Evelyn Pringle February 11, 2005
The main companies that were awarded billions of dollars worth of contracts in Iraq have paid more than $300 million in fines since 2000, to resolve allegations of fraud, bid rigging, delivery of faulty military equipment, and environmental damage.
For example, according to a review of documents conducted by the Associated Press, American tax payers are paying more than $780 million to one British firm that was convicted of fraud on 3 separate federal construction projects and was banned from US government work as recent as 2002.
A company in Virginia that was convicted of bid rigging on Federally funded projects has also been awarded hundreds of millions of dollars worth of contracts in Iraq, and a 3rd company, found guilty of bid rigging and environmental violations, was approved as a subcontractor to clean up an Iraqi harbor.
Seven other companies with reconstruction contracts have agreed to pay large fines without admitting wrongdoing. All total, these 10 companies have paid fines to resolve 30 violations in the past four years and 6 were fined more than once. Yet these same companies have been awarded reconstruction contracts in Iraq worth more than $7 billion.
Federal contracting regulations require contractors to have a "satisfactory record of integrity and business ethics." The government can ban unethical companies from getting new contracts through a process called debarment. However, companies too often escape debarment by agreeing to settle cases of misconduct by paying large fines without admitting guilt.
The contracts with these unethical companies are only legal because the Bush administration canceled regulations put in place by the Clinton administration which barred new government contracts for companies convicted or penalized during the previous three years.
The Clinton administration tightened contracting rules shortly before leaving office in 2001, and instructed officials to make companies with repeated violations of federal laws ineligible for new contracts. In its first 3 months in office, the Bush administration first suspended the rules, and than abolished them altogether in December 2001.
The largest government contractors in Iraq (other than Halliburton) have paid numerous penalties in the last four years.
* Bechtel paid more than $110,000 to the EPA and the Energy Department in 2000 and 2001 to settle safety and environmental violations. Bechtel has prime construction contracts in Iraq worth more than $2 billion. The company also hired 3 subcontractors for work in Iraq that have been fined more than $86 million in the past 4 years.
* American International Contractors Inc, paid $4.7 million in fines in 2000 after pleading guilty to bid rigging on a US funded project. AICI has part of a $325 million contract to rebuild Iraq's transportation systems, and has a share of a $500 million contract for emergency construction needs, and is also a partner in a company with a $70 million construction contract.
* Fluor Corporation paid $8.5 million in 2001 to settle charges that it improperly billed the government for work benefiting its other commercial clients. Fluor and AMEC created a joint venture and was awarded a contracts to rebuild Iraq's electricity, water, sewer and trash removal infrastructure, worth $1.7 billion.
* Great Lakes Dredge & Dock paid a $969,000 fine in 2002 for environmental damage in the Florida Keys National Marine Sanctuary. Yet, Bechtel awarded the firm a subcontract to clear the Iraqi port of Umm Qasr. Great Lakes also pleaded guilty to price fixing on contracts with Army Corps of Engineers in 1988. According to Bechtel, it told the Army Corps of Engineers it planned to hire Great Lakes when it was awarded the contract.
* Northrop Grumman Corporation's Vinnell subsidiary was awarded a $48 million contract to train the new Iraqi Army, even though it has been fined $191.7 million in the past 4 years, including $750,000 in 2000 for a case involving providing faulty replacement parts for the JSTARS airborne surveillance system.
War Profiteering - No Accountability and No End In Sight
For good reason, Bush has gone out of his way to stall congressional investigations into war profiteering. Requests for the most basic information have been virtually ignored, even as the companies continue to bilk taxpayers.
Now he's asking for another $80 billion for Iraq. How many more tax dollars have to be skimmed off before Americans face the fact that we have a major war profiteering problem on our hands, with our president leading the team?