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TechnoratiUS War Privatization Results in Billions Lost in Fraud, Waste and Abuse--Report
Half of the personnel the US has working on its wars in Iraq and Afghanistan are private contractors. A new report reveals how much of a rip-off this system has been to US taxpayers.
More than 240,000 contractor employees, about 80 percent of them foreign nationals, are working in Iraq and Afghanistan to support operations and projects of the U.S. military, the Department of State, and the U.S. Agency for International Development. Contractor employees outnumber U.S. troops in the region. While contractors provide vital services, the Commission believes their use has also entailed billions of dollars lost to waste, fraud, and abuse due to inadequate planning, poor contract drafting, limited competition, understaffed oversight functions, and other problems.
These statistics support a recent DoD report on the extent of the US reliance on contractors. That report also found that there has been a 23% increase in the number of “Private Security Contractors” working for the Department of Defense in Iraq in the second quarter of 2009 and a 29% increase in Afghanistan, which “correlates to the build up of forces” in the country. In Iraq, the Pentagon attributes the increase to better accounting. There are currently more private contractors (counting both armed and unarmed) in Afghanistan (68,197) than US troops (40,000). In Iraq, the number of contractors (132,610) is basically equal to the number of US troops.
(NOTE: I recently discussed this issue on Bill Moyers Journal)
The single greatest beneficiary of the US wars in Iraq and Afghanistan is KBR, the former Halliburton subsidiary. KBR has been paid nearly $32 billion since 2001. In May, April Stephenson, director of the Defense Contract Audit Agency, testified that KBR was linked to “the vast majority” of war-zone fraud cases and a majority of the $13 billion in “questioned” or “unsupported” costs. According to Agency, it sent the inspector general “a total of 32 cases of suspected overbilling, bribery and other violations since 2004.”
According to the Associated Press, which obtained an early copy of the commission’s report, “billions of dollars” of the total paid to KBR “ended up wasted due to poorly defined work orders, inadequate oversight and contractor inefficiencies.”
KBR is at the center of a lethal scandal involving the electrocution deaths of more than a dozen US soldiers, allegedly as a result of faulty electrical work done by the company. The DoD paid KBR more than $80 million in bonuses for the very work that resulted in the electrocution deaths.
Among the other scandals involving KBR that the commission is investigating is a questionable contract to rebuild a large dining facility at Camp Delta in Iraq:
In July 2008, the Army said a new dining facility was badly needed at the Camp Delta forward operating base because the existing one was too small, had a saggy ceiling, poor lighting and an unsanitary wooden floor.
KBR was awarded a contract in September. Work began in late October as American and Iraqi officials negotiated the agreement setting the dates for the U.S. troop withdrawal.
But during an April visit to Camp Delta, the commission learned that the existing mess hall had just been renovated. The $3.36 million job was done by KBR and completed in June 2008. Commission staff toured the renovated hall “without seeing or hearing of any problems or shortfalls,” the report says.
Here’s the kicker:
The decision to push ahead with the new hall was based on paperwork that was never updated and a failure to review the need for the project after the security agreement was signed. Most of the materials have been ordered and construction is well under way. That means canceling the project would save little money because KBR would have a legitimate claim for payment based on the investment it has already made.
So, are all these investigations and scandals hurting KBR? Apparently not:
Today, neither Halliburton nor KBR are suffering from their divorce. Halliburton reported $4 billion in operating profits in 2008, while KBR recently said its first quarter revenues in 2009 were up 27%, for a total of $3.2 billion. Its sales in 2008 were up 33%, and according to the Financial Times, the company had $1 billion in cash, no debt, and was looking for acquisitions.
One last note for context: While the Wartime Contracting Commission is doing very important work revealing the scope of the corruption, shoddy work and abuses within this system, it also includes several members who are either pro-war or have worked for major war contractors. This is the composition of the commissioners:
Co-chair Michael J. Thibault, a former deputy director of the Defense Contract Audit Agency, was appointed by Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi. Former Republican Congressman Co-Chair Shays was appointed by House Minority Leader John Boehner. The other six commissioners are Clark Kent Ervin, Grant S. Green, Linda J. Gustitus, Robert J. Henke, Charles Tiefer, and Dov S. Zakheim.
© 2009 Jeremy Scahill
42 Comments so far
Show AllIt is becoming quite clear that the entire Bush administration should be hanged
for either crimes against humanity and/or high treason and other myth-demeanors.
I saw Steven Colbert broadcasting from Iraq last night and the night before. It looked to me as though Steven was giving the Iraq war the "Colbert Bump".
Perhaps I am in the wrong generation, irony deficient, but there was a Dadaist quality. This struck me as exceedingly strange since the topic was, you know, killing.
The agenda was for every US national figure (Obama, McCain, Palin, Biden) and some generals and Iraqi leaders to unite around a story that praises the troops, and convinces them (and us) that they are doing a great job in bringing positive change to Iraq, and that they should stay as long as it takes to complete this change.
The tools are laughter and friendly shows of solidarity, such as Steven getting a buzz cut or dealing with a shouting drill sargeant.
Colbert is selling this war. He is raising troop morale for what seems to me an imperialist agenda without end. Grace, charm, humor and much better marketing skills are being brought to bear. I am disappointed that Colbert would allow himself to be used this way to send more kids out over there.
Is there anyone out there with another take? I am puzzled.
Joe
It's not waste, fraud and abuse, in Amerika-speak it's called 'profit'.
Perhaps we should carry outsourceing to its logical conclusion and oursource our government to a civilized nation.
Come on everybody,
" Freedom is not Free "
" Support our Troops "
" United We Stand "
" Never Forget "
" Pray for our Troops"
" In God we Trust"
All those bumper stickers accompanyed by fish symbols and American flags. SHAME ON ALL OF US.
The Bush/Cheney flim-flam war propoganda had us in a herd like a flock of sheep heading towards national disaster. And it worked.
My personal Favorite , " ARMY of ONE "
The ARMY of Americans working to pay for the greed of the Bush/Cheney War/Torture machine and nation wide warrant less surveillance spy network.
Just think , 10 percent of the population has 90 percent of the wealth.
Another 10 percent ride the coat-tails of the top ten percent.
15 percent of the popualtion is unemployed.
That leaves 65 percent of underpaid Americans paying all the bills, because Busch gave the top 20 percent huge tax cuts.
A republican friend told me yesterday that the drugs companys were not giving out free pens anymore, and that was due to the election of Obama.
Its crap like that, that is going to keep Republicans out of the White house and majority power for the next 30 years.
We can only pray, that Republicans keep treating Americans like stupid fools.
60 percent of us have figured out how they robbed us of our money and freedoms. Thats not going to change,ever.
bornfreemen
Don't forget that well over 45% of Americans pay no income tax at all. The Upper 5% pays little and the upper 1% pays less. That leave's the Middle Class carrying the load.
Lets disabuse the Republican argument of the uppers pay the majority of taxes. While true as far as income taxes go, they also have most of the wealth and income, on which they pay less than their proportional share.
I'd suggest that less than 40% of Americans are carrying the rest on their shoulders.
Bornfreemen: I'm sure you're wrong (without the statistics to back it up ;) It is more like the top percent and a half have 90% of the wealth of this nation while they pay a pittance of the income taxes collected.
And looking at the majority party in both the Legislative and Executive Branches right now is like looking at the other wing of the Republican party. Single payer off the table? Troop build ups in Afghanistan and drone attacks on wedding parties and funerals in a new country, Pakistan? Even further concessions from union workers and the cutting out of injury/ death lawsuits for victims of defective automakers? Bankster bailouts, anyone, while to date a mere 2100 homeowners have had help for foreclosure through fed programs in the last 8 months? "Clean coal"? ETC... Give up THAT "hope" bornfreemen, ain't gonna happen.
Now we know why Cheney kept saying things were going "swimingly".
You are correct sir, everything as far as profits are concerned is going according to the plan. The occupation, lives of American servicemen and Iraqis on the other hand is only a secondary issue.
I guess we know what "Support the Troops" means. Seems that every time you turn around there's another damn 'holiday' we should observe to honor our fallen heros. We even hear speeches on Valentine's Day, Mother's Day and every other obscure holiday extolling the virtue of those who died for our "freedoms". The latest one is the 274th (or some such odd milestone) anniverasary of the United States Army.
Just today I received a begging letter from the Paralyzed Veterans of America asking for money. What the Hell happened to the hundreds of billions of tax dollars we have already given to take care of that? Has KBR, Blackwater, Halliburton and all the rest of those greedy corporatists spent it all on building their empires?
As for the Amerikkkan Sheep, Jack Nicholson must have been right when he said, "The truth? You can't handle the truth!"
It surely looks more and more like folks died for the banking industry's and corporations' freedom to pillage the nation's public treasury.
The money is being spent just as it was intended. To enrich right wing contractors. No questions asked. No cost accounting. No evaluation of effectiveness. No quality control. No penalty for failure. No punishment for putting anyone at risk or injuring anyone. Just keep the river of cash flowing.
War makes it easy to claim urgency and a need for deep secrecy. Perfect cover for what amounts to a criminal collusion between our government, the military, the mercenaries and the manufacturers. That's why we NEED wars.
The prize? $600 billion per year of taxpayer money, our national well-being and our national soul.
And by the way - this report may be redundant by some standards, but we have to keep talking about it. It's too important to be buried or copy-edited into nothingness.
Joe
Sioux Rose
JCLIENTELLE: Astute post & analysis.
jclientelle
You sir are pretty much correct as usual. I would suggest that you don't quite go far enough though. While the Right uses wars and military fears to cover their profiteering and agendas, its become quite apparent that the present government is using economic chaos to the same purpose. Just my opinion so far, but evidence seems to be piling up.
Pax
?
Joe
The use of the Great Recession to push through useless and financially irresponsible bills like the Stimulas pkg, the Omnibus bill, the Budget. Using the TARP money for political pay offs in bailing out the Auto companies, even suggesting something like the Waxman/Markey national tax, etc...............telling people that everything is urgent because of the economy when these things have nothing to do with the economy except to hurt it.
Privately seeking epic profitability,
___ General Barack ◎'Bonaparte ◎bysmal
___ ( Gen. B◎◎ )
is as a ghost to our Constitution, Democracy and the true needs of the American people.
Publicly we can either :
___ B◎◎ HOO, or give him a
___ H◎◎T and B◎◎T
Wow - first "report" I've ever heard about this. Up until now, I thought everything was going really super, with tight oversight and stringent accounting and tons of checks and balances and stuff...
You know, the redundant report industry continues to seriously thrive...
Look
It may have been obvious to some of us on the outside that this is going on, but this is the first real report I have read of it, and if anything, there needs to be more of this.
Love
Zero
Here we go again with the idea of "lost" money. When I lose money, it's in the couch cushions, or it fell out of my pocket. If I go to Las Vegas and lose money the house wins it. It's somewhere; someone's got it or at least will probably find it when they move the couch.
When I brought this up about the banks losing all that money, I was told, oh that was all theoretical money caused by a "bubble", yet apparently real money was needed to replace it.
Now there's more lost money and it looks like it was the real kind. If we move the couch we see KBR and Halliburton reporting billions of dollars in profit. Why can't we get the "lost" money back?
"It Was Lost" = our systems answer to "Follow the Money".
Exactly. And if Halliburton and KBR need to "lose" more money, our congresspeople and senators have some PACs which are always glad to help.
Many decades ago, there was a film called "The Mouse That Roared" about a fictional European nation called The Duchy of Grand Fenwick that dedcides to declare war on the United States so we will invade it and provide what was then called "foreign aid". As absurd as it sounds, there may now be some destitute and desperate nations out there contemplating the same thing.
Jeremy Scahill must be commended for his years of research, reporting, appearances on Democracy Now!, on Bill Moyers and at town hall meetings around the country, and his book on this subject of War Privatization and the use of private contractors to fleece the American taxpayer.
My question since the first reports appeared of private contractors operating in Iraq and Afghanistan remains the same:
What is the difference between a "PRIVATE SECURITY CONTRACTOR," (basically a mercenary) who is motivated by MONEY and an "UNLAWFUL ENEMY COMBATANT", who is motivated by IDEOLOGY? (and motivated by desire for defense and by revenge)
The U.S. grabbed a bunch of these "unlawful enemy combatants" and threw them in Guantanamo, and Abu Ghraib, and Bagram and elsewhere. Meanwhile, the U.S. had a bunch of mercenaries shooting up towns and villages in Iraq and Afghanistan... Hmmm??
Recently, there seems to be some constraint on how private security contractors operate. But during those initial years of the U.S. operations in Iraq and Afghanistan, these security contractors were subject to ZERO legal oversight or restrictions - neither U.S. law, nor Iraqi or Afghan law, nor international law held them accountable for their actions. Sounds a little "UNLAWFUL" to me.
"What is the difference between..." That's an easy one. Private contractors were/are being paid by the US government, therefore they are good by definition. Basic American Exceptionalism.
War always has been the biggest export of the United States, and will continue to be well into the future. As long as the Military Industrial Media Complex continues to fool voters by churning out smooth-talking political candidates who constantly appeal to voters' patriotic emotions, then the MIMC will continue its destructive path, and the taxpayer endlessly will be on the hook to pay for the bottomless costs. The first step is to pull the plug on the war machine by eliminating any funding for the Pentagon.
"War always has been the biggest export of the United States"
(I've posted the following numerous times but there may be some who haven't read it)
The American government has always maintained the right of its citizens to ship arms to belligerents. President Washington took this position when France protested against the sale of arms to England in 1793, the answer being that "the exporting from the United States of warlike instruments and military stores is not to be interfered with." - Theodore Roosevelt's "Fear God..."p.160
gun runners from the off.
vdb,
Sorry, I had not seen your previous posts. My bad. From all that has been transpiring lately, it seemed to me to be the logical conclusion. I am not quoting anyone or trying to repeat what they already have said. I am just stating what to me seems to be obvious.
'Billions Lost in Fraud, Waste and Abuse' - in that case, "Mission Accomplished"! "We" "Won"!
Amen!
odoco
Antonia Juhasz's book, "The Bush Agenda" and Naomi Klein's "The Shock Doctrine" should be mandatory reading for every college poli sci class in this country. Both books explicitly outline what Scahill reports on in this article.
Tie this to Byron Dorgan's comment a few weeks ago that "the banks own Washington, D.C." and you have the final result of an economic system totally manipulated by the elite financiers who care nothing for the general welfare of the people - hence - perpetual war for perpetual profit and domination and control of lesser species: e.g. anyone not American, not white, and not Christian. Tie this to the ever-increasing Christian Jihadist movement in the US military and you have completed the fascistic circle.
Sioux Rose
ODOCO: Right on! I call it Mammon and Mars disguised as "Jesus says."
Siouxrose: I think I've read enough of your comments to point out to newbies my assumption that Sioux is putting down the "wolves in sheeps' clothing" to whom Jesus would say " I knew you not" ; not Jesus himself.
It is not real capitalism.... it is pure BullShitism.
If you want a revolution, call it what it is.
"It's not real communism," is the line one used to be fed by certain left constituencies when one would point out the massive failings, injustice, and sheer immorality of a lot of what went on under Soviet communism.
Please tell us, where is real capitalism? Is it in the private recesses of someone's mind?
Anyone who criticizes capitalism is not necessarily calling for a revolution. That's an assumption that presupposes that pure capitalism and and pure communism are the only options. That presupposition, though, is no longer tenable. First of all, there are economies that are mixed (social democracies with a highly regulated market economy). There is also a sense in an ever growing constituency that industrialism as we have known it, is coming to an end, that industrial societies are headed for collapse, and that we ought to attempt to make the transition to a living arrangement in which localized agriculture will become predominant again as peaceable and orderely as possible.
Well said,
Sounds like a peaceful revolution to me.
I second your recommended reading. The important point though is that the current crisis IS NOT some abherration. It's the natural and DESIRED result of the neocon/Friedmanite agenda.
And really, the "brilliance" of that agenda is that it's successfully pawned off as patriotic, democratic, and the opposite of Fascism.
Yes to Kane Jeeves June 10th, 2009 12:49 pm.
You are so very right about the highly manipulative, nay, Machiavelian, talents of the implementers of said agenda. That is what I often describe as the insidiousness of Amerikkkan ideology.
Yes, we are basically in agreement.
The thing that might be added to your characterization of the morally depraved machine that is spinning the whole world to death is its relation to nature and the Earth which it considers as mere stockpiles of stuffs to plunder and to exploit in order to satisfy its imperative of constant growth (a.k.a. constant predation).
Premise 1: War is now a business.
Premise 2: But, like all business made in U.S.A., it has to grow. (Otherwise, it isn't profitable.)
Conclusion: Therefore, if war as a business is to grow, there will have to be more wars and always more wars. (Better wars and more lucrative wars.)
Exercise: compare the above type of business to the administration of prisons as business, and apply the same logic.
Bonus question: who pays for the conduct of war (and all that such requires) and who pays for the administration of prisons?
Clue: are there venture capitalists in the war and prison business?
High-level question: what lessons can one draw from these two business phenomena regarding the relationship between capitalism and the State? Yes, it is all right to enlist the help of the various episodes of the present financial debacle and what they tell us about said relationship.
You forgot 2.a: outsource whenever possible to maximize profit and minimize accountability.
"More than 240,000 contractor employees, about 80 percent of them foreign nationals..."
"War is now a business."
Not a business -- a racket (see Smedley Butler), and not just now (see Smedley Butler). http://www.ratical.org/ratville/CAH/warisaracket.html published 1935
Capitalism inevitably leads to war as the end point of 'competition' by accumulating money,resources, and power and destroying the competition, because it's based on accumulation of wealth rather then the intermediate step of (over)production of goods by control of labor. Marx was correct in this. The ultimate capitalist dream is to have all the wealth, unlimited wealth, for free -- and unlimited dictatorial power.
clue: why would the wager of 'war' or administrator of prison care about the nationality, foreign or domestic, of the target or inmate, as long as the conditions required for maximum profit are sustained?
We return to the question of life's purpose...