9
9 Trillion Dollar Republican Natio
Guest
The Republicans have used the war as their convenient excuse to extort
hundreds of billions of our tax dollars giving it all to Halliburton,
don't ever vote for a Republican again if you want America to
survive.
The list below is where all your hard earned tax money went, into the
pockets of these Republican thieves who just helped themselves with
Bush's support to your money.
The 10 Most Brazen War Profiteers
By Charlie Cray, AlterNet. Posted September 5, 2006.
Halliburton has become synonymous with war profiteering, but there are
lots of other greedy fingers in the pie. We name names on 10 of the
worst.
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print PRINT
106 COMMENTS
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Stop Saying Iraq Is Another Vietnam; It's Another Enron
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Blackwater's Incompetence Led to Surge in Iraqi Violence
James Macintyre
Blackwater Tops Among Mercenaries in Rate of Shootings
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Richard W. Behan
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The history of American war profiteering is rife with egregious
examples of incompetence, fraud, tax evasion, embezzlement, bribery
and misconduct. As war historian Stuart Brandes has suggested, each
new war is infected with new forms of war profiteering. Iraq is no
exception. From criminal mismanagement of Iraq's oil revenues to armed
private security contractors operating with virtual impunity, this war
has created opportunities for an appalling amount of corruption. What
follows is a list of some of the worst Iraq war profiteers who have
bilked American taxpayers and undermined the military's mission.
No. 1 and No. 2: CACI and Titan
In early 2005 CIA officials told the Washington Post that at least 50
percent of its estimated $40 billion budget for that year would go to
private contractors, an astonishing figure that suggests that concerns
raised about outsourcing intelligence have barely registered at the
policymaking levels.
In 2004 the Orlando Sentinel reported on a case that illustrates what
can go wrong: Titan employee Ahmed Fathy Mehalba, an Egyptian
translator, was arrested for possessing classified information from
the Guantanamo Bay prison camp.
Critics say that the abuses at Abu Ghraib are another example of how
the lines can get blurred when contractors are involved in
intelligence work. CACI provided a total of 36 interrogators in Iraq,
including up to 10 at Abu Ghraib at any one time, according to the
company. Although neither CACI, Titan or their employees have yet been
charged with a crime, a leaked Army investigation implicated CACI
employee Stephen Stefanowicz in the abuse of prisoners.
CACI and Titan's role at Abu Ghraib led the Center for Constitutional
Rights to pursue companies and their employees in U.S. courts.
"We believe that CACI and Titan engaged in a conspiracy to torture and
abuse detainees, and did so to make more money," says Susan Burke, an
attorney hired by the Center for Constitutional Rights (CCR), whose
lawsuit against the companies is proceeding into discovery before the
Federal Court for the District of Columbia.
The private suits seem to have already had some effect: In September
2005 CACI announced that it would no longer do interrogation work in
Iraq.
Titan, on the other hand, has so far escaped any serious consequences
for its problems (in early 2005, it pleaded guilty to three felony
international bribery charges and agreed to pay a record $28.5 million
Foreign Corrupt Practices Act penalty). The company's contract with
the Army has been extended numerous times and is currently worth over
$1 billion. Last year L-3 Communications bought Titan as part of its
emergence as the largest corporate intelligence conglomerate in the
world.
No. 3: Bechtel: precast profits
The San Francisco-based construction and engineering giant received
one of the largest no-bid contracts -- worth $2.4 billion -- to help
coordinate and rebuild a large part of Iraq's infrastructure. But the
company's reconstruction failures range from shoddy school repairs to
failing to finish a large hospital in Basra on time and within budget.
Recall that USAID chief Andrew Natsios originally touted the
reconstruction as a Middle Eastern "Marshall Plan." Natsios should
have known that all would not go smoothly with Bechtel in the lead:
Prior to joining the Bush administration, he was chief executive of
the Massachusetts Turnpike Authority, where he oversaw the Big Dig --
whose costs exploded from $2.6 billion to $14.6 billion under
Bechtel's lead.
In July, the company's reputation for getting things done unexpectedly
plummeted like a 12-ton slab of concrete when Stuart Bowen, the
special inspector general for Iraq Reconstruction (SIGIR), released an
audit of the Basra Children's Hospital Project, which was $70 million
to $90 million over budget, and a year and half behind schedule.
Bechtel's contract to coordinate the project was immediately
cancelled.
Now that the money is running out, American officials are beginning to
blame Iraqis for mismanaging their own infrastructure. But as Bowen
warns, contractors like Bechtel, the CPA and other contracting
agencies will only have themselves to blame for failing to train Iraqi
engineers to operate these facilities (esp. water, sewage and
electricity) when they leave.
No. 4: Aegis Defense Services
The General Accounting Office (GAO) estimates 48,000 private security
and military contractors (PMCs) are stationed in Iraq. The Pentagon's
insistence on keeping a lid on military force requirements (thereby
avoiding the need for a draft) is one reason for that astronomical
growth, which has boosted the fortunes of the "corporate warriors" so
much that observers project the industry will be a $200 billion per
year business by 2010.
Yet the introduction of PMCs has put "both the military and security
providers at a greater risk for injury," the General Accounting Office
says, because PMCs fall outside the chain of command and do not
operate under the Code of Military Justice.
George Washington University professor Deborah Avant, author of Market
for Force and an expert on the industry, says that while established
PMCs may act professionally, the government's willingness to contract
with a few cowboy companies like Aegis -- a U.K.-based firm whose
infamous founder and CEO Tim Spicer was implicated for breaking an
arms embargo in Sierra Leone -- only reinforces the fear that U.S.
foreign policy is being outsourced to corporate "mercenaries."
An industry insider told Avant that the $293 million contract was
given despite the fact that American competitors had submitted lower
bids, suggesting the government wanted to hire the foreign company to
shield both sides of the transaction from accountability for any
"dirty tricks."
Industry critics, including Rep. Jan Schakowsky, D-Ill., say that, at
a minimum, Spicer's contract suggests that government agencies have
failed to conduct adequate background checks. While it's hard to say
how often PMCs have committed human rights violations in Iraq, the
Charlotte News-Observer reported in March that security contractors
regularly shoot into civilian cars. The problem was largely ignored
until a "trophy video" of security guards firing with automatic rifles
at civilian cars was posted on a web site traced back to Aegis.
Although the Army's Criminal Investigation Division says no charges
will be filed against Aegis or its employees, critics say that only
proves how unaccountable contractors are under current laws. Since the
war on terror began, just one civilian, CIA contract interrogator
David A. Passaro, has been convicted for felony assault associated
with interrogation tactics.
Even The International Peace Operations Association, a fledgling
industry trade association that insists the industry abides by
stringent codes of conduct has rejected Aegis' bid to join its ranks.
No. 5: Custer Battles
In March, Custer Battles became the first Iraq occupation contractor
to be found guilty of fraud. A jury ordered the company to pay more
than $10 million in damages for 37 counts of fraud, including false
billing. In August, however, the judge in the case dismissed most of
the charges on a technicality, ruling that since the Coalition
Provisional Authority was not strictly part of the U.S. government,
there is no basis for the claim under U.S. law. Custer Battles'
attorney Robert Rhoad says the company's owners were "ecstatic" about
the decision, adding that "there simply was no evidence of fraud or an
intent to defraud."
In fact the judge's ruling stated that the company had submitted
"false and fraudulently inflated invoices." He also allowed the jury's
verdict to stand against the company for retaliating against the
whistleblowers that originally brought the case under the False Claims
Act, the law that allows citizens to initiate a private right of
action to recover money on taxpayers' behalf. During the trial,
retired Brig. Gen. Hugh Tant III testified that the fraud "was
probably the worst I've ever seen in my 30 years in the Army."
When Tant confronted Mike Battles, one of the company's owners, with
the fact that 34 of 36 trucks supplied by the firm didn't work, he
responded: "You asked for trucks and we complied with our contract and
it is immaterial whether the trucks were operational."
The Custer Battles case is being watched closely by the contracting
community, since many other fraud cases could hinge on the outcome. A
backlog of 70 fraud cases is pending against various contractors. Who
they are is anyone's guess (one case was recently settled against
Halliburton subcontractor EGL for $4 million), since cases filed under
the False Claims Act are sealed and prevented from moving forward
until the government decides whether or not it will join the case. The
means some companies accused of fraud have yet to be publicly
identified, which makes it difficult for federal contracting officers
to suspend or debar them from any new contracts. The U.S. Air Force
moved to suspend Custer Battles from new contracts in September 2004,
after the alleged fraud was revealed.
In May, however, the Wall Street Journal reported that attempts were
made to bypass the suspension order by two former top Navy officials
who had formed a company that purchased the remnants of Custer
Battles. Meanwhile, Alan Grayson, the attorney who filed the Custer
Battles case, says that because of orders passed by the CPA, Iraqis
have no chance of recovering any of the $20 billion in Iraqi money
used to pay U.S. contractors. The CPA effectively created a "free
fraud zone," Grayson says.
No. 6: General Dynamics
Most of the big defense contractors have done well as a result of the
war on terror. The five-year chart for Lockheed Martin, for instance,
reveals that the company's stock has doubled in value since 2001.
Yet The Washington Post reported in July that industry analysts agree
that of the large defense contractors, the one that has received the
most direct benefit from the war in Iraq is General Dynamics. Much of
that has to do with the fact that the company has focused its large
combat systems business on supplying the Army with everything from
bullets to tank shells to Stryker vehicles, which made their debut
during the 2003 invasion.
In July, the Post reported that the company's profits have tripled
since 9/11. That should make some people happy, including David K
Heebner, a former top aide to Army Chief of Staff Eric Shinseki, who
was hired by General Dynamics in 1999, a year before the Stryker
contract was sealed. According to Defense watchdogs at the Project on
Government Oversight (POGO), General Dynamics formally announced it
was hiring Heebner on November 20, 1999, just one month after Shinseki
announced a new "vision" to transform the Army by moving away from
tracked armored vehicles toward wheeled light-armored vehicles, and
more than a month prior to Heebner's official retirement date of Dec.
31, 1999.
Less than a year and a half later, Heebner was present for the rollout
of the first Stryker in Alabama, where he was recognized by Shinseki
for his work in the Army on the Stryker project.
Although the Pentagon's inspector general concluded from a preliminary
investigation that Heebner had properly recused himself from any
involvement in projects involving his prospective employer once he had
been offered the job, critics say the current ethics rules are too
weak.
"It's clear that the Army was leaning toward handing a multibillion-
dollar contract to General Dynamics at the very time Heebner may have
been in negotiations with the company for a high-paying executive
position," says Jeffrey St. Clair, author of Grand Theft Pentagon, a
sweeping review of war-profiteering during the "war on terror."
Heebner's case is similar to Boeing's infamous courtship of Darlene
Druyan, the Air Force acquisition officer who was eventually sentenced
to nine months in prison and seven months in a halfway house for
arranging a $250,000 a year job for herself on the other side of the
revolving door while negotiating contracts for the Air Force that were
favorable to Boeing.
This March, Heebner reported owning 33,500 shares in the company,
worth over $ 4 million, along with 21,050 options.
Not everyone has been happy with the outcome of the Stryker contract.
Tom Christie, the Pentagon's director of operational testing and
evaluation, sent a classified letter to Donald Rumsfeld before it was
deployed in Iraq, warning that the $3 million vehicle was not ready
for heavy fire. Meanwhile, the GAO warned of serious deficiencies in
vehicle training provided, a concern that turned serious when soldiers
accidentally drove the Stryker into the Tigris rivers. Despite public
praise from top Army officials, an internal Army report leaked to the
Post in March 2005 revealed that the vehicles deployed in Iraq have
been plagued with inoperable gear and maintenance problems that are
"getting worse not better."
Perhaps as insurance against any flap, General Dynamics has added
former Attorney General John Ashcroft to its stable of high-powered
lobbyists. Working the account are Juleanna Glover Weiss, Vice
President Dick Cheney's former press secretary, Lori Day Sharp,
Ashcroft's former assistant, and Willie Gaynor, a former Commerce
Department official who also worked for the 2004 Bush-Cheney
reelection campaign.
No. 7: Nour USA Ltd.
Incorporated shortly after the war began, Nour has received $400
million in Iraq contracts, including an $80 million contract to
provide oil pipeline security that critics say came through the
assistance of Ahmed Chalabi, Iraq's No. 1 opportunist, who was
influential in dragging the United States into the current quagmire
with misleading assertions about WMDs. Chalabi has denied reports that
he received a $2 million finder's fee, but other bidders on the
contract point out that Nour had no prior related experience and that
its bid on the oil security contract was too low to be credible.
Another company consultant who hasn't denied getting paid to help out
is William Cohen, the former defense secretary under President
Clinton. Many Iraqis now believe that Chalabi is America's hand-picked
choice to rule Iraq, despite being a wanted fugitive from justice in
Jordan and despite being accused of passing classified information
along to Iran. Iyad Allawi, a potential rival for power in Iraq, has
publicly criticized Chalabi for creating contracts for work that he
says should be the responsibility of the state.
No. 8, No. 9 and No. 10: Chevron, ExxonMobil and the Petro-
imperialists
Three years into the occupation, after an evolving series of deft
legal maneuvers and manipulative political appointments, the oil
giants' takeover of Iraq's oil is nearly complete.
A key milestone in the process occurred in September 2004, when U.S.-
appointed Interim Prime Minister Iyad Allawi preempted Iraq's January
2005 elections (and the subsequent drafting of the Constitution) by
writing guidelines intended to form the basis of a new petroleum law.
Allawi's policy would effectively exclude the government from any
future involvement in oil production, while promising to privatize the
Iraqi National Oil Co. Although Allawi is no longer in power, his
plans heavily influenced future thinking on oil policy.
Helping the process move along are the economic hit men at
BearingPoint, the consultants whose latest contract calls for "private-
sector involvement in strategic sectors, including privatization,
asset sales, concessions, leases and management contracts, especially
those in the oil and supporting industries."
For their part, the oil industry giants have kept a relatively low
profile throughout the process, lending just a few senior statesmen to
the CPA, including Philip Carroll (Shell U.S., Fluor), Rob McKee
(ConocoPhillips and Halliburton) and Norm Szydlowski (ChevronTexaco),
the CPA's liaison to the fledgling Iraqi Oil Ministry. Greg Muttitt of
U.K. nonprofit Platform says Chevron, Shell and ConocoPhillips are
among the most ambitious of all the major oil companies in Iraq. Shell
and Chevron have already signed agreements with the Iraqi government
and begun to train Iraqi staff and conduct studies -- arrangements
that give the companies vital access to Oil Ministry officials and
geological data.
Although Iraqi Oil Minister Hussain al-Shahristani said in August that
the final competition for developing Iraq's oil fields will be wide
open, the preliminary arrangements will give the oil giants a distinct
advantage when it comes time to bid. The relative level of interest by
the big oil companies depends on their appetite for risk, and their
need for reserves. Shell, for example, has performed worse than most
of its peers in finding new reserves in recent years -- a fact
underscored by a 2004 scandal in which the company was caught lying to
its investors. At this point the key challenge to multinationals is
whether they can convince the Iraqi parliament to pass a new petroleum
law by the end of this year.
A key provision in the new law is a commitment to using production
sharing agreements (PSAs), which will lock the government into a long-
term commitment (up to 50 years) to sharing oil revenues, and restrict
its right to introduce any new laws that might affect the companies'
profitability. Greg Muttitt of Platform says the PSAs are designed to
favor private companies at the expense of exporting governments, which
is why none of the top oil producing countries in the Middle East use
them. Under the new petroleum law, all new fields and some existing
fields would be opened up to private companies through the use of
PSAs. Since less than 20 of Iraq's 80 known oil fields have already
been developed, if Iraq's government commits to signing the PSAs, it
could cost the country up to nearly $200 billion in lost revenues
according to Muttitt, lead researcher for "Crude Designs: the Rip-Off
of Iraq's Oil Wealth."
Meanwhile, in a kind of pincer movement, the parliament has begun to
feel pressured from the IMF to adopt the new oil law by the end of the
year as part of "conditionalities" imposed under a new debt relief
agreement. Of course pressuring a country as volatile as Iraq to agree
to any kind of arrangement without first allowing for legitimate
parliamentary debate is fraught with peril. It is a risky way to
nurture democracy in a country that already appears to be entering
into a civil war.
"If misjudged -- either by denying a fair share to the regions in
which oil is located, or by giving regions too much autonomy at the
expense of national cohesion -- these oil decisions could fracture,
and ultimately break apart, the country," Muttitt suggests.
Say good bye to US health care, education and job programs for all
Americans, say good bye to government grants for individuals, say good
bye to a clean and safe environment, say good bye to safe highways,
roads, bridges and tunnels, to national security, enough police and
firemen to do the job in an emergency, say good bye to whole cities
like New Orleans when there is no funding to rebuild them after a
natural disaster, say good bye to the housing market and the economy,
say good bye to America. These things and so much more cost hundreds
of billions of dollars to support, money Americans no longer have,
major funding that is now in the bank accounts of the Republican
criminals who will spend it on themselves, not America. Say hello to
the new wealthy class of Republican swindling bastards that have
helped themselves and are still helping themselves to hundreds of
billions of your tax dollars. Your choice, your money, you can let
them steal it or you can drop kick them all out of office with your
votes and take your country back in '08.
hundreds of billions of our tax dollars giving it all to Halliburton,
don't ever vote for a Republican again if you want America to
survive.
The list below is where all your hard earned tax money went, into the
pockets of these Republican thieves who just helped themselves with
Bush's support to your money.
The 10 Most Brazen War Profiteers
By Charlie Cray, AlterNet. Posted September 5, 2006.
Halliburton has become synonymous with war profiteering, but there are
lots of other greedy fingers in the pie. We name names on 10 of the
worst.
Tools
email EMAIL
print PRINT
106 COMMENTS
090506story
Partial image courtesy Matt Fitt.
Share & save this story:
Digg iconDelicious iconReddit iconFark iconYahoo! iconNewsvine! icon
Also in War on Iraq
Stop Saying Iraq Is Another Vietnam; It's Another Enron
Bill Maher
Blackwater's Incompetence Led to Surge in Iraqi Violence
James Macintyre
Blackwater Tops Among Mercenaries in Rate of Shootings
James Risen, John Broder
Will Blackwater Be Kicked Out of Iraq After Recent Bloodbath?
Jeremy Scahill
The Mega-Lie Called the "War on Terror": A Masterpiece of Propaganda
Richard W. Behan
U.S. Soldier: 'I Was Ordered to Murder Unarmed Iraqi'
More stories by Charlie Cray
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The history of American war profiteering is rife with egregious
examples of incompetence, fraud, tax evasion, embezzlement, bribery
and misconduct. As war historian Stuart Brandes has suggested, each
new war is infected with new forms of war profiteering. Iraq is no
exception. From criminal mismanagement of Iraq's oil revenues to armed
private security contractors operating with virtual impunity, this war
has created opportunities for an appalling amount of corruption. What
follows is a list of some of the worst Iraq war profiteers who have
bilked American taxpayers and undermined the military's mission.
No. 1 and No. 2: CACI and Titan
In early 2005 CIA officials told the Washington Post that at least 50
percent of its estimated $40 billion budget for that year would go to
private contractors, an astonishing figure that suggests that concerns
raised about outsourcing intelligence have barely registered at the
policymaking levels.
In 2004 the Orlando Sentinel reported on a case that illustrates what
can go wrong: Titan employee Ahmed Fathy Mehalba, an Egyptian
translator, was arrested for possessing classified information from
the Guantanamo Bay prison camp.
Critics say that the abuses at Abu Ghraib are another example of how
the lines can get blurred when contractors are involved in
intelligence work. CACI provided a total of 36 interrogators in Iraq,
including up to 10 at Abu Ghraib at any one time, according to the
company. Although neither CACI, Titan or their employees have yet been
charged with a crime, a leaked Army investigation implicated CACI
employee Stephen Stefanowicz in the abuse of prisoners.
CACI and Titan's role at Abu Ghraib led the Center for Constitutional
Rights to pursue companies and their employees in U.S. courts.
"We believe that CACI and Titan engaged in a conspiracy to torture and
abuse detainees, and did so to make more money," says Susan Burke, an
attorney hired by the Center for Constitutional Rights (CCR), whose
lawsuit against the companies is proceeding into discovery before the
Federal Court for the District of Columbia.
The private suits seem to have already had some effect: In September
2005 CACI announced that it would no longer do interrogation work in
Iraq.
Titan, on the other hand, has so far escaped any serious consequences
for its problems (in early 2005, it pleaded guilty to three felony
international bribery charges and agreed to pay a record $28.5 million
Foreign Corrupt Practices Act penalty). The company's contract with
the Army has been extended numerous times and is currently worth over
$1 billion. Last year L-3 Communications bought Titan as part of its
emergence as the largest corporate intelligence conglomerate in the
world.
No. 3: Bechtel: precast profits
The San Francisco-based construction and engineering giant received
one of the largest no-bid contracts -- worth $2.4 billion -- to help
coordinate and rebuild a large part of Iraq's infrastructure. But the
company's reconstruction failures range from shoddy school repairs to
failing to finish a large hospital in Basra on time and within budget.
Recall that USAID chief Andrew Natsios originally touted the
reconstruction as a Middle Eastern "Marshall Plan." Natsios should
have known that all would not go smoothly with Bechtel in the lead:
Prior to joining the Bush administration, he was chief executive of
the Massachusetts Turnpike Authority, where he oversaw the Big Dig --
whose costs exploded from $2.6 billion to $14.6 billion under
Bechtel's lead.
In July, the company's reputation for getting things done unexpectedly
plummeted like a 12-ton slab of concrete when Stuart Bowen, the
special inspector general for Iraq Reconstruction (SIGIR), released an
audit of the Basra Children's Hospital Project, which was $70 million
to $90 million over budget, and a year and half behind schedule.
Bechtel's contract to coordinate the project was immediately
cancelled.
Now that the money is running out, American officials are beginning to
blame Iraqis for mismanaging their own infrastructure. But as Bowen
warns, contractors like Bechtel, the CPA and other contracting
agencies will only have themselves to blame for failing to train Iraqi
engineers to operate these facilities (esp. water, sewage and
electricity) when they leave.
No. 4: Aegis Defense Services
The General Accounting Office (GAO) estimates 48,000 private security
and military contractors (PMCs) are stationed in Iraq. The Pentagon's
insistence on keeping a lid on military force requirements (thereby
avoiding the need for a draft) is one reason for that astronomical
growth, which has boosted the fortunes of the "corporate warriors" so
much that observers project the industry will be a $200 billion per
year business by 2010.
Yet the introduction of PMCs has put "both the military and security
providers at a greater risk for injury," the General Accounting Office
says, because PMCs fall outside the chain of command and do not
operate under the Code of Military Justice.
George Washington University professor Deborah Avant, author of Market
for Force and an expert on the industry, says that while established
PMCs may act professionally, the government's willingness to contract
with a few cowboy companies like Aegis -- a U.K.-based firm whose
infamous founder and CEO Tim Spicer was implicated for breaking an
arms embargo in Sierra Leone -- only reinforces the fear that U.S.
foreign policy is being outsourced to corporate "mercenaries."
An industry insider told Avant that the $293 million contract was
given despite the fact that American competitors had submitted lower
bids, suggesting the government wanted to hire the foreign company to
shield both sides of the transaction from accountability for any
"dirty tricks."
Industry critics, including Rep. Jan Schakowsky, D-Ill., say that, at
a minimum, Spicer's contract suggests that government agencies have
failed to conduct adequate background checks. While it's hard to say
how often PMCs have committed human rights violations in Iraq, the
Charlotte News-Observer reported in March that security contractors
regularly shoot into civilian cars. The problem was largely ignored
until a "trophy video" of security guards firing with automatic rifles
at civilian cars was posted on a web site traced back to Aegis.
Although the Army's Criminal Investigation Division says no charges
will be filed against Aegis or its employees, critics say that only
proves how unaccountable contractors are under current laws. Since the
war on terror began, just one civilian, CIA contract interrogator
David A. Passaro, has been convicted for felony assault associated
with interrogation tactics.
Even The International Peace Operations Association, a fledgling
industry trade association that insists the industry abides by
stringent codes of conduct has rejected Aegis' bid to join its ranks.
No. 5: Custer Battles
In March, Custer Battles became the first Iraq occupation contractor
to be found guilty of fraud. A jury ordered the company to pay more
than $10 million in damages for 37 counts of fraud, including false
billing. In August, however, the judge in the case dismissed most of
the charges on a technicality, ruling that since the Coalition
Provisional Authority was not strictly part of the U.S. government,
there is no basis for the claim under U.S. law. Custer Battles'
attorney Robert Rhoad says the company's owners were "ecstatic" about
the decision, adding that "there simply was no evidence of fraud or an
intent to defraud."
In fact the judge's ruling stated that the company had submitted
"false and fraudulently inflated invoices." He also allowed the jury's
verdict to stand against the company for retaliating against the
whistleblowers that originally brought the case under the False Claims
Act, the law that allows citizens to initiate a private right of
action to recover money on taxpayers' behalf. During the trial,
retired Brig. Gen. Hugh Tant III testified that the fraud "was
probably the worst I've ever seen in my 30 years in the Army."
When Tant confronted Mike Battles, one of the company's owners, with
the fact that 34 of 36 trucks supplied by the firm didn't work, he
responded: "You asked for trucks and we complied with our contract and
it is immaterial whether the trucks were operational."
The Custer Battles case is being watched closely by the contracting
community, since many other fraud cases could hinge on the outcome. A
backlog of 70 fraud cases is pending against various contractors. Who
they are is anyone's guess (one case was recently settled against
Halliburton subcontractor EGL for $4 million), since cases filed under
the False Claims Act are sealed and prevented from moving forward
until the government decides whether or not it will join the case. The
means some companies accused of fraud have yet to be publicly
identified, which makes it difficult for federal contracting officers
to suspend or debar them from any new contracts. The U.S. Air Force
moved to suspend Custer Battles from new contracts in September 2004,
after the alleged fraud was revealed.
In May, however, the Wall Street Journal reported that attempts were
made to bypass the suspension order by two former top Navy officials
who had formed a company that purchased the remnants of Custer
Battles. Meanwhile, Alan Grayson, the attorney who filed the Custer
Battles case, says that because of orders passed by the CPA, Iraqis
have no chance of recovering any of the $20 billion in Iraqi money
used to pay U.S. contractors. The CPA effectively created a "free
fraud zone," Grayson says.
No. 6: General Dynamics
Most of the big defense contractors have done well as a result of the
war on terror. The five-year chart for Lockheed Martin, for instance,
reveals that the company's stock has doubled in value since 2001.
Yet The Washington Post reported in July that industry analysts agree
that of the large defense contractors, the one that has received the
most direct benefit from the war in Iraq is General Dynamics. Much of
that has to do with the fact that the company has focused its large
combat systems business on supplying the Army with everything from
bullets to tank shells to Stryker vehicles, which made their debut
during the 2003 invasion.
In July, the Post reported that the company's profits have tripled
since 9/11. That should make some people happy, including David K
Heebner, a former top aide to Army Chief of Staff Eric Shinseki, who
was hired by General Dynamics in 1999, a year before the Stryker
contract was sealed. According to Defense watchdogs at the Project on
Government Oversight (POGO), General Dynamics formally announced it
was hiring Heebner on November 20, 1999, just one month after Shinseki
announced a new "vision" to transform the Army by moving away from
tracked armored vehicles toward wheeled light-armored vehicles, and
more than a month prior to Heebner's official retirement date of Dec.
31, 1999.
Less than a year and a half later, Heebner was present for the rollout
of the first Stryker in Alabama, where he was recognized by Shinseki
for his work in the Army on the Stryker project.
Although the Pentagon's inspector general concluded from a preliminary
investigation that Heebner had properly recused himself from any
involvement in projects involving his prospective employer once he had
been offered the job, critics say the current ethics rules are too
weak.
"It's clear that the Army was leaning toward handing a multibillion-
dollar contract to General Dynamics at the very time Heebner may have
been in negotiations with the company for a high-paying executive
position," says Jeffrey St. Clair, author of Grand Theft Pentagon, a
sweeping review of war-profiteering during the "war on terror."
Heebner's case is similar to Boeing's infamous courtship of Darlene
Druyan, the Air Force acquisition officer who was eventually sentenced
to nine months in prison and seven months in a halfway house for
arranging a $250,000 a year job for herself on the other side of the
revolving door while negotiating contracts for the Air Force that were
favorable to Boeing.
This March, Heebner reported owning 33,500 shares in the company,
worth over $ 4 million, along with 21,050 options.
Not everyone has been happy with the outcome of the Stryker contract.
Tom Christie, the Pentagon's director of operational testing and
evaluation, sent a classified letter to Donald Rumsfeld before it was
deployed in Iraq, warning that the $3 million vehicle was not ready
for heavy fire. Meanwhile, the GAO warned of serious deficiencies in
vehicle training provided, a concern that turned serious when soldiers
accidentally drove the Stryker into the Tigris rivers. Despite public
praise from top Army officials, an internal Army report leaked to the
Post in March 2005 revealed that the vehicles deployed in Iraq have
been plagued with inoperable gear and maintenance problems that are
"getting worse not better."
Perhaps as insurance against any flap, General Dynamics has added
former Attorney General John Ashcroft to its stable of high-powered
lobbyists. Working the account are Juleanna Glover Weiss, Vice
President Dick Cheney's former press secretary, Lori Day Sharp,
Ashcroft's former assistant, and Willie Gaynor, a former Commerce
Department official who also worked for the 2004 Bush-Cheney
reelection campaign.
No. 7: Nour USA Ltd.
Incorporated shortly after the war began, Nour has received $400
million in Iraq contracts, including an $80 million contract to
provide oil pipeline security that critics say came through the
assistance of Ahmed Chalabi, Iraq's No. 1 opportunist, who was
influential in dragging the United States into the current quagmire
with misleading assertions about WMDs. Chalabi has denied reports that
he received a $2 million finder's fee, but other bidders on the
contract point out that Nour had no prior related experience and that
its bid on the oil security contract was too low to be credible.
Another company consultant who hasn't denied getting paid to help out
is William Cohen, the former defense secretary under President
Clinton. Many Iraqis now believe that Chalabi is America's hand-picked
choice to rule Iraq, despite being a wanted fugitive from justice in
Jordan and despite being accused of passing classified information
along to Iran. Iyad Allawi, a potential rival for power in Iraq, has
publicly criticized Chalabi for creating contracts for work that he
says should be the responsibility of the state.
No. 8, No. 9 and No. 10: Chevron, ExxonMobil and the Petro-
imperialists
Three years into the occupation, after an evolving series of deft
legal maneuvers and manipulative political appointments, the oil
giants' takeover of Iraq's oil is nearly complete.
A key milestone in the process occurred in September 2004, when U.S.-
appointed Interim Prime Minister Iyad Allawi preempted Iraq's January
2005 elections (and the subsequent drafting of the Constitution) by
writing guidelines intended to form the basis of a new petroleum law.
Allawi's policy would effectively exclude the government from any
future involvement in oil production, while promising to privatize the
Iraqi National Oil Co. Although Allawi is no longer in power, his
plans heavily influenced future thinking on oil policy.
Helping the process move along are the economic hit men at
BearingPoint, the consultants whose latest contract calls for "private-
sector involvement in strategic sectors, including privatization,
asset sales, concessions, leases and management contracts, especially
those in the oil and supporting industries."
For their part, the oil industry giants have kept a relatively low
profile throughout the process, lending just a few senior statesmen to
the CPA, including Philip Carroll (Shell U.S., Fluor), Rob McKee
(ConocoPhillips and Halliburton) and Norm Szydlowski (ChevronTexaco),
the CPA's liaison to the fledgling Iraqi Oil Ministry. Greg Muttitt of
U.K. nonprofit Platform says Chevron, Shell and ConocoPhillips are
among the most ambitious of all the major oil companies in Iraq. Shell
and Chevron have already signed agreements with the Iraqi government
and begun to train Iraqi staff and conduct studies -- arrangements
that give the companies vital access to Oil Ministry officials and
geological data.
Although Iraqi Oil Minister Hussain al-Shahristani said in August that
the final competition for developing Iraq's oil fields will be wide
open, the preliminary arrangements will give the oil giants a distinct
advantage when it comes time to bid. The relative level of interest by
the big oil companies depends on their appetite for risk, and their
need for reserves. Shell, for example, has performed worse than most
of its peers in finding new reserves in recent years -- a fact
underscored by a 2004 scandal in which the company was caught lying to
its investors. At this point the key challenge to multinationals is
whether they can convince the Iraqi parliament to pass a new petroleum
law by the end of this year.
A key provision in the new law is a commitment to using production
sharing agreements (PSAs), which will lock the government into a long-
term commitment (up to 50 years) to sharing oil revenues, and restrict
its right to introduce any new laws that might affect the companies'
profitability. Greg Muttitt of Platform says the PSAs are designed to
favor private companies at the expense of exporting governments, which
is why none of the top oil producing countries in the Middle East use
them. Under the new petroleum law, all new fields and some existing
fields would be opened up to private companies through the use of
PSAs. Since less than 20 of Iraq's 80 known oil fields have already
been developed, if Iraq's government commits to signing the PSAs, it
could cost the country up to nearly $200 billion in lost revenues
according to Muttitt, lead researcher for "Crude Designs: the Rip-Off
of Iraq's Oil Wealth."
Meanwhile, in a kind of pincer movement, the parliament has begun to
feel pressured from the IMF to adopt the new oil law by the end of the
year as part of "conditionalities" imposed under a new debt relief
agreement. Of course pressuring a country as volatile as Iraq to agree
to any kind of arrangement without first allowing for legitimate
parliamentary debate is fraught with peril. It is a risky way to
nurture democracy in a country that already appears to be entering
into a civil war.
"If misjudged -- either by denying a fair share to the regions in
which oil is located, or by giving regions too much autonomy at the
expense of national cohesion -- these oil decisions could fracture,
and ultimately break apart, the country," Muttitt suggests.
Say good bye to US health care, education and job programs for all
Americans, say good bye to government grants for individuals, say good
bye to a clean and safe environment, say good bye to safe highways,
roads, bridges and tunnels, to national security, enough police and
firemen to do the job in an emergency, say good bye to whole cities
like New Orleans when there is no funding to rebuild them after a
natural disaster, say good bye to the housing market and the economy,
say good bye to America. These things and so much more cost hundreds
of billions of dollars to support, money Americans no longer have,
major funding that is now in the bank accounts of the Republican
criminals who will spend it on themselves, not America. Say hello to
the new wealthy class of Republican swindling bastards that have
helped themselves and are still helping themselves to hundreds of
billions of your tax dollars. Your choice, your money, you can let
them steal it or you can drop kick them all out of office with your
votes and take your country back in '08.
