9
9 Trillion Dollar Republican Natio
Guest
The Top Ten War Profiteers of 2004
The Center for Corporate Policy
Friday 31 December 2004
1. AEGIS: In June, the Pentagon's Program Management Office in
Iraq awarded a $293 million contract to coordinate security operations
among thousands of private contractors to Aegis, a UK firm whose
founder was once investigated for illegal arms smuggling. An inquiry
by the British parliament into Sandline, Aegis head Tim Spicer's
former firm, determined that the company had shipped guns to Sierra
Leone in 1998 in violation of a UN arms embargo. Sandline's position
was that it had approval from the British government, although British
ministers were cleared by the inquiry. Spicer resigned from Sandline
in 2000 and incorporated Aegis in 2002.
2. BEARING POINT: Critics find it ironic that Bearing Point, the
former consulting division of KPMG, received a $240 million contract
in 2003 to help develop Iraq's "competitive private sector," since it
had a hand in the development of the contract itself. According to a
March 22 report by AID's assistant inspector general Bruce
Crandlemire, "Bearing Point's extensive involvement in the development
of the Iraq economic reform program creates the appearance of unfair
competitive advantage in the contract award process."
Bearing Point spent five months helping USAID write the job
specifications and even sent some employees to Iraq to begin work
before the contract was awarded, while its competitors had only a week
to read the specifications and submit their own bids after final
revisions were made. "No company who writes the specs for a contract
should get the contract," says Keith Ashdown, the vice president of
Washington, DC-based Taxpayers for Common Sense.
3. BECHTEL: Schools, hospitals, bridges, airports, water treatment
plants, power plants, railroad, irrigation, electricity, etc. Bechtel
was literally tasked with repairing much of Iraq's infrastructure, a
job that was critical to winning hearts and minds after the war. To
accomplish this, the company hired over 90 Iraqi subcontractors for at
least 100 jobs. Most of these subcontracts involved rote maintenance
and repair work, however, and for sophisticated work requiring
considerable hands-on knowledge of the country's infrastructure, the
company bypassed Iraqi engineers and managers.
Although Bechtel is not entirely to blame, the company has yet to
meet virtually any of the major deadlines in its original contract.
According to a June GAO report, "electrical service in the country as
a while has not shown a marked improvement over the immediate postwar
levels of May 2003 and has worsened in some governorates."
4. BKSH & ASSOCIATES: Chairman Charlie Black, is an old Bush
family friend and prominent Republican lobbyist whose firm is
affiliated with Burson Marsteller, the global public relations giant.
Black was a key player in the Bush/Cheney 2000 campaign and together
with his wife raised $100,000 for this year's reelection campaign.
BKSH clients with contracts in Iraq include Fluor International
(whose ex-chair Phillip Carroll was tapped to head Iraq's oil ministry
after the war, and whose board includes the wife of James Woolsey, the
ex-CIA chief who was sent by Paul Wolfowitz before the war to convince
European leaders of Saddam Hussein's ties to al Qaeda). Fluor has won
joint contracts worth up to $1.6 billion.
Another client is Cummins Engine, which has managed to sell its
power generators thanks to the country's broken infrastructure.
Most prominent among BKSH's clients, however, is the Iraqi
National Congress, whose leader Ahmed Chalabi was called the "George
Washington of Iraq" by certain Pentagon neoconservatives before his
fall from grace. BKSH's K. Riva Levinson was hired to handle the INC's
U.S. public relations strategy in 1999. Hired by U.S. taxpayers, that
is: Until July 2003, the company was paid $25,000 per month by the
U.S. State Department to support the INC.
5. CACI AND TITAN: Although members of the military police face
certain prosecution for the horrific treatment of prisoners at the Abu
Ghraib prison, so far the corporate contractors have avoided any
charges. Maj. Gen. Antonio Taguba reported in an internal Army report
that two CACI employees "were either directly or indirectly
responsible" for abuses at the prison, including the use of dogs to
threaten detainees and forced sexual abuse and other threats of
violence. Another internal Army report suggested that Steven
Stefanowicz, one of 27 CACI interrogators working for the Army in
Iraq, "clearly knew [that] his instructions" to soldiers interrogating
Iraqi prisoners "equated to physical abuse."
"Titan's role in Iraq is to serve as translators and interpreters
for the U.S. Army," company CEO Gene Ray said, implying that news
reports had inaccurately implied the employees' involvement in
torture. "The company's contract is for linguists, not interrogators."
But according to Joseph a. Neurauter, a GSA suspension and debarment
official, CACI's role in designing its own Abu Ghraib contract
"continues to be an open issue and a potential conflict of interest."
Nevertheless, the GSA and other agencies conducting their own
investigations have yet to find a reason to suspend the company from
any new contracts. As a result, in August the Army gave CACI another
$15 million no-bid contract to continue providing interrogation
services for intelligence gathering in Iraq; In September, the Army
awarded Titan a contract worth up to $400 million for additional
translators.
6. CUSTER BATTLES: At the end of September, the Defense Department
suspended Custer Battles (the name comes from the company's two
principle founders - Michael Battles and Scott Custer) and 13
associated individuals and affiliated corporations from all federal
contracts for fraudulent billing practices involving the use of sham
corporations set up in Lebanon and the Cayman Islands. The CPA caught
the company after it left a spreadsheet behind at a meeting with CPA
employees. The spreadsheet revealed that the company had marked up
certain expenses associated with a currency exchange contract by 162
percent.
7. HALLIBURTON: In December Congressman Waxman (D-CA), announced
that "a growing list of concern's about Halliburton's performance" on
contracts that total $10.8 billion have led to multiple criminal
investigations into overcharging and kickbacks. In nine different
reports, government auditors have found "widespread, systemic problems
with almost every aspect of Halliburton's work in Iraq, from cost
estimation and billing systems to cost control and subcontract
management." Six former employees have come forward, corroborating the
auditors' concerns.
Another "H-bomb" dropped just before the election, when a top
contracting official responsible for ensuring that the Army Corps of
Engineers follows competitive contracting rules accused top Pentagon
officials of improperly favoring Halliburton in an early-contract
before the occupation. Bunnatine Greenhouse says that when the
Pentagon awarded the company a 5-year oil-related contract worth up to
$7 billion, it pressured her to withdraw her objections, actions that
she said were unprecedented in her experience.
8. LOCKHEED MARTIN: Lockheed Martin remains the king among war
profiteers, raking in $21.9 billion in Pentagon contracts in 2003
alone. With satellites and planes, missiles and IT systems, the
company has profited from just about every phase of the war except for
the reconstruction. The company's stock has tripled since 2000 to just
over $60.
Lockheed is helping Donald Rumsfeld's global warfare system
(called the Global Information Grid), a new integrated tech-heavy
system that the company promises will change transform the nature of
war. In fact, the large defense conglomerate's sophistication in areas
as diverse as space systems, aeronautics and information and
technology will allow it to play a leading role in the development of
new weapons systems for decades to come, including a planned highly-
secure military Internet, a spaced-based missile defense system and
next-generation warplanes such as the F-22 (currently in production)
and the Joint Strike Fighter F-35.
E.C. Aldridge Jr., the former undersecretary of defense for
acquisitions and procurement, gave final approval to begin building
the F-35 in 2001, a decision worth $200 billion to the company.
Although he soon left the Pentagon to join Lockheed's board, Aldridge
continues to straddle the public-private divide, Donald Rumsfeld
appointed him to a blue-ribbon panel studying weapons systems.
Former Lockheed lobbyists and employees include the current
secretary of the Navy, Gordon England, secretary of transportation
Norm Mineta (a former Lockheed vice president) and Stephen J. Hadley,
Bush's proposed successor to Condoleeza Rice as his next national
security advisor.
Not only are Lockheed executives commonly represented on the
Pentagon various advisory boards, but the company is also tied into
various security think tanks, including neoconservative networks. For
example, Lockheed VP Bruce Jackson (who helped draft the Republican
foreign policy platform in 2000) is a key player at the neo-
conservative planning bastion known as the Project for a New American
Century.
9. LORAL SATELLITE: In the buildup to the war the Pentagon bought
up access to numerous commercial satellites to bolster its own
orbiting space fleet. U.S. armed forces needed the extra spaced-based
capacity to be able to guide its many missiles and transmit huge
amounts of data to planes (including unmanned Predator drones flown
remotely by pilots who may be halfway around the world), guide
missiles and troops on the ground.
Industry experts say the war on terror literally saved some
satellite operators from bankruptcy. The Pentagon "is hovering up all
the available capacity" to supplement its three orbiting satellite
fleets, Richard DalBello, president of the Satellite Industry
Association explained to the Washington Post. The industry's other
customers - broadcast networks competing for satellite time - were
left to scramble for the remaining bandwidth.
Loral Space & Communications Chairman Bernard L. Schwartz is very
tight with the neoconservative hawks in the Bush administration's
foreign policy ranks, and is the principal funder of Blueprint, the
newsletter of the Democratic Leadership Council.
In the end, the profits from the war in Iraq didn't end up being
as huge for the industry as expected, and certainly weren't enough to
compensate for a sharp downturn in the commercial market. But more
help may be on its way. The Pentagon announced in November that it
would create a new global Intranet for the military that would take
two decades and hundreds of billions of dollars to build. Satellites,
of course, will play a key part in that integrated global weapons
system.
10. QUALCOMM: Two CPA officials resigned this year after claiming
they were pressured by John Shaw, the deputy undersecretary of defense
for technology security to change an Iraqi police radio contract to
favor Qualcomm's patented cellular technology, a move that critics say
was intended to lock the technology in as the standard for the entire
country. Iraq's cellular market is potentially worth hundreds of
millions of dollars in annual revenues for the company, and
potentially much more should it establish a standard for the region.
Shaw's efforts to override contracting officials delayed an emergency
radio contract, depriving Iraqi police officers, firefighters,
ambulance drivers and border guards of a joint communications system
for months.
Shaw says he was urged to push Qualcomm's technology by Rep.
Darrell E. Issa, a Republican whose San Diego County district includes
Qualcomm's headquarters. Issa, who received $5,000 in campaign
contributions from Qualcomm employees from 2003 to 2004, sits on the
House Small Business Committee, and previously tried to help the
company by sponsoring a bill that would have required the military to
use its CDMA technology.
"Hundreds of thousands of American jobs depend on the success of
U.S.-developed wireless technologies like CDMA," Issa claimed in a
letter to Donald Rumsfeld. But the Pentagon doesn't seem to be buying
the argument. The DoD's inspector general has asked the FBI to
investigate Shaw's activities.
The Center for Corporate Policy
Friday 31 December 2004
1. AEGIS: In June, the Pentagon's Program Management Office in
Iraq awarded a $293 million contract to coordinate security operations
among thousands of private contractors to Aegis, a UK firm whose
founder was once investigated for illegal arms smuggling. An inquiry
by the British parliament into Sandline, Aegis head Tim Spicer's
former firm, determined that the company had shipped guns to Sierra
Leone in 1998 in violation of a UN arms embargo. Sandline's position
was that it had approval from the British government, although British
ministers were cleared by the inquiry. Spicer resigned from Sandline
in 2000 and incorporated Aegis in 2002.
2. BEARING POINT: Critics find it ironic that Bearing Point, the
former consulting division of KPMG, received a $240 million contract
in 2003 to help develop Iraq's "competitive private sector," since it
had a hand in the development of the contract itself. According to a
March 22 report by AID's assistant inspector general Bruce
Crandlemire, "Bearing Point's extensive involvement in the development
of the Iraq economic reform program creates the appearance of unfair
competitive advantage in the contract award process."
Bearing Point spent five months helping USAID write the job
specifications and even sent some employees to Iraq to begin work
before the contract was awarded, while its competitors had only a week
to read the specifications and submit their own bids after final
revisions were made. "No company who writes the specs for a contract
should get the contract," says Keith Ashdown, the vice president of
Washington, DC-based Taxpayers for Common Sense.
3. BECHTEL: Schools, hospitals, bridges, airports, water treatment
plants, power plants, railroad, irrigation, electricity, etc. Bechtel
was literally tasked with repairing much of Iraq's infrastructure, a
job that was critical to winning hearts and minds after the war. To
accomplish this, the company hired over 90 Iraqi subcontractors for at
least 100 jobs. Most of these subcontracts involved rote maintenance
and repair work, however, and for sophisticated work requiring
considerable hands-on knowledge of the country's infrastructure, the
company bypassed Iraqi engineers and managers.
Although Bechtel is not entirely to blame, the company has yet to
meet virtually any of the major deadlines in its original contract.
According to a June GAO report, "electrical service in the country as
a while has not shown a marked improvement over the immediate postwar
levels of May 2003 and has worsened in some governorates."
4. BKSH & ASSOCIATES: Chairman Charlie Black, is an old Bush
family friend and prominent Republican lobbyist whose firm is
affiliated with Burson Marsteller, the global public relations giant.
Black was a key player in the Bush/Cheney 2000 campaign and together
with his wife raised $100,000 for this year's reelection campaign.
BKSH clients with contracts in Iraq include Fluor International
(whose ex-chair Phillip Carroll was tapped to head Iraq's oil ministry
after the war, and whose board includes the wife of James Woolsey, the
ex-CIA chief who was sent by Paul Wolfowitz before the war to convince
European leaders of Saddam Hussein's ties to al Qaeda). Fluor has won
joint contracts worth up to $1.6 billion.
Another client is Cummins Engine, which has managed to sell its
power generators thanks to the country's broken infrastructure.
Most prominent among BKSH's clients, however, is the Iraqi
National Congress, whose leader Ahmed Chalabi was called the "George
Washington of Iraq" by certain Pentagon neoconservatives before his
fall from grace. BKSH's K. Riva Levinson was hired to handle the INC's
U.S. public relations strategy in 1999. Hired by U.S. taxpayers, that
is: Until July 2003, the company was paid $25,000 per month by the
U.S. State Department to support the INC.
5. CACI AND TITAN: Although members of the military police face
certain prosecution for the horrific treatment of prisoners at the Abu
Ghraib prison, so far the corporate contractors have avoided any
charges. Maj. Gen. Antonio Taguba reported in an internal Army report
that two CACI employees "were either directly or indirectly
responsible" for abuses at the prison, including the use of dogs to
threaten detainees and forced sexual abuse and other threats of
violence. Another internal Army report suggested that Steven
Stefanowicz, one of 27 CACI interrogators working for the Army in
Iraq, "clearly knew [that] his instructions" to soldiers interrogating
Iraqi prisoners "equated to physical abuse."
"Titan's role in Iraq is to serve as translators and interpreters
for the U.S. Army," company CEO Gene Ray said, implying that news
reports had inaccurately implied the employees' involvement in
torture. "The company's contract is for linguists, not interrogators."
But according to Joseph a. Neurauter, a GSA suspension and debarment
official, CACI's role in designing its own Abu Ghraib contract
"continues to be an open issue and a potential conflict of interest."
Nevertheless, the GSA and other agencies conducting their own
investigations have yet to find a reason to suspend the company from
any new contracts. As a result, in August the Army gave CACI another
$15 million no-bid contract to continue providing interrogation
services for intelligence gathering in Iraq; In September, the Army
awarded Titan a contract worth up to $400 million for additional
translators.
6. CUSTER BATTLES: At the end of September, the Defense Department
suspended Custer Battles (the name comes from the company's two
principle founders - Michael Battles and Scott Custer) and 13
associated individuals and affiliated corporations from all federal
contracts for fraudulent billing practices involving the use of sham
corporations set up in Lebanon and the Cayman Islands. The CPA caught
the company after it left a spreadsheet behind at a meeting with CPA
employees. The spreadsheet revealed that the company had marked up
certain expenses associated with a currency exchange contract by 162
percent.
7. HALLIBURTON: In December Congressman Waxman (D-CA), announced
that "a growing list of concern's about Halliburton's performance" on
contracts that total $10.8 billion have led to multiple criminal
investigations into overcharging and kickbacks. In nine different
reports, government auditors have found "widespread, systemic problems
with almost every aspect of Halliburton's work in Iraq, from cost
estimation and billing systems to cost control and subcontract
management." Six former employees have come forward, corroborating the
auditors' concerns.
Another "H-bomb" dropped just before the election, when a top
contracting official responsible for ensuring that the Army Corps of
Engineers follows competitive contracting rules accused top Pentagon
officials of improperly favoring Halliburton in an early-contract
before the occupation. Bunnatine Greenhouse says that when the
Pentagon awarded the company a 5-year oil-related contract worth up to
$7 billion, it pressured her to withdraw her objections, actions that
she said were unprecedented in her experience.
8. LOCKHEED MARTIN: Lockheed Martin remains the king among war
profiteers, raking in $21.9 billion in Pentagon contracts in 2003
alone. With satellites and planes, missiles and IT systems, the
company has profited from just about every phase of the war except for
the reconstruction. The company's stock has tripled since 2000 to just
over $60.
Lockheed is helping Donald Rumsfeld's global warfare system
(called the Global Information Grid), a new integrated tech-heavy
system that the company promises will change transform the nature of
war. In fact, the large defense conglomerate's sophistication in areas
as diverse as space systems, aeronautics and information and
technology will allow it to play a leading role in the development of
new weapons systems for decades to come, including a planned highly-
secure military Internet, a spaced-based missile defense system and
next-generation warplanes such as the F-22 (currently in production)
and the Joint Strike Fighter F-35.
E.C. Aldridge Jr., the former undersecretary of defense for
acquisitions and procurement, gave final approval to begin building
the F-35 in 2001, a decision worth $200 billion to the company.
Although he soon left the Pentagon to join Lockheed's board, Aldridge
continues to straddle the public-private divide, Donald Rumsfeld
appointed him to a blue-ribbon panel studying weapons systems.
Former Lockheed lobbyists and employees include the current
secretary of the Navy, Gordon England, secretary of transportation
Norm Mineta (a former Lockheed vice president) and Stephen J. Hadley,
Bush's proposed successor to Condoleeza Rice as his next national
security advisor.
Not only are Lockheed executives commonly represented on the
Pentagon various advisory boards, but the company is also tied into
various security think tanks, including neoconservative networks. For
example, Lockheed VP Bruce Jackson (who helped draft the Republican
foreign policy platform in 2000) is a key player at the neo-
conservative planning bastion known as the Project for a New American
Century.
9. LORAL SATELLITE: In the buildup to the war the Pentagon bought
up access to numerous commercial satellites to bolster its own
orbiting space fleet. U.S. armed forces needed the extra spaced-based
capacity to be able to guide its many missiles and transmit huge
amounts of data to planes (including unmanned Predator drones flown
remotely by pilots who may be halfway around the world), guide
missiles and troops on the ground.
Industry experts say the war on terror literally saved some
satellite operators from bankruptcy. The Pentagon "is hovering up all
the available capacity" to supplement its three orbiting satellite
fleets, Richard DalBello, president of the Satellite Industry
Association explained to the Washington Post. The industry's other
customers - broadcast networks competing for satellite time - were
left to scramble for the remaining bandwidth.
Loral Space & Communications Chairman Bernard L. Schwartz is very
tight with the neoconservative hawks in the Bush administration's
foreign policy ranks, and is the principal funder of Blueprint, the
newsletter of the Democratic Leadership Council.
In the end, the profits from the war in Iraq didn't end up being
as huge for the industry as expected, and certainly weren't enough to
compensate for a sharp downturn in the commercial market. But more
help may be on its way. The Pentagon announced in November that it
would create a new global Intranet for the military that would take
two decades and hundreds of billions of dollars to build. Satellites,
of course, will play a key part in that integrated global weapons
system.
10. QUALCOMM: Two CPA officials resigned this year after claiming
they were pressured by John Shaw, the deputy undersecretary of defense
for technology security to change an Iraqi police radio contract to
favor Qualcomm's patented cellular technology, a move that critics say
was intended to lock the technology in as the standard for the entire
country. Iraq's cellular market is potentially worth hundreds of
millions of dollars in annual revenues for the company, and
potentially much more should it establish a standard for the region.
Shaw's efforts to override contracting officials delayed an emergency
radio contract, depriving Iraqi police officers, firefighters,
ambulance drivers and border guards of a joint communications system
for months.
Shaw says he was urged to push Qualcomm's technology by Rep.
Darrell E. Issa, a Republican whose San Diego County district includes
Qualcomm's headquarters. Issa, who received $5,000 in campaign
contributions from Qualcomm employees from 2003 to 2004, sits on the
House Small Business Committee, and previously tried to help the
company by sponsoring a bill that would have required the military to
use its CDMA technology.
"Hundreds of thousands of American jobs depend on the success of
U.S.-developed wireless technologies like CDMA," Issa claimed in a
letter to Donald Rumsfeld. But the Pentagon doesn't seem to be buying
the argument. The DoD's inspector general has asked the FBI to
investigate Shaw's activities.