Evelyn Pringle August 21, 2006
In the wake of overhauling the FDA, lawmakers are also cracking down on conflicts of interest within the Centers for Disease Control.
Last month, Representatives, Dr Dave Weldon (R-FL), and Carolyn Maloney (D-NY), held a press conference to announce the introduction of a bill that would give responsibility for vaccine safety to an independent agency within the Department of Health and Human Services, and remove most vaccine safety research from the CDC.
Specifically, they said on July 26, 2006, the "Vaccine Safety and Public Confidence Assurance Act of 2006," will create an independent office to address, investigate, and head off potential safety problems like the use of mercury in vaccines, in an objective and non-conflicted office whose sole purpose is vaccine safety and evaluation.
According to Dr Weldon in a prepared statement, Federal agencies charged with overseeing vaccine safety research have failed. They have failed to provide sufficient resources for vaccine safety research. They have failed to fund extramural research and they have failed to free themselves from conflicts of interest that serve to undermine public confidence in the safety of vaccines, he said.
"The American public deserves better," Dr Weldon stated, "and increasingly parents and the public at large are demanding better."
"There's an enormous inherent conflict of interest within the CDC," he said, "and if we fail to move vaccine safety to a separate independent office, safety issues will remain a low priority and public confidence in vaccines will continue to erode."
He said that similar conflicts have been remedied in other federal agencies, but in the vaccine program the conflicts persist unchecked. "This bill will provide the independence necessary," Dr Weldon said, "to ensure that vaccine safety research is robust, unbiased, and broadly accepted by the public at large."
"Vaccines do wonders for public health, but when the government requires them, it must also ensure that they're safe," Ms Maloney said in her statement. "We need adequate, unbiased research on vaccines, and this legislation would deliver that."
She applauded Dr Weldon for his tremendous commitment and leadership on the issue. "He is truly dedicated," she said, "to protecting our children and the public at large."
While announcing the new bill, Dr Weldon and Ms Maloney were joined by several groups advocating vaccine safety reform, including the National Autism Association, A-Champs, and safeMINDS.
According to the National Autism Association: "This landmark legislation will provide critical government agency oversight and implementation of vaccine safety research, which has not kept pace with the rise in the number of vaccines routinely prescribed to consumers including pregnant women and young children."
Additionally, the Act calls for $80 million in funding to conduct vaccine analysis and safety research.
Currently the CDC oversees vaccine research, safety and promotion, a situation that has been drawing more and more public criticism in recent years. The CDC compiles the list of vaccines that doctors are to give all children in the US, based on the recommendations of an advisory panel, and in many states kids can not attend day care or public schools unless they have received the CDC-endorsed vaccines.
A recommendation by the CDC guarantees a huge market for a vaccine and enables the drug company to use the government as a marketing device for its product. The annual global market for vaccines is expected to be over $10 billion this year.
On July 21, 2003, United Press International published a report based on a four-month investigation that found a pattern of problems linked to vaccines recommended by the CDC, as well as a web of close ties between the agency's advisory panel and the pharmaceutical industry.
By investigating members of an advisory panel of outside experts that make vaccine recommendations, UPI found that members of the panel received money from vaccine makers through relationships that included: sharing a vaccine patent; owning stock in a vaccine company; payments for research; money to monitor vaccine testing; and funding for academic departments.
In fact, according to UPI, the CDC itself is in the vaccine business. Under a 1980 law, UPI found the CDC had 28 licensing agreements with drug companies and one university for vaccines or vaccine-related products and eight ongoing projects to collaborate on new vaccines.
For instance, the CDC and SmithKline Beecham worked together on the Lyme-disease vaccine. A 1992 CDC activity report, obtained by UPI, says the agency had an agreement "with SmithKline Beecham that currently funds three positions at (the CDC) for the purpose of providing information of use in developing advanced test methods and vaccine candidates."
In June 2001, the General Accounting Office delivered a report on the issue to Senator Chris Dodd, (D-Conn), that noted that CDC employees "are listed on two Lyme-disease related patents" including "a 1993 joint patent between CDC and SmithKline Beecham Corporation." The report also said that six of 12 consultants working for the CDC on Lyme vaccines "reported at least one interest related to a vaccine firm."
According to CDC meeting transcripts where the committee weighed its recommendation, 3 had conflicts of interest with SmithKlineBeecham. The LYMERIX lyme-disease vaccine was approved by the CDC on February 18, 1999, and by October of 2000, more than 1.4 million people had received the vaccine.
But 18 months later, according to UPI, in February 2002, SmithKline Beecham pulled the vaccine off the market claiming that sales of LYMERIX were insufficient to justify the continued investment. However, according to UPI, the company also faced hundreds of lawsuits by people who said they suffered side effects from the vaccines.
The government's database at the time, listed possible side effects from LYMERIX as 640 emergency room visits, 34 life-threatening reactions, 77 hospitalizations, 198 disabilities and six deaths after people took the shots since the CDC endorsed it, according to UPI.
UPI also found other cases where vaccines endorsed by the panel were pulled off the market after a number of people suffered devastating side effects, and some died.
Congressman Dan Burton, (R-Ind), had already been investigating the advisory panel for several years, and told UPI that the conflicts of interest were a major problem. "This presents a real paradox," he said, "when the CDC routinely allows scientists with blatant conflicts of interest to serve on influential advisory committees that make recommendations on new vaccines, as well as policy matters."
"All the while these same scientists," Representative Burton said, "have financial ties, academic affiliations, and other vested interests in the products and companies for which they are supposed to be providing unbiased oversight."
An August 2001 report on the investigation by Rep Burton's House Government Reform Committee, stated that "four out of eight CDC advisory committee members who voted to approve guidelines for the rotavirus vaccine in June 1998 had financial ties to pharmaceutical companies that were developing different versions of the vaccine."
Critic say the conflicts of interest of Dr Paul Offit while sitting on the advisory panel could not be more blatant. He was part of the team that mandated the use of the RotaVirus vaccine, even though he received a $350,000 grant from Merck to develop the vaccine, shared the patent, and was paid to go around the country teaching doctors that vaccines were safe, according to the Wall Street Journal.
UPI discovered that Merck also had bought and distributed copies of a book written by Dr Offit titled, "What Every Parent Should Know About Vaccines," to physicians with a Dear Doctor letter that stated:"Merck Vaccine Division is pleased to present you with a copy of the recent publication, 'What Every Parent Should Know About Vaccines.'"
"The authors designed the book," Merck's letter told doctors, "to answer questions parents have about vaccines and to dispel misinformation about vaccines that sometimes appears in the public media."
The book had a list price of $14.95, and Dr Offit told UPI that he did not know how many copies Merck had purchased.
In 2001, Congressman Burton's investigation also found conflicts of interest with the then chairman of the advisory panel, Dr John Modlin, a Professor at Dartmouth Medical School, who owned $26,000 worth of Merck stock.
In a phone interview in 2003, Dr Modlin told UPI that he had sold the Merck stock, but that he had recently agreed to chair a committee to oversee Merck vaccine clinical trials.
"Meeting transcripts over the past decade," UPI says, "showed that at some meetings, half of the members present had potential conflicts with vaccine manufacturers."
For instance, at a June 2002 meeting, four of the 11 members on the panel acknowledged conflicts with Wyeth, GlaxoSmithKline, Merck, Pfizer, Aventis Pasteur, and Bayer. Two of the four conducted research or vaccine trials and one member was a co-holder of a patent.
The agency is currently facing a major credibility crisis over the issue of whether vaccines containing the mercury-based preservative, thimerosal, are responsible for the epidemic of neurological disorders ranging from ADHD to autism in children all across the country.
The CDC is being accused of research manipulation and cover-ups of vaccine maker culpability by an ever increasing number of activist groups and is also facing tough questions from some of the powerful members of Congress, both Republicans and Democrats alike.
The CDC continues to claim that there is no evidence to support a connection between the epidemic and thimerosal, which they say is no longer used in most pediatric vaccines.
It is however, included in the flu vaccine currently recommended for all pregnant women and children more than 6 months old.
Earlier this year, a group of lawmakers initiated a new investigation of the matter and basically directed the CDC to butt out. On February 22, 2006, they stated in a letter: "If the federal government is going to have a study whose results will be broadly accepted, such a study cannot be led by the CDC," in a letter to Dr David Schwartz, Director of the National Institute of Environmental Health Sciences.
The letter was signed by Senators, Joe Lieberman (D-Conn) and Debbie Stabenow (D-Mich), and members of the House Representatives including, Dr Dave Weldon, (R-Fla) Chris Smith, (R-NJ), Carolyn Maloney, (D-NY), Dan Burton, (R-Ind), Joseph Crowley, (D-NY), and Maurice Hinchey, (D-NY).
The Institute of Environmental Health Sciences is part of the National Institutes of Health, and was asked to convene a panel to decide how to analyze the CDC database to determine whether autism rates have dropped since thimerosal was removed from most vaccines.
The controversy picked up traction in April, "National Autism Month," when world renowned heavy metal experts, researchers, and physicians traveled to Washington and rallied on Capital Hill moving the debate beyond just the parents of autistic children.
This spring, a full-page ad appeared in USA Today, the most widely-circulated newspaper in the US, and accused the CDC of "causing an epidemic of autism" by recommending that kids receive a series of vaccinations that contained thimerosal at least as late as 2001.
The ad quoted one of the most recent and famous advocates to join the cause, environmental lawyer, Robert F Kennedy Jr, as saying: "It's time for the CDC to come clean with the American public."
The ad was funded by a coalition of advocacy groups led by Generation Rescue, and directed readers to the web site, www.PutChildren First.org, to view internal CDC documents, many of which were obtained under the FOIA, that includes transcripts of meetings and e-mails that the groups contend support their allegations of a CDC cover-up.
Congressman Weldon has a theory about why the CDC continues the charade of denying the link between vaccines and autism. "If it is eventually determined that an entire generation of kids was essentially poisoned," he says, "a class-action suit against the federal government could be on the order of hundreds of billions of dollars, and so there's very good reason for them to try to cover this up."
And Dr Weldon's prediction is proving true. Vaccine injury lawsuits are being filed and won against the vaccine makers and the government. Implemented in 1988, the National Childhood Vaccine Injury Act of 1986, established a mandatory, federally administered no-fault claims process for individuals who allege that they were harmed by the administration of childhood vaccines.
The vaccine compensation fund was created to supposedly ensure an adequate supply of vaccines, and to stabilize vaccine costs. A small fee charged on each vaccines funds the program. According to statistics on the vaccine compensation web site, in fiscal year 2006, a total of $38.2 million has been paid out in cases involving 47 awards.
In what is reported to be one of the largest settlements ever, in July 2006, a quadriplegic boy was awarded $43.1 million. The case alleged that now 7-year-old, Mario Rodriguez, became a quadriplegic after receiving a measles, mumps and rubella vaccine on January. 25, 2000.
Under the guidelines of the vaccine compensation fund program, the lawsuit was filed against the Department of Health and Human Services. Kansas City attorney, Leland Dempsey, who represented the child, told the Kansas City Star: "One unusual aspect of the case is that Mario is expected to have a normal lifespan, and therefore will require more years of care that will cost more money."
"He will need round-the-clock care, including extensive medical intervention, throughout his life," Mr Dempsey said.
Many other vaccine related lawsuits have been filed against drug makers. For instance, Eli Lilly, the company that invented thimerosal back in the 1930s, informed its shareholders in its 2005 Annual Report filed with the SEC on April 1, 2006: "We have been named as a defendant in approximately 340 actions in the U.S., involving approximately 1,020 claimants, brought in various state courts and federal district courts on behalf of children with autism or other neurological disorders."
Lilly also stated, we believe that "the majority of the cases should not be prosecuted in the courts in which they have been brought because the underlying claims are subject to the National Childhood Vaccine Injury Act of 1986."
Under the Act, claims must first be brought before the US Court of Claims for an award determination under the guidelines established by the Act. However, as Lilly points out in its filing, "Claimants who are unsatisfied with their awards under the Act may reject the award and seek traditional judicial remedies."
Showing posts with label GAO. Show all posts
Showing posts with label GAO. Show all posts
Thursday, August 5, 2010
Wednesday, August 4, 2010
Merck Caught Misrepresenting Vioxx Risks Again
May 17, 2006
Evelyn Pringle
Although Merck has long maintained that the risks associated with Vioxx occur after long-term use, a recent study in the Canadian Medical Association Journal, says the drug may raise the risk of heart attack for patients taking Vioxx for less than 2 weeks.
The study published online this month, found that more than 25% of 239 patients who had heart attacks did so in less than 13 days of being on the drug.
The study followed patients for about two and a half years and included 30,200 Vioxx users and 45,000 Celebrex patients. It found no statistically significant increase in heart attack risk with Celebrex patients.
In addition, on May 12, 2006, Dr Steven Nissen, interim chairman of cardiology at the Cleveland Clinic in Ohio, said Merck recently misrepresented an analysis of data from a follow-up review of patients who participated in the 3-year study called, Approve, that led to Vioxx being pulled off the market on September 30, 2004.
"It's important that we inform people about this because patients who have taken the drug will need increased surveillance by their physicians and increased awareness of their risks in the year subsequent to stopping the drug. And that risk may extend beyond a year; we simply don't know," Nissen told Reuters in a telephone interview.
"In the one year after Vioxx was stopped there was a 75 percent greater risk of having an adverse event," he said.
"What this means is that, surprisingly, in the year following discontinuation of Vioxx the relative risk remains approximately as high as it was when people were actually taking the drug," Dr Nissen explained. "That is very clear from the data," he said.
Critics say the cozy relationship between the pharmaceutical industry and the FDA is evidenced by the large number of industry connected members on the agency's advisory panels. A study conducted by the Public Citizen's Health Research Group in the April 26, 2006 issue of the Journal of American Medical Association analyzed the transcripts of 221 FDA drug advisory panel meetings that involved 16 committees, listed on the agency's web site as taking place between January 1, 2001 and December 31, 2004.
The analysis revealed that in 73% of the meetings, at least one member of the panel or one voting consultant disclosed a conflict, and yet only 1% of the members recused themselves from participating.
In all, 28% of committee members and voting consultants disclosed a conflict, the most common involving substantial financial dealings from consulting agreements, contracts or grants, and investments. For instance, the study found that 19% of the consulting agreements were worth over $10,000, 30% of the investments involved over $25,000, and 23% of contracts or grants exceeded $100,000.
In the case of Vioxx, ten of the 32 members on the FDA advisory committee that voted to allow the continued sale of Cox-2 pain drugs, including Vioxx, had previously acted as paid consultants for the drugs' manufacturers.
And true to form, the members with industry ties voted to return Vioxx to the market. Dr Marcia Angell, a senior lecturer in social medicine at Harvard Medical School and author of "The Truth About the Drug Companies: How They Deceive Us and What to Do About It," said in a March 10, 2005 editorial in the Boston Globe: "It is hard to see how the panel could have concluded that the benefits were worth those risks, especially given the fact that taking over-the-counter Prilosec in addition to an older pain reliever would probably have provided as much protection from stomach ulcers."
Dr Angell says advisory committees should not include paid consultants for drug companies. "Their conflict of interest is real, not 'potential'," she wrote.
"The excuse that they are indispensable," she says, "is not only self-serving but insulting to the experts who don't consult for industry."
However, in what critics call a rare occurrence, and no doubt because the agency was under intense public scrutiny, in this instance the FDA did not follow the recommendation of its advisory panel and Vioxx was not approved for a return to the market.
In light of the evidence of Merck's total disregard for patient health that has surfaced in Vioxx litigation thus far, the public needs to take a good hard look at any proposed legislation or action by Congress or the FDA that would shield drug companies from accountability based on the FDA's approval of a drug.
According to Attorney, Karen Barth Menzies, a partner in the Los Angeles based Baum Hedlund law firm, "the Vioxx public health debacle, has served to highlight deep-seeded problems within the FDA."
She says, "drug companies are profit-driven and are loath to issue warnings about risks associated with their drugs, even those that become quite clear."
"And it is precisely for this reason," Ms Menzies says, "that the public is in such desperate need for an agency that advocates for them, rather than the drug industry."
The FDA played a big part in the Vioxx disaster and allowed Merck to get away with murder. A new report released on April 24, 2006, by the Government Accountability Office is deeply critical of the FDA's approach to drug safety and specifically Vioxx, and lists organizational dysfunction, bureaucratic politics, and ineffective enforcement over drug companies as factors compromising drug safety.
The report was commissioned by Senator Charles Grassley (R-Iowa), in response to findings at a November 18, 2004, Senate Finance Committee hearing titled, "FDA, Merck and Vioxx: Putting Patient Safety First," where reports of mismanagement surfaced regarding the FDA's failure to implement safety measures to protect the public against the dangers of Vioxx.
Citing "recent controversy about drug safety," the report illuminates the weaknesses of the FDA in monitoring the safety of drugs once they are approved.
The report states that the FDA "lacks a clear and effective process for making decisions about, and providing management oversight of, postmarket drug safety issues."
It highlights the communication problems between the two FDA offices that handle postmarket safety concerns and advises that "insufficient communication" between the Office of Drug Safety and the Office of New Drugs "has hindered the decision-making process."
"Specifically," the GAO wrote, "ODS management does not always know how OND has responded to ODS's safety analyses and recommendations."
Ms Menzies says the FDA has sided with industry for years. "The recent GAO report," she says, "confirms many of the problems that we have been shouting about for years and illustrates that, contrary to FDA's preemption arguments, FDA's decisions must be second-guessed for the safety of the public."
The report comes almost two years after the hearing that revealed the FDA had not acted promptly to protect the public when it first became aware of information that Vioxx might pose risks to cardiovascular health.
The Senate Finance Committee got involved in the Vioxx matter because it has jurisdiction over the Medicare and Medicaid programs. "Accordingly," Senator Grassley informed the audience at the start of the November 18, 2004 hearing, "the committee has a responsibility to the more than 80 million Americans who receive health care coverage — including prescription drugs — under these programs."
"Of the 20 million Americans who reportedly took Vioxx, an untold number are Medicare and Medicaid beneficiaries," he advised. "I was told that the Medicaid program paid in excess of $1 billion for Vioxx while Vioxx was on the market," he said.
To demonstrate the value of government payments to Merck, at the beginning of the hearing, Senator Grassley described a June 4, 1999 Merck document titled "IN IT TO WIN IT" that said: "As of yesterday, Vioxx became reimbursable on Medicaid in 42 states with the other 8 states close behind."
"The Medicaid market was clearly going to be a money maker for Merck," he said, "and Medicaid has paid Merck well for Vioxx."
When the FDA approves a drug, Senator Grassley said, it's considered a "Good Housekeeping Seal of Approval."
"However," he told the audience, "what's come to light about Vioxx since September 30th makes people wonder if the FDA has lost its way when it comes to making sure drugs are safe."
It looks like the FDA, he said, allowed itself to be manipulated by Merck on labeling changes that became necessary after a review by Merck that's known as the VIGOR trial.
He explained how Merck completed the VIGOR trial in March 2000 and gave the findings to the FDA in June 2000, and was the subject of an advisory board meeting in February 2001. "But it was April 11, 2002," he told the audience, "before the Vioxx label was actually changed."
"During these 22 months," Senator Grassley said, "Merck aggressively marketed Vioxx, knowing that consumers and doctors were largely unaware of the cardiovascular risks found in the VIGOR trial."
The bottom line is, consumers should not have to second guess the safety of what's in
their medicine cabinets," he said. "The public should feel confident that when the FDA approves a drug, you can bank on it being safe, and if a drug isn't safe, the FDA will take it off the market."
The first witness called to testify at the hearing, was Dr David Graham, a scientist with an 18 year career at the FDA, who blew the whistle on the FDA' s handling of the safety issues related to Vioxx.
Right off the bat, he warned the committee: "we, are faced with what may be the single greatest drug safety catastrophe in the history of this country or the history of the world."
He called the Vioxx tragedy "a profound regulatory failure."
"It is important," Dr Graham said, "that this Committee and the American people understand that what has happened with Vioxx is really a symptom of something far more dangerous to the safety of the American people."
"Simply put," he told the panel, "FDA and its Center for Drug Evaluation and Research are broken."
Dr Graham discussed the studies that demonstrated that Merck and the FDA were aware of the Vioxx risks since before the drug was approved.
He told the panel of a Merck study named 090, that found a nearly 7-fold increase in heart attack risk with low doses of Vioxx conducted before the drug was approved and yet the labeling at the time of FDA approval said nothing about the risks.
In November 2000, he said, the VIGOR study found a 5-fold increase in heart attack risk with high-doses of Vioxx and yet the company said Vioxx was safe.
In fact, it was not until about 18 months after the VIGOR trial was published, that the FDA made a label change to include the heart attack risk, but even then the agency did not place it the "Warnings" section.
"Of note," Dr Graham told the committee, "FDA's label change had absolutely no effect on how often high-dose Vioxx was prescribed, so what good did it achieve?"
He informed the panel that a large study in 2002 also reported a 2-fold increase in heart attack risk with high-doses of Vioxx.
In March of 2004, he said another study determined that both high-dose and low-dose Vioxx increased the risk of heart attack and sudden death.
In this study, users of Vioxx were compared with users of another COX-2 inhibitor, Celebrex. The analysis found that Vioxx at doses of 25 mg or less daily was associated with a 50% increase in the risk of heart attack; and doses of greater than 25 mg daily were associated with a 370% increase in the risk of heart attacks.
Yet a report describing these findings was not posted on the FDA website until November 2004, on election day.
"In my opinion," Dr Graham said, "the FDA has let the American people down, and sadly, betrayed a public trust."
In regard to injuries, Dr Graham told the panel that Dr Eric Topol of the Cleveland Clinic estimated that there were up to 160,000 cases of heart attacks and strokes due to Vioxx, in an article published in the New England Journal of Medicine.
"This article," Dr Graham said, "lays out clearly the public health significance of what we're talking about today."
At the November 18, 2004 hearing, to illustrate the significance of 100,000 people being affected by Vioxx, Dr Graham presented charts to show that when looking at Florida or Pennsylvania, it would mean that 1% of the entire population would have been affected. For Iowa, the charts showed it would be 5%, for Maine 10%, and for Wyoming 27%.
"If we look at selected cities," Dr Graham told Senator Grassley who resides in Des Moines, Iowa, "67% of the citizens of Des Moines would be affected, and what's worse," he continued, "the entire population of every other city in the State of Iowa."
The VIGOR study started in January 1999, and included patients over 40, with rheumatoid arthritis who were given either Vioxx or Naproxen. Patients with recent cardiovascular events and patients taking aspirin were excluded from the study.
In the combined outcome of all cardiovascular deaths, heart attacks and strokes, Vioxx patients had higher rates than Naproxen patients. For the outcome of heart attack alone, the rate was five times higher in Vioxx patients than in Naproxen patients
In 1000 patients followed for one year, Vioxx treatment was found likely to be associated with 6 more heart attacks than Naproxen treatment.
Dr Graham said he became concerned about the public health risk after the VIGOR study indicated that the heart attack risk was increased 5-fold in patients who used the high-dose strength of Vioxx.
The safety question was important he explained because (1) Vioxx would be used by millions of patients; (2) heart attack is a fairly common event; and (3) even a small increase in risk could mean that tens of thousands of patients might be seriously harmed or killed.
"If these three factors were present," Dr Graham said, "I knew that we would have all the ingredients necessary to guarantee a national disaster."
To get answers, he worked with Kaiser Permanente in California to perform a study that took nearly 3 years to complete and concluded that high-dose Vioxx significantly increased the risk of heart attacks and sudden death and should not be prescribed or used by patients.
"This conclusion," Dr Graham said, "triggered an explosive response from the Office of New Drugs, which approved Vioxx in the first place and was responsible for regulating it postmarketing."
The response from senior management in the Office of Drug Safety was equally stressful he said. "I was pressured to change my conclusions and recommendations," he told the panel, "and basically threatened that if I did not change them, I would not be permitted to present the paper at the conference."
In fact, one Drug Safety manager recommended that he should be barred from presenting the poster at the meeting, and also said that Merck needed to know about the study results.
Finally, he said they wrote a manuscript for publication in a peer-reviewed medical journal and senior managers in the Office of Drug Safety would not grant clearance for its publication, even though it was accepted by a prestigious journal after rigorous peer review.
"Until it is cleared," Dr Graham told the panel, "our data and conclusions will not see the light of day in the scientific forum they deserve and have earned, and serious students of drug safety and drug regulation will be denied the opportunity to consider and openly debate the issues we raise in that paper."
As for the FDA conduct in responding to the studies that showed the dangers of Vioxx, Dr Graham discussed what he referred to as two "revelatory milestones," in 2004.
"In mid-August," he said, "despite our study results showing an increased risk of heart attack with Vioxx, and despite the results of other studies published in the literature, FDA announced it had approved Vioxx for use in children with rheumatoid arthritis."
"Also, on September 22," he told the committee, "at a meeting attended by the director of the reviewing office that approved Vioxx, the director and deputy director of the reviewing division within that office and senior managers from the Office of Drug Safety, no one thought there was a Vioxx safety issue to be dealt with."
At this meeting, the reviewing office director asked Dr Graham why he had even thought to study Vioxx and heart attacks because the FDA had made its labeling change and nothing more needed to be done.
At the same meeting, a senior manager from ODS labeled the latest Vioxx study conducted by Dr Graham's team, "a scientific rumor."
"Eight days later," Dr Graham told the panel, "Merck pulled Vioxx from the market."
"My experience with Vioxx is typical of how CDER responds to serious drug safety issues in general," he said.
On December 31, 2004, Dr Graham told Inter Press Service that the Vioxx debacle did not phase the FDA. "You have an agency in denial," he said in the interview with IPS, "the FDA still maintains it made no mistake in the approval or regulation of Vioxx."
He said, "intimidation of scientists who threaten the status quo at FDA is routine," and described how, his FDA superior reacted after he sought withdrawal of another arthritis drug called Arava.
"The division director spent the first 10 minutes of that meeting screaming at me," he said. "Basically, standing up, jugular veins bulging in his neck, eyes sort of bugging out of his head, screaming," he recalled, "basically trying to intimidate me so that I'd change my conclusion."
In fact, once Dr Graham went public, history shows that there was a full-court press by FDA officials against the agency Whistleblower.
Dr Steven Galson, the acting director of the FDA drug-evaluation division at the time, told reporters that Graham's work "constitutes junk science," and sent an email to an editor at the British medical journal The Lancet, questioning the "integrity" of Dr Graham's data.
Acting FDA commissioner, Dr Lester Crawford, accused Dr Graham of evading the agency's "long-established peer review and clearance process," and another agency official made calls to a Senate staffer, disparaging Dr Graham personally and professionally.
Before the testimony even began at the November 18 hearing, Senator Grassley responded to comments issued the night before by Dr Crawford against Dr Graham.
"News reports today," Senator Grassley noted, "say the FDA is calling Dr. Graham a "a maverick who did not follow Agency protocols."
Dr. Graham, he explained, completed an FDA sponsored three-year study under FDA guidance and with Drs. Campen, Levy, Shoor, Ray, Cheetham, Spence and Hui. Dr. Graham's immediate supervisor said the paper that formed the basis of the study was "... an excellent study and analysis of a complex topic."
"So the clarifications provided last night by Dr. Crawford," Senator Grassley said, "appear intended to intimidate a witness on the eve of hearing."
Dr Crawford knows there's a problem, he told the audience, "and would better serve the FDA by spending time on the problem rather than going after congressional witnesses who helped identify the problem in the first place."
Earlier in the year, on March 10, 2005, Senator Grassley gave a speech to the Consumer Federation of America and praised the FDA whistleblower and described how the FDA stonewalled concerns raised by Dr Graham after a study found an increased risk of heart attacks and strokes with Vioxx and said:
"Dr. Graham warned the FDA of the cardiovascular risks of Vioxx, the FDA approved the use of Vioxx for children. The director of FDA's office of new drugs suggested that Dr. Graham water down his Vioxx conclusions. Dr. Graham replied that in good conscience he could not. When Dr. Graham was asked to present his findings at my committee's Vioxx hearing, he was also undermined.
"Dr. Graham did testify before the advisory committee and his science was subjected to public scrutiny from his peers. ... In the end, the scientific process prevailed. But again, not before Dr. Graham's supervisors attempted to intercede."
In the speech, Senator Grassley said FDA whistleblowers are patriots.
"Think about the guts it takes to undermine your career," he said, "and to go against your supervisors at a huge federal agency, and in this case, the multi-billion-dollar drug companies."
"Whistleblowers are the rare birds who refuse to go along to get along," he told the audience. "The only thing they're guilty of is "committing truth," he said.
"Unfortunately," Grassley told the audience, "it appears that some drug companies are placing greed ahead of drug safety. In this fraudulent environment, the FDA's mission is more important than ever before. The FDA absolutely has to do a top-notch job on ensuring drug safety," he said.
The FDA "needs to demonstrate that it is unequivocally committed to the scientific process - and those who speak up on its behalf -- when it comes to drug safety and that nothing gets in the way of that, whether it's pressure from profit-oriented drug makers or institutional ego that doesn't want to admit a mistake," Grassley warned.
"The one and only client of the FDA must be John Q. Public," he declared.
Four months later, on July 18, 2005, Senator Grassley took to the floor of the Senate to explain why he would vote against the nomination of Dr Crawford to head the FDA, and gave a caustic speech about the FDA's relationship with drug companies as a whole, and Dr Crawford's conduct in the position of a temporary commissioner, and said in part:
"During the last 18 months, this country's confidence in the FDA has been shaken. It has been shaken not because of one isolated incident or one isolated whistleblower. It has been shaken because multiple drug safety concerns have been exposed by more than one courageous whistleblower.
"My oversight of the FDA leads me to the conclusion that there are cultural and systemic problems at the FDA. Unfortunately, Dr. Crawford has long been part of that same culture and system. The evidence is overwhelming that the FDA must change to better protect the American people. Dr. Crawford does not appear willing to be the man to change the FDA.
"During Dr. Crawford's tenure, I have witnessed the suppression of the scientific process and the muzzling of scientific dissent. First, with Dr. Mosholder finding a link between anti-depressants, children and suicide. And second with Dr. Graham's allegations regarding the FDA, Vioxx and post-marketing safety generally.
"Dr. Graham's testimony before the Finance Committee suggests that the problems are systemic. Oversight of the FDA exposed the cozy relationship that exists between the FDA and the drug industry. It revealed that the FDA negotiated for almost two years with Merck about how to change the Vioxx label so people would know about the risk of heart attacks."
In the end, Dr Crawford did become the FDA Commissioner in July 2005, but not for long. This Lester Crawford saga gives to new meaning to the phrase of "what goes around comes around."
After less than 3 months on the job, in a September 23, 2005 letter to President Bush, Crawford announced his resignation from the FDA and said it was "effective immediately."
In public, Crawford explained his departure by saying it was time for someone else to lead the agency. On September 28, 2005, Forbes.com reported that Crawford said he decided to leave the agency because he was tiring after three years at the agency. "He denies that financial conflicts of interest had anything to do with his decision to resign," Forbes noted.
However, Senators Mike Enzi (R-Wyo) and Edward Kennedy (D-Mass) disputed that claim and asked the HHS Inspector General to investigate Crawford's resignation to see whether he left due to an undisclosed financial conflict of interest.
Less than a month later, on October 26, 2005 the Wall Street Journal reported that as late as 2004, Crawford or his wife "owned stock in companies that make or distribute products regulated by the agency."
According to the Journal, Crawford or his wife held shares in several companies whose business is regulated by the FDA, as late as 2004, when Crawford was acting commissioner, quoting financial disclosure forms obtained by the Journal.
When Crawford began work at the FDA in 2002, the Journal said, he held stock in many companies, including Merck, Pfizer, and Johnson and Johnson. But he told ethics officials that he sold those stocks in 2002, along with stock he held in Kimberly-Clark, which makes medical devices.
Crawford also reported the sale of his stock in the company Teleflex Inc in 2002, which also makes medical devices, although "later forms show that he or his wife continued to own some shares," the Journal reports.
On the same day that the Journal's article was published, the Kaiser Daily Health Policy Report reported that the HHS Inspector General had confirmed that it had launched an investigation into Crawford's departure from the FDA.
About 3 months after that, on February 8, 2006, Crawford's new employer was revealed when the Washington Post reported that Crawford, "whose sudden resignation last fall after less than three months in office remains a mystery, has joined a lobbying firm that specializes in food and drug issues."
"Crawford is listed as "senior counsel" to the firm Policy Directions Inc." the Post said.
A few of the firm's clients listed in the article, include Merck, Altria Group Inc, formerly Philip Morris Companies, and the industry's trade group, the Pharmaceutical Research and Manufacturers of America.
According to the Post, "Crawford is barred from lobbying former colleagues at the FDA for a year, but he can give clients strategic advice about food and drug issues and can lobby members of Congress."
Less than a month later, on March 3, 2006, the Houston Chronicle reported that before he abruptly resigned, Crawford sold more than $50,000 in shares of Teleflex Inc, "a company that makes medical devices, according to financial disclosure forms" obtained by The Associated Press.
"As head of the FDA," the Chronicle noted, "Crawford oversaw the regulation of medical devices."
And on April 29, 2006, the Washington Post reported that the "former commissioner of the Food and Drug Administration is under federal investigation amid accusations of financial improprieties and making false statements to Congress."
The criminal investigation was disclosed at a hearing in a civil suit filed against the FDA over its handling of the emergency contraceptive Plan B, according to the Wall Street Journal on May 1, 2006. It seems Crawford was scheduled to be questioned under oath in the trial, but his attorney Barbara Van Gelder asked for a delay, saying she would instruct Crawford to invoke his Fifth Amendment rights.
Van Gelder said that Crawford is under criminal investigation and that the issue of his financial disclosures "is within the grand jury."
As for how things are going these days for Dr Graham, in April 2006, he was interviewed by Life Extension Magazine and described his life as "surreal" since the Vioxx scandal broke and discussed what its like to face the same people every day who tried to destroy him for simply telling the truth.
"It's very difficult," he said. "I periodically have to sit down with supervisors who I knew in November were lying to Congress about me, lying to The Lancet about me, and who tried to prevent my getting protection as a government whistleblower."
"They were doing hateful things," he explained, "and now they pretend nothing happened."
Dr Graham did say that the mistreatment comes only from senior management. "At the staff level," he said, "I'm very respected and supported."
"If anything, esteem for me has increased because they realize I told the truth," he told Life Extension. "They know the reality of what we're dealing with."
In April 2006, in what has to be one of Merck's worst nightmares, a federal judge ordered Dr Graham to testify at a deposition in the Vioxx multidistrict litigation. The MDL was created to consolidate pretrial proceedings for the thousands of lawsuits filed by users of Vioxx.
The FDA attempted to block Dr Graham's testimony by filing a motion to quash the Plaintiff's subpoena on grounds that his deposition would divert the agency's time and resources, and cripple its ability to fulfill its statutory mandate, and said there was no need to depose Dr Graham, given his public statements already made.
However, Judge Eldon Fallon denied the motion and said: "This court does not see how the deposition of one employee during nonworking hours would cripple the FDA's ability to function."
He also noted that none of the documents in the public record could "express Dr. Graham's opinion with the clarity and tone as he personally can in his deposition."
Evelyn Pringle
Although Merck has long maintained that the risks associated with Vioxx occur after long-term use, a recent study in the Canadian Medical Association Journal, says the drug may raise the risk of heart attack for patients taking Vioxx for less than 2 weeks.
The study published online this month, found that more than 25% of 239 patients who had heart attacks did so in less than 13 days of being on the drug.
The study followed patients for about two and a half years and included 30,200 Vioxx users and 45,000 Celebrex patients. It found no statistically significant increase in heart attack risk with Celebrex patients.
In addition, on May 12, 2006, Dr Steven Nissen, interim chairman of cardiology at the Cleveland Clinic in Ohio, said Merck recently misrepresented an analysis of data from a follow-up review of patients who participated in the 3-year study called, Approve, that led to Vioxx being pulled off the market on September 30, 2004.
"It's important that we inform people about this because patients who have taken the drug will need increased surveillance by their physicians and increased awareness of their risks in the year subsequent to stopping the drug. And that risk may extend beyond a year; we simply don't know," Nissen told Reuters in a telephone interview.
"In the one year after Vioxx was stopped there was a 75 percent greater risk of having an adverse event," he said.
"What this means is that, surprisingly, in the year following discontinuation of Vioxx the relative risk remains approximately as high as it was when people were actually taking the drug," Dr Nissen explained. "That is very clear from the data," he said.
Critics say the cozy relationship between the pharmaceutical industry and the FDA is evidenced by the large number of industry connected members on the agency's advisory panels. A study conducted by the Public Citizen's Health Research Group in the April 26, 2006 issue of the Journal of American Medical Association analyzed the transcripts of 221 FDA drug advisory panel meetings that involved 16 committees, listed on the agency's web site as taking place between January 1, 2001 and December 31, 2004.
The analysis revealed that in 73% of the meetings, at least one member of the panel or one voting consultant disclosed a conflict, and yet only 1% of the members recused themselves from participating.
In all, 28% of committee members and voting consultants disclosed a conflict, the most common involving substantial financial dealings from consulting agreements, contracts or grants, and investments. For instance, the study found that 19% of the consulting agreements were worth over $10,000, 30% of the investments involved over $25,000, and 23% of contracts or grants exceeded $100,000.
In the case of Vioxx, ten of the 32 members on the FDA advisory committee that voted to allow the continued sale of Cox-2 pain drugs, including Vioxx, had previously acted as paid consultants for the drugs' manufacturers.
And true to form, the members with industry ties voted to return Vioxx to the market. Dr Marcia Angell, a senior lecturer in social medicine at Harvard Medical School and author of "The Truth About the Drug Companies: How They Deceive Us and What to Do About It," said in a March 10, 2005 editorial in the Boston Globe: "It is hard to see how the panel could have concluded that the benefits were worth those risks, especially given the fact that taking over-the-counter Prilosec in addition to an older pain reliever would probably have provided as much protection from stomach ulcers."
Dr Angell says advisory committees should not include paid consultants for drug companies. "Their conflict of interest is real, not 'potential'," she wrote.
"The excuse that they are indispensable," she says, "is not only self-serving but insulting to the experts who don't consult for industry."
However, in what critics call a rare occurrence, and no doubt because the agency was under intense public scrutiny, in this instance the FDA did not follow the recommendation of its advisory panel and Vioxx was not approved for a return to the market.
In light of the evidence of Merck's total disregard for patient health that has surfaced in Vioxx litigation thus far, the public needs to take a good hard look at any proposed legislation or action by Congress or the FDA that would shield drug companies from accountability based on the FDA's approval of a drug.
According to Attorney, Karen Barth Menzies, a partner in the Los Angeles based Baum Hedlund law firm, "the Vioxx public health debacle, has served to highlight deep-seeded problems within the FDA."
She says, "drug companies are profit-driven and are loath to issue warnings about risks associated with their drugs, even those that become quite clear."
"And it is precisely for this reason," Ms Menzies says, "that the public is in such desperate need for an agency that advocates for them, rather than the drug industry."
The FDA played a big part in the Vioxx disaster and allowed Merck to get away with murder. A new report released on April 24, 2006, by the Government Accountability Office is deeply critical of the FDA's approach to drug safety and specifically Vioxx, and lists organizational dysfunction, bureaucratic politics, and ineffective enforcement over drug companies as factors compromising drug safety.
The report was commissioned by Senator Charles Grassley (R-Iowa), in response to findings at a November 18, 2004, Senate Finance Committee hearing titled, "FDA, Merck and Vioxx: Putting Patient Safety First," where reports of mismanagement surfaced regarding the FDA's failure to implement safety measures to protect the public against the dangers of Vioxx.
Citing "recent controversy about drug safety," the report illuminates the weaknesses of the FDA in monitoring the safety of drugs once they are approved.
The report states that the FDA "lacks a clear and effective process for making decisions about, and providing management oversight of, postmarket drug safety issues."
It highlights the communication problems between the two FDA offices that handle postmarket safety concerns and advises that "insufficient communication" between the Office of Drug Safety and the Office of New Drugs "has hindered the decision-making process."
"Specifically," the GAO wrote, "ODS management does not always know how OND has responded to ODS's safety analyses and recommendations."
Ms Menzies says the FDA has sided with industry for years. "The recent GAO report," she says, "confirms many of the problems that we have been shouting about for years and illustrates that, contrary to FDA's preemption arguments, FDA's decisions must be second-guessed for the safety of the public."
The report comes almost two years after the hearing that revealed the FDA had not acted promptly to protect the public when it first became aware of information that Vioxx might pose risks to cardiovascular health.
The Senate Finance Committee got involved in the Vioxx matter because it has jurisdiction over the Medicare and Medicaid programs. "Accordingly," Senator Grassley informed the audience at the start of the November 18, 2004 hearing, "the committee has a responsibility to the more than 80 million Americans who receive health care coverage — including prescription drugs — under these programs."
"Of the 20 million Americans who reportedly took Vioxx, an untold number are Medicare and Medicaid beneficiaries," he advised. "I was told that the Medicaid program paid in excess of $1 billion for Vioxx while Vioxx was on the market," he said.
To demonstrate the value of government payments to Merck, at the beginning of the hearing, Senator Grassley described a June 4, 1999 Merck document titled "IN IT TO WIN IT" that said: "As of yesterday, Vioxx became reimbursable on Medicaid in 42 states with the other 8 states close behind."
"The Medicaid market was clearly going to be a money maker for Merck," he said, "and Medicaid has paid Merck well for Vioxx."
When the FDA approves a drug, Senator Grassley said, it's considered a "Good Housekeeping Seal of Approval."
"However," he told the audience, "what's come to light about Vioxx since September 30th makes people wonder if the FDA has lost its way when it comes to making sure drugs are safe."
It looks like the FDA, he said, allowed itself to be manipulated by Merck on labeling changes that became necessary after a review by Merck that's known as the VIGOR trial.
He explained how Merck completed the VIGOR trial in March 2000 and gave the findings to the FDA in June 2000, and was the subject of an advisory board meeting in February 2001. "But it was April 11, 2002," he told the audience, "before the Vioxx label was actually changed."
"During these 22 months," Senator Grassley said, "Merck aggressively marketed Vioxx, knowing that consumers and doctors were largely unaware of the cardiovascular risks found in the VIGOR trial."
The bottom line is, consumers should not have to second guess the safety of what's in
their medicine cabinets," he said. "The public should feel confident that when the FDA approves a drug, you can bank on it being safe, and if a drug isn't safe, the FDA will take it off the market."
The first witness called to testify at the hearing, was Dr David Graham, a scientist with an 18 year career at the FDA, who blew the whistle on the FDA' s handling of the safety issues related to Vioxx.
Right off the bat, he warned the committee: "we, are faced with what may be the single greatest drug safety catastrophe in the history of this country or the history of the world."
He called the Vioxx tragedy "a profound regulatory failure."
"It is important," Dr Graham said, "that this Committee and the American people understand that what has happened with Vioxx is really a symptom of something far more dangerous to the safety of the American people."
"Simply put," he told the panel, "FDA and its Center for Drug Evaluation and Research are broken."
Dr Graham discussed the studies that demonstrated that Merck and the FDA were aware of the Vioxx risks since before the drug was approved.
He told the panel of a Merck study named 090, that found a nearly 7-fold increase in heart attack risk with low doses of Vioxx conducted before the drug was approved and yet the labeling at the time of FDA approval said nothing about the risks.
In November 2000, he said, the VIGOR study found a 5-fold increase in heart attack risk with high-doses of Vioxx and yet the company said Vioxx was safe.
In fact, it was not until about 18 months after the VIGOR trial was published, that the FDA made a label change to include the heart attack risk, but even then the agency did not place it the "Warnings" section.
"Of note," Dr Graham told the committee, "FDA's label change had absolutely no effect on how often high-dose Vioxx was prescribed, so what good did it achieve?"
He informed the panel that a large study in 2002 also reported a 2-fold increase in heart attack risk with high-doses of Vioxx.
In March of 2004, he said another study determined that both high-dose and low-dose Vioxx increased the risk of heart attack and sudden death.
In this study, users of Vioxx were compared with users of another COX-2 inhibitor, Celebrex. The analysis found that Vioxx at doses of 25 mg or less daily was associated with a 50% increase in the risk of heart attack; and doses of greater than 25 mg daily were associated with a 370% increase in the risk of heart attacks.
Yet a report describing these findings was not posted on the FDA website until November 2004, on election day.
"In my opinion," Dr Graham said, "the FDA has let the American people down, and sadly, betrayed a public trust."
In regard to injuries, Dr Graham told the panel that Dr Eric Topol of the Cleveland Clinic estimated that there were up to 160,000 cases of heart attacks and strokes due to Vioxx, in an article published in the New England Journal of Medicine.
"This article," Dr Graham said, "lays out clearly the public health significance of what we're talking about today."
At the November 18, 2004 hearing, to illustrate the significance of 100,000 people being affected by Vioxx, Dr Graham presented charts to show that when looking at Florida or Pennsylvania, it would mean that 1% of the entire population would have been affected. For Iowa, the charts showed it would be 5%, for Maine 10%, and for Wyoming 27%.
"If we look at selected cities," Dr Graham told Senator Grassley who resides in Des Moines, Iowa, "67% of the citizens of Des Moines would be affected, and what's worse," he continued, "the entire population of every other city in the State of Iowa."
The VIGOR study started in January 1999, and included patients over 40, with rheumatoid arthritis who were given either Vioxx or Naproxen. Patients with recent cardiovascular events and patients taking aspirin were excluded from the study.
In the combined outcome of all cardiovascular deaths, heart attacks and strokes, Vioxx patients had higher rates than Naproxen patients. For the outcome of heart attack alone, the rate was five times higher in Vioxx patients than in Naproxen patients
In 1000 patients followed for one year, Vioxx treatment was found likely to be associated with 6 more heart attacks than Naproxen treatment.
Dr Graham said he became concerned about the public health risk after the VIGOR study indicated that the heart attack risk was increased 5-fold in patients who used the high-dose strength of Vioxx.
The safety question was important he explained because (1) Vioxx would be used by millions of patients; (2) heart attack is a fairly common event; and (3) even a small increase in risk could mean that tens of thousands of patients might be seriously harmed or killed.
"If these three factors were present," Dr Graham said, "I knew that we would have all the ingredients necessary to guarantee a national disaster."
To get answers, he worked with Kaiser Permanente in California to perform a study that took nearly 3 years to complete and concluded that high-dose Vioxx significantly increased the risk of heart attacks and sudden death and should not be prescribed or used by patients.
"This conclusion," Dr Graham said, "triggered an explosive response from the Office of New Drugs, which approved Vioxx in the first place and was responsible for regulating it postmarketing."
The response from senior management in the Office of Drug Safety was equally stressful he said. "I was pressured to change my conclusions and recommendations," he told the panel, "and basically threatened that if I did not change them, I would not be permitted to present the paper at the conference."
In fact, one Drug Safety manager recommended that he should be barred from presenting the poster at the meeting, and also said that Merck needed to know about the study results.
Finally, he said they wrote a manuscript for publication in a peer-reviewed medical journal and senior managers in the Office of Drug Safety would not grant clearance for its publication, even though it was accepted by a prestigious journal after rigorous peer review.
"Until it is cleared," Dr Graham told the panel, "our data and conclusions will not see the light of day in the scientific forum they deserve and have earned, and serious students of drug safety and drug regulation will be denied the opportunity to consider and openly debate the issues we raise in that paper."
As for the FDA conduct in responding to the studies that showed the dangers of Vioxx, Dr Graham discussed what he referred to as two "revelatory milestones," in 2004.
"In mid-August," he said, "despite our study results showing an increased risk of heart attack with Vioxx, and despite the results of other studies published in the literature, FDA announced it had approved Vioxx for use in children with rheumatoid arthritis."
"Also, on September 22," he told the committee, "at a meeting attended by the director of the reviewing office that approved Vioxx, the director and deputy director of the reviewing division within that office and senior managers from the Office of Drug Safety, no one thought there was a Vioxx safety issue to be dealt with."
At this meeting, the reviewing office director asked Dr Graham why he had even thought to study Vioxx and heart attacks because the FDA had made its labeling change and nothing more needed to be done.
At the same meeting, a senior manager from ODS labeled the latest Vioxx study conducted by Dr Graham's team, "a scientific rumor."
"Eight days later," Dr Graham told the panel, "Merck pulled Vioxx from the market."
"My experience with Vioxx is typical of how CDER responds to serious drug safety issues in general," he said.
On December 31, 2004, Dr Graham told Inter Press Service that the Vioxx debacle did not phase the FDA. "You have an agency in denial," he said in the interview with IPS, "the FDA still maintains it made no mistake in the approval or regulation of Vioxx."
He said, "intimidation of scientists who threaten the status quo at FDA is routine," and described how, his FDA superior reacted after he sought withdrawal of another arthritis drug called Arava.
"The division director spent the first 10 minutes of that meeting screaming at me," he said. "Basically, standing up, jugular veins bulging in his neck, eyes sort of bugging out of his head, screaming," he recalled, "basically trying to intimidate me so that I'd change my conclusion."
In fact, once Dr Graham went public, history shows that there was a full-court press by FDA officials against the agency Whistleblower.
Dr Steven Galson, the acting director of the FDA drug-evaluation division at the time, told reporters that Graham's work "constitutes junk science," and sent an email to an editor at the British medical journal The Lancet, questioning the "integrity" of Dr Graham's data.
Acting FDA commissioner, Dr Lester Crawford, accused Dr Graham of evading the agency's "long-established peer review and clearance process," and another agency official made calls to a Senate staffer, disparaging Dr Graham personally and professionally.
Before the testimony even began at the November 18 hearing, Senator Grassley responded to comments issued the night before by Dr Crawford against Dr Graham.
"News reports today," Senator Grassley noted, "say the FDA is calling Dr. Graham a "a maverick who did not follow Agency protocols."
Dr. Graham, he explained, completed an FDA sponsored three-year study under FDA guidance and with Drs. Campen, Levy, Shoor, Ray, Cheetham, Spence and Hui. Dr. Graham's immediate supervisor said the paper that formed the basis of the study was "... an excellent study and analysis of a complex topic."
"So the clarifications provided last night by Dr. Crawford," Senator Grassley said, "appear intended to intimidate a witness on the eve of hearing."
Dr Crawford knows there's a problem, he told the audience, "and would better serve the FDA by spending time on the problem rather than going after congressional witnesses who helped identify the problem in the first place."
Earlier in the year, on March 10, 2005, Senator Grassley gave a speech to the Consumer Federation of America and praised the FDA whistleblower and described how the FDA stonewalled concerns raised by Dr Graham after a study found an increased risk of heart attacks and strokes with Vioxx and said:
"Dr. Graham warned the FDA of the cardiovascular risks of Vioxx, the FDA approved the use of Vioxx for children. The director of FDA's office of new drugs suggested that Dr. Graham water down his Vioxx conclusions. Dr. Graham replied that in good conscience he could not. When Dr. Graham was asked to present his findings at my committee's Vioxx hearing, he was also undermined.
"Dr. Graham did testify before the advisory committee and his science was subjected to public scrutiny from his peers. ... In the end, the scientific process prevailed. But again, not before Dr. Graham's supervisors attempted to intercede."
In the speech, Senator Grassley said FDA whistleblowers are patriots.
"Think about the guts it takes to undermine your career," he said, "and to go against your supervisors at a huge federal agency, and in this case, the multi-billion-dollar drug companies."
"Whistleblowers are the rare birds who refuse to go along to get along," he told the audience. "The only thing they're guilty of is "committing truth," he said.
"Unfortunately," Grassley told the audience, "it appears that some drug companies are placing greed ahead of drug safety. In this fraudulent environment, the FDA's mission is more important than ever before. The FDA absolutely has to do a top-notch job on ensuring drug safety," he said.
The FDA "needs to demonstrate that it is unequivocally committed to the scientific process - and those who speak up on its behalf -- when it comes to drug safety and that nothing gets in the way of that, whether it's pressure from profit-oriented drug makers or institutional ego that doesn't want to admit a mistake," Grassley warned.
"The one and only client of the FDA must be John Q. Public," he declared.
Four months later, on July 18, 2005, Senator Grassley took to the floor of the Senate to explain why he would vote against the nomination of Dr Crawford to head the FDA, and gave a caustic speech about the FDA's relationship with drug companies as a whole, and Dr Crawford's conduct in the position of a temporary commissioner, and said in part:
"During the last 18 months, this country's confidence in the FDA has been shaken. It has been shaken not because of one isolated incident or one isolated whistleblower. It has been shaken because multiple drug safety concerns have been exposed by more than one courageous whistleblower.
"My oversight of the FDA leads me to the conclusion that there are cultural and systemic problems at the FDA. Unfortunately, Dr. Crawford has long been part of that same culture and system. The evidence is overwhelming that the FDA must change to better protect the American people. Dr. Crawford does not appear willing to be the man to change the FDA.
"During Dr. Crawford's tenure, I have witnessed the suppression of the scientific process and the muzzling of scientific dissent. First, with Dr. Mosholder finding a link between anti-depressants, children and suicide. And second with Dr. Graham's allegations regarding the FDA, Vioxx and post-marketing safety generally.
"Dr. Graham's testimony before the Finance Committee suggests that the problems are systemic. Oversight of the FDA exposed the cozy relationship that exists between the FDA and the drug industry. It revealed that the FDA negotiated for almost two years with Merck about how to change the Vioxx label so people would know about the risk of heart attacks."
In the end, Dr Crawford did become the FDA Commissioner in July 2005, but not for long. This Lester Crawford saga gives to new meaning to the phrase of "what goes around comes around."
After less than 3 months on the job, in a September 23, 2005 letter to President Bush, Crawford announced his resignation from the FDA and said it was "effective immediately."
In public, Crawford explained his departure by saying it was time for someone else to lead the agency. On September 28, 2005, Forbes.com reported that Crawford said he decided to leave the agency because he was tiring after three years at the agency. "He denies that financial conflicts of interest had anything to do with his decision to resign," Forbes noted.
However, Senators Mike Enzi (R-Wyo) and Edward Kennedy (D-Mass) disputed that claim and asked the HHS Inspector General to investigate Crawford's resignation to see whether he left due to an undisclosed financial conflict of interest.
Less than a month later, on October 26, 2005 the Wall Street Journal reported that as late as 2004, Crawford or his wife "owned stock in companies that make or distribute products regulated by the agency."
According to the Journal, Crawford or his wife held shares in several companies whose business is regulated by the FDA, as late as 2004, when Crawford was acting commissioner, quoting financial disclosure forms obtained by the Journal.
When Crawford began work at the FDA in 2002, the Journal said, he held stock in many companies, including Merck, Pfizer, and Johnson and Johnson. But he told ethics officials that he sold those stocks in 2002, along with stock he held in Kimberly-Clark, which makes medical devices.
Crawford also reported the sale of his stock in the company Teleflex Inc in 2002, which also makes medical devices, although "later forms show that he or his wife continued to own some shares," the Journal reports.
On the same day that the Journal's article was published, the Kaiser Daily Health Policy Report reported that the HHS Inspector General had confirmed that it had launched an investigation into Crawford's departure from the FDA.
About 3 months after that, on February 8, 2006, Crawford's new employer was revealed when the Washington Post reported that Crawford, "whose sudden resignation last fall after less than three months in office remains a mystery, has joined a lobbying firm that specializes in food and drug issues."
"Crawford is listed as "senior counsel" to the firm Policy Directions Inc." the Post said.
A few of the firm's clients listed in the article, include Merck, Altria Group Inc, formerly Philip Morris Companies, and the industry's trade group, the Pharmaceutical Research and Manufacturers of America.
According to the Post, "Crawford is barred from lobbying former colleagues at the FDA for a year, but he can give clients strategic advice about food and drug issues and can lobby members of Congress."
Less than a month later, on March 3, 2006, the Houston Chronicle reported that before he abruptly resigned, Crawford sold more than $50,000 in shares of Teleflex Inc, "a company that makes medical devices, according to financial disclosure forms" obtained by The Associated Press.
"As head of the FDA," the Chronicle noted, "Crawford oversaw the regulation of medical devices."
And on April 29, 2006, the Washington Post reported that the "former commissioner of the Food and Drug Administration is under federal investigation amid accusations of financial improprieties and making false statements to Congress."
The criminal investigation was disclosed at a hearing in a civil suit filed against the FDA over its handling of the emergency contraceptive Plan B, according to the Wall Street Journal on May 1, 2006. It seems Crawford was scheduled to be questioned under oath in the trial, but his attorney Barbara Van Gelder asked for a delay, saying she would instruct Crawford to invoke his Fifth Amendment rights.
Van Gelder said that Crawford is under criminal investigation and that the issue of his financial disclosures "is within the grand jury."
As for how things are going these days for Dr Graham, in April 2006, he was interviewed by Life Extension Magazine and described his life as "surreal" since the Vioxx scandal broke and discussed what its like to face the same people every day who tried to destroy him for simply telling the truth.
"It's very difficult," he said. "I periodically have to sit down with supervisors who I knew in November were lying to Congress about me, lying to The Lancet about me, and who tried to prevent my getting protection as a government whistleblower."
"They were doing hateful things," he explained, "and now they pretend nothing happened."
Dr Graham did say that the mistreatment comes only from senior management. "At the staff level," he said, "I'm very respected and supported."
"If anything, esteem for me has increased because they realize I told the truth," he told Life Extension. "They know the reality of what we're dealing with."
In April 2006, in what has to be one of Merck's worst nightmares, a federal judge ordered Dr Graham to testify at a deposition in the Vioxx multidistrict litigation. The MDL was created to consolidate pretrial proceedings for the thousands of lawsuits filed by users of Vioxx.
The FDA attempted to block Dr Graham's testimony by filing a motion to quash the Plaintiff's subpoena on grounds that his deposition would divert the agency's time and resources, and cripple its ability to fulfill its statutory mandate, and said there was no need to depose Dr Graham, given his public statements already made.
However, Judge Eldon Fallon denied the motion and said: "This court does not see how the deposition of one employee during nonworking hours would cripple the FDA's ability to function."
He also noted that none of the documents in the public record could "express Dr. Graham's opinion with the clarity and tone as he personally can in his deposition."
Sunday, August 1, 2010
Resume of Dick Cheney to be Posted on Monster.Com
August 6, 2004
Evelyn Pringle
Dick Cheney is too modest to list his past accomplishments as CEO of Halliburton on the White House Website, so I decided to give him a few pointers on writing a resume to submit to future employers when he leaves the White House in January 2005.
I would definitely keep the focus on three areas of expertise: (1) Setting up fraudulent tax havens to avoid paying US taxes; (2) Doing business with terrorist countries; and (3) Stonewalling criminal investigations without going to prison.
(1) How To Set Up Fraudulent Corporate Tax Havens
As CEO of Halliburton, Cheney did rack up a number of accomplishments. He increased Halliburton's offshore tax haven subsidiaries nearly 5-fold. The company currently has 143 subsidiaries, but only 36 are incorporated in the US. The other 107 are located in other countries. According to CitizenWorks.org, Halliburton is 8th on the Fortune 500 list of companies with the most offshore tax havens.
For tax purposes, a subsidiary is defined as a controlled foreign corporation if US shareholders own more than 50% of its voting stock, or more than 50% of the value of all its outstanding stock (directly, indirectly, or constructively) on any day of the year.
Here's how they work. Under the US tax code, American corporations must pay taxes on income earned in foreign countries. But if a company incorporates a subsidiary under the laws of a foreign nation, the subsidiary is not considered a US resident, it is considered a foreign citizen. This allows the US parent company to avoid paying US taxes on the subsidiary's income as long as the income is retained and reinvested outside the US.
So by filing a few incorporation papers and paying a small fee to a foreign government Halliburton can turn a subsidiary into a foreign corporation that can avoid paying any US income tax. Its that easy.
Overall, the tax saving generated by Halliburton's tax havens, and the correlative tax loss to American taxpayers, is enormous. For example, in 2002, Halliburton only paid $15 million of its $80 million tax bill (or 19%) to the US government. The remaining 81% went to foreign governments.
Bob McIntyre, the director of Citizens for Tax Justice, talks about tax havens engaging in complex deals to shelter their profits, "The more these companies can bounce things around offshore, the more profit that can be kept offshore and tax free," McIntyre says. "They shouldn't get away with it, but it is really hard to police."
This may be true, but I think Bob would agree that with Cheney in the VP office, Halliburton gets away with a lot more than other corporations do.
(2) How To Do Business With Terrorists
Cheney and Halliburton were a match made in heaven. Together they found ways to make money off of just about every known terrorist country on God's green earth, regardless of the strict US laws against it.
While Cheney was CEO, American companies were barred from doing business with Iran. So the company set up an address in the Cayman Islands. The TV news program 60 Minutes did an investigation of a subsidiary called Halliburton Products and Services, and discovered that the company had no office or employees. The only sign of the phantom company was a forwarding address to Houston, Texas.
The 60 Minutes reporter traveled to the Cayman Islands, went to the address listed for Halliburton Products, and found a building owned by a local bank and a bank employee who told him that when mail arrived for Halliburton Products, it was forwarded directly to Houston, Texas.
The company's luck might be running out because this particular subsidiary has recently come under new scrutiny. A grand jury is said to be examining whether it is truly independent and whether Halliburton violated federal sanctions by operating in Iran.
The LA Times explains that US companies are allowed to operate in Iran, but under strict guidelines requiring that their subsidiaries have a foreign registry, and no US employees, and that they act independently of the parent company. So in a nutshell, it boils down to whether Halliburton Products met those criteria.
The Treasury Department website details US sanctions that bar almost all trade with Iran, and says that, "No US person may approve or facilitate the entry into or performance of transactions or contracts with Iran by a foreign subsidiary of a US firm that the US person is precluded from performing directly. Similarly, no US person may facilitate such transactions by unaffiliated foreign persons," it says.
According to media reports, investigators are examining Halliburton documents dating back to 1997 - 1998 that relate to a Dubai based subsidiary that received several tender offers from Kala Ltd, which is a subsidiary of the National Iranian Oil Company. Investigators want to know whether the deals were completed and whether they were in violation of US sanctions against Iran.
So, is Halliburton worried? Apparently not. It has known since 2001, that the Office of Foreign Assets Control (OFAC) was conducting an investigation to determine whether the company violated the ban, and it still went right on doing business with Iran. In fact in 2003, Halliburton's subsidiary was used to sell $63 million worth of oil products to Iran.
Something must have turned up because the OFAC recently referred the matter over to the Justice Department for investigation, which in turn prompted the Justice Department to issue a subpoena that calls on Halliburton to provide documents relating to its business relationships with Iran. It will be interesting to see what information Halliburton turns over (if anything).
But this trading with the enemy is nothing new. While Cheney was CEO, Halliburton even used subsidiaries to make tens of millions of dollars off Iraq. According to UN records and industry executives quoted in the Washington Post, Halliburton held stakes in 2 firms that sold over $73 million in oil production equipment and spare parts to Iraq.
And yet, listen to what that pathological liar said when he running for VP and was interviewed on ABC's "This Week" on July 30 2000. "I had a firm policy that we wouldn't do anything in Iraq, even arrangements that were supposedly legal. We've not done any business in Iraq since U.N. sanction were imposed...," Cheney claimed. He really needs to get some help for that compulsive lying disorder. Its obviously out of control.
Halliburton has been doing business with known terrorists for years. Back in 1995, it was fined $3.8 million for doing business with Libya. The company sold tools to Libya that critics said could be used to trigger nuclear bombs. So be sure to keep in mind whenever Bush starts bragging about dismantling Libya's WMD program, that it was Halliburton that helped create it in the first place.
(3) How To Stonewall Investigations and Stay Out Of Prison
Halliburton is the all-time pro at fraudulent scams and war profiteering. And its top level executives are pros at stonewalling investigations and finding ways to stay out of prison.
Under Cheney's watch, the company was caught over-billing the government time and time again. In 1997, the GAO caught Halliburton charging $85.98 for a sheet of plywood that only cost $14.06. A 2000 follow-up investigation caught it charging tax payers for cleaning the exact same office space 4 times a day. So what happened to Halliburton as a result of these lengthily and expensive investigations? Nothing until 2002. Then it was fined $2 million for defrauding the government and that's it.
And nobody better think for one minute that the company has turned over a new leaf just because it was forced to pay a few million in fines. That is never going to happen. By now, I'm convinced that Halliburton estimates the cost of potential fines and lists them under "war profiteering expenses" when it submits the bid. Of course, that's if its even required to submit bid.
For example, as recently as January 2004, Halliburton employees were caught accepting $6.3 million in kickbacks from a Kuwaiti subcontractor. The company paid back the $6.3 million, said it fired the employees, and went right on as if nothing had ever happened.
In fact, the administration not only ignored the kickbacks, it gave Halliburton another $1.2 billion contract. Republican Congressman Tom Davis, Chairman of the House Committee on Government Reform, even said, "It's incomprehensible that the [Bush] Administration could give Halliburton another billion-dollar contract without fully investigating such serious criminal wrongdoing." Well incomprehensible or not, it did.
Here's another good example of Halliburton officials stonewalling and avoiding prison. In May of 2003, Halliburton was forced to admit to the SEC that it had paid $2.4 million in bribes to officials of Nigeria's Federal Inland Revenue Service in 2001 and 2002 "to obtain favorable tax treatment."
Halliburton put all the blame on a couple of lowly employees and claimed that none of its senior officers were involved in the bribe. But as the Houston Chronicle pointed out, "left unanswered is how a 'low-level employee' could channel that much money from the company to the pockets of a corrupt official."
So what are they asking us to believe? That 2 employees took a brown paper bag to an ATM machine and made withdrawals of $2.4 million? Oh Please!
We are talking here about ripping off hundreds of millions of dollars from the US government (aka the taxpayers), and yet no matter how bad it gets, there are never any arrests.
In fact, the SEC might even end up letting the $2.4 million bribery case slide, because it has far bigger fish to fry. As of July 2004, the French, British, Nigerian and US governments are all investigating allegations that Halliburton and three other companies paid $180 million in bribes to Nigerian officials in exchange for a $6 billion contract to build a natural gas plant in Nigeria, while Cheney was CEO.
French police started the initial investigation into the matter way back in October, 2002. In June 2003, the chief prosecutor on the case believed that there was enough evidence to appoint anti-corruption judge, Renaud van Ruymbeke, to expand the investigation.
This second case is far more complicated because it involves an international consortium between Halliburton and three other companies from France, Italy, and Japan. Together, they formed the joint venture TSKJ, a company registered in Medeira, Portugal.
TSKJ was then awarded the $6 billion contract. But here's where it gets tricky for Halliburton because the alleged bribery payments were made through TSKJ, and Halliburton owns 25% of the company.
According to the Washington Post, "at the heart of the investigation is the question of whether those payments amounted to illegal commissions, or bribes, to Nigerian public officials." The payments were made during Cheney's tenure, and according to the Boson Globe, "If such payments were made and Cheney approved them, he could be guilty of violating the U.S. Foreign Corrupt Practices Act."
Ex-Halliburton consultant, Attorney Jeffrey Tesler, says that Cheney knew all about the bribes. Tesler testified under oath in May, 2004 that he made payments to Jack Stanley, while Stanley was president of Halliburton subsidiary KBR, and Tesler specifically said that Cheney approved the payments.
His testimony is backed up by banking records that show that at least $5 million in payments were wired to Stanley through a secret bank account in Zurich. Tesler also testified that he paid $350,000 to another Halliburton executive, William Chaudran, through a secret bank account on the isle of Jersey.
On June 18, 2004, Halliburton announced that it was cutting its ties with Jack Stanley. But there's good news for Stanley in France. Judge Ruymbeke is said to be offering him a deal if he implicates Cheney, and sources within the French legal system say that there is more than enough evidence to indict Cheney on charges of bribery, money laundering and misuse of corporate assets.
It's Definitely Time To Lawyer Up
Halliburton knows it's in big trouble with this case. Cheney might have pull in the US but not France. In February 2004, Halliburton hired Attorney James Doty, from (where else but) the Baker-Botts law firm.
Doty just happens to be the same attorney that Bush hired when he bought the Texas Rangers, and he was also general counsel to the SEC when it investigated Bush for insider trading while he was a director on the board of Harken Energy. What a tight-knit little group. I guess birds of a feather definitely do flock together.
Something I heard recently suddenly makes sense. Halliburton apparently purchased some kind of insurance policy to cover legal expenses that Cheney might incur as a direct result of problems arising from his employment with Halliburton. Now it becomes clear.
Well lets hope that's true and that they get Cheney a good attorney too, because the way things stand right now, he may very well be looking at criminal indictments for the some of the illegal activities he engaged in while CEO of Halliburton. With such a long history of corrupt business deals hanging over his head, its no wonder that he has heart trouble.
I bet Cheney longs for the good old days of Campaign 2000, when his only legal problems consisted of trying to hide drunk driving arrests, and worrying about whether, if elected Vice President, he could get into Canada since he was a two-time convicted criminal.
Evelyn Pringle
Dick Cheney is too modest to list his past accomplishments as CEO of Halliburton on the White House Website, so I decided to give him a few pointers on writing a resume to submit to future employers when he leaves the White House in January 2005.
I would definitely keep the focus on three areas of expertise: (1) Setting up fraudulent tax havens to avoid paying US taxes; (2) Doing business with terrorist countries; and (3) Stonewalling criminal investigations without going to prison.
(1) How To Set Up Fraudulent Corporate Tax Havens
As CEO of Halliburton, Cheney did rack up a number of accomplishments. He increased Halliburton's offshore tax haven subsidiaries nearly 5-fold. The company currently has 143 subsidiaries, but only 36 are incorporated in the US. The other 107 are located in other countries. According to CitizenWorks.org, Halliburton is 8th on the Fortune 500 list of companies with the most offshore tax havens.
For tax purposes, a subsidiary is defined as a controlled foreign corporation if US shareholders own more than 50% of its voting stock, or more than 50% of the value of all its outstanding stock (directly, indirectly, or constructively) on any day of the year.
Here's how they work. Under the US tax code, American corporations must pay taxes on income earned in foreign countries. But if a company incorporates a subsidiary under the laws of a foreign nation, the subsidiary is not considered a US resident, it is considered a foreign citizen. This allows the US parent company to avoid paying US taxes on the subsidiary's income as long as the income is retained and reinvested outside the US.
So by filing a few incorporation papers and paying a small fee to a foreign government Halliburton can turn a subsidiary into a foreign corporation that can avoid paying any US income tax. Its that easy.
Overall, the tax saving generated by Halliburton's tax havens, and the correlative tax loss to American taxpayers, is enormous. For example, in 2002, Halliburton only paid $15 million of its $80 million tax bill (or 19%) to the US government. The remaining 81% went to foreign governments.
Bob McIntyre, the director of Citizens for Tax Justice, talks about tax havens engaging in complex deals to shelter their profits, "The more these companies can bounce things around offshore, the more profit that can be kept offshore and tax free," McIntyre says. "They shouldn't get away with it, but it is really hard to police."
This may be true, but I think Bob would agree that with Cheney in the VP office, Halliburton gets away with a lot more than other corporations do.
(2) How To Do Business With Terrorists
Cheney and Halliburton were a match made in heaven. Together they found ways to make money off of just about every known terrorist country on God's green earth, regardless of the strict US laws against it.
While Cheney was CEO, American companies were barred from doing business with Iran. So the company set up an address in the Cayman Islands. The TV news program 60 Minutes did an investigation of a subsidiary called Halliburton Products and Services, and discovered that the company had no office or employees. The only sign of the phantom company was a forwarding address to Houston, Texas.
The 60 Minutes reporter traveled to the Cayman Islands, went to the address listed for Halliburton Products, and found a building owned by a local bank and a bank employee who told him that when mail arrived for Halliburton Products, it was forwarded directly to Houston, Texas.
The company's luck might be running out because this particular subsidiary has recently come under new scrutiny. A grand jury is said to be examining whether it is truly independent and whether Halliburton violated federal sanctions by operating in Iran.
The LA Times explains that US companies are allowed to operate in Iran, but under strict guidelines requiring that their subsidiaries have a foreign registry, and no US employees, and that they act independently of the parent company. So in a nutshell, it boils down to whether Halliburton Products met those criteria.
The Treasury Department website details US sanctions that bar almost all trade with Iran, and says that, "No US person may approve or facilitate the entry into or performance of transactions or contracts with Iran by a foreign subsidiary of a US firm that the US person is precluded from performing directly. Similarly, no US person may facilitate such transactions by unaffiliated foreign persons," it says.
According to media reports, investigators are examining Halliburton documents dating back to 1997 - 1998 that relate to a Dubai based subsidiary that received several tender offers from Kala Ltd, which is a subsidiary of the National Iranian Oil Company. Investigators want to know whether the deals were completed and whether they were in violation of US sanctions against Iran.
So, is Halliburton worried? Apparently not. It has known since 2001, that the Office of Foreign Assets Control (OFAC) was conducting an investigation to determine whether the company violated the ban, and it still went right on doing business with Iran. In fact in 2003, Halliburton's subsidiary was used to sell $63 million worth of oil products to Iran.
Something must have turned up because the OFAC recently referred the matter over to the Justice Department for investigation, which in turn prompted the Justice Department to issue a subpoena that calls on Halliburton to provide documents relating to its business relationships with Iran. It will be interesting to see what information Halliburton turns over (if anything).
But this trading with the enemy is nothing new. While Cheney was CEO, Halliburton even used subsidiaries to make tens of millions of dollars off Iraq. According to UN records and industry executives quoted in the Washington Post, Halliburton held stakes in 2 firms that sold over $73 million in oil production equipment and spare parts to Iraq.
And yet, listen to what that pathological liar said when he running for VP and was interviewed on ABC's "This Week" on July 30 2000. "I had a firm policy that we wouldn't do anything in Iraq, even arrangements that were supposedly legal. We've not done any business in Iraq since U.N. sanction were imposed...," Cheney claimed. He really needs to get some help for that compulsive lying disorder. Its obviously out of control.
Halliburton has been doing business with known terrorists for years. Back in 1995, it was fined $3.8 million for doing business with Libya. The company sold tools to Libya that critics said could be used to trigger nuclear bombs. So be sure to keep in mind whenever Bush starts bragging about dismantling Libya's WMD program, that it was Halliburton that helped create it in the first place.
(3) How To Stonewall Investigations and Stay Out Of Prison
Halliburton is the all-time pro at fraudulent scams and war profiteering. And its top level executives are pros at stonewalling investigations and finding ways to stay out of prison.
Under Cheney's watch, the company was caught over-billing the government time and time again. In 1997, the GAO caught Halliburton charging $85.98 for a sheet of plywood that only cost $14.06. A 2000 follow-up investigation caught it charging tax payers for cleaning the exact same office space 4 times a day. So what happened to Halliburton as a result of these lengthily and expensive investigations? Nothing until 2002. Then it was fined $2 million for defrauding the government and that's it.
And nobody better think for one minute that the company has turned over a new leaf just because it was forced to pay a few million in fines. That is never going to happen. By now, I'm convinced that Halliburton estimates the cost of potential fines and lists them under "war profiteering expenses" when it submits the bid. Of course, that's if its even required to submit bid.
For example, as recently as January 2004, Halliburton employees were caught accepting $6.3 million in kickbacks from a Kuwaiti subcontractor. The company paid back the $6.3 million, said it fired the employees, and went right on as if nothing had ever happened.
In fact, the administration not only ignored the kickbacks, it gave Halliburton another $1.2 billion contract. Republican Congressman Tom Davis, Chairman of the House Committee on Government Reform, even said, "It's incomprehensible that the [Bush] Administration could give Halliburton another billion-dollar contract without fully investigating such serious criminal wrongdoing." Well incomprehensible or not, it did.
Here's another good example of Halliburton officials stonewalling and avoiding prison. In May of 2003, Halliburton was forced to admit to the SEC that it had paid $2.4 million in bribes to officials of Nigeria's Federal Inland Revenue Service in 2001 and 2002 "to obtain favorable tax treatment."
Halliburton put all the blame on a couple of lowly employees and claimed that none of its senior officers were involved in the bribe. But as the Houston Chronicle pointed out, "left unanswered is how a 'low-level employee' could channel that much money from the company to the pockets of a corrupt official."
So what are they asking us to believe? That 2 employees took a brown paper bag to an ATM machine and made withdrawals of $2.4 million? Oh Please!
We are talking here about ripping off hundreds of millions of dollars from the US government (aka the taxpayers), and yet no matter how bad it gets, there are never any arrests.
In fact, the SEC might even end up letting the $2.4 million bribery case slide, because it has far bigger fish to fry. As of July 2004, the French, British, Nigerian and US governments are all investigating allegations that Halliburton and three other companies paid $180 million in bribes to Nigerian officials in exchange for a $6 billion contract to build a natural gas plant in Nigeria, while Cheney was CEO.
French police started the initial investigation into the matter way back in October, 2002. In June 2003, the chief prosecutor on the case believed that there was enough evidence to appoint anti-corruption judge, Renaud van Ruymbeke, to expand the investigation.
This second case is far more complicated because it involves an international consortium between Halliburton and three other companies from France, Italy, and Japan. Together, they formed the joint venture TSKJ, a company registered in Medeira, Portugal.
TSKJ was then awarded the $6 billion contract. But here's where it gets tricky for Halliburton because the alleged bribery payments were made through TSKJ, and Halliburton owns 25% of the company.
According to the Washington Post, "at the heart of the investigation is the question of whether those payments amounted to illegal commissions, or bribes, to Nigerian public officials." The payments were made during Cheney's tenure, and according to the Boson Globe, "If such payments were made and Cheney approved them, he could be guilty of violating the U.S. Foreign Corrupt Practices Act."
Ex-Halliburton consultant, Attorney Jeffrey Tesler, says that Cheney knew all about the bribes. Tesler testified under oath in May, 2004 that he made payments to Jack Stanley, while Stanley was president of Halliburton subsidiary KBR, and Tesler specifically said that Cheney approved the payments.
His testimony is backed up by banking records that show that at least $5 million in payments were wired to Stanley through a secret bank account in Zurich. Tesler also testified that he paid $350,000 to another Halliburton executive, William Chaudran, through a secret bank account on the isle of Jersey.
On June 18, 2004, Halliburton announced that it was cutting its ties with Jack Stanley. But there's good news for Stanley in France. Judge Ruymbeke is said to be offering him a deal if he implicates Cheney, and sources within the French legal system say that there is more than enough evidence to indict Cheney on charges of bribery, money laundering and misuse of corporate assets.
It's Definitely Time To Lawyer Up
Halliburton knows it's in big trouble with this case. Cheney might have pull in the US but not France. In February 2004, Halliburton hired Attorney James Doty, from (where else but) the Baker-Botts law firm.
Doty just happens to be the same attorney that Bush hired when he bought the Texas Rangers, and he was also general counsel to the SEC when it investigated Bush for insider trading while he was a director on the board of Harken Energy. What a tight-knit little group. I guess birds of a feather definitely do flock together.
Something I heard recently suddenly makes sense. Halliburton apparently purchased some kind of insurance policy to cover legal expenses that Cheney might incur as a direct result of problems arising from his employment with Halliburton. Now it becomes clear.
Well lets hope that's true and that they get Cheney a good attorney too, because the way things stand right now, he may very well be looking at criminal indictments for the some of the illegal activities he engaged in while CEO of Halliburton. With such a long history of corrupt business deals hanging over his head, its no wonder that he has heart trouble.
I bet Cheney longs for the good old days of Campaign 2000, when his only legal problems consisted of trying to hide drunk driving arrests, and worrying about whether, if elected Vice President, he could get into Canada since he was a two-time convicted criminal.
Halliburton Contracts Illegal - But Bush Busts The Whistleblower
Evelyn Pringle August 31, 2005
In October, 2004, Bunnatine Greenhouse, a top military official responsible for making sure the Army Corps of Engineers complies with contracting rules, came forward and revealed that top Pentagon officials showed improper favoritism to Halliburton when awarding military contracts.
The allegations made by this official were first reported by Time Magazine.
Greenhouse said that when the Pentagon awarded Halliburton a five-year $7 billion contract, it pressured her to withdraw her objections, actions which she claimed were unprecedented in her experience.
In a letter from her attorney's office, Greenhouse told members of Congress that the Army gave the no-bid contracts to Halliburton's subsidiary KBR for political reasons.
Greenhouse charged that contracts were approved over her reservations, some of which were handwritten on the original contracts, and extensions of contracts were awarded because underlings signed them in collusion with senior officials without her knowledge.
A five-year Iraq contract was awarded less than a month before the invasion, under a clause which allowed for no-bid contracts in the case of a "compelling emergency." Greenhouse contends that she objected to the 5-year terms of the contract, questioning the probability of an emergency lasting for five years.
When her superiors signed off on the contract and sent it back for her approval, she wrote the following message next to her signature: "I caution that extending this sole-source effort beyond a one year period could convey an invalid perception that there is not strong intent for a limited competition."
Federal contracting rules say contracts must be awarded by career civil servants, not political appointees. Greenhouse claimed the Army ignored this requirement when giving contracts to Halliburton and violated "the integrity of the federal contracting program as it relates to a major defense contractor."
"Employees of the U.S. government have taken improper action that favored KBR's interests," Greenhouse wrote. "This conduct has violated specific regulations and calls into question the independence" of the contracting process, she said.
She also said the Army altered documents in order to justify the Halliburton's contract work in the Balkans. In a letter from Michael Kohn, Greenhouse's attorney, to then acting Army Secretary Les Brownlee, Greenhouse charged that on a Balkan's contract, a deputy assistant secretary of the Army had ordered changes in documents to legitimize the contract "for political reasons."
According to Kohn's letter, in January 2002, Greenhouse sent an investigative team to review the Halliburton operation in the Balkans. After which she reported: "The general feeling in the theater is that the contractor (KBR) is 'out of control'" and was able to manipulate Corps of Engineer officials.
The Balkan's contract was scheduled to expire no later than May 27, 2004. However, it was extended without Greenhouse's knowledge, after a search for other contractors was stopped. Although the contract was originally awarded a "compelling emergency" exception, the extended contract was awarded under another exception, that KBR was the "one and only source."
Nothing was ever done about the illegal contracts awarded to Halliburton. Instead, less than a year after she reported these blatant violations of procurement law, Bush decided to bust the Whistleblower, Ms Greenhouse.
The August 29, 2005 New York Times reports: "A top Army contracting official who criticized a large, noncompetitive contract with the Halliburton Company for work in Iraq was demoted Saturday for what the Army called poor job performance.
"The official, Bunnatine H. Greenhouse," the Times wrote, "has worked in military procurement for 20 years and for the past several years had been the chief overseer of contracts at the Army Corps of Engineers, the agency that has managed much of the reconstruction work in Iraq."
Ms Greenhouse's lawyer, Michael Kohn, "called the action an "obvious reprisal" for the strong objections she raised in 2003 to a series of corps decisions involving the Halliburton subsidiary Kellogg Brown & Root, which has garnered more than $10 billion for work in Iraq," according to the Times.
Whistleblower Told The Truth
When Cheney appeared on NBC's Meet the Press on Sept 14, 2003, he arrogantly stated: "And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government."
And when Cheney was specifically asked whether he had known about Halliburton's no-bid contract, he said, "I don't know any of the details of the contract because I deliberately stayed away from any information on that."
Those statements were proven false on June, 2004, by an article in Time Magazine entitled, “The Paper Trail: Did Cheney Okay a Deal?”
The truth is, Bush and Cheney both were informed that Halliburton would get the contract before it was ever awarded. Time Magazine quoted an email sent by the Army Corps of Engineers, that said the contract for construction of oil pipelines was approved by Under Secretary of Defense Douglas Feith “contingent on informing WH tomorrow. We anticipate no issues since action has been coordinated w VP’s [Vice President’s] office.”
The author of the email, Stephen Browning, said in an interview that he wrote the memo after he and retired Lt Gen Jay Garner met with Douglas Feith about plans to declassify the earlier $1.8 million contract with the Halliburton.
According to Browning, Feith told him that he had already informed Cheney's office.
The email was dated March 5, 2003, and Halliburton was awarded the contract three days later without allowing for any bids from other companies.
The email totally contradicts Cheney's televised claims that he had no involvement in Halliburton's contracts whatsoever and proves that Cheney and the White House played a key role in boosting Halliburton into the number one war profiteering position in Iraq.
When confronted with the email, Bush dismissed it by saying the Corp of Engineers was just trying to give the Vice President's office a heads-up on the process. Now I suppose people's opinions could vary as to what the email actually meant, depending on what the definition of co-or-di-na-ted is.
No Political Appointees Were Involved - None
In the heat of the debate over Halliburton contracts, some readers may recall a news conference, where Richard Boucher, spokesman for State Department at the time, explained how decisions are made on military contracts. "The decisions are made by career procurement officials. There's a separation, a wall, between them and political-level questions when they're doing the contracts," he said.
Then the chief counsel of the Army Corp of Engineers appeared on "60 Minutes" where he denied that there was any involvement by political appointees in the Halliburton contract. He specifically said: "The procurement of this particular contract was done by career civil servants."
We also heard from a spokesman from the Department of Defense, Major Joseph Yoswa, who claimed safeguards existed to insure that the process was free of favoritism. "Most important,” he said, “career civil servants, not political appointees, make final decisions on contracts," according to The New Yorker.
Next Halliburton spokeswoman, Wendy Hall, stepped up to the mike in August, 2003, and said Halliburton's military contracts were awarded "not by politicians but by government civil servants, under strict guidelines."
Finally, during a hearing on March 11, 2004, before the Government Reform Committee, six senior government officials from the CPA and DOD testified under oath, and were each asked the following question by Republican Committee Chairman, Tom Davis:
"I want to get this on the record, and everybody is under oath. Have you or anyone in your office ever discussed with the Vice President or with his office the award of a contract for Iraqi reconstruction prior to any contract being awarded?"
Every single one of those six officials said "no sir," which means every single one of them lied under oath. I may not know how Cheney got this number of people to lie under oath, but the fact is he did it and nothing was ever done about it.
Three months after the hearing, the June 14, 2004, LA Times reported: "The Pentagon admitted that a $7 billion no-bid contract to extinguish oil fires in Iraq was awarded to Halliburton after a political appointee from the Bush administration recommended the company for the job."
The political appointee referred to was Michael Mobbs, a special assistant to Undersecretary of Defense Douglas Feith.
During the Summer of 2002, the Times wrote, "Mobbs was in charge of the Pentagon's Energy Infrastructure Planning Group (EIPG) to develop a plan for reconstructing Iraq's oil industry."
This is how the Halliburton contract got set up. In November 2002, a Pentagon group led by Mobbs (under Cheney's instruction), came up with the idea to pay Halliburton $1.9 million to develop a secret contingency plan for handling the Iraqi oil industry. Its important to understand that it was this order to develop a contingency plan, that ultimately led to the firm being awarded the $7 billion oil infrastructure contract.
To ensure that Halliburton would get the contract, Cheney used the exact same strategy that he developed back when he was secretary of defense during the first Bush Presidency. The way it works is actually quite simple. Halliburton gets funding to create a market for its services and then it becomes the logical company to carry out the plan when the time for awarding contracts rolls around.
I'm sure no one needs reminding of how well this plan paid off for Cheney when he left office in 1992 and soon thereafter became very gainfully employed with Halliburton. Ten years later, his method of contract manipulation worked like a charm again.
According to testimony at a House oversight hearing, by GAO investigator, William Woods, it was discovered that Michael Mobbs even acknowledged in a memo that the $1.9 million task order would uniquely position Halliburton to win the far larger sole-source contract to actually do the restoration work to Iraqi oil fields.
In fact, Mobbs himself later admitted that he had described the contingency plan in a meeting of the Deputies' Committee to an audience that including Cheney's chief of staff, Scooter Libby, Rice's deputy national security adviser, Steven Hadley (guy who took the fall for the 16 words about uranium in Africa in Bush's state of the union address), the deputy secretaries of state and defense, and the deputy director of the CIA.
On March 8, 2003, Halliburton was awarded the $7 billion contract and the war began on March 20, 2003.
When the topic of the no-bid contract came up in the media, Bush claimed that it was merely a deal to put out oil well fires. However, Pentagon officials were soon forced to admit that it was a very big deal and would in fact amount to billions of dollars for Halliburton. But even then, the story of the day was that the contract was only temporary and would be replaced by competitive bidding shortly.
After months of senseless delays, new contracts were finally awarded on January 16, 2004 but once again, Halliburton netted the top prize. The Parsons Corporation was awarded an $800 million contract, but the $1.2 billion contract went to Halliburton.
During a June 8, 2004, briefing to staff members of the House Committee on Government Reform, Mobbs and Pentagon officials were asked about the specific details of the contracting procedure that was employed with Halliburton.
Before making a final decision, Mobbs admitted that he briefed top officials from several executive agencies, in the Deputies Committee, to make sure they had no objections. According to Mobbs, White House Staff members were also at the meeting. After that meeting, Mobb's said that a White House official told Douglas Feith that the group did not object.
These disclosures prove that Cheney and Bush were informed about the Halliburton contracts on at least two key occasions during the procurement process.
So we've got all these high level officials plotting together for 6 months to set up a plan to hand Halliburton billions of dollars, and Bush and Cheney expect us to believe that not one of these guys uttered a word about contracts to either one of them.
And the media is no help.
During the Clinton administration, it chased after a stupid story about a 20-year-old land deal involving $100,000 (hardly the crime of the century) for 8 years and to this day, I still have never figured out what they were expecting to find exactly. I do know one thing, it wasn't that the Clintons and their cronies were accused of funneling billions of tax dollars through the bodies of our slain and injured young soldiers like what is going on right now in the Bush administration.
The media in fact spends very little effort and time investigating and reporting on the real crimes within the current administration, even when they involve fraud and corruption by officials at every level of government who are openly handing our tax dollars to war profiteers to the tune of a billion dollars a month.
I often find myself wondering whether the mainstream media has been bought off entirely.
Who's Next In Line For Retaliation?
The question is, who's next? Greenhouse wasn't the only official to report on the illegal procurement practices of the Bush administration. According to a report on an investigation of Halliburton by the Government Accounting Office titled, Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges, contracts worth billions of dollars were awarded to Halliburton without full and open competition, including Iraq's oil infrastructure contract.
The GAO determined that the administration had violated procurement law when it issued various task orders under already existing contracts and that out of 11 task orders examined, more than half were awarded outside the scope of their contracts.
As an example of the inept procurement process, the GAO report described how "a military review board approved a six-month renewal contract with Halliburton worth $587 million in just ten minutes and based on only six pages of documentation."
After wasting millions of tax dollars conducting the investigation, the GAO concluded that the contracts should have never been awarded to the company in the first place and yet Halliburton remains the number one contractor in Iraq. Go figure.
In October, 2004, Bunnatine Greenhouse, a top military official responsible for making sure the Army Corps of Engineers complies with contracting rules, came forward and revealed that top Pentagon officials showed improper favoritism to Halliburton when awarding military contracts.
The allegations made by this official were first reported by Time Magazine.
Greenhouse said that when the Pentagon awarded Halliburton a five-year $7 billion contract, it pressured her to withdraw her objections, actions which she claimed were unprecedented in her experience.
In a letter from her attorney's office, Greenhouse told members of Congress that the Army gave the no-bid contracts to Halliburton's subsidiary KBR for political reasons.
Greenhouse charged that contracts were approved over her reservations, some of which were handwritten on the original contracts, and extensions of contracts were awarded because underlings signed them in collusion with senior officials without her knowledge.
A five-year Iraq contract was awarded less than a month before the invasion, under a clause which allowed for no-bid contracts in the case of a "compelling emergency." Greenhouse contends that she objected to the 5-year terms of the contract, questioning the probability of an emergency lasting for five years.
When her superiors signed off on the contract and sent it back for her approval, she wrote the following message next to her signature: "I caution that extending this sole-source effort beyond a one year period could convey an invalid perception that there is not strong intent for a limited competition."
Federal contracting rules say contracts must be awarded by career civil servants, not political appointees. Greenhouse claimed the Army ignored this requirement when giving contracts to Halliburton and violated "the integrity of the federal contracting program as it relates to a major defense contractor."
"Employees of the U.S. government have taken improper action that favored KBR's interests," Greenhouse wrote. "This conduct has violated specific regulations and calls into question the independence" of the contracting process, she said.
She also said the Army altered documents in order to justify the Halliburton's contract work in the Balkans. In a letter from Michael Kohn, Greenhouse's attorney, to then acting Army Secretary Les Brownlee, Greenhouse charged that on a Balkan's contract, a deputy assistant secretary of the Army had ordered changes in documents to legitimize the contract "for political reasons."
According to Kohn's letter, in January 2002, Greenhouse sent an investigative team to review the Halliburton operation in the Balkans. After which she reported: "The general feeling in the theater is that the contractor (KBR) is 'out of control'" and was able to manipulate Corps of Engineer officials.
The Balkan's contract was scheduled to expire no later than May 27, 2004. However, it was extended without Greenhouse's knowledge, after a search for other contractors was stopped. Although the contract was originally awarded a "compelling emergency" exception, the extended contract was awarded under another exception, that KBR was the "one and only source."
Nothing was ever done about the illegal contracts awarded to Halliburton. Instead, less than a year after she reported these blatant violations of procurement law, Bush decided to bust the Whistleblower, Ms Greenhouse.
The August 29, 2005 New York Times reports: "A top Army contracting official who criticized a large, noncompetitive contract with the Halliburton Company for work in Iraq was demoted Saturday for what the Army called poor job performance.
"The official, Bunnatine H. Greenhouse," the Times wrote, "has worked in military procurement for 20 years and for the past several years had been the chief overseer of contracts at the Army Corps of Engineers, the agency that has managed much of the reconstruction work in Iraq."
Ms Greenhouse's lawyer, Michael Kohn, "called the action an "obvious reprisal" for the strong objections she raised in 2003 to a series of corps decisions involving the Halliburton subsidiary Kellogg Brown & Root, which has garnered more than $10 billion for work in Iraq," according to the Times.
Whistleblower Told The Truth
When Cheney appeared on NBC's Meet the Press on Sept 14, 2003, he arrogantly stated: "And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government."
And when Cheney was specifically asked whether he had known about Halliburton's no-bid contract, he said, "I don't know any of the details of the contract because I deliberately stayed away from any information on that."
Those statements were proven false on June, 2004, by an article in Time Magazine entitled, “The Paper Trail: Did Cheney Okay a Deal?”
The truth is, Bush and Cheney both were informed that Halliburton would get the contract before it was ever awarded. Time Magazine quoted an email sent by the Army Corps of Engineers, that said the contract for construction of oil pipelines was approved by Under Secretary of Defense Douglas Feith “contingent on informing WH tomorrow. We anticipate no issues since action has been coordinated w VP’s [Vice President’s] office.”
The author of the email, Stephen Browning, said in an interview that he wrote the memo after he and retired Lt Gen Jay Garner met with Douglas Feith about plans to declassify the earlier $1.8 million contract with the Halliburton.
According to Browning, Feith told him that he had already informed Cheney's office.
The email was dated March 5, 2003, and Halliburton was awarded the contract three days later without allowing for any bids from other companies.
The email totally contradicts Cheney's televised claims that he had no involvement in Halliburton's contracts whatsoever and proves that Cheney and the White House played a key role in boosting Halliburton into the number one war profiteering position in Iraq.
When confronted with the email, Bush dismissed it by saying the Corp of Engineers was just trying to give the Vice President's office a heads-up on the process. Now I suppose people's opinions could vary as to what the email actually meant, depending on what the definition of co-or-di-na-ted is.
No Political Appointees Were Involved - None
In the heat of the debate over Halliburton contracts, some readers may recall a news conference, where Richard Boucher, spokesman for State Department at the time, explained how decisions are made on military contracts. "The decisions are made by career procurement officials. There's a separation, a wall, between them and political-level questions when they're doing the contracts," he said.
Then the chief counsel of the Army Corp of Engineers appeared on "60 Minutes" where he denied that there was any involvement by political appointees in the Halliburton contract. He specifically said: "The procurement of this particular contract was done by career civil servants."
We also heard from a spokesman from the Department of Defense, Major Joseph Yoswa, who claimed safeguards existed to insure that the process was free of favoritism. "Most important,” he said, “career civil servants, not political appointees, make final decisions on contracts," according to The New Yorker.
Next Halliburton spokeswoman, Wendy Hall, stepped up to the mike in August, 2003, and said Halliburton's military contracts were awarded "not by politicians but by government civil servants, under strict guidelines."
Finally, during a hearing on March 11, 2004, before the Government Reform Committee, six senior government officials from the CPA and DOD testified under oath, and were each asked the following question by Republican Committee Chairman, Tom Davis:
"I want to get this on the record, and everybody is under oath. Have you or anyone in your office ever discussed with the Vice President or with his office the award of a contract for Iraqi reconstruction prior to any contract being awarded?"
Every single one of those six officials said "no sir," which means every single one of them lied under oath. I may not know how Cheney got this number of people to lie under oath, but the fact is he did it and nothing was ever done about it.
Three months after the hearing, the June 14, 2004, LA Times reported: "The Pentagon admitted that a $7 billion no-bid contract to extinguish oil fires in Iraq was awarded to Halliburton after a political appointee from the Bush administration recommended the company for the job."
The political appointee referred to was Michael Mobbs, a special assistant to Undersecretary of Defense Douglas Feith.
During the Summer of 2002, the Times wrote, "Mobbs was in charge of the Pentagon's Energy Infrastructure Planning Group (EIPG) to develop a plan for reconstructing Iraq's oil industry."
This is how the Halliburton contract got set up. In November 2002, a Pentagon group led by Mobbs (under Cheney's instruction), came up with the idea to pay Halliburton $1.9 million to develop a secret contingency plan for handling the Iraqi oil industry. Its important to understand that it was this order to develop a contingency plan, that ultimately led to the firm being awarded the $7 billion oil infrastructure contract.
To ensure that Halliburton would get the contract, Cheney used the exact same strategy that he developed back when he was secretary of defense during the first Bush Presidency. The way it works is actually quite simple. Halliburton gets funding to create a market for its services and then it becomes the logical company to carry out the plan when the time for awarding contracts rolls around.
I'm sure no one needs reminding of how well this plan paid off for Cheney when he left office in 1992 and soon thereafter became very gainfully employed with Halliburton. Ten years later, his method of contract manipulation worked like a charm again.
According to testimony at a House oversight hearing, by GAO investigator, William Woods, it was discovered that Michael Mobbs even acknowledged in a memo that the $1.9 million task order would uniquely position Halliburton to win the far larger sole-source contract to actually do the restoration work to Iraqi oil fields.
In fact, Mobbs himself later admitted that he had described the contingency plan in a meeting of the Deputies' Committee to an audience that including Cheney's chief of staff, Scooter Libby, Rice's deputy national security adviser, Steven Hadley (guy who took the fall for the 16 words about uranium in Africa in Bush's state of the union address), the deputy secretaries of state and defense, and the deputy director of the CIA.
On March 8, 2003, Halliburton was awarded the $7 billion contract and the war began on March 20, 2003.
When the topic of the no-bid contract came up in the media, Bush claimed that it was merely a deal to put out oil well fires. However, Pentagon officials were soon forced to admit that it was a very big deal and would in fact amount to billions of dollars for Halliburton. But even then, the story of the day was that the contract was only temporary and would be replaced by competitive bidding shortly.
After months of senseless delays, new contracts were finally awarded on January 16, 2004 but once again, Halliburton netted the top prize. The Parsons Corporation was awarded an $800 million contract, but the $1.2 billion contract went to Halliburton.
During a June 8, 2004, briefing to staff members of the House Committee on Government Reform, Mobbs and Pentagon officials were asked about the specific details of the contracting procedure that was employed with Halliburton.
Before making a final decision, Mobbs admitted that he briefed top officials from several executive agencies, in the Deputies Committee, to make sure they had no objections. According to Mobbs, White House Staff members were also at the meeting. After that meeting, Mobb's said that a White House official told Douglas Feith that the group did not object.
These disclosures prove that Cheney and Bush were informed about the Halliburton contracts on at least two key occasions during the procurement process.
So we've got all these high level officials plotting together for 6 months to set up a plan to hand Halliburton billions of dollars, and Bush and Cheney expect us to believe that not one of these guys uttered a word about contracts to either one of them.
And the media is no help.
During the Clinton administration, it chased after a stupid story about a 20-year-old land deal involving $100,000 (hardly the crime of the century) for 8 years and to this day, I still have never figured out what they were expecting to find exactly. I do know one thing, it wasn't that the Clintons and their cronies were accused of funneling billions of tax dollars through the bodies of our slain and injured young soldiers like what is going on right now in the Bush administration.
The media in fact spends very little effort and time investigating and reporting on the real crimes within the current administration, even when they involve fraud and corruption by officials at every level of government who are openly handing our tax dollars to war profiteers to the tune of a billion dollars a month.
I often find myself wondering whether the mainstream media has been bought off entirely.
Who's Next In Line For Retaliation?
The question is, who's next? Greenhouse wasn't the only official to report on the illegal procurement practices of the Bush administration. According to a report on an investigation of Halliburton by the Government Accounting Office titled, Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges, contracts worth billions of dollars were awarded to Halliburton without full and open competition, including Iraq's oil infrastructure contract.
The GAO determined that the administration had violated procurement law when it issued various task orders under already existing contracts and that out of 11 task orders examined, more than half were awarded outside the scope of their contracts.
As an example of the inept procurement process, the GAO report described how "a military review board approved a six-month renewal contract with Halliburton worth $587 million in just ten minutes and based on only six pages of documentation."
After wasting millions of tax dollars conducting the investigation, the GAO concluded that the contracts should have never been awarded to the company in the first place and yet Halliburton remains the number one contractor in Iraq. Go figure.
Halliburton Contracts Illegal - Bush Says So What
Evelyn Pringle February 2005
After millions of tax dollars were spent investigating how Halliburton ended up being awarded billions of dollar worth of no-bid contracts in Iraq, the Government Accounting Office determined that the company should never have been awarded the contracts in the first place.
In response to those findings, Cheney and Bush both, as much as thumbed their noses at tax payers as if to say "so what, what are you going to do about it?" Well, it's beginning to look like they were right, there is nothing we can do about it.
According to the GAO's report, Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges, contracts worth billions of dollars were awarded without full and open competition, including Halliburton’s oil infrastructure contract.
The GAO found that the Bush Administration violated procurement law when it issued various task orders under existing contracts. Of the 11 task orders examined, more than half were awarded outside the scope of their contracts, according to the report.
As an example of the inept procurement process, the GAO told how "a military review board approved a six-month renewal contract with Halliburton worth $587 million in just ten minutes and based on only six pages of documentation," the report said.
Once and For All - How Did Halliburton Get Those Contracts?
Remember back when Cheney appeared on NBC's Meet the Press on Sept 14, 2003, and said, "And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government."
And remember when he was asked whether he had known about Halliburton's noncompetitive contract, and he said, "I don't know any of the details of the contract because I deliberately stayed away from any information on that."
Those statements were proven false by a June, 2004, article in Time Magazine entitled, “The Paper Trail: Did Cheney Okay a Deal?” As it turns out, Bush and Cheney both were informed that Halliburton would get the contract before it was awarded. Time quoted an email sent by the Army Corps of Engineers, that said the contract for construction of oil pipelines was approved by Under Secretary of Defense Douglas Feith “contingent on informing WH tomorrow. We anticipate no issues since action has been coordinated w VP’s [Vice President’s] office.”
This email totally contradicts Cheney's nationally televised assertion that he had no involvement in Halliburton's contracts whatsoever. It proved once and for all that Cheney and the White House had played a key role in making Cheney's ex-employer the number one war profiteer in Iraq.
The email was dated March 5, 2003, and Halliburton was awarded the contract three days later without any bids by other companies.
The administration tried to dismiss the email by saying the employee at the Corp was just trying to give the Vice President's office a heads-up on the process. Now I suppose opinions on what the email mean could differ. However, people's opinions on what it means are likely based on what their definition of co-or-di-na-ted IS.
No Political Appointees Involved - None
Some people may recall the news conference, where State Department spokesman, Richard Boucher, explained who makes the decisions on contracts. "The decisions are made by career procurement officials. There's a separation, a wall, between them and political-level questions when they're doing the contracts," he maintained. Boucher lied.
Then there was the time that the chief counsel of the Army Corp of Engineers appeared on "60 Minutes" and denied that there was any involvement by political appointees in the Halliburton contract. He specifically said: "The procurement of this particular contract was done by career civil servants." Well, I hate to be the bearer of bad news, but this guy is a liar too.
Major Joseph Yoswa, a Department of Defense spokesman, also claimed safeguards existed to insure that the process was free of favoritism. "Most important,” he said, “career civil servants, not political appointees, make final decisions on contracts," according to The New Yorker. As it turns out, the Major has a problem telling the truth as well.
Then back in August, 2003, there was Halliburton spokeswoman, Wendy Hall, who said the company’s military contracts were awarded "not by politicians but by government civil servants, under strict guidelines." I for one, would like to see the list of strict guidelines, and then, I'd like to have the names of the civil servants Wendy dealt with.
Finally, during a March 11, 2004, hearing before the Government Reform Committee, six senior officials from the CPA and DOD testified under oath, and were asked to answer the following question by Republican Committee Chairman, Tom Davis:
"I want to get this on the record, and everybody is under oath. Have you or anyone in your office ever discussed with the Vice President or with his office the award of a contract for Iraqi reconstruction prior to any contract being awarded?"
Every single one of those six officials said "no sir," which means every single one of them lied under oath. So how Cheney could pull this off? How could he get all these people to lie? I may not know how he did it, but the fact is he did it and nothing has been done about it.
Because, according to the June 14, 2004, LA Times, "The Pentagon admitted that a $7 billion no-bid contract to extinguish oil fires in Iraq was awarded to Halliburton after a political appointee from the Bush administration recommended the company for the job. ... the political appointee was Michael Mobbs — a special assistant to Undersecretary of Defense Douglas Feith. During the Summer of 2002, Mobbs was in charge of the Pentagon's Energy Infrastructure Planning Group (EIPG) to develop a plan for reconstructing Iraq's oil industry," the Times reported.
For obvious reasons, contracting experts say political appointees like Mobbs should not decide which companies compete for contracts. "The suggestion that political appointees would be directing that type of investigation does not seem consistent with maintaining the appearance of propriety," expert Steven Schooner told the Times.
How Could They Pull This Off?
In November 2002, long before the war began, a Pentagon group led by Mobbs, deceded to pay Halliburton $1.9 million to develop a secret contingency plan for handling the Iraqi oil industry.
Tax payers need to understand that it was this initial task order to develop a plan, that led to the company being awarded the $7 billion oil infrastructure contract.
Remember the strategy that Cheney's developed back when he was secretary of defense under the first President Bush. It goes like this, you give Halliburton funding so it can create a market for its services and then its the logical company to hire to carry out the plan when it comes time for contracts to be awarded.
In this particular instance, according to testimony by GAO investigator, Willim Woods, at a House oversight hearing, Mobbs even acknowledged in a memo that the $1.9 million task order would uniquely position Halliburton to win the far larger sole-source contract to actually do the restoration work to Iraqi oil fields.
So once again, Cheney’s contract manipulation strategy worked like a charm.
Mott described the Halliburton contingency plan in a meeting of the Deputies Committee. Those attending the meeting included Cheney's chief of staff, Lewis Libby, the deputy national security adviser, Steven Hadley, the deputy secretaries of state and defense, and deputy director of the CIA.
On March 8, 2003, Halliburton was chosen to carry out the plan. When the contract came up in the media, Bush claimed the contract was merely a deal to put out oil well fires. However, it wasn't long before Pentagon officials were forced to admit that it was a big deal and would involve billions of dollars. But even then, they said that the contract was only temporary and would be replaced by competitively bid contracts shortly.
After umteen delays, new contracts were finally awarded on Jan 16, 2004 and surprise, surprise, Halliburton won the big prize again. An $800 million contract went to the Parsons Corporation, and a $1.2 billion contract went to Halliburton.
Bush and Cheney In Up To Their Necks
During a June 8, 2004 briefing to staff members of the House Committee on Government Reform, Pentagon officials, including Mobbs, were asked about the specific details of the contracting procedure that was employed with Halliburton.
Before making a final decision, Mobbs admitted that he briefed top officials from several executive agencies, in the Deputies Committee, to make sure they had no objections. According to Mobbs, White House Staff members were among those at the meeting.
So, we've got Cheney's top dog, Libby, and Rice's second in command, Hadley, and White House staff members, and political appointee, Mobbs, leading the pack. And Bush and Cheney want us to believe that not one of these officials uttered a word about Halliburton contracts to either one of them. Yea right.
Following the June 8th Mobb's briefing, Waxman sent a letter to Cheney and gave reporters a copy. "These new disclosures appear to contradict your assertions that you were not informed about the Halliburton contracts," Waxman wrote. "They also seem to contradict the administration's repeated assertions that political appointees were not involved in the award of the contracts to Halliburton," he said.
The letter described the briefing at which Mobbs acknowledged that he chose Halliburton. After that meeting, Mobb's said that a White House official told Douglas Feith the group did not object, according to Waxman's letter.
Waxman also raised questions about the March 5, 2003, e-mail that Cheney received. The author of that email, Stephen Browning, said in an interview that he wrote the memo after he and retired Lt Gen Jay Garner met with Douglas Feith about plans to declassify the earlier $1.8 million contract with the Halliburton.
According to Browning, Feith told him that he had already informed Cheney's office. Three days later, Halliburton got the $7 billion contract and the war began March 20, 2003. At the briefing, "Browning repeated his story," Waxman wrote.
"These disclosures mean that your office was informed about the Halliburton contracts at least twice at key moments," Waxman wrote.
When Waxman tried to investigate the matter further, Cheney simply refused to respond to a request for records of any communications he and his staff had with Halliburton, or actions they took on the contracts. And in what has by now become a pattern when it comes to Cheney, Congress did nothing about it.
The Whistleblower
Finally, in October, 2004, Bunnatine Greenhouse, a top official responsible for making sure the Army Corps of Engineers complies with contracting rules, came forward and revealed that top Pentagon officials showed improper favoritism to Halliburton.
Greenhouse said that when the Pentagon awarded the company a 5-year $7 billion contract, it pressured her to withdraw her objections, actions that were unprecedented in her experience, she said.
The Greenhouse allegations were first reported by Time Magazine. In a letter, Greenhouse told members of Congress that the Army gave the no-bid contract to Halliburton for political reasons. She also said the Army altered documents in order to justify the company's contract work in the Balkans.
Federal contracting rules say contracts must be awarded by career civil servants, not political appointees. Greenhouse said the Army ignored this requirement when giving contracts to Halliburton. She said the Army violated "the integrity of the federal contracting program as it relates to a major defense contractor."
"Employees of the U.S. government have taken improper action that favored KBR's interests," Greenhouse said in the letter. "This conduct has violated specific regulations and calls into question the independence" of the contracting process.
Bush and Cheney Are Busted - So What?
The media chased after that dumb 20-year-old Whitewater story (hardly the crime of the century) for 8 years To this day, I still don't know what they were trying to prove exactly. I do know it wasn't that the Clintons and their cronies had scammed billions of dollars from tax payers. Yet now with Bush administration, the media spends little or no effort exposing crimes involving real fraud and corruption even though the schemes are costing tax payers billions of dollars.
Has the mainstream media been bought off entirely?
After millions of tax dollars were spent investigating how Halliburton ended up being awarded billions of dollar worth of no-bid contracts in Iraq, the Government Accounting Office determined that the company should never have been awarded the contracts in the first place.
In response to those findings, Cheney and Bush both, as much as thumbed their noses at tax payers as if to say "so what, what are you going to do about it?" Well, it's beginning to look like they were right, there is nothing we can do about it.
According to the GAO's report, Rebuilding Iraq: Fiscal Year 2003 Contract Award Procedures and Management Challenges, contracts worth billions of dollars were awarded without full and open competition, including Halliburton’s oil infrastructure contract.
The GAO found that the Bush Administration violated procurement law when it issued various task orders under existing contracts. Of the 11 task orders examined, more than half were awarded outside the scope of their contracts, according to the report.
As an example of the inept procurement process, the GAO told how "a military review board approved a six-month renewal contract with Halliburton worth $587 million in just ten minutes and based on only six pages of documentation," the report said.
Once and For All - How Did Halliburton Get Those Contracts?
Remember back when Cheney appeared on NBC's Meet the Press on Sept 14, 2003, and said, "And as vice president, I have absolutely no influence of, involvement of, knowledge of in any way, shape or form of contracts led by the Corps of Engineers or anybody else in the federal government."
And remember when he was asked whether he had known about Halliburton's noncompetitive contract, and he said, "I don't know any of the details of the contract because I deliberately stayed away from any information on that."
Those statements were proven false by a June, 2004, article in Time Magazine entitled, “The Paper Trail: Did Cheney Okay a Deal?” As it turns out, Bush and Cheney both were informed that Halliburton would get the contract before it was awarded. Time quoted an email sent by the Army Corps of Engineers, that said the contract for construction of oil pipelines was approved by Under Secretary of Defense Douglas Feith “contingent on informing WH tomorrow. We anticipate no issues since action has been coordinated w VP’s [Vice President’s] office.”
This email totally contradicts Cheney's nationally televised assertion that he had no involvement in Halliburton's contracts whatsoever. It proved once and for all that Cheney and the White House had played a key role in making Cheney's ex-employer the number one war profiteer in Iraq.
The email was dated March 5, 2003, and Halliburton was awarded the contract three days later without any bids by other companies.
The administration tried to dismiss the email by saying the employee at the Corp was just trying to give the Vice President's office a heads-up on the process. Now I suppose opinions on what the email mean could differ. However, people's opinions on what it means are likely based on what their definition of co-or-di-na-ted IS.
No Political Appointees Involved - None
Some people may recall the news conference, where State Department spokesman, Richard Boucher, explained who makes the decisions on contracts. "The decisions are made by career procurement officials. There's a separation, a wall, between them and political-level questions when they're doing the contracts," he maintained. Boucher lied.
Then there was the time that the chief counsel of the Army Corp of Engineers appeared on "60 Minutes" and denied that there was any involvement by political appointees in the Halliburton contract. He specifically said: "The procurement of this particular contract was done by career civil servants." Well, I hate to be the bearer of bad news, but this guy is a liar too.
Major Joseph Yoswa, a Department of Defense spokesman, also claimed safeguards existed to insure that the process was free of favoritism. "Most important,” he said, “career civil servants, not political appointees, make final decisions on contracts," according to The New Yorker. As it turns out, the Major has a problem telling the truth as well.
Then back in August, 2003, there was Halliburton spokeswoman, Wendy Hall, who said the company’s military contracts were awarded "not by politicians but by government civil servants, under strict guidelines." I for one, would like to see the list of strict guidelines, and then, I'd like to have the names of the civil servants Wendy dealt with.
Finally, during a March 11, 2004, hearing before the Government Reform Committee, six senior officials from the CPA and DOD testified under oath, and were asked to answer the following question by Republican Committee Chairman, Tom Davis:
"I want to get this on the record, and everybody is under oath. Have you or anyone in your office ever discussed with the Vice President or with his office the award of a contract for Iraqi reconstruction prior to any contract being awarded?"
Every single one of those six officials said "no sir," which means every single one of them lied under oath. So how Cheney could pull this off? How could he get all these people to lie? I may not know how he did it, but the fact is he did it and nothing has been done about it.
Because, according to the June 14, 2004, LA Times, "The Pentagon admitted that a $7 billion no-bid contract to extinguish oil fires in Iraq was awarded to Halliburton after a political appointee from the Bush administration recommended the company for the job. ... the political appointee was Michael Mobbs — a special assistant to Undersecretary of Defense Douglas Feith. During the Summer of 2002, Mobbs was in charge of the Pentagon's Energy Infrastructure Planning Group (EIPG) to develop a plan for reconstructing Iraq's oil industry," the Times reported.
For obvious reasons, contracting experts say political appointees like Mobbs should not decide which companies compete for contracts. "The suggestion that political appointees would be directing that type of investigation does not seem consistent with maintaining the appearance of propriety," expert Steven Schooner told the Times.
How Could They Pull This Off?
In November 2002, long before the war began, a Pentagon group led by Mobbs, deceded to pay Halliburton $1.9 million to develop a secret contingency plan for handling the Iraqi oil industry.
Tax payers need to understand that it was this initial task order to develop a plan, that led to the company being awarded the $7 billion oil infrastructure contract.
Remember the strategy that Cheney's developed back when he was secretary of defense under the first President Bush. It goes like this, you give Halliburton funding so it can create a market for its services and then its the logical company to hire to carry out the plan when it comes time for contracts to be awarded.
In this particular instance, according to testimony by GAO investigator, Willim Woods, at a House oversight hearing, Mobbs even acknowledged in a memo that the $1.9 million task order would uniquely position Halliburton to win the far larger sole-source contract to actually do the restoration work to Iraqi oil fields.
So once again, Cheney’s contract manipulation strategy worked like a charm.
Mott described the Halliburton contingency plan in a meeting of the Deputies Committee. Those attending the meeting included Cheney's chief of staff, Lewis Libby, the deputy national security adviser, Steven Hadley, the deputy secretaries of state and defense, and deputy director of the CIA.
On March 8, 2003, Halliburton was chosen to carry out the plan. When the contract came up in the media, Bush claimed the contract was merely a deal to put out oil well fires. However, it wasn't long before Pentagon officials were forced to admit that it was a big deal and would involve billions of dollars. But even then, they said that the contract was only temporary and would be replaced by competitively bid contracts shortly.
After umteen delays, new contracts were finally awarded on Jan 16, 2004 and surprise, surprise, Halliburton won the big prize again. An $800 million contract went to the Parsons Corporation, and a $1.2 billion contract went to Halliburton.
Bush and Cheney In Up To Their Necks
During a June 8, 2004 briefing to staff members of the House Committee on Government Reform, Pentagon officials, including Mobbs, were asked about the specific details of the contracting procedure that was employed with Halliburton.
Before making a final decision, Mobbs admitted that he briefed top officials from several executive agencies, in the Deputies Committee, to make sure they had no objections. According to Mobbs, White House Staff members were among those at the meeting.
So, we've got Cheney's top dog, Libby, and Rice's second in command, Hadley, and White House staff members, and political appointee, Mobbs, leading the pack. And Bush and Cheney want us to believe that not one of these officials uttered a word about Halliburton contracts to either one of them. Yea right.
Following the June 8th Mobb's briefing, Waxman sent a letter to Cheney and gave reporters a copy. "These new disclosures appear to contradict your assertions that you were not informed about the Halliburton contracts," Waxman wrote. "They also seem to contradict the administration's repeated assertions that political appointees were not involved in the award of the contracts to Halliburton," he said.
The letter described the briefing at which Mobbs acknowledged that he chose Halliburton. After that meeting, Mobb's said that a White House official told Douglas Feith the group did not object, according to Waxman's letter.
Waxman also raised questions about the March 5, 2003, e-mail that Cheney received. The author of that email, Stephen Browning, said in an interview that he wrote the memo after he and retired Lt Gen Jay Garner met with Douglas Feith about plans to declassify the earlier $1.8 million contract with the Halliburton.
According to Browning, Feith told him that he had already informed Cheney's office. Three days later, Halliburton got the $7 billion contract and the war began March 20, 2003. At the briefing, "Browning repeated his story," Waxman wrote.
"These disclosures mean that your office was informed about the Halliburton contracts at least twice at key moments," Waxman wrote.
When Waxman tried to investigate the matter further, Cheney simply refused to respond to a request for records of any communications he and his staff had with Halliburton, or actions they took on the contracts. And in what has by now become a pattern when it comes to Cheney, Congress did nothing about it.
The Whistleblower
Finally, in October, 2004, Bunnatine Greenhouse, a top official responsible for making sure the Army Corps of Engineers complies with contracting rules, came forward and revealed that top Pentagon officials showed improper favoritism to Halliburton.
Greenhouse said that when the Pentagon awarded the company a 5-year $7 billion contract, it pressured her to withdraw her objections, actions that were unprecedented in her experience, she said.
The Greenhouse allegations were first reported by Time Magazine. In a letter, Greenhouse told members of Congress that the Army gave the no-bid contract to Halliburton for political reasons. She also said the Army altered documents in order to justify the company's contract work in the Balkans.
Federal contracting rules say contracts must be awarded by career civil servants, not political appointees. Greenhouse said the Army ignored this requirement when giving contracts to Halliburton. She said the Army violated "the integrity of the federal contracting program as it relates to a major defense contractor."
"Employees of the U.S. government have taken improper action that favored KBR's interests," Greenhouse said in the letter. "This conduct has violated specific regulations and calls into question the independence" of the contracting process.
Bush and Cheney Are Busted - So What?
The media chased after that dumb 20-year-old Whitewater story (hardly the crime of the century) for 8 years To this day, I still don't know what they were trying to prove exactly. I do know it wasn't that the Clintons and their cronies had scammed billions of dollars from tax payers. Yet now with Bush administration, the media spends little or no effort exposing crimes involving real fraud and corruption even though the schemes are costing tax payers billions of dollars.
Has the mainstream media been bought off entirely?
Bush Pays Halliburton For Services Never Rendered
Evelyn Pringle February 2005
As of June 2004, the Government Accounting Office estimated that more than $1 billion in taxpayer money had been wasted due to illegal overcharges by contractors in Iraq, since the onset of the war. Furthermore, experts say that once the total is calculated correctly, the losses could very well add up to billions more.
According to GAO Comptroller General, David Walker, the $1 billion represents about 2% of the $60 billion spent in Iraq between March 2003 and June 2004. To no one's surprise I'm sure, Walker listed Halliburton's overbilling for meals as the kind of typical overcharging that is occurring.
Last summer, 5 whistleblowers, who were past employees of Halliburton, came forward to tell tax payers what was really going on in Iraq. They specifically described how the company was robbing tax payers blind with apparently not a care in the world about discovery or punishment.
Marie deYoung, is a former Army chaplain who worked for Halliburton, and then spent 5 months inside its Kuwaiti operation, said the Iraq operation: "it’s just a gravy train." She claims there is no effort to hold down costs because the company knows that all costs will be passed down to taxpayers. When she complained to her higher ups, they told her, "We can be as dumb and stupid as we want in the first year of a war, nobody’s going to care."
And they were half-right. Republicans don’t care but none of Democrats who do care have been able to do one thing about it. A Vice President in the back pocket is seemingly priceless.
DeYoung revealed documents that proved that Halliburton had billed tax payers $50,000 a month for pop, and $1 million a month to clean clothes at $100 per bag.
Her allegations were validated on June 30, 2004, with the release of a report from an investigation of the US controlled Coalition Provisional Authority of Iraq, that found the CPA had failed to adequately control over $9 billion in international aid, including Halliburton's hotel costs in Kuwait.
The CPA Inspector General, Stuart Bowen, claimed the CPA had participated in Halliburton's overcharging by failing to stop unauthorized personnel from staying at the $700 per night Hilton in Kuwait City, which was only authorized to house senior government officials.
Billing documents showed that over a 3 month period, Halliburton had billed tax payers $1 million to house 100 employees at a the Kuwaiti hotel. However, by the time the Inspector General’s report was released, Halliburton had charged $2.85 million for hotel costs, the report noted.
The CPA, and its leader Paul Bemmer, controlled the governing processes in Iraq from May 2003 to June 29, 2004. So how’s this for a coincidence? Bowen released the report on June 30, 2004, one day after the CPA was disbanded, and its authority was turned over to Iraqi citizens.
Americans Forced To Risk Death To Boost Halliburton Profits
Twelve former truckers who made the 300 mile resupply run from Camp Cedar in southern Iraq to Camp Anaconda near Baghdad told Knight Ridder that they risked their lives driving empty trucks while Halliburton billed the government for hauling what they sarcastically called "sailboat fuel."
At the time of the disclosure by the truckers, Knight Ridder found Defense Department records that showed Halliburton had been paid $327 million for "theater transportation" of war materiel and supplies and was earmarked to be paid $230 million more.
In addition to interviewing the drivers, Knight Ridder viewed records of the empty trips, dozens of photographs of empty flatbeds and a videotape that showed 15 empty trucks in one convoy.
"There was one time we ran 28 trucks, one trailer had one pallet (a trailer can hold as many as 26 pallets) and the rest of them were empty," David Wilson, who was the convoy commander on more than 100 runs, told Knight Ridder. Four other drivers who were with Wilson confirmed his account, Ridder added.
The lives of the National Guard and Army escorts who provided security for the truckers were also put in danger during these trips. So why would Halliburton risk the lives of American soldiers and truckers by forcing them to drive empty trucks 300 miles in a war zones? $$$
Halliburton's contract allowed the company to pass on the cost of the transportation and to also tack on a 1 to 3% for profit. According to Knight Riddeer, trucking "experts estimate that each round trip costs taxpayers thousands of dollars."
Peter Singer, author of "Corporate Warrior," a book on privatization of the military, says the use of empty trucks to boost profits demonstrates how the contracting system is broken. The government gives out large cost-plus contracts in which "essentially it rewards firms when they add to costs rather than rewarding them for cost savings," Singer said.
Other whistleblowers came forward to describe how employees were instructed to abandon or torch new trucks, worth $80,000, if they got a flat tire or had some other minor problems, so that Halliburton could then purchase new trucks with taxpayer dollars, according to a letter penned by Congressman Henry Waxman.
NBC News obtained Pentagon documents that support these charges. They showed where Halliburton was buying hundreds of high-end SUVs and pickup trucks with options like CD players that employees don‘t need, and duplication in purchases of computers and other high-tech equipment.
DeYoung said employees were paid even if they didn‘t work. Her charge was verified by Mike West, another ex-Halliburton employee, who was paid $82,000 a year to be a labor foreman, although he had no workers to supervise, "They said just log 12 hours a day and walk around and look busy," West said.
Just think what we could have done in this country with the billions of dollars that Halliburton has ripped off. According to the Feb 4, 2005 Houston Chronicle, as of Dec 31, 2004, the Army has paid Halliburton ... $5.9 billion for the operations in Iraq and Kuwait, Army officials said.
$5.9 billion went right down the drain.
Halliburton Does Not Discriminate
Halliburton does not discriminate when it comes to robbing people. As it turns out, American tax dollars were not the company’s only source of fraudulent income.
According to the May 21, 2004, the Sidney Morning Herald, "One of Australia's largest postwar contracts in Iraq has collapsed, with the partners embroiled in a multi-million-dollar legal battle and allegations of corruption in the awarding of contracts by a leading Pentagon supplier," it reported.
The Herald revealed the "Morris Corporation, a catering company was dumped last year by the US contractor Halliburton, losing a $100 million contract to supply meals to US troops in Iraq."
Morris was awarded a contract in partnership with KCPC, a Kuwaiti company, to feed 18,000 troops. But Halliburton cancelled the deal 6 weeks later, claiming Morris and its Kuwaiti partner had not met their obligations.
However, according to the Herald, an insider involved in the deal alleged that the companies involved were approached by a Halliburton employee seeking kickbacks worth up to $3 million during contract negotiations.
"We're not talking about a paper bag. This guy was after a percentage of your sales every month," the insider said. "They wanted kickbacks of 3 per cent to 4 per cent, which pushed up the prices because then the sub-contractors would add the price of the kickbacks to their costs."
Confidential Halliburton documents leaked to the Herald showed the employee who was accused of soliciting the bribe was involved in awarding millions of dollars worth of Halliburton work in Kuwait to supply the military with services.
The Herald maintained that it had been told that the same employee had made similar propositions to other contractors. In fact, the insider claimed the demand for kickbacks was widely known. "It was too blatant, the corruption that was going on, not to be caught," he said.
The problems with the contract first became public when a report by Pentagon auditors was released to a congressional committee in March, 2004, after Rep Henry Waxman called for hearings to investigate the over-billing in Iraq. The report accused Halliburton of massive over-billing for the meals it served to troops in Iraq and Kuwait.
The investigation determined that not only had Halliburton failed to inform the military that it had cancelled the Morris-KCPC contract in July, 2003, it had continued to use the contract to estimate costs of more than $1 billion for meal facilities in Iraq and Kuwait.
At about the same time, Halliburton was forced to admit that two employees were under criminal investigation for accepting over $6 million in bribes related to those contracts.
Halliburton Fraud - No End In Sight
In addition to the stonewalling of investigations in this country, the International Advisory and Monitoring Board, established by the UN to monitor US control of Iraq's oil revenue, is complaining because the administration refuses to release documents relating to the money paid to Halliburton from the Iraq oil revenue fund under the no-bid contracts.
The IAMB includes representatives from the World Bank, the International Monetary Fund, the United Nations and the Arab Fund for Social and Economic Development.
According to a letter from Rep Waxman, "the [Bush] Administration has failed to comply with numerous IAMB requests for U.S. government reports about the payment of approximately $1.5 billion in DFI funds to Halliburton," who is the "single largest private recipient of Iraqi oil proceeds."
Waxman also quoted minutes from an IAMB meeting which said "some contracts using DFI funds were awarded to Halliburton without competitive bidding." As a result of this discovery, the IAMB instructed the KPMG accounting firm "to pay special attention" to this issue during its audit of CPA documents.
However, the Bush administration and Halliburton have stonewalled this investigation as well, as the company remains open for business.
Despite the massive increase in contracts due to the war in Iraq, Bush as not increased the number of officials who supervise contractors at all. Only 180 Army officials monitor defense contracts and only a little more than a handful of them are in Iraq, Peter Singer told Knight Ridder.
Halliburton Gets Away With Grand Theft
On Feb 4, 2005, the Washington Post reported that “the Army said yesterday it will not withhold future payments to Halliburton Co., despite audit reports last summer that said the giant logistical contractor had not properly accounted for a wide variety of work in Iraq and Kuwait.”
“The decision comes months after Army auditors recommended withholding 15 percent of payments, about $60 million a month, from Halliburton ... the largest government contractor in Iraq,” the Post noted.
Democrats were outraged and said “senior Pentagon officials have ignored audit reports documenting allegations that Halliburton overcharged the government and mismanaged tax dollars,” the Post reported.
“Critics complained the Pentagon has given the company special treatment by twice waiving deadlines for imposing the 15 percent withholding,” it noted.
Rep Waxman, who has spent years investigating the fraud, was furious. "This action is incomprehensible," he said. "Once again, the Bush Administration is putting Halliburton's interests above those of the taxpayers," Waxman said in a written statement.
"Halliburton is busting the Army's budget, yet Administration officials continue to ignore rampant overcharging and the recommendations of their own auditors," he added.
When is somebody going to say enough already? Halliburton has been caught ripping off tax payers time and time again. Which begs the question of how many more billions of dollars has this corrupt company made off with for all the times it wasn't caught?
Halliburton has proven one fact beyond any doubt. If a company is engaged in the war profiteering business, having an American Vice President to cover your ass is priceless.
As of June 2004, the Government Accounting Office estimated that more than $1 billion in taxpayer money had been wasted due to illegal overcharges by contractors in Iraq, since the onset of the war. Furthermore, experts say that once the total is calculated correctly, the losses could very well add up to billions more.
According to GAO Comptroller General, David Walker, the $1 billion represents about 2% of the $60 billion spent in Iraq between March 2003 and June 2004. To no one's surprise I'm sure, Walker listed Halliburton's overbilling for meals as the kind of typical overcharging that is occurring.
Last summer, 5 whistleblowers, who were past employees of Halliburton, came forward to tell tax payers what was really going on in Iraq. They specifically described how the company was robbing tax payers blind with apparently not a care in the world about discovery or punishment.
Marie deYoung, is a former Army chaplain who worked for Halliburton, and then spent 5 months inside its Kuwaiti operation, said the Iraq operation: "it’s just a gravy train." She claims there is no effort to hold down costs because the company knows that all costs will be passed down to taxpayers. When she complained to her higher ups, they told her, "We can be as dumb and stupid as we want in the first year of a war, nobody’s going to care."
And they were half-right. Republicans don’t care but none of Democrats who do care have been able to do one thing about it. A Vice President in the back pocket is seemingly priceless.
DeYoung revealed documents that proved that Halliburton had billed tax payers $50,000 a month for pop, and $1 million a month to clean clothes at $100 per bag.
Her allegations were validated on June 30, 2004, with the release of a report from an investigation of the US controlled Coalition Provisional Authority of Iraq, that found the CPA had failed to adequately control over $9 billion in international aid, including Halliburton's hotel costs in Kuwait.
The CPA Inspector General, Stuart Bowen, claimed the CPA had participated in Halliburton's overcharging by failing to stop unauthorized personnel from staying at the $700 per night Hilton in Kuwait City, which was only authorized to house senior government officials.
Billing documents showed that over a 3 month period, Halliburton had billed tax payers $1 million to house 100 employees at a the Kuwaiti hotel. However, by the time the Inspector General’s report was released, Halliburton had charged $2.85 million for hotel costs, the report noted.
The CPA, and its leader Paul Bemmer, controlled the governing processes in Iraq from May 2003 to June 29, 2004. So how’s this for a coincidence? Bowen released the report on June 30, 2004, one day after the CPA was disbanded, and its authority was turned over to Iraqi citizens.
Americans Forced To Risk Death To Boost Halliburton Profits
Twelve former truckers who made the 300 mile resupply run from Camp Cedar in southern Iraq to Camp Anaconda near Baghdad told Knight Ridder that they risked their lives driving empty trucks while Halliburton billed the government for hauling what they sarcastically called "sailboat fuel."
At the time of the disclosure by the truckers, Knight Ridder found Defense Department records that showed Halliburton had been paid $327 million for "theater transportation" of war materiel and supplies and was earmarked to be paid $230 million more.
In addition to interviewing the drivers, Knight Ridder viewed records of the empty trips, dozens of photographs of empty flatbeds and a videotape that showed 15 empty trucks in one convoy.
"There was one time we ran 28 trucks, one trailer had one pallet (a trailer can hold as many as 26 pallets) and the rest of them were empty," David Wilson, who was the convoy commander on more than 100 runs, told Knight Ridder. Four other drivers who were with Wilson confirmed his account, Ridder added.
The lives of the National Guard and Army escorts who provided security for the truckers were also put in danger during these trips. So why would Halliburton risk the lives of American soldiers and truckers by forcing them to drive empty trucks 300 miles in a war zones? $$$
Halliburton's contract allowed the company to pass on the cost of the transportation and to also tack on a 1 to 3% for profit. According to Knight Riddeer, trucking "experts estimate that each round trip costs taxpayers thousands of dollars."
Peter Singer, author of "Corporate Warrior," a book on privatization of the military, says the use of empty trucks to boost profits demonstrates how the contracting system is broken. The government gives out large cost-plus contracts in which "essentially it rewards firms when they add to costs rather than rewarding them for cost savings," Singer said.
Other whistleblowers came forward to describe how employees were instructed to abandon or torch new trucks, worth $80,000, if they got a flat tire or had some other minor problems, so that Halliburton could then purchase new trucks with taxpayer dollars, according to a letter penned by Congressman Henry Waxman.
NBC News obtained Pentagon documents that support these charges. They showed where Halliburton was buying hundreds of high-end SUVs and pickup trucks with options like CD players that employees don‘t need, and duplication in purchases of computers and other high-tech equipment.
DeYoung said employees were paid even if they didn‘t work. Her charge was verified by Mike West, another ex-Halliburton employee, who was paid $82,000 a year to be a labor foreman, although he had no workers to supervise, "They said just log 12 hours a day and walk around and look busy," West said.
Just think what we could have done in this country with the billions of dollars that Halliburton has ripped off. According to the Feb 4, 2005 Houston Chronicle, as of Dec 31, 2004, the Army has paid Halliburton ... $5.9 billion for the operations in Iraq and Kuwait, Army officials said.
$5.9 billion went right down the drain.
Halliburton Does Not Discriminate
Halliburton does not discriminate when it comes to robbing people. As it turns out, American tax dollars were not the company’s only source of fraudulent income.
According to the May 21, 2004, the Sidney Morning Herald, "One of Australia's largest postwar contracts in Iraq has collapsed, with the partners embroiled in a multi-million-dollar legal battle and allegations of corruption in the awarding of contracts by a leading Pentagon supplier," it reported.
The Herald revealed the "Morris Corporation, a catering company was dumped last year by the US contractor Halliburton, losing a $100 million contract to supply meals to US troops in Iraq."
Morris was awarded a contract in partnership with KCPC, a Kuwaiti company, to feed 18,000 troops. But Halliburton cancelled the deal 6 weeks later, claiming Morris and its Kuwaiti partner had not met their obligations.
However, according to the Herald, an insider involved in the deal alleged that the companies involved were approached by a Halliburton employee seeking kickbacks worth up to $3 million during contract negotiations.
"We're not talking about a paper bag. This guy was after a percentage of your sales every month," the insider said. "They wanted kickbacks of 3 per cent to 4 per cent, which pushed up the prices because then the sub-contractors would add the price of the kickbacks to their costs."
Confidential Halliburton documents leaked to the Herald showed the employee who was accused of soliciting the bribe was involved in awarding millions of dollars worth of Halliburton work in Kuwait to supply the military with services.
The Herald maintained that it had been told that the same employee had made similar propositions to other contractors. In fact, the insider claimed the demand for kickbacks was widely known. "It was too blatant, the corruption that was going on, not to be caught," he said.
The problems with the contract first became public when a report by Pentagon auditors was released to a congressional committee in March, 2004, after Rep Henry Waxman called for hearings to investigate the over-billing in Iraq. The report accused Halliburton of massive over-billing for the meals it served to troops in Iraq and Kuwait.
The investigation determined that not only had Halliburton failed to inform the military that it had cancelled the Morris-KCPC contract in July, 2003, it had continued to use the contract to estimate costs of more than $1 billion for meal facilities in Iraq and Kuwait.
At about the same time, Halliburton was forced to admit that two employees were under criminal investigation for accepting over $6 million in bribes related to those contracts.
Halliburton Fraud - No End In Sight
In addition to the stonewalling of investigations in this country, the International Advisory and Monitoring Board, established by the UN to monitor US control of Iraq's oil revenue, is complaining because the administration refuses to release documents relating to the money paid to Halliburton from the Iraq oil revenue fund under the no-bid contracts.
The IAMB includes representatives from the World Bank, the International Monetary Fund, the United Nations and the Arab Fund for Social and Economic Development.
According to a letter from Rep Waxman, "the [Bush] Administration has failed to comply with numerous IAMB requests for U.S. government reports about the payment of approximately $1.5 billion in DFI funds to Halliburton," who is the "single largest private recipient of Iraqi oil proceeds."
Waxman also quoted minutes from an IAMB meeting which said "some contracts using DFI funds were awarded to Halliburton without competitive bidding." As a result of this discovery, the IAMB instructed the KPMG accounting firm "to pay special attention" to this issue during its audit of CPA documents.
However, the Bush administration and Halliburton have stonewalled this investigation as well, as the company remains open for business.
Despite the massive increase in contracts due to the war in Iraq, Bush as not increased the number of officials who supervise contractors at all. Only 180 Army officials monitor defense contracts and only a little more than a handful of them are in Iraq, Peter Singer told Knight Ridder.
Halliburton Gets Away With Grand Theft
On Feb 4, 2005, the Washington Post reported that “the Army said yesterday it will not withhold future payments to Halliburton Co., despite audit reports last summer that said the giant logistical contractor had not properly accounted for a wide variety of work in Iraq and Kuwait.”
“The decision comes months after Army auditors recommended withholding 15 percent of payments, about $60 million a month, from Halliburton ... the largest government contractor in Iraq,” the Post noted.
Democrats were outraged and said “senior Pentagon officials have ignored audit reports documenting allegations that Halliburton overcharged the government and mismanaged tax dollars,” the Post reported.
“Critics complained the Pentagon has given the company special treatment by twice waiving deadlines for imposing the 15 percent withholding,” it noted.
Rep Waxman, who has spent years investigating the fraud, was furious. "This action is incomprehensible," he said. "Once again, the Bush Administration is putting Halliburton's interests above those of the taxpayers," Waxman said in a written statement.
"Halliburton is busting the Army's budget, yet Administration officials continue to ignore rampant overcharging and the recommendations of their own auditors," he added.
When is somebody going to say enough already? Halliburton has been caught ripping off tax payers time and time again. Which begs the question of how many more billions of dollars has this corrupt company made off with for all the times it wasn't caught?
Halliburton has proven one fact beyond any doubt. If a company is engaged in the war profiteering business, having an American Vice President to cover your ass is priceless.
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