Mr. Smith Goes to War With KBR

Published as a New York Times editorial : June 19, 2008

In the annals of Iraq war profiteering, put Charles Smith down as one of the casualties. Four years ago, Army auditors notified Mr. Smith, a Pentagon contract manager, that KBR, the Bush administration’s most favored defense contractor, could not adequately explain more than $1 billion in war billings.

Mr. Smith, a career civilian employee, did his duty: He confronted KBR and warned that unless they supplied credible justification, he would levy penalties of 15 percent on future work payments while also, needless to say, blocking any performance bonuses for the company.

Whoops. Mr. Smith was replaced suddenly by the brass in overseeing the contract and the Pentagon took the unusual step of second-guessing its own auditors by hiring an outside contractor to reconsider the claims from KBR. Such is the clout of the Texas-based company and largest Pentagon contractor in Iraq, once part of the Halliburton conglomerate so dear to the heart and wallet of Vice President Dick Cheney.

Sure enough, KBR’s claims were soon unblocked. The contract Goliath got performance bonuses, too.

The risks of bucking KBR from inside the defense establishment were disclosed by Mr. Smith to James Risen of The Times. “Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that,” said Mr. Smith, now retired. The Pentagon insists that it had good management motives in reversing Mr. Smith and heeding KBR’s warning that penalties would erode basic services for the troops. The military dares to maintain that Mr. Smith was not taken off the job because of political pressure.

Nothing much seems to have stood in the company’s way since Mr. Smith was purged. KBR just snared a big piece of a new 10-year, $150 billion Iraq contract.

Let America Be America Again, a poem by Langston Hughes

Let America Be America Again by Langston Hughes

Let America be America again.
Let it be the dream it used to be.
Let it be the pioneer on the plain
Seeking a home where he himself is free.

(America never was America to me.)

Let America be the dream the dreamers dreamed–
Let it be that great strong land of love
Where never kings connive nor tyrants scheme
That any man be crushed by one above.

(It never was America to me.)

O, let my land be a land where Liberty
Is crowned with no false patriotic wreath,
But opportunity is real, and life is free,
Equality is in the air we breathe.

(There’s never been equality for me,
Nor freedom in this “homeland of the free.”)

Say, who are you that mumbles in the dark?
And who are you that draws your veil across the stars?

I am the poor white, fooled and pushed apart,
I am the Negro bearing slavery’s scars.
I am the red man driven from the land,
I am the immigrant clutching the hope I seek–
And finding only the same old stupid plan
Of dog eat dog, of mighty crush the weak.

I am the young man, full of strength and hope,
Tangled in that ancient endless chain
Of profit, power, gain, of grab the land!
Of grab the gold! Of grab the ways of satisfying need!
Of work the men! Of take the pay!
Of owning everything for one’s own greed!

I am the farmer, bondsman to the soil.
I am the worker sold to the machine.
I am the Negro, servant to you all.
I am the people, humble, hungry, mean—
Hungry yet today despite the dream.
Beaten yet today–O, Pioneers!
I am the man who never got ahead,
The poorest worker bartered through the years.

Yet I’m the one who dreamt our basic dream
In the Old World while still a serf of kings,
Who dreamt a dream so strong, so brave, so true,
That even yet its mighty daring sings
In every brick and stone, in every furrow turned
That’s made America the land it has become.
O, I’m the man who sailed those early seas
In search of what I meant to be my home–
For I’m the one who left dark Ireland’s shore,
And Poland’s plain, and England’s grassy lea,
And torn from Black Africa’s strand I came
To build a “homeland of the free.”

The free?

Who said the free? Not me?
Surely not me? The millions on relief today?
The millions shot down when we strike?
The millions who have nothing for our pay?
For all the dreams we’ve dreamed
And all the songs we’ve sung
And all the hopes we’ve held
And all the flags we’ve hung,
The millions who have nothing for our pay–
Except the dream that’s almost dead today.

O, let America be America again–
The land that never has been yet–
And yet must be–the land where every man is free.
The land that’s mine–the poor man’s, Indian’s, Negro’s, ME–
Who made America,
Whose sweat and blood, whose faith and pain,
Whose hand at the foundry, whose plow in the rain,
Must bring back our mighty dream again.

Sure, call me any ugly name you choose–
The steel of freedom does not stain.
From those who live like leeches on the people’s lives,
We must take back our land again,
America!

O, yes,
I say it plain,
America never was America to me,
And yet I swear this oath–
America will be!

Out of the rack and ruin of our gangster death,
The rape and rot of graft, and stealth, and lies,
We, the people, must redeem
The land, the mines, the plants, the rivers.
The mountains and the endless plain–
All, all the stretch of these great green states–
And make America again!

A BBC investigation on U.S. war profiteering estimates that $23 billion of taxpayer funds has been “lost, stolen, or not properly accounted for in Iraq.”

A BBC investigation on U.S. war profiteering estimates that $23 billion of taxpayer funds has been “lost, stolen, or not properly accounted for in Iraq.” The figure, which uses U.S. and Iraqi government sources, is meeting resistance from the Bush administration, which pushed through a gag order in dozens of court cases involving the alleged mismanagement of funds by private contractors.

---

The BBC:

The BBC’s Panorama programme has used US and Iraqi government sources to research how much some private contractors have profited from the conflict and rebuilding.

A US gagging order is preventing discussion of the allegations.

The order applies to 70 court cases against some of the top US companies.

To date, no major US contractor faces trial for fraud or mismanagement in Iraq. Read the rest of this article here.

New York Times reports U.S. government is splitting up KBR/Halliburton military contract monopoly in Iraq due to mismanagement and wasteful spending, rape, and electrocutions

Controversial Contractor’s Iraq Work Is Split Up

Found in New York Times:

By JAMES RISEN

Published: May 24, 2008

WASHINGTON — Sometime soon, a group of American corporate executives and military leaders will quietly sit down and divide Iraq into three parts.

Their meeting will not have anything to do with Iraq’s national sovereignty, but instead will involve slicing up billions of dollars in work for the defense contractors that support the American military’s presence in the country.

For the first time since the war began, the largest single Pentagon contract in Iraq is being divided among three companies, ending the monopoly held by KBR, the Houston-based corporation that has been accused of wasteful spending and mismanagement and of exploiting its political ties to Vice President Dick Cheney.

Yet even as the Pentagon begins to pull apart the enormous KBR contract, critics warn that the new three-company deal could actually result in higher costs for American taxpayers and weak oversight by the military. In fact, under the new deal, KBR and the two other companies could actually make more than three times as much as KBR has been paid each year since the war began.

Last month the Pentagon awarded the companies pieces of a new contract to provide food, shelter and basic services for American soldiers, a 10-year, $150 billion deal that stretches far beyond the final days of the Bush administration. KBR will still get a sizable chunk of the business, but now it will have to share the work with Fluor Corporation and DynCorp International.

Army officials and executives of the three companies are planning to meet in the next few weeks to start the complex process of breaking up KBR’s sprawling operations in Iraq.

KBR, previously a subsidiary of Halliburton, once headed by Mr. Cheney, has collected more than $24 billion since the war began. It has 40,000 employees in Iraq and 28,000 more in Afghanistan and Kuwait.

But KBR has come under fire from Congress and Pentagon auditors for complaints ranging from making more than $200 million in excessive charges, including meals never served to soldiers, to delivering unsafe water to American troops to doing little to prevent sexual assaults of its female employees, often by their KBR co-workers.

Army officials acknowledge that they were under intense pressure from Capitol Hill to give KBR some competition, yet leading Democratic lawmakers and other critics say the new contract will merely paper over the fundamental problems that stem from the Pentagon’s heavy dependence on outside contractors in Iraq.

“This is just another verse in the same old song,” said Senator Byron L. Dorgan, a Democrat from North Dakota who is one of the leading Congressional critics of KBR and other major defense contractors. “It appears to me that this is a broken process.”

Critics also say they doubt that the new contract will result in significant cost savings or better services for soldiers in Iraq. The Army has built into the deal the potential for larger profits for the contractors than existed under the prior contract, and it plans to outsource much of the management and oversight of the contractors to yet another company, Serco Inc., for $59 million.

“This new contract sounds good, they are splitting it up, but there are serious flaws, including what looks like outsourcing oversight,” said Dina Rasor, an investigator and co-author of a book about contracting in Iraq. “And the size of the contract is enormous. When you think of these big, multibillion-dollar defense contracts and contractors, you think of companies like Lockheed, and you can see their big airplane plants. But what is KBR doing for all this money? They are slinging hash, washing laundry.”

Army officials said that they would not be able to actually shift work from KBR to the other companies until late this year, meaning that the change would be under way just as Americans are choosing a new president. The Army officials said the huge new multiyear contract for Iraq would not commit any new presidential administration to paying billions of dollars to defense contractors for services in Iraq if the new president decided to withdraw American troops.

It is not clear how the Pentagon will try to untangle KBR’s operations in Iraq to share them with DynCorp and Fluor. Lee Thompson, the executive director of the Logistics Civil Augmentation Program, as the program is called, said the Army would first try to split work in Kuwait among the three companies, and would then move on to Afghanistan and Iraq.

Even if the United States remains in Iraq long term, the contract could ultimately cost much less than $150 billion over 10 years, Mr. Thompson said. But after being caught off guard by the scale of the spending at the start of the war, the Army is building in a cushion this time, he said.

Army officials have been working for two years to undo KBR’s monopoly on business in Iraq.

U.S., Halliburton’s KBR subsidiary cover up KBR employee gang rape of U.S. civilian in Iraq

Halliburton/KBR employee, Jamie Leigh Jones, now 22, was kept in a “storage container” under armed gaurd by the company’s other employees in Iraq and repeatedly gang raped. U.S. army doctors reported that there was clear evidence of both vaginal and anal trauma due to rape and a rape kit was administered to collect DNA from the perpetrators, however the kit was subsequently lost after army officials handed the kit over to Halliburton/KBR security personnel.

Nice.

So, now, The two sickest, saddest things I have read about in the past two days are both tragic events that could have and should have been prevented by Halliburton subsidiary and primary Iraq War military contractor, Kellogg, Brown, and Root (KBR) (both occurred in Iraq last year.), A company that is immune to prosecution for either of these acts under special laws enacted to protect from prosecution, any U.S. military contractors working in Iraq .

nice.

Congress moves to force KBR and other defense contractors to stop using off-shore shell companies to avoid paying billions in payroll taxes owed to the US government…the contractors say they are “patriotically” passing on savings in the war effort by listing their US employees as being employed in foreign countries.

The following is an opinion piece published in the New York Times yesterday:

“Congress is finally moving to shut one of the more egregious forms of Iraq war profiteering: defense contractors using offshore shell companies to avoid paying their fair share of payroll taxes. The practice is widespread and Congressional investigators have been dispatched to one of the prime tax refuges, the Cayman Islands, to seek a firsthand estimate of how much the Treasury is being shorted.

No one will be surprised to hear that one of the suspected prime offenders is KBR, the Texas-based defense contractor, formerly a part of the Halliburton conglomerate allied with Vice President Dick Cheney. According to a report in The Boston Globe, KBR, which has landed billions in Iraq contracts, has used two Cayman shell companies to avoid paying hundreds of millions in payroll, Medicare and unemployment taxes.

Unfortunately right now there is nothing illegal about this. The House has approved legislation to plug the dodge by treating foreign subsidiaries of defense contractors as what they are — American employers required to pay taxes. The Senate must quickly follow suit and not buy the contractors’ line that listing American workers at offshore companies is a cost saving passed on patriotically to the war effort. No less insulting, the Cayman dodge has been blocking Americans from the protection of labor and anti-discrimination laws.

The House has taken on another shamefully common abuse: voting to deny future government contracts to any company that fails to pay its corporate taxes, including an estimated 25,000 defense contractors keeping billions due the Treasury. The Senate should approve that legislation as well.

Companies enriched by taxpayers in the war boom should not be able to compound their profits by not paying their fair share of taxes. Congress must do far more to bring them to a full accounting.”