"NEW YORK - Despite scandals over human rights abuses and war profiteering, private military contractors are expanding their presence overseas, and may even be involved in helping to draft the next U.S. defense budget.
"Currently more than 20,000 privately contracted employees are at work in Iraq, feeding U.S. troops, providing security, and rebuilding the occupied nation's shattered infrastructure.
Although private military contractors, known as PMCs, were implicated in the torture scandal at Baghdad's Abu Ghraib prison, and are the target of congressional probes into over-billing, more than 150 U.S. companies have been awarded contracts worth up to $48.7 billion for work in postwar Afghanistan and Iraq, according to research by the Washington-based Center for Public Integrity.
"That figure represents an increase of 82 companies and more than $40 billion since the center first issued a study of contracts awarded to PMCs last fall.
"In a separate report released Jul. 29, the center also found that three private companies – Booz Allen Hamilton, Perot Systems Government Services and Miltec Systems Co. – are headhunting for analysts to work in the development of the U.S. defense budget..
""The trend is rising and has been driven by many factors: the drive to privatize state services, the vast disparity between the pay PMCs get and those employed by the state – PMCs earn perhaps five times as much – leading to a real shortage within the armed forces of the U.S. and UK," says William Bowles, a journalist who has written extensively on PMCs.
""It's [also] a method of hiding the real level of casualties," he added in an interview.
"Some high-profile killings in Iraq have involved contractors, like Paul Johnson, the Lockheed Martin engineer beheaded by Islamic militants in June, and the four employees of Blackwater Security who were killed and dragged through the streets by a mob in Fallujah.
Lesser known are the more than 100 other contractors, including about 40 employees of controversial giant Halliburton, who have also lost their lives in Iraq since fighting officially ended more than one year ago.
"Casualty numbers from the war itself are hard to come by, but Robert Fisk and Patrick Cockburn reported in South Africa's The Star April 16 that "at least 80 foreign mercenaries – security guards recruited from the United States, Europe and South Africa and working for American companies – have been killed in the past eight days in Iraq".
"Independent experts say one of the main problems with PMCs is the lack of transparency in the bidding for their contracts, combined with scant oversight of how they spend the money.
Halliburton, the military services company with close ties to Vice President Dick Cheney, has been probed by Congress and the accounting firm KPMG for overcharging for some $167 million worth of gasoline imports from Kuwait, as well as a variety of other abuses associated with its $5.6 billion troop support and military logistics (LOGCAP) contract.
"Bechtel Corp., which won a $680 million deal to rebuild Iraq's water and sewage system, was one of only six firms to take part in a secretive bidding process. According to the Center for Responsive Politics in Washington, the company gave $1.3 million in campaign contributions over the last three years, mostly to Republicans.
""Ironically, we set up a process to take advantage of the private market, but we're getting the worst of it," said Peter Singer, a scholar at the Brookings Institution who is an expert on military privatization.
""It's more about who you know, not who can do the best job for the best price," he said in an interview. "The oversight has been quite terrible, so we're not seeing any cost savings."
One of the most controversial tasks delegated to private contractors has been interrogation of Iraqi detainees. This week, victims of abuse at Abu Ghraib, including the widow of one detainee who died of torture, filed a lawsuit in U.S. federal court against two PMCs: CACI and Titan. Employees of the firms were allegedly present during the abuse of prisoners.
"According to an Army Inspector General's report, more than one-third of the 31 interrogators provided by CACI lacked any "formal training in military interrogation policies and techniques." The company still has 19 interrogators working in Iraq.
"CACI insists its workers were always subject to the military chain of command, and notes that it has been cleared of any wrongdoing and continues to hold government contracts. It has called the lawsuit "frivolous."
""CACI personnel were never in charge of military personnel in Iraq," the company said in a statement. "Civilian contractors do not give orders to military personnel."
"But some experts say that focusing on the chain of command misses the more important issue.
"Most people, including many people in the military, find it stunning to turn over an integral, mission-critical role like interrogation in a military prison to a private contractor," said Singer...." [more]
"The General Services Administration has "concerns about Lockheed Martin Corp.'s business practices and ethics" after learning the company supplied interrogators to the U.S. military through a contract that wasn't designed for that purpose, according to a GSA official.
Lockheed Martin, the largest federal contractor according to GSA records, received notice from the agency's suspension and debarment official June 16 that it must show why it "should remain eligible for future government contracts." GSA took action after it discovered the government procured interrogators using a contract Lockheed held for engineering services. The requirement for Lockheed to demonstrate its fitness as a contractor is the first step in the government's decision whether to recommend the company be suspended or barred from receiving contracts.
"While it's highly unlikely that GSA would recommend such action, serving notice to Lockheed reflects the agency's heightened sensitivity to monitoring government contractors' ethics and how they perform their work, particularly in the wake of high-profile corporate scandals and bankruptcies.
"GSA asked Lockheed to provide information "in regard to administration of the contract" under which the company supplied interrogators and analysts for the U.S. detention facility at Guantanamo Bay, Cuba, said company spokesman Tom Greer. Detainees there have been labeled enemy combatants by the president.
"Lockheed supplied the interrogators for the intelligence directorate of U.S. Southern Command. The military, however, didn't award the contract on its own. Rather, it sought the assistance of the National Business Center, a fee-for-service procurement agency at the Interior Department that administers contracts for other agencies. The business center chose to use the engineering services contract. The business center has moved Lockheed's interrogators onto a new, sole-source contract, and it has decided to stop awarding interrogation work all together.
Spokespersons at Southern Command were unavailable to explain why the military purchased the interrogators from Lockheed and why they chose to use the National Business Center...." [more]
"WASHINGTON (Reuters) - U.S. investigators found multiple examples of fraud and abuse in millions of dollars worth of contracts to rebuild Iraq that used U.S. taxpayer and Iraqi funds, according to an audit released on Friday.
"The report to Congress by the inspector general's office of the Coalition Provisional Authority, the U.S. occupying force dissolved in June, said it had been involved in 69 criminal investigations, of which 42 had been closed or referred elsewhere. A further 27 are still open.
"In one case, an unnamed senior adviser for the CPA bypassed the bidding process for a $7.2 million security contract. The deal was revoked, a $2.3 million advance taken back from the contractor and the CPA adviser removed.
"CPA Inspector General Stuart Bowen said his findings were not unexpected given that the CPA and contractors were working in a volatile, dangerous environment.
""These results are not surprising: the CPA faced a variety of daunting challenges, including extremely hazardous working conditions," the former White House lawyer said in a letter accompanying the report.
"In another case, the Iraqi Ministry of Interior appointed a Defense Department civilian as a coach for an Iraqi amateur sports team.
"The civilian received a $40,000 cash advance but gave the funds to his military assistant who went gambling and lost some of it. The money frittered away was then written off as a legitimate loss. That case is still pending.
'TIME CARD FRAUD'
"The CPA-IG's office also found weaknesses in the monitoring process for oil pipeline repair and found employees were not doing work in the field specified by the contract, the report said.
In yet another instance of abuse, a Defense Department official in the CPA's contracting office committed "time card fraud" and charged for work he had not done. He also had an unauthorized weapon. The employee was removed from his position and sent back to the United States, the report said.
"Another probe is focusing on the "illegal exchange of worthless Iraqi dinars" by a foreign national that has led to the recovery of $29,000. The investigation was continuing and the report said further funds were likely to be recovered...." [more]
"WASHINGTON — A comprehensive examination of the U.S.-led agency that oversaw the rebuilding of Iraq has triggered at least 27 criminal investigations and produced evidence of millions of dollars' worth of fraud, waste and abuse, according to a report by the Coalition Provisional Authority's inspector general.The report is the most sweeping indication yet that some U.S. officials and private contractors repeatedly violated the law in the free-wheeling atmosphere that pervaded the multibillion-dollar effort to rebuild the war-torn country.
"More than $600 million in cash from Iraqi oil money was spent with insufficient controls. Senior U.S. officials manipulated or misspent contract money. Millions of dollars' worth of equipment could not be located, the report said."We found problems in the CPA's financial management, procurement practices and operational controls," Stuart W. Bowen Jr., the inspector general, wrote in the report. "These results are not surprising: The CPA faced a variety of daunting challenges, including extremely hazardous working conditions."
"The report raises anew questions surrounding the occupation government under Ambassador L. Paul Bremer III, who turned over control in June to an interim Iraqi government.The coalition's failures continue to haunt the country today as Iraqis struggle with security issues and infrastructure problems with electricity, transportation and water.
"The Times has reported on several cases in which a small circle of former Republican administration officials had drawn scrutiny for their actions in Iraq, including a deputy undersecretary of Defense under investigation by the FBI in connection with a telecommunications contract. In another case, officials have said, a former senior U.S. advisor conducted negotiations with a family connected to Saddam Hussein to form a new Iraqi airline.
"Former CPA officials and contracting experts said they were surprised at the number of criminal investigations described in Bowen's report. They noted that criminal corruption charges in the U.S. involving federal contracting were rare...." [more]
"CHICAGO (Reuters) - Defense contractor CACI International Inc., cited in a report about prisoner abuse in Iraq, said Thursday its employees were never in charge of military personnel in Iraq.
"The company, which provides interrogation services to the U.S. military, has been sued in a Washington, D.C. federal court over the abuse issue at the Abu Ghraib prison.
""Civilian contractors do not give orders to military personnel," the company said in a statement. "The CACI personnel serving in Iraq at all times have been under the operational control and direction of U.S. military."
"CACI said its employees in Iraq provided administrative supervision over CACI contractor personnel, such as managing and monitoring their pay, billeting and leave schedules. But control over interrogation operations at the prison and elsewhere has been a military function, the company said...." [more]
"A Halliburton subsidiary has lost about one-third of the items it was given to manage in Iraq, $18.6 million worth of government property that includes trucks, computers and office furniture, a government audit has found. Government auditors could not account for 6,975 of 20,531 items on the ledgers of one of Halliburton's subsidiaries, Kellogg Brown Root, according to a report by Stuart Bowen, the auditor for the authority that oversees contractors in Iraq. Halliburton is providing services to U.S. troops under a contract that has so far generated $3.2 billion in revenue.
"The report said the company "did not effectively manage government property." It projected that Kellogg Brown Root could not account for nearly 7,000 items from a total inventory valued at $61.1 million.
"Halliburton, which has contracts in Iraq worth as much as $18.6 billion, is under investigation by the Justice Department for allegedly overcharging the military by $61 million for fuel purchases.
"Democrats in Congress have accused the Bush administration of giving the company favorable treatment; Vice President Dick Cheney formerly served as Halliburton's chief executive.
"Halliburton disagrees with the audit, said a company spokeswoman, Cathy Gist.
""The examination simply included projections that were based on limited sample groups that were not necessarily a representative selection amount which could have provided a more accurate measure," Gist said in an e-mailed statement.
"In Congressional hearings last week, three former Halliburton employees, two truck drivers and an administrator, testified that Halliburton housed its staff in a five-star hotel in Kuwait at government expense, failed to keep proper records of expenditures and fired employees who spoke up about those practices.
"The truck drivers testified that the company supplied them with new $80,000 trucks and then allowed them to be destroyed when they broke down, even with a flat tire...." [more]
"Sheryl Elam Tappan has broken a cardinal rule of the private contractors who work for the federal government:
"Don't criticize your client.
"The consultant and former Bechtel Corp. employee has published a book that accuses the U.S. Army Corps of Engineers of handing Halliburton extra oil- field repair work in Iraq through what she calls a sham competition slanted against other companies.
"Tappan writes from experience. A contract bidding specialist, she was part of the Bechtel team that pursued the same work.
"Tappan argues that the corps' actions violated federal contracting law. Her anger about it runs throughout her book, "Shock and Awe in Fort Worth."
""It may be simpleminded, but if you're going to make contractors abide by the law, then the government ought to do the same," Tappan said, in an interview at her San Mateo home.
"At the time of the competition, Halliburton already was operating in Iraq, making oil field repairs under an earlier contract. Halliburton, where Vice President Dick Cheney was once chief executive, had locked up most of the future oil field repairs as well, through a plan the company's KBR subsidiary hashed out with the corps and the Iraqi Ministry of Oil, Tappan writes. Other companies seeking the contract didn't even see that plan until two weeks before the bidding deadline.
"San Francisco's Bechtel and the other companies, Tappan argues, were competing for crumbs. In the end, Bechtel chose not to bid, and the corps awarded the work to Halliburton and Pasadena's Parsons Corp.
"Stunned by book
"Her book, self-published in April for about $2,000, has stunned people in the world of government contracting, who aren't used to one of their own biting the federal hand. Her name inspires profound nervousness in some former colleagues, who don't want to talk about her. Bechtel will say little about the book, except noting that the company didn't ask her to write it...." [more]
"Halliburton Co. has lost $18.6 million of government property in Iraq, about a third of the items it was given to manage, including trucks, computers and office furniture, government auditors claim.
"The auditors couldn't account for 6,975 of 20,531 items on the ledgers of Halliburton's KBR unit, according to a report by Stuart Bowen, auditor for the coalition provisional authority inspector general.
"Halliburton is providing services to U.S. troops under a contract that has generated $3.2 billion in revenue so far.
""This occurred because KBR did not effectively manage government property," Bowen wrote. "As a result, we projected that KBR could not account for 6,975 property items from an inventory of 20,531 valued at $61.1 million."
"Halliburton is under investigation by the Justice Department for allegedly overcharging the military by $61 million for fuel purchases.
"Democrats accuse the Bush administration of favoring the company because of its former connections to Vice President Dick Cheney...." [more]
"WASHINGTON - The American general who headed the U.S. military prison at Abu Ghraib personally witnessed abuses there, an Iraqi man alleged in a federal lawsuit protesting his treatment.
"In a videotaped deposition from Iraq played Tuesday, Saddam "Sam" Saleh Aboud said he endured beatings at the prison. During one session, his hood was removed and he said he saw Brig. Gen. Janis Karpinski.
"Aboud identified Karpinski from a photograph in a news magazine that his lawyer, Michael Hourigan, showed him.
""He was adamant that there was an occasion when he was being tortured, in Tier 1A, when she was present and watching and laughing as he was being tortured," Hourigan said. He said Aboud did not know Karpinski's identity until he told him.
""He knew she was a supervisor because she had a star on her hat and she was in an American uniform," Hourigan said. "He said the other soldiers would defer to her."..." [more]
"On Tuesday, July 27, 2004 a consortium of trial lawyers from a number of states, collectively referred to as the Iraqi Torture Victim Group (ITVG), filed a lawsuit in federal court in Washington, D.C. on behalf of five Iraqis who claimed they were subjected to acts of murder, torture and other abuses while they or their family members were held in the infamous Abu Ghraib prison in Iraq....
"Six weeks ago an Australian-based attorney affiliated with the ITVG traveled through Jordan into Iraq and obtained actual videotaped interviews of the torture victims and their relatives. In these videotaped interviews the torture victims give graphic, sensational details of the horrors of rampant and numerous abuses and deaths in Abu Ghraib prison. Rod Edmond, attorney for the Iraqi victims, said, "None of the victims or families whom we represent are terrorists or combatants against U.S. or coalition military forces. They are just ordinary people -- an Imam (a pastor or priest), a businessman, a taxi driver, a housewife and the like. All were ultimately released without charge. If you're going to do business with the United States government at taxpayers' expense, then you need to obey the same laws as everyone else."
"The lawsuit charges that two prominent U.S. companies, CACI Internationaland the Titan Corporation, were contracted by the U.S. government to provide interrogation services to Coalition forces in Iraq...." [more]
"In the days leading up to World War I, "Fighting Bob" La Follette and the man who started this newspaper, William T. Evjue, railed about the rush to go to war.
"Those at the forefront of that rush back in 1917-18 were many of the nation's big corporations, those that made steel, guns, munitions and the dozens of other products that would be needed at the front.
""War profiteers," La Follette and Evjue called them. After the nation did go to war, La Follette produced lists of profits these corporations were making supplying the war machine.
Here in Madison, Evjue listed the huge windfall reaped by the politically connected Gisholt Machine and Foundry Co. on East Washington Avenue from its military contracts. The titans at Gisholt were among the most vocal proponents of the United States entering the war in Europe and were fierce foes of the anti-war La Follette.
"Well, folks, times haven't changed a whole lot.
"Perhaps you saw The Washington Post piece we ran a few days ago that, in effect, exposed the war profiteers of the modern era.
"According to the article, the lobbyists, public relations counselors and advisers to high-powered federal officials who argued that Saddam Hussein had weapons of mass destruction and praised exiled Iraqi leader Ahmad Chalabi are now collecting tens of thousands of dollars in fees for helping business clients pursue federal contracts.
"James Woolsey, the former CIA director, is only one example. He is now vice president of Booz Allen Hamilton, a nationwide consulting firm. Before the war, Woolsey was a founding member of the Committee for the Liberation of Iraq, an organization set up in 2002 at the request of the White House to help build backing for the war.
"Today, according to The Washington Post, Booz Allen is a subcontractor on a $275 million telecommunications contract in Iraq. The story listed a number of other examples.
"All this, of course, comes on top of Halliburton, whose corporate officers advocated for war, all the while standing to benefit from huge - and often inflated - profits once that war got under way...." [more]
"Halliburton Co. said Friday it posted a second-quarter loss, as troubles widened in Brazil and costs climbed for asbestos- litigation fund.
"Meanwhile, the Houston-based company's controversial work in Iraq is ebbing, officials said.
"Halliburton expects third-quarter revenue to reflect the shift.
"One-third of Halliburton's revenue came from Iraq in the second quarter.
"Overall, the company took a loss for the quarter of $663 million, or $1.51 a share, vs. a profit in the same period last year of $26 million, or 6 cents.
"The report marked the third straight quarterly loss for the energy services and construction giant.
"Quarterly revenue, however, was up 38 percent to $5 billion from $3.6 billion a year ago.
In a conference call with analysts, company executives circled the wagons around the company formerly headed by Vice President Dick Cheney.
"Halliburton faces three investigations into its practices overseas, including allegations of bribery in Nigeria, violations of U.S. trade restrictions in Iran and over- charging in Iraq.
""We do continue to be a political punching bag," said David J. Lesar, Halliburton's chairman, president and chief executive.
"Hitting a sarcastic note, Christopher Gaut, Halliburton's executive vice president and chief financial officer, said the company would increase spending on public relations to defend its reputation "at least through the election."..." [more]
"WASHINGTON July 23, 2004 — The images were vivid: A U.S. Army sergeant who told his troops to "rough up" two prisoners; a platoon that agreed to make prisoners jump off a bridge into the Tigris River; an interrogator who hit a prisoner in the head. Those were among the new details of abuses by U.S. troops in Iraq and Afghanistan reported by the Army Inspector General's office.
"The review found 94 cases of confirmed or alleged abuses and 39 deaths, 20 of which were ruled homicides or remain under investigation.
"Still, Army Inspector General Lt. Gen. Paul Mikolashek concluded in Thursday's report that the abuses were the work of rule-breaking soldiers and a few officers and not the fault of Army rules or training.
"Senate Democrats, pointing to deficiencies in training and inconsistencies in doctrine outlined in the Army report, immediately challenged the findings.
""It is difficult to believe there were not systemic problems with our detention and interrogation operations," Michigan Sen. Carl Levin, top Democrat on the Senate Armed Services Committee, said at a hastily called hearing....
"Civilian interrogators working on an Army contract were accused of mistreating prisoners in two separate incidents, including pouring water on the head of a prisoner forced into an uncomfortable "stress position." The interrogators' employer, CACI International Inc., plans to investigate further, spokeswoman Jody Brown said Thursday. She said that in one incident military interrogators reportedly used the same techniques as the contract workers.
"The Army investigators looked at alleged abuse incidents that happened between the start of combat in Afghanistan in October 2001 until June 9. The allegations included physical and sexual abuse, prisoner deaths and thefts.
"Mikolashek's review found that all the interrogation procedures approved in Iraq and Afghanistan were legal, "if executed carefully, by trained soldiers, under the full range of safeguards." But interrogator training was often incomplete and inconsistent, the report said.
"The Army's contract with CACI did not require the civilian contractors to have military interrogation training. Eleven of the 31 CACI interrogators who worked in Iraq did not have military interrogation training and one said he had been given no training after arriving in Iraq, the report said...." [more]
"The case of "Jack" Idema, the American accused of running a private interrogation centre in Kabul, could now lead to full-scale embarrassment for the US authorities. It emerged yesterday that Mr Idema had handed over to the US military an Afghan who was subsequently held for a month by them in Bagram air base.
"Mr Idema, two other Americans and four Afghans are facing charges of hostage-taking and torture in Kabul.
"They face up to 20 years in prison if convicted.
"Yesterday a US military spokesman, Major Jon Siepmann, admitted that they had received a detainee captured by Mr Idema's organisation, Counter Group, at Bagram on May 3.
Major Siepmann said that Mr Idema had appeared "questionable" when he presented the detainee, and that suspi cion grew when, one month later, the man turned out not to be the top suspect that Mr Idema had described, according to Associated Press.
""That doesn't mean at the time that we knew Mr Idema's full track record or other things he was doing out there," Major Siepmann said.
"Originally, the US authorities distanced themselves from Jonathon Keith "Jack" Idema, saying that he had no connection with them...." [more]
"WASHINGTON (Reuters) - Halliburton defended its giant government contracts in Iraq on Thursday at a rancorous hearing on Capitol Hill at which ex-employees accused Vice President Dick Cheney's old company of wasting taxpayer money.
"Appearing at a House of Representatives committee hearing, executives from Halliburton (HAL) unit Kellogg Brown and Root tried to squash accusations from whistle-blowers who said the corporate culture was one of waste, theft and misuse of funds.
"``We absolutely do not have a policy that cost does not matter,'' said William Walter, a director for the company's government operations.
"Halliburton is the U.S. Army's main logistics contractor in Iraq and also has a separate deal trying to revive Iraq's oil industry. This work has the potential to bring in $18 billion for the company, according to government estimates.
"In a gloves-off, partisan hearing, the Rep. Tom Davis, the chairman of the House Committee on Government Reform, said many of the whistle-blowers' accusations were ``flat out wrong'' and the goal was to embarrass Cheney during the presidential election campaign.
"Cheney headed Halliburton until he joined the race for the White House in 2000 and Democrats have accused the Bush administration of giving the company special treatment.
"``I believe that tunnel vision, inexperience and naivete are behind most of these witnesses' allegations,'' said Davis, a Republican from Virginia, adding that he believed some of the ex-employees were out to make book deals.
"Former KBR logistics specialist Marie de Young said she decided to go before the committee because she believed the company was letting down soldiers and not for personal gain.
"``Every dollar that is squandered because of waste, fraud, or abuse, is a dollar we do not have for critical equipment and supplies for our troops,'' said de Young...." [more]
"WASHINGTON - Assigning Halliburton Co. rather than the military to truck fuel into Iraq pushed up costs by $167 million, or 90 percent, House Democrats contend.
With the House Government Reform Committee scheduled to focus today on contracting woes in Iraq, Democratic lawmakers produced what they say is further evidence that Halliburton overcharged the military.
""The Bush administration gave Halliburton a blank check, and the taxpayer has been stuck with the bill," said Rep. Henry Waxman of California, the panel's ranking Democrat.
"Halliburton spokeswoman Wendy Hall responded that the task of taking fuel from Kuwait to Iraq "was carried out inan extremely dangerous war zone environment and ... helped avert a security crisis in Iraq."
"The lawmakers also released a report by Congress' Government Accountability Office, formerly known as the General Accounting Office, criticizing the Pentagon for not keeping a closer eye on Halliburton's operations in Iraq.
"The GAO pointed to late planning by the Pentagon, along with inattention to costs early on and inadequate training for those overseeing this complex job account for "recurring contractor problems."..." [more]
By Robert O'Harrow Jr.
Washington Post Staff Writer
"In the spring of 2003, not long after John Mancini arrived in Kuwait City as procurement employee for Halliburton Co., he came to an unsettling conclusion: No one cared about his skill at buying goods and making sure government money was wisely spent.
"Over the next three months, Mancini said in a recent interview, he watched as colleagues at Halliburton subsidiary KBR paid inflated fees for cell phone services, bought hundred of rolls of duct tape for $60 each and obscured the waste by failing to file paperwork properly. In one case, he said, a fellow procurement employee recorded a multimillion-dollar purchase as a $200 order, then dismissed it as a mistake.
"After he and others raised questions, Mancini said, the company sent in a team to prepare for government audits. "The waste was unbelievable," said Mancini, who left KBR after three months. "This was pure negligence."
"Stories like Mancini's will be the focus of a hearing today by the House Committee on Government Reform, as it examines allegations of waste, abuse and profiteering related to the Army's contracts in Iraq with Halliburton, the oil services company that Dick Cheney ran from 1995 to 2000...." [more]
"WASHINGTON (AP) The Army botched planning and management of the multibillion-dollar contract to provide food and other services to troops in Iraq, congressional investigators said.
Investigators from the Government Accountability Office found a ''pattern of contractor management problems'' which led to cost disputes between the Pentagon and the contractor, Houston-based Halliburton. The GAO investigators also criticized Halliburton's staffing and accounting.
"So far, the military has agreed to pay Halliburton more than $5 billion on the contract in question.
"Separate federal investigations are looking into whether Halliburton overcharged the Army for fuel and meals and allegations that former Halliburton workers may have taken bribes from a Kuwaiti subcontractor.
"Separately, a report from congressional Democrats said Halliburton charged the government $2.68 per gallon to import gasoline to Iraq from Kuwait, while a government agency did the same work for $1.57 a gallon. That cost the government an extra $166.5 million, the Democrats' report said...." [more]
"KABUL, Afghanistan - An eccentric American bounty hunter goes on trial Wednesday in Kabul, charged with running his own private prison and torture chamber in the Afghan capital.
Jonathan Keith Idema, 48, and two American subordinates, Edward Caraballo and Brent Bennett, face prison terms of five to 15 years on charges of torture, assault and robbery. Four of Idema's Afghan followers also have been charged.
"The three Americans have been in an Afghan jail since their arrest July 5. They've denied the charges and have elected to defend themselves in court. Idema says he'll call senior Afghan diplomats, military officers and police officials to testify on his behalf.
"It's unclear what Idema's group was up to in Kabul. Speculation is widespread that Idema was after the $50 million U.S. reward for capturing al-Qaida leader Osama bin Laden.
"Several of Idema's alleged victims said the former special forces reservist had forced his captives - eight Afghan men he suspected of ties to the al-Qaida terrorist network - to wear black hoods continuously for seven days and nights. He shackled and starved them, they allege, and deprived them of sleep. They became so disoriented that when he dunked them in ice water they thought they'd been set on fire.
""This is the clearest case I have seen in my 20 years as a judge," said Abdul Baset Bakhtiari, the presiding judge, who's read the police file. "The criminals were arrested at the scene of the crime, they were armed and their prisoners were there for the police and everyone to see."..." [more]
"KABUL (Reuters) - An American arrested in Afghanistan (news - web sites) with two countrymen for illegally detaining people he suspected of being Islamic militants said Wednesday he was working for the U.S. government, and he had evidence to prove it.
"Jonathan "Jack" Idema said he had been in frequent contact with the Pentagon (news - web sites) and other U.S. agencies in the course of his work tracking Islamic militants in Afghanistan, including al Qaeda members.
""We were working for the U.S. counter-terrorist group and working with the Pentagon and some other federal agencies," Idema told reporters before the opening of his trial.
""We were in contact directly by fax and email and phone with Donald Rumsfeld's office," he said, referring to the Secretary of Defense...." [more]
By T. Christian Miller and Peter Wallsten, Times Staff Writers
"WASHINGTON — A Halliburton controversy erupted Tuesday, fueled by a grand jury investigation into whether the oil services giant violated federal sanctions by operating in Iran while Vice President Dick Cheney was running the company.
"The investigation centers on Halliburton Products and Services Ltd., a subsidiary registered in the Cayman Islands and headquartered in Dubai that provided oil field services in Iran. The unit's operations in Iran included Cheney's stint as chief executive from 1995 to 2000, when he frequently urged the lifting of such sanctions.
"Numerous U.S. companies operate in Iran, but under strict guidelines requiring that their subsidiaries have a foreign registry and no U.S. employees, and that they act independently of the parent company.
"At issue is whether Halliburton's subsidiary met those criteria.
"The Treasury Department has been investigating the matter since 2001. But Halliburton disclosed in public financial filings this week that the department had forwarded the case to the U.S. attorney in Houston for further investigation. The company said a federal grand jury had subpoenaed documents on its Iranian operations.
"The Treasury Department refers such complaints only after finding evidence of "serious and willful violations" of the sanctions law, a government official said.
"Sen. Frank R. Lautenberg (D-N.J.), whose office has provided information on the case to the Treasury Department, said Tuesday that Halliburton Products and Services was a sham that existed only to circumvent the sanctions.
""It's unconscionable that an American company would skirt the law to help Iran generate revenues," Lautenberg told reporters during a conference call arranged by the campaign of the presumed Democratic presidential nominee, Sen. John F. Kerry of Massachusetts...." [more]
"Democrats who have been hammering away at Halliburton Co. and its former chief executive Dick Cheney about the company's work in Iraq yesterday added Iran to their list of complaints.
"In a telephone press conference, Sen. Frank Lautenberg (D-N.J.) said he found it "unconscionable" that a Halliburton subsidiary appeared to be doing business with a country tied to terrorist activities at a time Cheney was Halliburton's chief executive.
The press conference, organized by the presidential campaign of Sen. John F. Kerry (D-Mass.), came one day after Halliburton disclosed that a federal prosecutor had subpoenaed documents as part of an investigation of whether a Halliburton subsidiary violated anti-terror sanctions on Iran. "This is such an outrageous bit of news," Lautenberg said.
"In a filing with federal regulators Monday, Halliburton disclosed that the three-year-old investigation had escalated from an inquiry by the Treasury Department's Office of Foreign Assets Control to a criminal investigation by the Justice Department.
Such cases are referred to Justice only when there is evidence "intentional or willful" violations have occurred, government officials said...." [more]
"A US grand jury has subpoenaed Halliburton seeking information about the work of its Cayman Islands subsidiary in Iran, where it is illegal for American companies to operate.
"The company, formerly headed by the Vice-President, Dick Cheney, denies any US laws have been broken.
"But the disclosure, filed with the Securities and Exchange Commission, came as the Houston-based corporation faces a growing number of domestic and international investigations into its operations from Iraq to Nigeria.
""We have a Cayman Islands subsidiary with operations in Iran, and other European subsidiaries that manufacture goods destined for Iran and/or render services in Iran," Halliburton's vice-president, Margaret Carriere, acknowledged in the filing.
"She said the company had received a subpoena this month requesting documents related to the operations.
"In an ominous sign, Halliburton has also been notified that the investigation, which was initially launched by the Treasury Department in 2001, has now been handed over to the Justice Department.
"The oilfield services company said a subpoena was also issued to a former employee as part of a separate investigation into its Iraq contracts.
Halliburton's engineering and construction unit KBR, formerly Kellogg Brown & Root, is the subject of investigations over possible overcharging for fuel and food services in Iraq, where it is the largest contractor...." [more]
"The General Services Administration is reviewing a technology company, Affiliated Computer Services (ACS), for its role in using a technology contract to provide dozens of interrogators and intelligence support personnel at the U.S. naval base prison in Guantanamo Bay, Cuba, according to an administration procurement official.
"Although the $13.3 million contract was written for technology engineering services and managed by the Interior Department, the agreement has been used largely for hiring 30 intelligence analysts and 15 to 20 interrogators, according to Raul Duany, spokesman for the U.S. Southern Command, which oversees Guantanamo.
"That may be cause for suspension or debarment from future government work if GSA determines that ACS, a Dallas-based company purchased by Lockheed Martin last November, played an active role in helping draft the statement of work or other inappropriate behavior...." [more]
"HOUSTON - A former employee of KBR, Halliburton Co.'s engineering and construction arm that performs much of its government contract work, has been subpoenaed by the Justice Department in an investigation of possible overcharges by the company in Iraq.
"In a Securities and Exchange Commission filing Monday, Halliburton disclosed word of that subpoena and another seeking information from the company about foreign subsidiaries that do business in Iran. Federal prosecutors are seeking documents from the Houston-based company regarding Iran...." [more]
"Henry Waxman is an awkward customer. For 30 years, this California congressman has probed, badgered and embarrassed US administrations of every hue.
"As the senior Democrat on the House of Representatives' government reform committee, Congress's principal standing investigative panel, he is a difficult man to ignore.
"Right now, Mr Waxman has a question on Iraq. In fact, he has several - and in typically robust fashion, he is demanding answers. What he wants to know is whether the Bush administration has been fiddling with Iraq's oil revenues.
He wrote to the Republican chairman of the reform committee on July 9, suggesting there was a serious case to answer. Subpoenas should be issued, he said, "to investigate potential mismanagement of the Development Fund for Iraq (DFI) by the United States".
"The DFI was set up after last year's invasion as the depository for Iraq's multi-billion-dollar oil revenues and was administered, until June 28, by the US-led Coalition Provisional Authority (CPA) - with notional UN oversight.
In particular, Mr Waxman is curious about "the [Bush] administration's last-minute 'draw-down' of billions of dollars from the DFI for unspecified expenses" prior to last month's transfer of sovereignty. "For example, $1bn [about £550m] was withdrawn from the DFI during the last month of the CPA's existence for unspecified 'security' purposes."
"The administration provided no information about how these funds would be spent, Mr Waxman says, and has yet to do so.
"He is concerned about apparent attempts by the then CPA chief, Paul Bremer, to mandate and direct the spending of a further $4.6bn in Iraqi oil funds after the handover.
"He is also exercised by the results of a belated audit of the DFI's accounts that concluded they were "open to fraudulent acts" and lacked "transparency". In all, the CPA earmarked more than $6bn of Iraqi funds in the last two months of its existence.
"He wants to know whether CPA officials obstructed the auditors, KPMG, who were employed by the UN-created International Advisory and Monitoring Board (IAMB).
"And he also asks why the White House has "failed to comply with numerous IAMB requests [for information about] payments of approximately $1.5bn in DFI funds to Halliburton" - the Texas-based oil services company formerly headed by the vice-president, Dick Cheney.
"Mr Waxman is not alone in asking questions...." [more]
"While this country was digesting the findings of Lord Butler's report on intelligence findings in the run-up to the invasion of Iraq, a more damning account of intelligence failings in Iraq was being unveiled in Washington - failings that occurred since the war, under the aegis of the occupiers, and involving billions of dollars. Last week's report by the International Advisory and Monitoring Board on Iraq, responsible for overseeing the nearly $20bn of funds accruing to the Iraqi people from oil revenues since the occupation, shed some light on what has happened to much of that money. While the board's auditors said they had found no evidence of fraud by the US-backed Coalition Provisional Authority, they did find a disturbing pattern of lax controls, inadequate or absent records, and a lack of transparency. In war now being justified on the grounds of democracy and stability for the people of Iraq, the findings suggest a dangerous template for the country's future.
"The monitoring board was established in May 2003 by the UN security council, to guard against accusations that Iraq's oil wealth was open to abuse by the US-led coalition. The CPA was authorised by the council to use the oil revenues for repairing oil facilities, construction and vital imports, as well as goodwill projects requested by the military. The monitoring board itself includes representatives from the UN, the World Bank and the International Monetary Fund - hardly a hostile group. Yet the audit conducted for the board by the accounting firm KPMG recorded a deeply concerning lack of cooperation from the US authorities.
"The auditors complained that visits to Iraqi ministries were so difficult that they managed to meet only one. CPA staff resisted their efforts to gather information or documents - citing lack of time and other priorities - and made it difficult for the auditors to even receive entry passes to the "green zone", the heavily fortified area in Baghdad where the CPA and government are based. When they did manage to get in, the auditors found primitive and unreliable book-keeping, along with "critical deficiencies" in the way oil production and sales were recorded. The report also found a lack of oversight and missing details involving the emergency and regional response programmes - discretionary funds given to military commanders, allowing them to hand out dollars to keep the peace. This "greatly diminishes the transparency of the expenditures made," according to the auditors, and left it "open to fraudulent acts".
"But the report's concerns also lead back to the US company that has become inextricably linked with the occupation: Halliburton. Given that the US vice president Dick Cheney was previously chief executive of Halliburton, the potential conflict of interest over its business dealings in Iraq were always going to be a focus of concern. Yet when the monitoring board's auditors asked for details of contracts involving Halliburton being paid for out of the oil funds, the Pentagon repeatedly refused. At issue are three contracts, worth a total of $1.4bn, awarded in noncompetitive tenders - meaning Halliburton was the sole bidder. The monitoring board rightly concluded that further investigation is required...." [more]
"UNITED NATIONS, July 15 -- The Bush administration is withholding information from U.N.-sanctioned auditors examining more than $1 billion in contracts awarded to Halliburton Co. and other companies in Iraq without competitive bidding, the head of the international auditing board said Thursday.
"Jean-Pierre Halbwachs, the U.N. representative to the International Advisory and Monitoring Board (IAMB), said that the United States has repeatedly rebuffed his requests since March to turn over internal audits, including one that covered three contracts valued at $1.4 billion that were awarded to Halliburton, a Texas-based oil services firm. It has also failed to produced a list of other companies that have obtained contracts without having to compete.
"The Security Council established the IAMB, which includes representatives from the United Nations, the World Bank and the International Monetary Fund, in May 2003 to ensure that Iraq's oil revenue would be managed responsibly during the U.S. occupation. The council extended its mandate in July so it could continue to monitor the use of Iraq's oil revenue after the United States transferred political authority to the Iraqis in June.
"The dispute comes as the board released an initial audit by the accounting firm KPMG on Thursday that sharply criticized the U.S.-led coalition's management of billions of dollars in Iraqi oil revenue. The audit also raised concerns about lax financial controls in some Iraqi ministries, citing poor bookkeeping and duplicate payments of salaries to government employees...." [more]
By Jonathan S. Landay and Warren P. Strobel
Knight Ridder Newspapers
"WASHINGTON - A former CIA director who advocated war against Saddam Hussein helped arrange the debriefing of an Iraqi defector who falsely claimed that Iraq had biological-warfare laboratories disguised as yogurt and milk trucks.
"R. James Woolsey's role as a go-between was detailed in a classified Defense Department report chronicling how the defector's assertion came to be included in the Bush administration's case for war even after the defector was determined to be a fabricator.
"A senior U.S. official summarized portions of the report for Knight Ridder on condition of anonymity because it's top secret. The report said that on Feb. 11, 2002, Woolsey telephoned Deputy Assistant Defense Secretary Linton Wells about the defector and told him how to contact the man, who'd been produced by an Iraqi exile group eager to oust Saddam. Wells said he passed the information to the Defense Intelligence Agency.
"Woolsey's previously undisclosed role in the case of Maj. Mohammad Harith casts new light on how prominent invasion advocates outside the government used their ties to senior officials in the Bush administration to help make the case for war...." [more]
Even before he became VP, Dick Cheney and Bush fundraisers were crafting national energy policy
By Kevin Bogardus
"WASHINGTON, July 15, 2004 — The National Petroleum Council, a little-known federally chartered but privately funded advisory committee, has been an underground pipeline of political influence for the oil and gas industry in Washington for years.
"The NPC's membership roster reads like a who's who of the oil industry and the Bush political fundraising machine, particularly during the late 1990s. It included current Commerce Secretary Don Evans, once the chief executive officer of oil company Tom Brown Inc., recently indicted former Enron chief executive officer Ken Lay, and various Bush "pioneers"—individuals who pledged to raise more than $100,000 in hard-money donations for the Bush-Cheney 2000 campaign, according to an investigation by the Center for Public Integrity.
"NPC members, including current members of the Bush White House and several Republican fundraisers, have often stood to benefit from their advice to the Energy Secretary, particularly when it comes to opening drilling concessions for their oil and gas companies.
"As the CEO of Halliburton throughout the late 1990s, Vice President Richard Cheney attended meetings as an NPC member with his fellow oil and gas industry executives to draft reports and recommendations for the Department of Energy—plans that would ultimately be rolled into the Bush Administration's energy policy.
"Transcripts acquired by the Center reveal that Cheney and many of the Bush Administration's largest political fundraisers were extremely active members of the NPC throughout the late 1990s. One of the major initiatives the group got the Energy Department to consider during Cheney's tenure there was a wide-ranging exemption for the energy industry from public disclosure laws. Another helped open up federal lands for oil and gas use in the Rocky Mountains, including Cheney's home state of Wyoming.
"The NPC, designed to provide the government with the industry's expertise, was created by President Harry Truman after World War II. The council has 175 members that are asked to serve by the Energy Secretary for two-year terms. Membership includes academics, environmentalists, as well as oil and gas company representatives. Yet according to records analyzed by the Center, an average of about 45 people attended select committee meetings from 1999 to the present. The vast majority of attendees were oil and gas executives; none was from an environmentalist organization.
"NPC members have given generously to political campaigns. Those who have been council members since 1999 are responsible for more than $14 million in contributions. About four-fifths of that money has been funneled to Republican candidates. John Kaneb, chairman of Gulf Oil, tops the list of donors at $1.3 million...." [more]
By Walter F. Roche Jr. and Ken Silverstein, Times Staff Writers
"WASHINGTON — In the months and years leading up to the U.S.-led invasion of Iraq, they marched together in the vanguard of those who advocated war.
"As lobbyists, public relations counselors and confidential advisors to senior federal officials, they warned against Iraqi weapons of mass destruction, praised exiled leader Ahmad Chalabi, and argued that toppling Saddam Hussein was a matter of national security and moral duty.
"Now, as fighting continues in Iraq, they are collecting tens of thousands of dollars in fees for helping business clients pursue federal contracts and other financial opportunities in Iraq. For instance, a former Senate aide who helped get U.S. funds for anti-Hussein exiles who are now active in Iraqi affairs has a $175,000 deal to advise Romania on winning business in Iraq and other matters.
"And the ease with which they have moved from advocating policies and advising high government officials to making money in activities linked to their policies and advice reflects the blurred lines that often exist between public and private interests in Washington. In most cases, federal conflict-of-interest laws do not apply to former officials or to people serving only as advisors.
"Larry Noble, executive director of the Center for Responsive Politics, said the actions of former officials and others who serve on government advisory boards, although not illegal, can raise the appearance of conflicts of interest. "It calls into question whether the advice they give is in their own interests rather than the public interest," Noble said.
"Michael Shires, a professor of public policy at Pepperdine University, disagreed. "I don't see an ethical issue there," he said. "I see individuals looking out for their own interests."
"Former CIA Director R. James Woolsey is a prominent example of the phenomenon, mixing his business interests with what he contends are the country's strategic interests. He left the CIA in 1995, but he remains a senior government advisor on intelligence and national security issues, including Iraq. Meanwhile, he works for two private companies that do business in Iraq and is a partner in a company that invests in firms that provide security and anti-terrorism services.
"Woolsey said in an interview that he was not directly involved with the companies' Iraq-related ventures. But as a vice president of Booz Allen Hamilton, a consulting firm, he was a featured speaker in May 2003 at a conference co-sponsored by the company at which about 80 corporate executives and others paid up to $1,100 to hear about the economic outlook and business opportunities in Iraq.
"Before the war, Woolsey was a founding member of the Committee for the Liberation of Iraq, an organization set up in 2002 at the request of the White House to help build public backing for war in Iraq. He also wrote about a need for regime change and sat on the CIA advisory board and the Defense Policy Board, whose unpaid members have provided advice on Iraq and other matters to Defense Secretary Donald H. Rumsfeld.
"Woolsey is part of a small group that shows with unusual clarity the interlocking nature of the way the insider system can work. Moving in the same social circles, often sitting together on government panels and working with like-minded think tanks and advocacy groups, they wrote letters to the White House urging military action in Iraq, formed organizations that pressed for invasion and pushed legislation that authorized aid to exile groups.
"Since the start of the war, despite the violence and instability in Iraq, they have turned to private enterprise.
"The group, in addition to Woolsey, includes:
• Neil Livingstone, a former Senate aide who has served as a Pentagon and State Department advisor and issued repeated public calls for Hussein's overthrow. He heads a Washington-based firm, GlobalOptions, that provides contacts and consulting services to companies doing business in Iraq.
• Randy Scheunemann, a former Rumsfeld advisor who helped draft the Iraq Liberation Act of 1998 authorizing $98 million in U.S. aid to Iraqi exile groups. He was the founding president of the Committee for the Liberation of Iraq. Now he's helping former Soviet Bloc states win business there.
• Margaret Bartel, who managed federal money channeled to Chalabi's exile group, the Iraqi National Congress, including funds for its prewar intelligence program on Hussein's alleged weapons of mass destruction. She now heads a Washington-area consulting firm helping would-be investors find Iraqi partners.
• K. Riva Levinson, a Washington lobbyist and public relations specialist who received federal funds to drum up prewar support for the Iraqi National Congress. She has close ties to Bartel and now helps companies open doors in Iraq, in part through her contacts with the Iraqi National Congress.
"Other advocates of military action against Hussein are pursuing business opportunities in Iraq. Two ardent supporters of military action, Joe Allbaugh, who managed President Bush's 2000 campaign for the White House and later headed the Federal Emergency Management Agency, and Edward Rogers Jr., an aide to the first President Bush, recently helped set up two companies to promote business in postwar Iraq. Rogers' law firm has a $262,500 contract to represent Iraq's Kurdistan Democratic Party...." [more]
"GENEVA (AP) -- The international Red Cross said Tuesday it suspects the United States is hiding detainees in lockups across the globe, though the agency has been granted access to thousands of prisoners in Iraq and elsewhere.
"Terror suspects reported by the FBI as captured have never turned up in detention centers, and the United States has failed to reply to agency demands for a list of everyone it's holding, said Antonella Notari, spokeswoman for the International Committee of the Red Cross.
""These people are, as far as we can tell, detained in locations that are undisclosed not only to us but also to the rest of the world," Notari told The Associated Press.
"White House spokesman Scott McClellan said Tuesday he was "looking further into" the Red Cross concerns and added: "We do work closely with the Red Cross on all detainee issues." He did not concede a problem exists.
"At the Pentagon, spokesman Bryan Whitman said, "The International Committee of the Red Cross has access to all Defense Department detention operations."
"However, in his report into allegations of abuse at Baghdad's Abu Ghraib prison, U.S. Army Maj. Gen. Antonio Taguba found that military police there had "routinely held persons brought to them by other government agencies without accounting for them, knowing their identities, or even the reason for their detention."
"On at least one occasion, they moved these "ghost detainees" around the prison to hide them from a visiting Red Cross delegation, he added. He described the actions as "deceptive, contrary to Army Doctrine, and in violation of international law."..." [more]
FORTUNES OF WAR A mercenary's dream at the outset of the war, Iraq is turning into a difficult market for security firms. Most of their problems would be familiar to any startup.
By John Helyar
"Oh, what a lovely war it's been for security contractors in Iraq. Taking on the many military tasks outsourced by the stretched-thin Pentagon, they have profited from a battle-zone gold rush: an instant billion-dollar industry with a 20,000-person workforce. But now the business of war is starting to look more like the war itself: a long, hard slog.
"With the transfer of power to Iraq's interim government, the rules governing this mercenary marketplace are subject to change. Payrolls and other costs have soared, while business has slowed. Contractors whose business skills haven't proven as sharp as their battle skills are in trouble.
"Most of the soldiers of fortune in Iraq are not classic mercenaries who move from one war to the next. Most work for security firms founded for this war and headed by former elite troopers: Army Rangers, Deltas, Green Berets, and Navy SEALs. And the majority of those firms are classic undercapitalized startups...." [more]
"A seasoned Long Island federal prosecutor is about to go from investigating scams in the tens of millions of dollars in Nassau and Suffolk counties to probing whether a United Nations program in Iraq was swindled out of billions.
"Assistant U.S. Attorney Michael Cornacchia, a native of Long Island, will be leaving the Justice Department in two weeks to work for a year as the chief investigator for the independent group, which will look into allegations of massive corruption in the $67-billion United Nations Oil-for-Food Program in Iraq.
"The oil program, which ran from 1996 through 2003, was set up under United Nations supervision to allow Saddam Hussein's Iraq to sell its oil on the world market in return for humanitarian goods such as food and medicine or to pay reparations to victims of the 1991 Gulf War.
"But recent reports from the federal General Accounting Office, based on documents in the archives of the Iraqi oil ministry, indicate that as much as $10 billion may have been siphoned off in kickbacks for Hussein and his cronies.
"Kojo Annan, the son of United Nations Secretary- General Kofi Annan, worked for a Swiss firm that had been hired to monitor the oil program. However, he has said he was not directly involved in that aspect of the firm's activities.
"Cornacchia, 53, who grew up in Rockville Centre and Huntington, also has worked as a Suffolk County assistant district attorney and a special assistant town attorney in Huntington. He was chosen because of his long expertise in investigating complex white-collar crimes, said Reid Morden, executive director of what is known as the Independent Inquiry Committee.
"The chairman of the committee is former Federal Reserve Chairman Paul Volcker, who said the committee has been given complete freedom by the United Nations to investigate the situation...." [more]
"WASHINGTON -- The US-financed reconstruction program in Iraq has so far hired just over 30,000 Iraqis, far below the projected goal of 250,000 set last year and well below even the more modest objective set just a month ago by former US administrator L. Paul Bremer III.
"Reconstruction officials cite the new job figures, compiled by the US-run Project and Contracting Office in Baghdad, as evidence that the multibillion-dollar rebuilding effort is finally picking up steam, and addressing a critical need in a country with a jobless rate as high as 30 percent. These officials note that the number of Iraqis employed on US-funded reconstruction projects has tripled over the last six weeks as more contracts are being awarded for school construction, health services, sanitation, oil projects and other capital improvements around the war-torn country.
"But many analysts argue that more Iraqis could easily be given additional lower-level jobs. While Iraqis make up the largest number of workers supported by the $18.4 billion in US reconstruction funds, many more jobs have been filled by foreign laborers imported by outside firms under lucrative contracts from the US government.
"They say the United States and its allies should enlist far more Iraqis in the rebuilding of their own country and fewer foreigners.
"Every day, thousands of foreign workers drive trucks ferrying oil refining equipment and other supplies, while others cook meals and clean the laundry for more than 160,000 US and foreign troops deployed in Iraq. Most of these jobs are filled by Americans, Koreans, Japanese, Italians, Indians, Nepalese, and other foreign workers who have been brought into the country by private contractors, according to US officials. Kellogg, Brown & Root alone has thousands of foreign workers on its payroll in Iraq.
"However, the lion's share of this support work is not financed through the $18.4 billion in US rebuilding money appropriated last year. Rather, these jobs are paid for by a a variety of agencies and organizations including the Department of Defense, the Department of State, the Army Corps of Engineers, and foreign governments.
"Many say that barring Iraqis from filling these less-skilled jobs punishes the US taxpayer since it costs substantially more to hire a foreigner due to insurance and security costs than an Iraqi, and at the same time fails to boost the Iraqi economy.
""The American taxpayer is spending billions of dollars on no-bid contracts to companies like Halliburton. Not only has this money often been poorly spent or outright wasted, but in many cases it is paying the salaries of foreign workers to do jobs in Iraq that are well within the skill sets of Iraqis," said Representative Martin T. Meehan, Democrat of Lowell and a member of the House Armed Services Committee...." [more]
"When the 15-member U.N. Security Council legitimised the U.S.-imposed interim government in Baghdad in June, the five-page unanimous resolution carried a provision little publicised in the media: the lifting of a 14-year arms embargo on Iraq.
"UNITED NATIONS, Jul 9 (IPS) - When the 15-member U.N. Security Council legitimised the U.S.-imposed interim government in Baghdad in June, the five-page unanimous resolution carried a provision little publicised in the media: the lifting of a 14-year arms embargo on Iraq.
"The Security Council's decision to end military sanctions on Iraq has triggered a mad scramble by the world's weapons dealers to make a grab for a potentially new multi-million-dollar arms market in the already over-armed Middle East.
"The former U.S.-run Coalition Provisional Authority (CPA), which handed over power to the new Iraqi government Jun. 28, finalised plans for the purchase of six C-130 Hercules military transport aircraft, 16 Iroquois helicopters and a squadron of 16 low-flying, light reconnaissance aircraft -- all for delivery by April 2005.
"The proposed purchases were part of an attempt to rebuild and revitalise Iraq's sanctions-hit, weapons-starved military.
"But some experts question the strategy.
"''The flow of weapons to Iraq will not improve the security situation in Iraq, nor will it make the country safe from outside threats or an external invasion,'' said Naseer H Aruri, chancellor professor (emeritus) at the University of Massachusetts.
"''With 140,000 U.S. military personnel, 20,000 from the so-called coalition of the willing and another 20,000 contracted civilians, Iraq remains occupied and denied effective sovereignty,'' said Aruri, author of 'Dishonest Broker, the U.S. Role in Israel and Palestine'.
"''Purchasing weapons at this time, therefore, is more relevant to the needs of the occupier relating to the suppression of armed opposition, and consolidation of U.S. hegemony. Moreover, it is not appropriate for the interim government, a sub-contracting agency for the United States, to go shopping for arms as numerous arms exporting countries compete feverishly for contracts,'' he told IPS...." [more]
THESE DOGS DON'T HUNT A Pentagon inspector’s defense of Halliburton is a textbook example of the cronyism of Bush's so-called watchdogs.
By David J. Sirota and Judd Legum
"Fact: Halliburton has overcharged taxpayers for food, accepted kickbacks for oil subcontracts, and spent taxpayer money renting rooms at five-star resorts in Kuwait.
"But instead of expressing outrage the government's top watchdog, Pentagon Inspector General Joseph Schmitz, last week parroted the company line, saying he believes Halliburton's problems "are not out of line with the size and scope of their contracts." He then accused the press of overemphasizing the connections between the company and its former CEO Dick Cheney, even though Vice President Cheney still collects hundreds of thousands of dollars in deferred compensation, owns company stock options, and had his office "coordinate" Halliburton contracts in Iraq.
"Why is the government's top independent watchdog deliberately sugarcoating taxpayer ripoffs? Because he, like other Bush administration officials charged with overseeing expenditures in Iraq, is anything but independent.
"Instead of filling the various inspector general, comptroller, and budget officer positions in Iraq with skilled, non-partisan public servants, President Bush has packed them with partisans and cronies like Schmitz. Many of these individuals have longstanding political ties with the administration and ties to the very industries and companies that they are supposed to oversee. Here are the dirty details..." [more]
"Former employees who fault a leading Army contractor for mismanagement, reckless spending and cavalier subcontracting practices are scheduled to testify before a July 22 hearing of the House Government Reform Committee.
"The employees all once worked under a multibillion-dollar contract held by a Halliburton subsidiary, formerly known as Kellogg Brown and Root, to provide support services for the Army in Iraq and other trouble spots. Contract work included food services, construction, base maintenance, trucking and logistical services.
"One employee expected to testify, Marie deYoung, said she expected the same quality standards at the subsidiary, now known as Halliburton KBR, as those she had during her 10 years in the Army and Army Reserve until 2002, but she said she was sorely disappointed during more than four months on the job in Kuwait.
"Assigned to adjust dozens of subcontracts and renew others that KBR had written, deYoung told Federal Times she quit after discovering the company was unprepared to meet the Army’s immediate war needs — a key requirement for the 10-year contract known as LOGCAP. The contract requires KBR to be prepared to support Army needs within 24 hours’ notice, she said.
"Rather than having supplies and services in place, the company chose to rely on hiring subcontractors at the last minute, deYoung said.
"“They were making it up as they went along, even though they have 10 years of experience in this,” she said. “Halliburton is supposed to be working under a contingency contract to be anywhere in the world, but it was showing up with empty shelves and there were no prepositioned stocks.”...
"The committee’s ranking Democrat, Rep. Henry Waxman, D-Calif., located six former Halliburton employees he portrays as whistleblowers, and he has been pressing for a hearing to air their allegations of waste and abuse by the company.
"The contract employees include a former truck driver and a former convoy commander who accuse the company of regularly abandoning $85,000 trucks because of flat tires or other minor maintenance issues. Another former employee who worked in procurement claims KBR repeatedly skirted acquisition regulations and appeared to forgo competitive bidding among subcontractors...." [more]
As the number of contracts rises, problems continue to plague the contracting process
By Daniel Politi
"WASHINGTON, July 7, 2004 — More than 150 American companies have received contracts worth up to $48.7 billion for work in postwar Afghanistan and Iraq, according to the latest update of the Center for Public Integrity's Windfalls of War project.
"This figure represents an increase of 82 companies and more than $40 billion since the Center first released its study of contracts awarded to U.S. companies for postwar work in Afghanistan and Iraq on Oct. 30, 2003.
"The Center has continued to file Freedom of Information Act requests with, among others, the Department of Defense, the State Department and the U.S. Agency for International Development in hopes of getting the complete picture of U.S. contractors involved with Operation Iraqi Freedom and Operation Enduring Freedom. As was the case with the Center's initial report, contractors and dollar values have only been included in the overall list if there was authoritative information from either an official government source or a company source.
"Since the Center's first release in October 2003, there has been more scrutiny of these postwar contracts by Congress, the media and various government agencies. This was partly due to the revelation that employees of private contractors Titan Corporation and CACI were present during the alleged torture of Iraqi prisoners at the Abu Ghraib prison.
"The agencies that have been awarding these postwar contracts have in turn become more organized with contract information and more responsive to requests from the media; some agencies have even increased the amount of information available to the general public. For example, USAID has enhanced the Iraq section of its Web site, posting redacted versions of some contracts the agency awarded. The Coalition Provisional Authority, which formally ceased to exist on June 28, added a listing of awarded contracts on its Web site, while the Commerce Department's list of contracts awarded for work in Iraq is more complete now than it was previously.
"Still, much of the work continues to be uncoordinated within federal agencies and no agency seems to have a full picture of all the postwar contracts. For example, the Center did not receive a contract or any list of contracts that included Titan Corporation or CACI; those contract values came, rather, from Congressional testimony. This may be due to the number of agencies involved in the contracting process. The CACI contract, for example, is funded by the Army but was awarded through the Department of the Interior...." [more]
"Once upon a time, politics by other means took the form of war between state-sponsored armies. Then along came the creeping tide of international terror, whose practitioners play by different rules. Terrorists have little use for top-heavy chains of command, cumbersome procurement procedures, and pesky government oversight. They eschew conventional rules of engagement and international codes like the Geneva Conventions. Faced with such an agile enemy, beleaguered states are turning to a force that operates under a similar lack of constraints: private military contractors. Once the hired guns settle into the trenches, though, it can be hard to get them to leave.
"The role of private companies in Iraq has been widely reported. What hasn't gotten so much play is that, taken as a whole, contractors make up the second-largest armed force there, after the US military. Although this "army" is mostly on the Pentagon's payroll for now, it doesn't fly any flag or belong to any state. It's a multiethnic, for-profit, postnational force, and its sole agenda is to mind the bottom line. It has no incentive to stand down as long as there's money to be made. It's not afraid of terrorists, and whatever passes for an Iraqi government in the future will likely live at its mercy...." [more]
"The new Iraqi government is investigating whether illegal payoffs were made to secure cell phone contracts for a financial associate of Saddam Hussein, said the former U.S. administrator in Iraq.
"L. Paul Bremer, who until last week headed the Coalition Provisional Authority (CPA), said the issue of illegal cell phone contracting was referred to Iraq's Board of Supreme Audit, a government agency set up to deal with the widespread problem of corruption in Iraq. It also was referred to an Iraqi inspector general's office, he said.
"Other U.S. officials said the cell phone contracting improprieties also are being investigated by Iraq's new National Communications and Media Commission (ICMC), which was modeled after the Federal Communications Commission.
"The independent institution is in charge of licensing and regulating telecommunications, broadcasting, information services and other media in Iraq and can revoke the cell phone licenses.
"I said that if anybody in the Pentagon has evidence to show [contracting improprieties], they should bring it forward. [The Iraqis] can bring a criminal case against whoever they allege did it," Mr. Bremer said in a meeting with reporters and editors of The Washington Times. "It's basically under investigation."
Mr. Bremer ordered the cell phone contract investigation after receiving a memorandum last month from John A. Shaw, the deputy undersecretary of defense for international technology security, who said the contracts should be revoked because of fraud...." [more]
"SAN FRANCISCO The California State Teachers Retirement System, the third-largest U.S. public pension fund, should ban investment in companies engaged in torture, said Steve Westly, the state controller.
"Westly, a member of the board of the $116 billion fund known as Calstrs, will introduce his proposal at a meeting on Wednesday of the board's corporate governance subcommittee.
"The group is to discuss a proposal to question executives from CACI International about its role in the Iraq prisoner abuse scandal.
"CACI, which provides interrogation services to the U.S. military, has come under scrutiny for a possible link to prisoner abuses in Iraq.
"The company, based in Arlington, Virginia, has denied allegations in a lawsuit that it conspired with U.S. officials to torture and abuse prisoners in Iraq...." [more]
"ARLINGTON, Va. -- CACI International Inc. said Wednesday the General Services Administration has decided against barring the company from federal contracts following an inquiry into the use of its interrogators in Iraq. The news sent the company's shares up more than 5 percent.
"The Arlington-based information technology company said a GSA official determined it is "not necessary to suspend or debar CACI."
"But the GSA has asked for "additional information illustrating CACI's understanding that all parties to a transaction, including contractors, are responsible for ensuring that the rules are followed and the integrity of the system maintained," CACI said...." [more]
"07/04/04 "Der Spiegel" -- (Translated by SAB, NY) -- According to information from the International Red Cross, more than a 100 children are imprisoned in Iraq, including in the infamous prison Abu Ghraib.
"The German TV magazine "Report" revealed that there has been abuse of children and youth by the coalition forces.
"Mainz - "Between January and May of this year we've registered 107 children, during 19 visits in 6 different detention locations" the representative of the International Red Cross, Florian Westphal, told the TV station SWR's Magazine "Report Mainz". He noted that these were places of detention controlled by coalition troops. According to Westphal the number of children held captive could be even higher.
"The TV Magazine also reported of evidence and eye witness reports according to which U.S. soldiers also abused children and youthful detainees. Samuel Provance, a staff sergeant stationed in the now infamous Abu Ghraib prison said that interrogating officers had pressured a 15 or 16 year old girl. Military police had only intervened when the girl was already half undressed. On another occasion, a 16 year old was soaked with water, driven through the cold, and then smeared with mud.
"UNICEF, the United Nations Children's Fund, confirmed the detention of Iraqi children by foreign military according to "Report" which cited an interim memorandum by the organization, The as yet unreleased report, which is dated June 2004, is quoted as follows: "Children who were detained in the cities of Kerbala and Basra because of alleged activities against the occupying forces were reportedly routinely sent to a detention camp at Umm Kasr. The classification of these children as detainees is worrisome because it includes unspecified length of detention without contact to their families pending further proceedings or legal actions".
"The German section of the human rights organization Amnesty International is demanding a clarification of the allegations and a response from the US government.
"WASHINGTON -- A senior Defense Department official conducted unauthorized investigations of Iraq reconstruction efforts and used their results to push for lucrative contracts for friends and their business clients, according to current and former Pentagon officials and documents.
"John A. "Jack" Shaw, deputy undersecretary for international technology security, represented himself as an agent of the Pentagon's inspector general in conducting the investigations this year, sources said.
"In one case, Shaw disguised himself as an employee of Halliburton Co. and gained access to a port in southern Iraq after he was denied entry by the U.S. military, the sources said.
"In that investigation, Shaw found problems with operations at the port of Umm al Qasr, Pentagon sources said. In another, he criticized a competition sponsored by the U.S.-led Coalition Provisional Authority to award cell phone licenses in Iraq.
"In both cases, Shaw urged government officials to fix the alleged problems by directing multimillion-dollar contracts to companies linked to his friends, without competitive bidding, according to the Pentagon sources and documents. In the case of the port, the clients of a lobbyist friend won a no-bid contract for dredging.
"Shaw's actions are the latest to raise concerns that senior Republican officials working in Washington and Iraq have used the rebuilding effort in Iraq to reward associates and political allies. One of Shaw's close friends -- the former top U.S. transportation official in Iraq -- is under investigation for his role in promoting an Iraqi national airline with a company linked to the Saddam Hussein regime...." [more]
