Chris Floyd / The Moscow Times – 2005-08-17 00:02:39
MOSCOW (August 5, 2005) — It’s easy to forget sometimes — amid all the lofty talk of geopolitics, of apocalyptic clashes between good and evil, of terror, liberty, security and God — that the war on Iraq is “largely a matter of loot,” as Kasper Gutman so aptly described the Crusades in that seminal treatise on human nature, “The Maltese Falcon.” And nowhere is this more evident than in the festering, oozing imposthume of corruption centered around the Gutman-like figure of Vice President Dick Cheney.
Yes, it’s once more unto the breach with Halliburton, the gargantuan government contractor that still pays Cheney, its former CEO, enormous annual sums in “deferred compensation” and stock options — even while he presides over a White House war council that has steered more than $10 billion in no-bid Iraqi war contracts back to his corporate paymaster. This is rainmaking of monsoon proportions. Indeed, the company’s military servicing wing announced a second-quarter profit spike of 284 percent last week — a feast of blood and gravy that will send Cheney’s stock options soaring into the stratosphere.
Rampant Cronyism and Rotten Food
But although Halliburton has already entered the American lexicon as a byword for rampant cronyism, the true extent of its dense and deadly web of graft is only now emerging, most recently in a remarkable public hearing that revealed some of the corporation’s standard business practices in Iraq: fraud, extortion, brutality, pilferage, theft — even serving rotten food to US soldiers in the battle zone.
By piecing together bits from the fiercely suppressed reports of a few honest Pentagon auditors and investigators, a joint House-Senate minority committee (the Bushist majority refused to take part) has unearthed at least $1.4 billion in fraudulent overcharges and unsourced billing by Cheney’s company in Iraq. Testimony from Pentagon whistleblowers, former Halliburton officials and fellow contractors revealed the grim picture of a rogue operation, power-drunk and arrogant, beyond the reach of law, secure in the protection of its White House sugar daddy.
One tale is particularly instructive: Halliburton’s strenuous efforts to prevent a company hired by the Iraqis, Lloyd-Owen International, from delivering gasoline into the conquered land from Kuwait for 18 cents a gallon. Why? Because LOI’s cost-efficient operation undercuts Halliburton’s highway-robbery price of $1.30 a gallon for the exact same service.
Halliburton Controls Critical US Military Checkpoint
But how is Halliburton able to interfere with the sacred process of free enterprise? Well, it seems that Cheney’s firm, a private company, has control over the US military checkpoint on the volatile Iraq-Kuwait border, and it also has the authority to grant — or withhold — the Pentagon ID cards that are indispensable for contractors operating in Iraq. (Even contractors who, like LOI, are working for the supposedly sovereign Iraqi government.) Halliburton used these powers to block LOI’s access to the military crossing — which provides quick, safe delivery of the fuel — for months. Then the game got rougher.
In June, Cheney’s boys blackmailed LOI into delivering some construction materials to a Halliburton project in the friendly confines of Fallujah: no delivery, no “golden ticket” Pentagon card, said Halliburton. They neglected to tell LOI that convoys on the route had been repeatedly hit by insurgents in recent days. And sure enough, LOI’s delivery trucks were ripped to shreds just outside a Halliburton-operated military base. Three men were killed and seven wounded. But that’s not all. An e-mail obtained by investigators revealed that Halliburton brass had expressly prohibited company employees from offering any assistance to the shattered convoy.
Halliburton Food Service Abysmal
Halliburton extended this milk of human kindness to its food services as well. The firm had to bring in Turkish and Filipino guest workers to feed US soldiers, because the happily liberated Iraqis couldn’t be trusted not to blow up their benefactors.
The Cheneymen treated these coolies as befitted their lowly station: They packed them into tents with sand floors and no beds, and literally fed them scraps from the garbage. When the peons complained, Halliburton sacked the subcontractor, who had been buying bargain produce and meat from the locals, and hired an American crony to ship in food all the way from Philadelphia.
US soldiers weren’t treated much better. Employees testified that Halliburton brass had ordered them to serve spoiled and rotten food to soldiers, day in and day out. Meanwhile, Halliburton brass were reserving choice cuts for the big beer-soaked barbecues they threw for themselves two or three times a week.
They also billed the taxpayer for 10,000 “ghost meals” per day at a single base: The food was phantom, but the rake-off was real. Meanwhile, any employee who made noises about exposing the fraud to auditors was threatened with transfer to a red-hot fire zone, like Fallujah or Saddam’s hometown, Tikrit.
All of this criminal katzenjammer — and much, much more — was authorized at the highest levels, as top procurement brass and Pentagon officials confirmed. Cheney’s office kept tabs on Halliburton’s bids while Pentagon warlord Don Rumsfeld “violated federal law,” the committee noted, by directly intervening in the procurement process to eliminate all possible rivals and to make sure Cheney’s employer got the guaranteed-profit gig.
Rumsfeld’s office also removed oversight procedures for the dirty deals and ignored repeated warnings from Pentagon auditors about Halliburton’s blatant, persistent, pervasive fraud. And the money keeps rolling in. Just last month, Don and Dick ladled another $1.75 billion dollop of pork gravy into Halliburton’s bowl.
For this they have made a holocaust in the desert sands, sacrificing tens of thousands of innocent lives: for cheap, greasy graft; for grubby pilfering; for the personal profit of Richard B. Cheney and the whole pack of Bushist jackals gorging themselves on blood money.
• Halliburton’s Questioned and Unsupported Costs in Iraq Exceed $1.4 Billion
House-Senate Minority Staff Repot, June 27, 2005
• Halliburton Overcharges in Iraq: Transcript of Hearing
Federal News Service, June 27, 2005
• Halliburton announces 284 percent increase in war profits
Halliburton Watch, July 25, 2005 http://www.halliburtonwatch.org/news/earnings072205.html
Posted in accordance with Title 17, US Code, for noncommercial, educational purposes.
Halliburton Announces 284 Percent Increase in War Profits
WASHINGTON (July 25, 2005) — Halliburton announced on Friday that its KBR division, responsible for carrying out Pentagon contracts, experienced a 284 percent increase in operating profits during the second quarter of this year.
The increase in profits was primarily due to the Pentagon’s payment of “award fees” for what military officials call “good” or “very good” work done by KBR in the Middle East for America’s taxpayers and the troops.
Despite the scandals that plague KBR’s military contracts, the Pentagon awarded $70 million in “award” fees to the company, along with four ratings of “excellent” and two ratings of “very good” for the troop logistics work under the Army’s LOGCAP contract.
The Pentagon has provided preferential treatment to Halliburton on a number of occasions, including the concealment from the public of critical reports by military auditors.
Audits conducted by the Pentagon’s Defense Contract Audit Agency determined that KBR had $1 billion in “questioned” expenses (i.e. expenses which military auditors consider “unreasonable”) and $442 million in “unsupported” expenses (i.e. expenses which military auditors have determined contain no receipt or any explanation on how the expenses were disbursed).
But the top Pentagon brass ignored these audits and rewarded KBR’s work anyway.
Halliburton’s earnings announcement comes on the heels of new reports showing the Iraq and Afghan wars have already cost US taxpayers $314 billion and that another ten years of war will cost $700 billion.
In another coup for Halliburton, a federal judge this month decided that whistleblowers may not sue US companies for fraud if payment for services was made in Iraqi, not US, money.
Halliburton was paid over $1 billion in Iraqi oil money during the first 15 months of the occupation. The judge’s ruling means the False Claims Act cannot be used to offer large rewards to corporate insiders who reveal wrongdoing or overcharges for services.
The law is considered America’s most successful deterrent against contractor fraud, but the judge’s decision will help Halliburton and other contractors avoid tough scrutiny in Iraq.