gross incompetence or deliberate malfeasance, the result is the same: The taxpayers are getting bilked," Representative Henry A. Waxman of California, the ranking Democrat on the House Government Reform Committee, said yesterday at a hearing Democrats held to highlight the report. ''This special treatment must end."
Cathy Mann, a spokeswoman for Houston-based Halliburton, said the $1.4 billion figure is a ''gross mischaracterization" of the expenses that are under review, since some of the discrepancies have already been resolved.
For example, Mann said, Halliburton and the Pentagon disagreed over a bill for food services, but resolved the matter in April. She said both sides ultimately agreed that Halliburton would get $145 million of $200 million that had been withheld over the dispute.
''The only thing that's been inflated is the political rhetoric, which is mostly a rehash of last year's elections," Mann said. ''Halliburton is taking care of our troops' needs so they can focus on the tasks at hand. . .Audits are part of the normal contracting process, and it is important to note that the auditors' role in the process is advisory only" to the other Pentagon agencies that award private contracts.
The audits surfaced in a joint report prepared by the Senate Democratic Policy Committee and the Democratic staff of the House Government Reform Committee. The audits were part of the Pentagon's normal contract review policy; Democratic lawmakers obtained them from whistle-blowers who thought the information should come to light, according to committee aides. The whistleblowers asked not to be identified.
Much of the money in question has not yet been paid to Halliburton, pending resolution of the concerns raised by auditors.
Halliburton has won a number of contracts -- some the Pentagon handed to them on a no-bid basis -- for military suppport, security and reconstruction work in Iraq, deals that could total as much as $18 billion. Divisions of the company are under contract to provide meals and logistical services for coalition troops, rebuilding Iraq's oil infrastructure, and purchasing equipment and supplies to help with the reconstruction of the country.
The contracts entitle the company to get full reimbursement for its costs from the government, in addition to a fee that is a percentage of those costs, an arrangement that critics say creates an incentive for the company to pad its bills.
Democrats cited numerous instances in the report of apparent double-charging for services and equipment, and seemingly excessive costs for basic materials like food, gasoline, and laundry.
A November report by the Army Audit Agency, another Pentagon review office, found that Halliburton contracts had nearly $10 million in ''duplicate costs" for cargo and freight equipment as well as instances where the company issued more paychecks for a project than the number of people working on it, and the purchase of $560,000 worth of unnecessary equipment. At one point, the company billed the government $152,000 to build a 10,000-title ''movie library," an expense auditors ultimately deemed excessive.
Rory Mayberry, a former food production manager for the Halliburton subsidiary Kellogg, Brown & Root, testified at the hearing that the company routinely overpaid for staples such as tomatoes and bacon by importing the food from Philadelphia instead of using local suppliers overseas and in the region. Mayberry said that in early 2004, the company ordered enough food to prepare 20,000 meals every day at one US base in Iraq even though it was serving only 10,000 of them a day.
''When I questioned these practices, the managers told me this needed to be done because KBR lost money in prior months, when the government suspended some of the dining-hall payments to the company," said Mayberry, who testified via videotape from Iraq, where he is now working for another private company.
Two employees of the fuel transport and security company Lloyd-Owen International, another private company, told lawmakers yesterday that while Halliburton paid a Kuwaiti company about $1.30 per gallon of gasoline to fill the tanks of its vehicles, other contractors paid as little as 18 cents per gallon.
Federal officials have launched investigations of portions of Halliburton contracts, most notably in a March indictment where the Justice Department accused a company official and a subcontractor of overcharging taxpayers by nearly $5 million.
Senate minority leader Harry Reid, Democrat of Nevada, said: ''The American taxpayers have simply been cheated. For every dollar that Halliburton gets in excess profits, these are jobs that cannot go to Iraqis who need them."
Rick Klein can be reached at rklein@globe.com.
© Copyright 2005 Globe Newspaper Company.
Pentagon releases Halliburton documents
(via the Hill)
In the wake of a subpoena threat, the Pentagon has started turning over to Congress documents related to Halliburton Corp.’s disputed billing under a $2.5 billion contract for Iraqi oil-site repairs and fuel imports.
Rep. Christopher Shays (R-Conn.), chairman of the House Government Reform Subcommittee on National Security, Emerging Threats and International Relations, intended to subpoena the Defense Department if the administration did not provide the long-requested documents.
Halliburton received the contract in 2003 without competition. The company is a major recipient of Development Fund for Iraq (DFI) money. DFI is the successor of the United Nations Oil-for-Food program.
The Pentagon has submitted documents related to the contract without a subpoena, a subcommittee aide said, and more documents are on the way. Subcommittee members objected to heavily redacted internal Defense Department audits provided to a U.N. board charged with monitoring the DFI program.
The audits found more than $200 million in questioned charges that Halliburton had passed to the government.
Pentagon officials said that the documents were redacted to protect the company’s proprietary information.
Roxana Tiron
In the wake of a subpoena threat, the Pentagon has started turning over to Congress documents related to Halliburton Corp.’s disputed billing under a $2.5 billion contract for Iraqi oil-site repairs and fuel imports.
Rep. Christopher Shays (R-Conn.), chairman of the House Government Reform Subcommittee on National Security, Emerging Threats and International Relations, intended to subpoena the Defense Department if the administration did not provide the long-requested documents.
Halliburton received the contract in 2003 without competition. The company is a major recipient of Development Fund for Iraq (DFI) money. DFI is the successor of the United Nations Oil-for-Food program.
The Pentagon has submitted documents related to the contract without a subpoena, a subcommittee aide said, and more documents are on the way. Subcommittee members objected to heavily redacted internal Defense Department audits provided to a U.N. board charged with monitoring the DFI program.
The audits found more than $200 million in questioned charges that Halliburton had passed to the government.
Pentagon officials said that the documents were redacted to protect the company’s proprietary information.
Roxana Tiron
Halliburton's Higher Bill
Rising Costs Reflect Growing Demand for Firm's Services
By Griff Witte
Washington Post Staff Writer
Wednesday, July 6, 2005; D01
The Army has ordered nearly $5 billion in work from Halliburton Co. to provide logistics support to U.S. troops in Iraq over the next year, $1 billion above what the Army paid for similar services the previous year.
The new order, which comes despite lingering questions about the company's past billing, replaces an earlier agreement that expired last June but had been extended through this spring to ensure a continuous supply of food, sanitation, laundry and other logistical services for the troops, according to Linda K. Theis, an Army spokeswoman.
The new order does not change the nature of Halliburton's work, but the higher price tag does reflect the growing demand for the company's services as U.S. forces continue to battle a stubborn insurgency two years after the fall of Saddam Hussein.
The increased bill parallels ballooning overall costs in Iraq. President Bush said in March 2003 that combat in Iraq would cost about $60 billion. But the cost for military operations alone had hit $135.3 billion as of March 2005, according to the Office of Management and Budget. The price tag would be far higher if the costs to fund the Coalition Provisional Authority, reconstruction projects and intelligence operations were included.
Halliburton subsidiary Kellogg Brown & Root has received more money from the U.S. involvement in Iraq than any other contractor. The company has been a lightning rod for criticism by administration foes who think Halliburton's high-level connections -- most notably its former chief executive, Dick Cheney, who is now vice president -- may have given it undue influence in winning sole-source business.
Under the Army's previous order for logistics support, Halliburton was paid $6.3 billion for work during the first two years of the occupation, including $3.98 billion between the beginning of May 2004 and the end of May 2005. Under the new deal, Halliburton will receive $4.97 billion to support U.S. troops in Iraq until May 2006.
Both orders stem from a 10-year contract known as LOGCAP, which KBR won in a competitive bid in 2001. As of the beginning of June, the Army had obligated nearly $12 billion to the company under the logistic contract, the vast majority of it for work in Iraq.
The new order took effect two months ago but had not been made public. Theis, the spokeswoman for the U.S. Army Field Support Command, which oversees the contract, said that there was "not a conscious decision" to keep the new deal quiet but that her office had simply been too busy with other news.
Rep. Henry A. Waxman (D-Calif.), a vocal critic of Halliburton, said the Army should not be giving the company orders for more work at the same time it is citing the company for unreasonable bills. "The accountability vacuum at the Defense Department is costing the taxpayer dearly," Waxman said in a statement.
The Pentagon last week confirmed a report by congressional Democrats saying that the Defense Contract Audit Agency has questioned more than $1 billion of Halliburton's bills for work in Iraq under LOGCAP and an energy contract called Restore Iraqi Oil. Among the costs that Pentagon auditors questioned were $152,000 for movie rentals, $1.5 million for tailoring and two multimillion-dollar transportation bills that appeared to overlap.
Pentagon spokeswoman Lt. Col. Rose-Ann L. Lynch said that the questioned costs are not necessarily overcharges and that contracting officials have either resolved, or are in the process of resolving, most of the discrepancies.
Halliburton has said that questioning costs is part of the normal contracting process and that the company is doing all it can to support U.S. troops in a dangerous environment.
About seven months ago, the Army gave Halliburton a list of the services it wanted under the primary task order for the LOGCAP contract, Theis said. But the company estimated the cost of those services would top $10 billion a year, far above what the Army had budgeted. Army officials ended up paring down their list, and they reached agreement with the company on the $4.97 billion figure this spring.
The Army would not provide a copy of the task order without a Freedom of Information Act request. But a draft of the order was provided to The Washington Post by David Phinney, a correspondent for CorpWatch.org, a Web site that monitors contractor involvement in Iraq.
The LOGCAP contract is not the only way the Army can buy logistical services, but it has received heavy use at a time when the Pentagon is outsourcing many of its non-war-fighting functions. Some have questioned whether such reliance on a single contractor makes sense. In a report issued last July, the Government Accountability Office found that the government could save $31 million -- or 43 percent -- on food services at six locations in Kuwait if it bypassed LOGCAP and KBR, working instead through a subcontractor.
Halliburton said in January that it would try to sell KBR, citing in part the controversy surrounding the company's work. Halliburton spokeswoman Jennifer W. Dellinger said in a statement yesterday that "no timeline has been set for a separation of KBR, nor has a decision been made on what form any potential separation might take."
By Griff Witte
Washington Post Staff Writer
Wednesday, July 6, 2005; D01
The Army has ordered nearly $5 billion in work from Halliburton Co. to provide logistics support to U.S. troops in Iraq over the next year, $1 billion above what the Army paid for similar services the previous year.
The new order, which comes despite lingering questions about the company's past billing, replaces an earlier agreement that expired last June but had been extended through this spring to ensure a continuous supply of food, sanitation, laundry and other logistical services for the troops, according to Linda K. Theis, an Army spokeswoman.
The new order does not change the nature of Halliburton's work, but the higher price tag does reflect the growing demand for the company's services as U.S. forces continue to battle a stubborn insurgency two years after the fall of Saddam Hussein.
The increased bill parallels ballooning overall costs in Iraq. President Bush said in March 2003 that combat in Iraq would cost about $60 billion. But the cost for military operations alone had hit $135.3 billion as of March 2005, according to the Office of Management and Budget. The price tag would be far higher if the costs to fund the Coalition Provisional Authority, reconstruction projects and intelligence operations were included.
Halliburton subsidiary Kellogg Brown & Root has received more money from the U.S. involvement in Iraq than any other contractor. The company has been a lightning rod for criticism by administration foes who think Halliburton's high-level connections -- most notably its former chief executive, Dick Cheney, who is now vice president -- may have given it undue influence in winning sole-source business.
Under the Army's previous order for logistics support, Halliburton was paid $6.3 billion for work during the first two years of the occupation, including $3.98 billion between the beginning of May 2004 and the end of May 2005. Under the new deal, Halliburton will receive $4.97 billion to support U.S. troops in Iraq until May 2006.
Both orders stem from a 10-year contract known as LOGCAP, which KBR won in a competitive bid in 2001. As of the beginning of June, the Army had obligated nearly $12 billion to the company under the logistic contract, the vast majority of it for work in Iraq.
The new order took effect two months ago but had not been made public. Theis, the spokeswoman for the U.S. Army Field Support Command, which oversees the contract, said that there was "not a conscious decision" to keep the new deal quiet but that her office had simply been too busy with other news.
Rep. Henry A. Waxman (D-Calif.), a vocal critic of Halliburton, said the Army should not be giving the company orders for more work at the same time it is citing the company for unreasonable bills. "The accountability vacuum at the Defense Department is costing the taxpayer dearly," Waxman said in a statement.
The Pentagon last week confirmed a report by congressional Democrats saying that the Defense Contract Audit Agency has questioned more than $1 billion of Halliburton's bills for work in Iraq under LOGCAP and an energy contract called Restore Iraqi Oil. Among the costs that Pentagon auditors questioned were $152,000 for movie rentals, $1.5 million for tailoring and two multimillion-dollar transportation bills that appeared to overlap.
Pentagon spokeswoman Lt. Col. Rose-Ann L. Lynch said that the questioned costs are not necessarily overcharges and that contracting officials have either resolved, or are in the process of resolving, most of the discrepancies.
Halliburton has said that questioning costs is part of the normal contracting process and that the company is doing all it can to support U.S. troops in a dangerous environment.
About seven months ago, the Army gave Halliburton a list of the services it wanted under the primary task order for the LOGCAP contract, Theis said. But the company estimated the cost of those services would top $10 billion a year, far above what the Army had budgeted. Army officials ended up paring down their list, and they reached agreement with the company on the $4.97 billion figure this spring.
The Army would not provide a copy of the task order without a Freedom of Information Act request. But a draft of the order was provided to The Washington Post by David Phinney, a correspondent for CorpWatch.org, a Web site that monitors contractor involvement in Iraq.
The LOGCAP contract is not the only way the Army can buy logistical services, but it has received heavy use at a time when the Pentagon is outsourcing many of its non-war-fighting functions. Some have questioned whether such reliance on a single contractor makes sense. In a report issued last July, the Government Accountability Office found that the government could save $31 million -- or 43 percent -- on food services at six locations in Kuwait if it bypassed LOGCAP and KBR, working instead through a subcontractor.
Halliburton said in January that it would try to sell KBR, citing in part the controversy surrounding the company's work. Halliburton spokeswoman Jennifer W. Dellinger said in a statement yesterday that "no timeline has been set for a separation of KBR, nor has a decision been made on what form any potential separation might take."
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