Bush's Crony Capitalism: Unaccountable, Unauditable & Out of Control

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Common Dreams

Bush's Crony Capitalism: Unaccountable, Unauditable & Out of Control

Amidst the wailing and grieving by those many victims of Hurricanes Katrina and Rita comes the growls of greed from those corporations getting huge contracts from the US government to supply emergency relief, reconstruction services and materials.

From everywhere - the press, citizen groups, lawmakers, federal inspectors general - come the howls and charges of 'profiteering', 'gouging the taxpayers', 'political favoritism', 'Halliburton again' and so forth. Clark Kent Ervin, formerly the inspector general at the Department of Homeland Security, says "when they issue rapid-fire, no-bid contracts, they're basically asking companies to gouge them."

Some of the early disclosures seem to confirm Mr. Ervin's experience. According to Senators Tom Coburn (R-OK) and Barack Obama (D-IL), FEMA has entered a no-bid contract with Carnival Cruise Lines for $192 million to house hurricane evacuees on three cruise ships. Senators Coburn and Obama note the price the taxpayers are paying a company that has polluted offshore waters for years: "$2,550 per guest, per week, which is four times the cost of a $599 per tourist 7 Day Western Caribbean Cruise from Galveston, Texas".

Halliburton - flush with so many Iraq war contracts that one cannot keep up with all the Pentagon and Congressional charges of waste, fraud and abuse - has got it hands on $60 million in Katrina contracts. This is the company that charges the Pentagon $100 for each 15 pounds of laundry, gouges the Army on fuel and has charged the Defense Department for undelivered meals for soldiers. (The Army decided it cannot feed itself anymore in the field.)

Hundreds of companies are rushing for the gold. During a Katrina reconstruction summit at the Senate Office Building, US News and World Report describes the scene: "Edward Badolato, a retired Marine colonel who is now an executive with the Shaw Group, reportedly reassured attendees. 'Trust me', he said, 'there's going to be enough for everybody down there.'"

Indeed there will be plenty of money - taxpayer money heading toward $100 billion, charitable money in the billions and uncountable donations in kind. Will the million displaced Americans receive the bulk of the benefits?

If you ask the Bush administration, the answer of assurance comes from all the teams of inspectors and auditors it is sending to the Gulf states. There will be an Office of Hurricane Katrina Oversight. Auditing offices are operating in Baton Rouge, Montgomery, AL and Jackson, MS. Pentagon auditors will help those from the Department of Homeland Security.

And of course the Government Accountability Office (GAO), the investigative arm of Congress, will have its sleuths prowling around the region and looking at the Bush regime's books.

What is an average taxpayer to think of the likelihood of success here? Let's ask some questions. How many people have been fired or demoted following the gross boondoggles revealed in the federal and state governments after Hurricane Katrina passed through? Count your fingers and you have more of them.

What has been the result of scores of Pentagon audits of private contracting abuses in Iraq? Very few debarments, very few prosecutions and the enormous fraud and abuse continue. The big companies over there just ride out the bad publicity and rake in the money. Apparently they are too big to fire.

Will the trustworthy, professional GAO reports produce any changes? Not if the GAO's mountains of critical reports of Pentagon contracting are any basis for prediction. Over ten years ago the GAO threw its hands in the air and pronounced the Pentagon's $300 billion budget "unauditable".

This is, to say the least, a serious charge. Especially when subsequent reports futilely repeat the same findings as the Pentagon budget nears $500 billion a year.

In its latest report to Congressional committees last month, the GAO wearily referred to its repeated findings about "the long-standing weaknesses in the Department of Defense's (DOD) financial management and related business processes and systems." These deficiencies, the GAO concludes, have "(1) resulted in a lack of reliable information needed to make sound decisions and report on the status of DOD activities, including the accountability of assets,.(2) hindered its operational efficiency; (3) adversely affected mission performance; and (4) left the department vulnerable to fraud, waste and abuse."

The Bush administration could not account for the first $9 billion spent in Iraq, according to these auditors.

Fundamentally, the federal budgets in the Department of Homeland Security and the Department of Defense are out of control, by the Office of Management and Budget (OMB), which is an arm of the White House. The draconian imposition of cost-benefit rigor that John Graham, OMB's regulatory czar, imposes on the little federal health and safety agencies, dealing with auto safety and food and drug safety and efficacy, does not extend to the gargantuan Departments of Defense or Homeland Security.

Over two years ago, we thought that the OMB was going to require both the cost-benefit yardstick for the Homeland Security Department and the placement online of all major government contracts with corporations. Then Mitch Daniels, head of OMB, left to run for governor of Indiana. His successor, Josh Bolton, has displayed no interest thus far in the reforms we had suggested to Mr. Daniels.

So taxpayers, ask yourself: how long you are going to remain inactive while this no-fault government headed by a no-fault President who is spreading fault in every direction but his own as he presides over the accelerating deficit and debasement of the USA's budget?  

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