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To the U.S.: “Thanks for the Money!” -Halliburton

Earlier this week, the Republicans celebrated a reduction of the federal deficit to $296 billion (as opposed to the $400 billion projection in February) for the upcoming fiscal year. (ed. note: What a surprise. They botched an estimation. Business as usual in the Bush White House.) While members of the GOP did endzone dances in celebration of the fourth highest deficit — ever — there were some interesting developments this week with government spending on Bush’s misadventure in Iraq and the underworld of war profiteering.

President Bush submitted a request for an additional $110 billion to finance Iraq and Afghanistan operations. The supplement is likely to increase the total cost of the war in Iraq to $400 billion — about $400 billion off from former Deputy Defense Secretary Paul Wolfowitz’s estimation. (Give or take.) Though none of this money will go to reconstruction. (ed. note: Reconstruction is still desperately needed; a situation that is accuarately characterized by the crumbling buildings described in the Parsons post. The major problem was that the money went to corporate lackies of the White House who were only interested in increasing their bottom-line rather than producing quality work. That much is undeniable as defense contractors consistently tried to cut corners. Don’t forget that these defense contractors are being paid for jobs that the U.S. military used to do, such as feeding soldiers, you know, food that isn’t double-charged and water that isn’t contaminated.)

Just a quick update, sports fans. Iraq/Afghanistan wars: +$110 billion; Number of veterans whose personal information has gone M.I.A.: 17.5 million; Moral authority of the U.S. in the world: 0.

On the corporate greed-front, the Army Corps of Engineers canceled Halliburton’s logistical support contract (LOGCAP), which was awarded in December 2001, and that the U.S. Army has already paid $14.5 billion to Vice President Dick Cheney’s former employer, as reported by Griff Witte of the Washington Post on July 12. (Christy had a quick post on this earlier this week.)

Under the deal, Halliburton had exclusive rights to provide the military with a wide range of work that included keeping soldiers around the world fed, sheltered and in communication with friends and family back home. Government audits turned up more than $1 billion in questionable costs. Whistle-blowers told how the company charged $45 per case of soda, double-billed on meals and allowed troops to bathe in contaminated water.

Halliburton officials have denied the allegations strenuously. Army officials yesterday defended the company’s performance but also acknowledged that reliance on a single contractor left the government vulnerable. The Pentagon’s new plan will split the work among three companies, to be chosen this fall, with a fourth firm hired to help monitor the performance of the other three. Halliburton will be eligible to bid on the work. (emphasis mine)

Why is Halliburton being allowed to bid? Well, the cancellation of the contract was not because of the poor work of Halliburton’s subsidiary, Kellogg Brown & Root, but rather, the job is too large for one company. Thus, we cannot blame KBR’s crappy performance on them. No, no, no. That would be accountability and that’s not how we run business.

The company maintains that its billing disputes with Defense Department auditors have been resolved and that its work has received rave reviews from the military. "By all accounts, KBR’s logistical achievements in support of the troops in Iraq, Kuwait and Afghanistan have been nothing short of amazing," said company spokeswoman Melissa Norcross in a statement.

King, the Army official, agreed yesterday. "Halliburton has done an outstanding job, under the circumstances," he said. He added that Pentagon leaders ultimately decided they did not want to have "all our eggs in one basket" because multiple contractors will give them better prices, more accountability and greater protection if one contractor fails to perform. (emphasis mine)

Hey, thanks buddy, you’re about three years too late. While there are some funds left over from the reconstruction aid, they have to be allocated by September, and after that, nothing. So I find it a bit disingenuous for this Army official to come to this realization this late in the game. And I don’t think the "we need to get them out there" argument from 2003 really sufficed. Perhaps this is one of those many problems of privatizing war. Many of these jobs are things the U.S. military used to do itself. Cut out the (greedy) middlemen and the U.S. government, among many other things, save a boatload of cash for the government, morale among U.S. forces will not be diminished because some contractor makes five to ten times as much as they do and you have accountability under the UMCJ. The only downside is that their buddies in the private sector cannot rob the U.S. Treasury.


So who’s on tap to take over? Meet the possible new bosses:

The bidding on the new contract is likely to attract some high-profile suitors, including weapons makers Lockheed Martin Corp. and Northrop Grumman Corp.

For all of you LieberMen, LieberWomen, and LieberYouth out there, the political action committee Employees of Northrop Grumman have given Senator Joseph I. Lieberman (Me! Me! Me!-Connecticut) $18,000 since 1999, including $9,000 in 2005. (The last donation, which was $5,000, was June 2005.) Not suggesting anything; that’s just a fun little fact for ya. (Jane reminds us of Lieberman’s other friends.)

Moving along. Remember a few weeks ago when I wrote about the poor quality of the health clinics that were "crumbling to dust"? I provided a "visual approximation" but Sean-Paul Kelley of The Agonist has pictures! (ed. note: I love pictures.) In the article I cited above, the reporter attributed the health clinics to Halliburton, but as I wrote in the Parsons profile, it was the Pasadena-based company that was responsible for the shoddy work. However, S-PK informs us that only eight of the 142 clinics were built; less than half of the originally reported number of twenty. (ed. note: Ugh. I was duped with the phony twenty clinics-completed story. I feel so — so — so used.)

"Halliburton wasn’t the contractor," said James Mitchell, spokesman for the Special Inspector General for Iraq Reconstruction, this morning when I called him. "It was a company called Parsons," he added, "in Pasadena and only 8 of the centers were completed."


Mitchell was a generous fount of knowledge on the subject. He pointed out that the original Parsons contract was for $243 million. I asked if all of the money had been given to Parsons. He wasn’t sure, but pointed me to this document to find out. On page i of the executive summary it indicates that $186,000,000 of the original $243,000,000 was spent by Parsons "with little progress made."


I had asked Mr. Mitchell earlier, from the Inspector General’s office, "where did all the money go then, if they only managed to complete 8 healthcare centers?" "Was it because of security concerns? Did the Blackwater-types eat the money up?" I asked. Mitchell said much of it was "administrative overhead." I’m not sure how Mitchell or the IG’s office defines "administrative overhead." And I doubt Parsons would tell me if I asked.

A few examples produced by Kelley:

I’ll race you up the stairs! Last one up is… well, dead, as they would probably be killed by the collapsing staircase.

Progress is being ma– ah, forget it.

Other Posts in the Series:
"Merchants of Misery" and the "Do-Less-Than-Nothing" Congress (introduction), 04.29.06
Houston, We Have a Problem (Halliburton), 05.06.06
Friends in High Places (Bechtel), 05.20.06
Transforming Risk into Opportunity (Custer Battles), 06.03.06
The Insider (General Dynamics), 06.25.06
A Day Late and a Dollar Short (Parsons), 07.01.06
Justice in a Sea of Destruction?, 07.08.06

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