WASHINGTON - U.S. President George W. Bush and Congress should join Pentagon and State Department probes into allegations that construction giant Halliburton overcharged the U.S. government for its work in Iraq, to ensure accountability of other military contractors, watchdog groups here say.
Activists from the "Campaign to Stop the War Profiteers," initiated by the North Carolina State-based Institute for Southern Studies and endorsed by 50 organizations across the United States, say adding the weight of the White House and Congress to the investigation could help guarantee that controversial contractors are accountable before the U.S. public.
Activists say that dubious billing and procurement practices have raised questions about the quality of government oversight in Iraq and whether the Bush administration is sufficiently protecting the interests of U.S. taxpayers.
From no-bid contracts with little supervision to manipulating gasoline prices, Halliburton, formerly run by Vice President Dick Cheney, has largely come to embody the secretive nature of awarding contracts in post-war Iraq and accusations of hefty war profiteering.
Doug Eyde (C) wears a mask of U.S. Vice President Dick Cheney during a protest in front of Kellogg Brown and Root Inc.'s Washington office, February 24, 2004. The Pentagon announced Monday that it opened a criminal investigation against the Halliburton subsidiary, including allegations of potential overpricing of fuel delivered to Baghdad. REUTERS/Jonathan Ernst
"The scope of the scandals surrounding Halliburton and other military contractors demands a full congressional inquiry into the politics surrounding contract decisions and the performance of corporations that have been given billions of taxpayer dollars," said Chris Kromm, co-director of the campaign, in a statement.
The groups say that hundreds of millions of dollars are being wasted as a result of crooked conduct by contractors and sloppy government controls.
Halliburton, the company that has been awarded the most lucrative contracts in Iraq, faces a number of investigations in the United States. The Defense Department is probing the firm after an audit found it overcharged the U.S. Army by $61 million for gasoline transferred to Iraq as part of one deal that was awarded without a bidding process.
Auditors at the Pentagon are also looking into the company's food contracts at more than 50 other locations, where it is said to have overcharged by $27.4 million.
"A bipartisan, independent commission is needed to review the performance of contractors under existing contracts and (to) monitor the letting of sub-contracts," said Keith Ashdown, vice president of policy at Taxpayers for Common Sense, a Washington-based group that monitors government spending.
The groups say they need more scrutiny of Halliburton because the Pentagon official in charge of the investigation, L. Jean Lewis, is known as a highly partisan Republican activist.
Lewis was roundly condemned for her ardent leadership of the Whitewater legal case against Bill Clinton in the 1990s.
The calls for more oversight of Iraq contracts come as the New York-based World Policy Institute (WPI) issued an analysis Wednesday that documents a rapid rise in military contracts given to Halliburton and other U.S. mega-companies as a result of the U.S. invasions of Iraq and Afghanistan.
The report says Washington's huge military and security budgets have proven a bonanza for the firms.
The Pentagon budget is $400 billion per year and steadily growing, while the new Department of Homeland Security is spending around $40 billion a year. The wars in Afghanistan and Iraq have cost $180 billion to date.
Halliburton alone received $3.9 billion from the Pentagon in 2003 for its work in and around Iraq and Afghanistan.
"These are lucrative times to be a military contractor," said WPI's Michelle Ciarrocca.
"Just as their government counterparts do, these companies need to be held to clear, enforceable standards of conduct," says her group's report.
"If they are allowed to function in an ethical never-never land, where cost is no object and no one is monitoring the quality of the goods and services they are providing, problems can multiply exponentially."
William D. Hartung, co-author of the WPI's new analysis, said the biggest beneficiary to date of the Bush administration's "war without end" approach to fighting terrorism has been Halliburton.
Hartung, who authored a book on war profiteering in the Bush era entitled How Much Are You Making on the War, Daddy? A Quick and Dirty Guide to War Profiteering in the Bush Administration, says Halliburton faces a huge ethical problem.
The San Francisco-based engineering giant's Iraq contracts have drawn fire on several fronts.
The company allegedly overcharged the U.S. government by $1 per gallon for gasoline purchased from Kuwait, and its employees have been accused of receiving some $6.3 million in kickbacks on another Kuwaiti contract by charging for three times as many meals as were actually served at a major army facility.
"In short, Halliburton is a desperate firm with a history of shaky ethical practices that is being allowed to take U.S. taxpayers for a ride in large part because of its cozy relationship with the army and its powerful friend in the White House, Vice President Cheney," Hartung said in a statement.
During a Senate oversight hearing on Iraq reconstruction, Stephen Ellis from Taxpayers for Common Sense warned that Halliburton's malpractices might signal more serious mishandling of funds.
"We believe this may only be the proverbial tip of the waste iceberg," he said in his testimony Feb. 13.
The company is fighting back with a salvo of TV commercials featuring Halliburton Chief Executive Officer Dave Lesar, who lists the services the company performs for U.S. "servicemen," and claims Halliburton is working in Iraq and Afghanistan "because of what we know, not who we know."
In a statement Wednesday, the campaigning groups said they want the White House and Congress to participate in a bipartisan committee that would have the power to subpoena the concerned parties and conduct a far-ranging probe into the contracting process.
The groups said they also want to see an end to the "cost-plus" contracts used in Iraq reconstruction--legal commitments that guarantee a contractor a certain profit for a job.
This type of contract must end because the contracting side, the U.S. government for example, takes all of the risk while the contractor takes none.
The WPI report quotes former Halliburton purchasing officer, Henry Bunting, saying recently that the company's motto for its work in Iraq appears to be "don't worry about it, it's cost-plus."
Hartung argues that the Pentagon is so dependent on companies like Halliburton that to cut them out of contracts instantly would damage U.S. interests.
Instead, he argues, "what we need is a 'policy audit' of the relationship between the Pentagon and private contractors like Boeing and Halliburton."
"Otherwise, they will continue to overcharge and under-perform," he said.
© 2004 Inter Press Service