Evelyn Pringle January 25, 2005
Josh Marshall writes a column for The Hill, a Congressional newspaper. Josh says that every big new piece of legislation needs a catchy title to set it apart, and he came up with a good title for the $87 billion allocated for rebuilding Iraq. ''The Bush Crony Full-Employment Act of 2003.'' I like that, its very fitting.
Who is Joe Allbaugh?
Anybody remember Joe Allbaugh? He was part of the inner circle in Bush's 2000 presidential campaign, along with Karl Rove and Karen Hughes. In January 2001, when Bush took over the White House, he put Allbaugh in charge of the Federal Emergency Management Agency (FEMA), which dispenses disaster money and loans after hurricanes, floods and fires.
I think Joe missed his calling. He should be a fortune teller, because somehow he knew a couple of weeks before Bush declared war on Iraq, that he should quit his government job and go into the business of helping wealthy clients secure Iraqi reconstruction contracts.
Of course Joe didn't say that at the time. When he announced his resignation from FEMA on March 1, 2003 he said, "Now I am going to take the opportunity to spend some time with my wife and children." Well his family could not have enjoyed too much quality with Joe because in a matter of weeks he opened a new firm called New Bridge Strategies.
True to form, with the press seemingly unwilling to publicize the war profiteering aspects of the war in Iraq, the formation of New Bridge basically went unnoticed by the American public and only briefly showed up in the headlines.
It deserved public attention because of the Republican heavyweights on its board that were linked to one or the other Bush administrations or to the family itself. The members not only included Allbaugh, but also Ed Rogers and Lanny Griffith, former George H W Bush aids.
The president of the company is John Howland, and Jamal Daniel, (business partners of first brother Neil Bush), is a principal.
Josh Marshall says New Bridge is actually an outgrowth of Haley Barbour’s lobbying firm, Barbour Griffith & Rogers (BGR). Josh says he came to this conclusion after he learned that both firms were located in the same office space. And also because Griffith is the CEO of New Bridge and Rogers is the vice president. Sounds to me like he reached the right conclusion.
Others agree. "The bottom line on New Bridge is that it appears to be very closely linked to BGR, which has many overlapping ties to the highest levels of the Republican Party," said Thomas Ferguson, a campaign finance expert at the University of Massachusetts, the Oct 15, 2004 Village Voice reports.
So here's the setup. Bush’s main man Joe, quits FEMA to spend time with his family, right before the bombs start falling in Iraq. He then moves into the offices of one of the biggest and most politically connected GOP lobbying firms in Washington and starts advertising services to clients who want to win reconstruction contracts in Iraq. How could it possibly get any sweeter than this?
Allbaugh Has A Big Heart
According to the Oct 6, 2003 New York Times, Allbaugh "is here to tell you that his new company, which advises clients on how to get business in Iraq, is not trading on his White House connections. The Iraqis need assistance ... and he can help."
Although its connections to the administration may not have received much attention in the media, the company itself was not shy about advertising its contacts. Its web site as much as brags about the company's links to Bush, by specifically pointing out that Allbaugh was "chief of staff to then-Gov. Bush of Texas and was the national campaign manager for the Bush-Cheney 2000 presidential campaign."
It says New Bridge is "a unique company that was created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war in Iraq." I'm surprised that the site doesn't have a blinking neon sign saying AKA war profiteering.
Initially, it said, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq." But someone must have warned Allbaugh that that particular sentence was a little over the top because that particular phrasing has since been changed on the web site.
Allbaugh himself, didn't seem to give his ties to the administration a second thought. According to a Sept 30, 2003 article in Mother Jones, he claimed, "It's beneficial to clients that I know who the players are and I know who the decision makers are." Apparently he forgot to mention that because of all these friends in high places, he has insider knowledge of how much money the government will spend and when it will become available.
Middle East specialist, Richard Murphy, claims Iraqis will view the situation differently, and was quick to point out that the Bush ties to New Bridge would only validate what was already suspected. "In the Middle East, it will be received as confirming the weary cynicism prevailing in the area about US intentions in launching the attack on Iraq in the first place," said Murphy.
Allbaugh denied having any improper motives. "The stories I've seen have been couched as if people are trying to game the system, and that's not what we're about," he said. "We are trying to help Iraq become a capitalist country, and a leader throughout the Middle East. Iraqis themselves are asking for help," wrote the New York Times.
That's funny, I thought the Iraqis said they wanted us to get the hell out of their country and leave them alone. I wonder why I never knew that they had asked Joe to help.
Joe seems baffled that anyone would question his assertion about wanting to help the poor Iraqis. "We fought a war, we displaced a horrible, horrible regime, and as a part of that we have an obligation to help Iraqis," he said. "We can't just leave in the middle of the night."
He gets downright defensive if you question his business practices. On Oct 6, 2003, he told a New York Times reporter, "Because my friend is president of the United States, I'm supposed to check out of life?"
To that I would say no, of course you don't have to check out of life Joe. But you also don't quit your government job before the president even admits he's taking the country to war, set up shop and start advertising to get contracts for work in a country that you somehow know we're about to destroy.
Another Funnel - Diligence Security Company
It's clear that BGR was instrumental in bringing other companies into New Bridge's fold, including Diligence, a security firm set up by former US and British intelligence officers.
On Oct 6, 2003, Allbaugh told the NYTs, that "As part of his package for clients ... he offered security in the form of yet another new company, Diligence Iraq, which worked hand-in-hand with New Bridge. New Bridge is a minority partner in Diligence Iraq, which is just opening up in Baghdad. Mike Baker, the head of Diligence Iraq, serves as an advisory board member of New Bridge."
In other words, explained the Times, "if your company wants to send over three people from New York to investigate business opportunities in Baghdad, Mr. Baker will secure the way in: a three-car convoy of armed S.U.V.'s driving 90 miles an hour, to avoid bandits, in an eight-hour-plus streak across the desert from the border of Jordan or Kuwait," it said.
BGR provided the initial funding for Diligence, according to Nick Day, a co-founder of the firm. Like New Bridge, it was given office space at BGR's Washington office. BGR also provided the firm's advisory board. Many of the names on the Diligence board, including the Carlyle Group's Ed Mathias, match the names on the board of New Bridge.
And with a closer look, the web of this grand war profiteering scheme just keeps getting more and more entwined. In return for finding an investor for Diligence in Iraq, New Bridge got a minority shareholding in the firm.
According to a June 22, 2004 article on Corporate Watch, Diligence, is now headed by Richard Burt, former US Ambassador to Germany and a consultant in the Carlyle Group (which also has George Bush Sr, John Major and James Baker on its payroll). Whitley Bruner, formerly head of the CIA Baghdad station, is now director of the Iraq branch of Diligence.
And guess what? The deputy chairman of Diligence is none other than Joe Allbaugh.
Objections to Cronyism and Privatization
Is it any wonder that critics are questioning the propriety of the reconstruction effort? "I'm appalled that the war is being used by people close to the Bush Administration to make money for themselves," Democratic Rep Henry Waxman said. "At a time when we're asking young men and women to make perhaps the ultimate sacrifice, it's just unseemly."
On Sept 30, 2003, while the reconstruction bill was being debated in the Senate, Sen John Edwards explained why he was against giving Bush the $87 billion. "This is an administration of the insiders, for the insiders, and by the insiders. Learning that George Bush's campaign manager, Joe Allbaugh, has started his own consulting firm to profit from the war in Iraq proves this point,” Edwards said. “First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts and now this.”
Edwards said, “It is an outrage and disrespectful to the young men and women who are serving in Iraq today. President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq, and by agreeing to an independent oversight panel to ensure that contracts in Iraq are administered fairly.”
"In this enormously expensive mission, the American people ought to be assured that any dollar we spend there is for the rebuilding of Iraq, and not just the building of profit for the president's friends and political supporters," he said.
On Oct 14, 2003, Edwards said he would vote against $87 billion because Bush had failed to outline a credible long-term plan for rebuilding the country, failed to persuade allies to help shoulder the costs, and failed to stop sweetheart deals for politically-connected companies.
"We used to talk about this money as a blank check. Well, now we know it's not really a blank check. We know the president is writing it out to Joe Allbaugh and Halliburton, and it's all endorsed by Vice President Cheney," Edwards said.
Always Close By - Bush Family Funnel
True to form, if there's a tax dollar to be skimmed off a business deal a Bush family funnel will be there to grab it. This time its First Brother Neil Bush. On Dec 11, 2003, The Financial Times of London reported that, "Two businessmen instrumental in setting up New Bridge Strategies, a well-connected Washington firm designed to help clients win contracts in Iraq, have previously used an association with Neil, the younger brother of President Bush, to seek business in the Middle East."
That would be New Bridge president John Howland and Jamal Daniel, a principal. As it turns out, Neil landed a $60,000 a year consultant contract, for which according to his testimony in a divorce deposition, he is required to take phone messages for about 3 hours a week.
However, Neil is being far too modest about his consultant work. According to the Times, he is doing much more than answering phones. Three people contacted by the Financial Times said they have seen letters written by Neil that recommend business ventures promoted by New Bridges in the Middle East. So in a nutshell, Neil is being paid an annual fee to "help companies secure contracts in Iraq," the Times reports.
Bush Sends Bremer To Privatize Iraq
According to a Sept 2004 article in Harper's Magazine by Naomi Klein, "before the fires from the “shock and awe” military onslaught were even extinguished, Bremer unleashed his shock therapy, pushing through more wrenching changes in one sweltering summer than the International Monetary Fund has managed to enact over three decades in Latin America.”
In his first major act on the job, Bremer "fired 500,000 state workers, most of them soldiers, but also doctors, nurses, teachers, publishers, and printers. Next, he flung open the country’s borders to absolutely unrestricted imports: no tariffs, no duties, no inspections, no taxes. Iraq, Bremer declared was “open for business,” says Harper.
Before the war, Iraq’s non-oil-related economy consisted of 200 state-owned companies, that produced everything from cement to paper to washing machines. In June, Bremer attended an economic summit in Jordan and announced that the firms would be privatized immediately. “Getting inefficient state enterprises into private hands,” he said, “is essential for Iraq’s economic recovery," according to Harpers.
In September, to entice investors to buy the state-owned companies, Bremer enacted a new set of laws. For example, Order 37 lowered Iraq’s corporate tax rate from roughly 40% to a flat 15%. Order 39 allowed foreign companies to own 100% of Iraqi assets outside of the natural-resource sector.
Investors could take 100% of the profits they made in Iraq out of the country. They would not be required to reinvest and would not be taxed. Under Order 39, they could sign leases and contracts that would last for forty years. Order 40 welcomed foreign banks to Iraq under the same favorable terms, said Harpers.
At first, privatization seemed likely. For as Harper's notes, "Iraqis, reeling from violence both military and economic, were far too busy staying alive to mount a political response to Bremer’s campaign. Worrying about the privatization of the sewage system was an unimaginable luxury with half the population lacking access to clean drinking water; the debate over the flat tax would have to wait until the lights were back on," it said.
By fall, rebuilding trade shows were being held all over the place. The Economist described Iraq under Bremer as “a capitalist dream,” and a flurry of new consulting firms were launched promising to help companies get access to the Iraqi market, their boards of directors stacked with well-connected Republicans, Harper's said.
The most prominent was New Bridge and it was absolutely jubilant over the potential opportunities in Iraq. “Getting the rights to distribute Procter & Gamble products can be a gold mine,” one of the company’s partners enthused. “One well-stocked 7-Eleven could knock out thirty Iraqi stores; a Wal-Mart could take over the country,” Harper quoted.
Iraq seemed like a gold mine. There were rumors that a McDonald’s would be opening, funding was almost in place for a Starwood luxury hotel, and General Motors was planning to build a factory. On the financial side, HSBC would have branches all over the country, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil, and the bell was going to ring on a New York style stock exchange in Baghdad any day, said Harpers.
However none of that came to pass. For good reason. Klein explained that Bremer's illegal changes to Iraqi law may have made the country the most friendly in the world to corporations, but they were the least useful to Iraqi workers suffering an unemployment rate over 60%.
During the past year and a half, the whole world has watched as the Iraqis refused to hand over their country to Bremer and the plan for privatization went right down the tubes.
Bush cronies who drooled at the prospect of making mega-bucks in Iraq are no longer drooling. According to Harper's, "New Bridge Strategies, the company that had gushed about how “a Wal-Mart could take over the country,” is sounding distinctly humbled. “McDonald’s is not opening anytime soon,” company partner Ed Rogers told the Washington Post. Neither is Wal-Mart."
What Happens To Iraq Now?
God only knows what will happen to Iraq now. The Financial Times has called it “the most dangerous place in the world in which to do business.” Harper's described the mess created by the Bush gang: "It’s quite an accomplishment: in trying to design the best place in the world to do business, the neocons have managed to create the worst, the most eloquent indictment yet of the guiding logic behind deregulated free markets."
But don't worry about old Joe. Things may not have went as planned in Iraq, but he's branching out and finding other ways to cash in on the war. According to the Sept 30, 2004 Fairfield County Weekly, Allbaugh started yet another consulting company with Andrew Lundquist, the former director of Dick Cheney's secretive energy policy task force. The firm's first client? Lockheed Martin, one of the country's largest defense contractors.
Never fear, if there's an opportunity for profiteering, a Bush funnel will be there.
Showing posts with label Bremer. Show all posts
Showing posts with label Bremer. Show all posts
Tuesday, August 3, 2010
Mission Accomplished in Iraq by Bremer and CPA
Evelyn Pringle April 25, 2007
When President Bush announced "Mission Accomplished," and the end of the war in May 2003, he also said we would help the citizens of Iraq rebuild their country. "Now that the dictator's gone," he stated, "we and our coalition partners are helping Iraqis to lay the foundations of a free economy."
Apparently he was referring to the Coalition Provisional Authority that took up residence in Saddam's luxurious palace in May 2003, with the newly appointed King, Paul Bremer. The CPA was granted the authority to award reconstruction contracts in Iraq and it used that authority to implement what will go down in the history books as the most blatant war profiteering scheme of all time.
In large part, the masterminds of the reconstruction disaster that would occur after the CPA took over Iraq were Secretary of Defense, Donald Rumsfeld, and Undersecretary of Defense, Douglas Feith.
But to ensure control of the contracting process on the ground in Iraq, Bush filled the top slots of the CPA with the administration cronies. For instance, a friend of Cheney's, Peter McPherson, took a leave of absence as president of Michigan State University to serve as Bremer's economic deputy.
The leader of the CPA's private development sector was Thomas Foley, an old college classmate of Bush, who served as finance chairman for his Presidential campaign in Connecticut and also raised more than $100,000 for Bush.
Relatives of the administration were also given jobs, such as Ari Fleischer's brother Michael, and Simone Ledeen, the daughter of Michael Ledeen. Cheney's daughter Liz, also did a short stint. However, it should be noted that none of them lounged around for too long in what soon became a hellhole in Iraq.
On May 16, 2003, the CPA issued its first regulation and described its authority in no uncertain terms stating:
"The CPA is vested with all executive, legislative, and judicial authority necessary to achieve its objectives, to be exercised under relevant U.N. Security Council resolutions, including resolution 1483 (2003), and the laws and usages of war. This authority shall be exercised by the CPA Administrator."
With one swipe of the pen, Bremer granted himself the authority to run the government ministries, appoint Iraqi officials and award contracts for reconstruction. Next he fired 500,000 Iraqis, most of them soldiers, but pink slips also went out to many doctors, nurses, teachers and other public employees as well.
For the most part, the CPA financed its activities with billions of dollars that belonged to the Iraqis. On May 22, 2003, a UN Security Council passed a resolution that directed the proceeds from Iraqi oil to be placed in a Development Fund for Iraq, and the CPA was granted authority to control the fund and decide which profiteers would get contracts.
During the year that Bremer controlled the purse strings, the Iraqi Development Fund received $20.2 billion, including $8.1 billion from the UN's oil-for-food program, $10.8 billion from Iraqi oil, and the rest from repatriated funds, vested assets and donations.
The CPA accounting system was cash and carry and a steady stream of cash was flown into Bagdad from the US. Inspector General, Stuart Bowen later said that he knew of one $2 billion flight.
A report released by the House Government Reform Committee in February 2007, shows that in the 13 months that Bremer ruled, from May 2003 to June 2004, the Federal Reserve Bank in New York shipped nearly $12 billion in a cash to Iraq.
One can only imagine the Bank service charges associated with these shipments because to accomplish this feat, according to the Democratic chairman of the Reform Committee, Henry Waxman, the cash weighed 363 tons and the Bank had to count and pack 281 million individual bills, including more than 107 million $100 bills, and then load them onto wooden pallets to be shipped to Bagdad on C-130 cargo planes.
Inspector Bowen later said that he determined that some of this cash went to pay salaries for thousands of "ghost employees" and Iraqi civil servants who did not exist.
Within a few months of the CPA's arrival in Iraq reports of corruption in the contracting process began appearing in the media. A British adviser to the Iraqi Governing Council told the BBC that officials in the CPA were demanding bribes of up to $300,000 in return for contracts.
Reports of flat out-fraud remained steady throughout Bremer's reign in Iraq. One audit showed that the CPA Ministry of Finance could not provide documentation for about $17 million spent on employee salaries in February 2004, and a CPA Advisor to the Ministry of the Interior said the Ministry was paid for 8,602 guards but only 602 could be verified.
A CPA advisor to the Ministry of Finance was so concerned about payroll corruption that he submitted a formal complaint that stated in part: "Of the 1.6 million government employees currently on payroll, credible estimates put the number of ghost workers at somewhere between 250,000-300,000 employees."
An October 2004, audit performed for the International Advisory and Monitoring Board, created by the UN to monitor the spending of Iraqi money, found one case where a payment of $2.6 million was authorized by a CPA senior adviser to the Ministry of Oil, and auditors were unable to obtain an underlying contract or any evidence that the services had been rendered.
The auditors in this group found 37 cases where files could not be located for contracts worth $185 million all total. In another 52 cases, there was no record that goods had been received for a total of $87.9 million.
People on the ground in Iraq said that doing business with the CPA was reminiscent of the Wild West. Former CPA employees told a congressional committee that sackfuls of cash were tossed around like footballs. Franklin Willis, showed pictures of himself and others holding up bundles of $100 notes totaling $2 million, which he said was used to pay the contractor Custer Battles. "We told them to come in and bring a bag," Willis said.
He also testified that millions of dollars in $100 bills were stored in the basement of the CPA offices and distributed to favored contractors with little accounting discipline. For instance, in the year that the CPA ruled, Custer was awarded contracts worth more than $100 million.
Two former Custer employees ended up filing a lawsuit under the Federal False Claims Act, saying Custer had swindled $50 million from the CPA with scams like double-billing for salaries and repainting the forklifts found at the Baghdad airport and then leasing them back to the US government.
The employees said the CPA paid the Custer $15 million to provide security for Iraq's civilian airline, when no services were needed because the airline was grounded during the time covered by the contract.
These employees said they kept informing the CPA about Custer's fraudulent conduct for more than a year and when they asked why the firm continued to get contracts, they were told: "Battles is very active in the Republican party, and speaks to individuals he knows in the Whitehouse almost daily."
In June 2004, the Government Accounting Office estimated that more than $1 billion in had been wasted due to illegal overcharges by contractors since the war began. A later audit by the Iraqi government found that as much as $1.27 billion was lost to accounting irregularities between June 2004 and February 2005.
Inspector Bowen cited two examples of poor oversight in a November 3, 2005 interview on National Public Radio where $28 million was paid to build 5 power plants and $1.8 million was paid to rebuild a library, but the work was never performed and the money
"simply disappeared," he said.
A recent report by Bowen says DynCorp was paid $43.8 million for a residential camp for police training personnel and has been empty for months and that the company may also have billed $18 million in other unjustified costs.
About $4.2 million, he says, was improperly spent on 20 VIP trailers and an Olympic-size pool and an additional $36.4 million in spending for weapons such as armored vehicles, body armor and communications equipment that cannot be accounted for.
Not surprisingly, Cheney's Halliburton remained the top profiteer under Bremer's rule. A July 23, 2004, audit conducted by Bowen, showed the company had received 60% of all contracts paid for with Iraq money, including 5 no-bid contracts worth $222 million, $325 million, $180 million, and the last 2 together totaled $194 million for the last two. In comparison, the audit showed that the CPA awarded only 2% of the reconstruction contracts to Iraqi companies.
In one example of blatant fraud, an audit found that Halliburton was charging for more than 41,000 meals a day for soldiers when only about 14,000 were served.
By the fall of 2003, the country was realizing that the rational for war was based on lies and that the only ones drawing any benefits were the profiteers. So when Bush asked Congress for another $20 billion for the CPA, Bremer was summoned to Washington to explain where all the money was going and of course he testified in full stonewall mode.
Before the Appropriations Committee on September 22, 2003, Bremer said the CPA had detailed records of all its receipts and outlays that could be audited by Congress. But when he testified before the Armed Services Committee 3 days later he said the Office of Management and Budget was responsible for maintaining the CPA records and that Congress would have to go to the White House to access the records.
That arrogant assertion went over like a lead balloon with many members of Congress. Senator Robert Byrd said he was outraged over the inability to monitor CPA spending. "There is no reason why any arm of the executive branch charged with making such significant spending decisions," he said, "should not be working directly with Congress."
"When we're talking about handing over another $20 billion to the CPA," he said, "there is a real need for Congress to confirm that the CPA has its finances in order and that it is managing the taxpayer's money responsibly."
"We don't even know how much of the $20 billion," Byrd said, "will flow to government contractors in Iraq."
"Whatever the amount is," he noted, "we know that the size and scope of the profits being made will be enormous."
"Former Bush Administration officials," he warned fellow Senators, "are even setting up consulting firms to act as middlemen for contractors hoping to take part in the bonanza."
"Are we turning the U.S. Treasury into a grab bag for favorite campaign contributors to be financed at taxpayer expense?" he asked.
The answer was yes, and what a grab bag it was. Media reports revealed that Bush's ex-campaign manager and Feith's former law partner had set up consulting firms to profit off the war by lining up contracts for clients through their partners in crime within the CPA.
Other reports revealed that contracts worth $407 were awarded to a firm called Nour that was formed less than 2 months after the war began. The names linked to the profits from Nour, among many others, included former Secretary of Defense, William Cohen, Ahmad Chalabi via a $2 million kickback, his nephew Salam Chalabi as the attorney handling the deal, and the money trail even led to the First Brothers, Marvin and Jeb Bush.
But come to find out, Doug Feith the ringleader on the ground in Washington, had awarded a batch of no-bid contracts to a favored company the month before the war began for the purpose of controlling the media in post-war Iraq.
In October 2003, the Center for Public Integrity obtained copies of 7 contracts awarded to the San Diego-based Science Applications. The total value of the contracts was redacted but the Center was able to determine that they were all awarded in February 2003, and called for the work to be directed by Feith.
However, the Center's most stunning discovery was that when the contracts were awarded, Feith's top deputy at the time, Christopher "Ryan" Henry, had been a senior vice president at SAIC until October 2002.
In addition, one of SAIC's board members was Army General, Wayne Downing, who ran counterterrorism in the Bush administration for almost a year after 9/11, and had even went to the CIA with Cheney to discuss intelligence on Iraq. Downing had also served as an advisor to Ahmed Chalabi and the Iraqi National Congress, and was well-known advocate for a war against Saddam.
Some of the SAIC contracts required that specific persons referred to as "executive management consultants" be hired and the pay range listed went as high as $209 and $273 per hour. The Center said congressional sources estimated the value of the media contract as $38 million for the first year and as high $90 million in 2004.
The SAIC had no special expertise to justify the award of these contracts. One company executive, quoted in the media, said the firm's only credential for setting up an independent media, supposedly modeled after the BBC, was military work in "informational warfare"-signal jamming, "perception management," and the like.
Under these contracts, the Iraq Media Network (IMN) was established and journalist, Mark North, who covered the Iraq invasion for National Public Radio, was hired to train Iraqi journalists to report for the IMN.
In one of the many Congressional hearings, North testified about the control of the IMN by the CPA and said CPA officials regularly directed and censored the activities of the news station and provided "a laundry list of CPA activities" to cover in the news reports instead of stories about security or the lack of electricity and jobs
While testifying, he also described the CPA's shabby treatment of Iraqi employees and its refusal to pay their wages. "For the first two months," North said, "the local staff of about 200 journalists and technicians were not paid their salaries."
When the staffers went on strike in attempt to get paid, he said, the CPA told the Iraqis to get back to work or the US Army would remove them from the studios.
All total, the CPA had control of Iraqi money for one year between June 2003 and June 2004, but unfortunately no auditors arrived to take a look at the agency's spending until April 2004, two months before the CPA's rule was scheduled to end.
And as so often happens when it comes to giving solid advice or warnings, the senior Senator from Virginia was absolutely right. It was far too late for audits, because the CPA and its gang of profiteers had already robbed the Iraqis blind.
The favored companies enjoyed a fraud-free-all. For instance, Halliburton said it had lost over $60 million worth of government property including trucks, office furniture and computers. Inspector Bowen reported that 6,975 items valued at $61.1 million were lost, and in June 2005, the Defense Contract Audit Agency reported that the Halliburton had overcharged or presented questionable bills for close to $1.5 billion.
In the end, Bowen's audit concluded that "the CPA's internal controls for approximately $8.8 billion in DFI funds disbursed to Iraqi ministries through the national budget process failed to provide sufficient accountability for the use of those funds."
As of February 2007, according to Bowen, audits of the CPA have resulted in 300 criminal and civil investigations, 5 arrests and convictions, and another 23 cases are currently under prosecution at the DOJ, and he is working on 76 on-going investigations.
One of the convictions involved Robert Stein, a former CPA comptroller and funding officer, who recently pleaded guilty to 5 felony counts including conspiracy, money laundering, and bribery in stealing more than $2 million of reconstruction funds and taking more than $1 million in kickbacks to rig the bids on contracts that exceeded $8 million.
The whistleblower case against Custer Battle went to trial and a jury found that Custer had committed 37 acts of fraud and filed $3 million in false claims, and rendered a verdict with a $10 million penalty. However, the verdict was overturned by Republican appointed US District Court Judge TS Ellis III, who ruled that the CPA was not a US entity and therefore the false claims act does not apply to it.
In the ruling, the judge said Custer's accusers "failed to prove that the U.S. government was ever defrauded. Any fraud that occurred was perpetrated instead against the Coalition Provisional Authority, formed to run Iraq until a government was established."
Legal experts say this ruling is great news for the CPA and contractors because from now on anyone charged with any act of fraud related to the Iraqi money doled out by the CPA in Bagdad will use it in attempt to avoid civil or criminal prosecution.
When President Bush announced "Mission Accomplished," and the end of the war in May 2003, he also said we would help the citizens of Iraq rebuild their country. "Now that the dictator's gone," he stated, "we and our coalition partners are helping Iraqis to lay the foundations of a free economy."
Apparently he was referring to the Coalition Provisional Authority that took up residence in Saddam's luxurious palace in May 2003, with the newly appointed King, Paul Bremer. The CPA was granted the authority to award reconstruction contracts in Iraq and it used that authority to implement what will go down in the history books as the most blatant war profiteering scheme of all time.
In large part, the masterminds of the reconstruction disaster that would occur after the CPA took over Iraq were Secretary of Defense, Donald Rumsfeld, and Undersecretary of Defense, Douglas Feith.
But to ensure control of the contracting process on the ground in Iraq, Bush filled the top slots of the CPA with the administration cronies. For instance, a friend of Cheney's, Peter McPherson, took a leave of absence as president of Michigan State University to serve as Bremer's economic deputy.
The leader of the CPA's private development sector was Thomas Foley, an old college classmate of Bush, who served as finance chairman for his Presidential campaign in Connecticut and also raised more than $100,000 for Bush.
Relatives of the administration were also given jobs, such as Ari Fleischer's brother Michael, and Simone Ledeen, the daughter of Michael Ledeen. Cheney's daughter Liz, also did a short stint. However, it should be noted that none of them lounged around for too long in what soon became a hellhole in Iraq.
On May 16, 2003, the CPA issued its first regulation and described its authority in no uncertain terms stating:
"The CPA is vested with all executive, legislative, and judicial authority necessary to achieve its objectives, to be exercised under relevant U.N. Security Council resolutions, including resolution 1483 (2003), and the laws and usages of war. This authority shall be exercised by the CPA Administrator."
With one swipe of the pen, Bremer granted himself the authority to run the government ministries, appoint Iraqi officials and award contracts for reconstruction. Next he fired 500,000 Iraqis, most of them soldiers, but pink slips also went out to many doctors, nurses, teachers and other public employees as well.
For the most part, the CPA financed its activities with billions of dollars that belonged to the Iraqis. On May 22, 2003, a UN Security Council passed a resolution that directed the proceeds from Iraqi oil to be placed in a Development Fund for Iraq, and the CPA was granted authority to control the fund and decide which profiteers would get contracts.
During the year that Bremer controlled the purse strings, the Iraqi Development Fund received $20.2 billion, including $8.1 billion from the UN's oil-for-food program, $10.8 billion from Iraqi oil, and the rest from repatriated funds, vested assets and donations.
The CPA accounting system was cash and carry and a steady stream of cash was flown into Bagdad from the US. Inspector General, Stuart Bowen later said that he knew of one $2 billion flight.
A report released by the House Government Reform Committee in February 2007, shows that in the 13 months that Bremer ruled, from May 2003 to June 2004, the Federal Reserve Bank in New York shipped nearly $12 billion in a cash to Iraq.
One can only imagine the Bank service charges associated with these shipments because to accomplish this feat, according to the Democratic chairman of the Reform Committee, Henry Waxman, the cash weighed 363 tons and the Bank had to count and pack 281 million individual bills, including more than 107 million $100 bills, and then load them onto wooden pallets to be shipped to Bagdad on C-130 cargo planes.
Inspector Bowen later said that he determined that some of this cash went to pay salaries for thousands of "ghost employees" and Iraqi civil servants who did not exist.
Within a few months of the CPA's arrival in Iraq reports of corruption in the contracting process began appearing in the media. A British adviser to the Iraqi Governing Council told the BBC that officials in the CPA were demanding bribes of up to $300,000 in return for contracts.
Reports of flat out-fraud remained steady throughout Bremer's reign in Iraq. One audit showed that the CPA Ministry of Finance could not provide documentation for about $17 million spent on employee salaries in February 2004, and a CPA Advisor to the Ministry of the Interior said the Ministry was paid for 8,602 guards but only 602 could be verified.
A CPA advisor to the Ministry of Finance was so concerned about payroll corruption that he submitted a formal complaint that stated in part: "Of the 1.6 million government employees currently on payroll, credible estimates put the number of ghost workers at somewhere between 250,000-300,000 employees."
An October 2004, audit performed for the International Advisory and Monitoring Board, created by the UN to monitor the spending of Iraqi money, found one case where a payment of $2.6 million was authorized by a CPA senior adviser to the Ministry of Oil, and auditors were unable to obtain an underlying contract or any evidence that the services had been rendered.
The auditors in this group found 37 cases where files could not be located for contracts worth $185 million all total. In another 52 cases, there was no record that goods had been received for a total of $87.9 million.
People on the ground in Iraq said that doing business with the CPA was reminiscent of the Wild West. Former CPA employees told a congressional committee that sackfuls of cash were tossed around like footballs. Franklin Willis, showed pictures of himself and others holding up bundles of $100 notes totaling $2 million, which he said was used to pay the contractor Custer Battles. "We told them to come in and bring a bag," Willis said.
He also testified that millions of dollars in $100 bills were stored in the basement of the CPA offices and distributed to favored contractors with little accounting discipline. For instance, in the year that the CPA ruled, Custer was awarded contracts worth more than $100 million.
Two former Custer employees ended up filing a lawsuit under the Federal False Claims Act, saying Custer had swindled $50 million from the CPA with scams like double-billing for salaries and repainting the forklifts found at the Baghdad airport and then leasing them back to the US government.
The employees said the CPA paid the Custer $15 million to provide security for Iraq's civilian airline, when no services were needed because the airline was grounded during the time covered by the contract.
These employees said they kept informing the CPA about Custer's fraudulent conduct for more than a year and when they asked why the firm continued to get contracts, they were told: "Battles is very active in the Republican party, and speaks to individuals he knows in the Whitehouse almost daily."
In June 2004, the Government Accounting Office estimated that more than $1 billion in had been wasted due to illegal overcharges by contractors since the war began. A later audit by the Iraqi government found that as much as $1.27 billion was lost to accounting irregularities between June 2004 and February 2005.
Inspector Bowen cited two examples of poor oversight in a November 3, 2005 interview on National Public Radio where $28 million was paid to build 5 power plants and $1.8 million was paid to rebuild a library, but the work was never performed and the money
"simply disappeared," he said.
A recent report by Bowen says DynCorp was paid $43.8 million for a residential camp for police training personnel and has been empty for months and that the company may also have billed $18 million in other unjustified costs.
About $4.2 million, he says, was improperly spent on 20 VIP trailers and an Olympic-size pool and an additional $36.4 million in spending for weapons such as armored vehicles, body armor and communications equipment that cannot be accounted for.
Not surprisingly, Cheney's Halliburton remained the top profiteer under Bremer's rule. A July 23, 2004, audit conducted by Bowen, showed the company had received 60% of all contracts paid for with Iraq money, including 5 no-bid contracts worth $222 million, $325 million, $180 million, and the last 2 together totaled $194 million for the last two. In comparison, the audit showed that the CPA awarded only 2% of the reconstruction contracts to Iraqi companies.
In one example of blatant fraud, an audit found that Halliburton was charging for more than 41,000 meals a day for soldiers when only about 14,000 were served.
By the fall of 2003, the country was realizing that the rational for war was based on lies and that the only ones drawing any benefits were the profiteers. So when Bush asked Congress for another $20 billion for the CPA, Bremer was summoned to Washington to explain where all the money was going and of course he testified in full stonewall mode.
Before the Appropriations Committee on September 22, 2003, Bremer said the CPA had detailed records of all its receipts and outlays that could be audited by Congress. But when he testified before the Armed Services Committee 3 days later he said the Office of Management and Budget was responsible for maintaining the CPA records and that Congress would have to go to the White House to access the records.
That arrogant assertion went over like a lead balloon with many members of Congress. Senator Robert Byrd said he was outraged over the inability to monitor CPA spending. "There is no reason why any arm of the executive branch charged with making such significant spending decisions," he said, "should not be working directly with Congress."
"When we're talking about handing over another $20 billion to the CPA," he said, "there is a real need for Congress to confirm that the CPA has its finances in order and that it is managing the taxpayer's money responsibly."
"We don't even know how much of the $20 billion," Byrd said, "will flow to government contractors in Iraq."
"Whatever the amount is," he noted, "we know that the size and scope of the profits being made will be enormous."
"Former Bush Administration officials," he warned fellow Senators, "are even setting up consulting firms to act as middlemen for contractors hoping to take part in the bonanza."
"Are we turning the U.S. Treasury into a grab bag for favorite campaign contributors to be financed at taxpayer expense?" he asked.
The answer was yes, and what a grab bag it was. Media reports revealed that Bush's ex-campaign manager and Feith's former law partner had set up consulting firms to profit off the war by lining up contracts for clients through their partners in crime within the CPA.
Other reports revealed that contracts worth $407 were awarded to a firm called Nour that was formed less than 2 months after the war began. The names linked to the profits from Nour, among many others, included former Secretary of Defense, William Cohen, Ahmad Chalabi via a $2 million kickback, his nephew Salam Chalabi as the attorney handling the deal, and the money trail even led to the First Brothers, Marvin and Jeb Bush.
But come to find out, Doug Feith the ringleader on the ground in Washington, had awarded a batch of no-bid contracts to a favored company the month before the war began for the purpose of controlling the media in post-war Iraq.
In October 2003, the Center for Public Integrity obtained copies of 7 contracts awarded to the San Diego-based Science Applications. The total value of the contracts was redacted but the Center was able to determine that they were all awarded in February 2003, and called for the work to be directed by Feith.
However, the Center's most stunning discovery was that when the contracts were awarded, Feith's top deputy at the time, Christopher "Ryan" Henry, had been a senior vice president at SAIC until October 2002.
In addition, one of SAIC's board members was Army General, Wayne Downing, who ran counterterrorism in the Bush administration for almost a year after 9/11, and had even went to the CIA with Cheney to discuss intelligence on Iraq. Downing had also served as an advisor to Ahmed Chalabi and the Iraqi National Congress, and was well-known advocate for a war against Saddam.
Some of the SAIC contracts required that specific persons referred to as "executive management consultants" be hired and the pay range listed went as high as $209 and $273 per hour. The Center said congressional sources estimated the value of the media contract as $38 million for the first year and as high $90 million in 2004.
The SAIC had no special expertise to justify the award of these contracts. One company executive, quoted in the media, said the firm's only credential for setting up an independent media, supposedly modeled after the BBC, was military work in "informational warfare"-signal jamming, "perception management," and the like.
Under these contracts, the Iraq Media Network (IMN) was established and journalist, Mark North, who covered the Iraq invasion for National Public Radio, was hired to train Iraqi journalists to report for the IMN.
In one of the many Congressional hearings, North testified about the control of the IMN by the CPA and said CPA officials regularly directed and censored the activities of the news station and provided "a laundry list of CPA activities" to cover in the news reports instead of stories about security or the lack of electricity and jobs
While testifying, he also described the CPA's shabby treatment of Iraqi employees and its refusal to pay their wages. "For the first two months," North said, "the local staff of about 200 journalists and technicians were not paid their salaries."
When the staffers went on strike in attempt to get paid, he said, the CPA told the Iraqis to get back to work or the US Army would remove them from the studios.
All total, the CPA had control of Iraqi money for one year between June 2003 and June 2004, but unfortunately no auditors arrived to take a look at the agency's spending until April 2004, two months before the CPA's rule was scheduled to end.
And as so often happens when it comes to giving solid advice or warnings, the senior Senator from Virginia was absolutely right. It was far too late for audits, because the CPA and its gang of profiteers had already robbed the Iraqis blind.
The favored companies enjoyed a fraud-free-all. For instance, Halliburton said it had lost over $60 million worth of government property including trucks, office furniture and computers. Inspector Bowen reported that 6,975 items valued at $61.1 million were lost, and in June 2005, the Defense Contract Audit Agency reported that the Halliburton had overcharged or presented questionable bills for close to $1.5 billion.
In the end, Bowen's audit concluded that "the CPA's internal controls for approximately $8.8 billion in DFI funds disbursed to Iraqi ministries through the national budget process failed to provide sufficient accountability for the use of those funds."
As of February 2007, according to Bowen, audits of the CPA have resulted in 300 criminal and civil investigations, 5 arrests and convictions, and another 23 cases are currently under prosecution at the DOJ, and he is working on 76 on-going investigations.
One of the convictions involved Robert Stein, a former CPA comptroller and funding officer, who recently pleaded guilty to 5 felony counts including conspiracy, money laundering, and bribery in stealing more than $2 million of reconstruction funds and taking more than $1 million in kickbacks to rig the bids on contracts that exceeded $8 million.
The whistleblower case against Custer Battle went to trial and a jury found that Custer had committed 37 acts of fraud and filed $3 million in false claims, and rendered a verdict with a $10 million penalty. However, the verdict was overturned by Republican appointed US District Court Judge TS Ellis III, who ruled that the CPA was not a US entity and therefore the false claims act does not apply to it.
In the ruling, the judge said Custer's accusers "failed to prove that the U.S. government was ever defrauded. Any fraud that occurred was perpetrated instead against the Coalition Provisional Authority, formed to run Iraq until a government was established."
Legal experts say this ruling is great news for the CPA and contractors because from now on anyone charged with any act of fraud related to the Iraqi money doled out by the CPA in Bagdad will use it in attempt to avoid civil or criminal prosecution.
Monday, August 2, 2010
Iraq Money Trail to Bush Cronies Must End
Evelyn Pringle April 2007
It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.
It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, “There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation.”
“As long as we are there,” he warned, “we are the number one public enemy for the Muslim-Arab world.”
“We were after all,” he points out, “a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster.”
This decorated combat veteran says Bush's strategy will never work. “We did not go to Iraq originally,” he explains, “to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become.”
After Bush's speech, military families also spoke out publicly against the decision to send more troops. “I don’t have words for it,” said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.
“This is a war,” she said, “that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable.”
An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.
This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.
The only people who are benefiting from Bush’s war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.
The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.
Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.
Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. “Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."
"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years.”
Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.
In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.
"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.
Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.
For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.
Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."
At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
According to its web site back then, the IILG was made up of lawyers and businessmen who “dared to take the lead in bringing private sector investment and experience” to the war-torn country and offered to “be your Professional Gateway to the New Iraq.”
"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.
For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.
Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.
In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.
Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.
In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.
Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.
The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.
Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."
Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."
However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.
From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.
In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.
The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.
In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."
When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.
Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush‘s former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.
“First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this.”
He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.
Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.
In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.
And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.
The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. “Getting the rights to distribute Procter & Gamble products can be a gold mine,” one of the firm’s partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.
“One well-stocked 7-Eleven,” the partner said, “could knock out thirty Iraqi stores; a Wal-Mart could take over the country.”
There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.
However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.
The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.
It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.
On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.
Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."
In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.
According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.
However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.
So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."
According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."
Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.
However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."
Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.
However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.
In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.
Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.
And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.
For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it’s a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.
And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.
We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.
It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.
It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, “There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation.”
“As long as we are there,” he warned, “we are the number one public enemy for the Muslim-Arab world.”
“We were after all,” he points out, “a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster.”
This decorated combat veteran says Bush's strategy will never work. “We did not go to Iraq originally,” he explains, “to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become.”
After Bush's speech, military families also spoke out publicly against the decision to send more troops. “I don’t have words for it,” said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.
“This is a war,” she said, “that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable.”
An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.
This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.
The only people who are benefiting from Bush’s war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.
The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.
Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.
Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. “Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."
"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years.”
Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.
In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.
"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.
Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.
For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.
Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."
At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
According to its web site back then, the IILG was made up of lawyers and businessmen who “dared to take the lead in bringing private sector investment and experience” to the war-torn country and offered to “be your Professional Gateway to the New Iraq.”
"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.
For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.
Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.
In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.
Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.
In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.
Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.
The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.
Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."
Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."
However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.
From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.
In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.
The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.
In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."
When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.
Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush‘s former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.
“First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this.”
He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.
Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.
In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.
And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.
The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. “Getting the rights to distribute Procter & Gamble products can be a gold mine,” one of the firm’s partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.
“One well-stocked 7-Eleven,” the partner said, “could knock out thirty Iraqi stores; a Wal-Mart could take over the country.”
There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.
However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.
The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.
It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.
On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.
Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."
In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.
According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.
However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.
So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."
According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."
Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.
However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."
Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.
However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.
In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.
Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.
And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.
For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it’s a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.
And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.
We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.
Top War Profiteer Doug Feith Retires Wealthy
Evelyn Pringle September 2005
Douglas Feith, the recently resigned undersecretary of defense, who just happened to be one of the main people who for years on end advocated for a war in Iraq, and who in large part developed the disastrous policies for the war in Iraq, planned ahead for his retirement and will not be seen in the unemployment line.
On January 27, 2005, the Washington Post announced: "A principal architect of the Defense Department's postwar strategy in Iraq ... will leave his post this summer."
The announcement came after years of rumors that top administration officials had decided that Feith had to go, but were dissuaded by Donald Rumsfeld who argued that his ouster would be viewed as an admission that the war in Iraq was a mistake. But the administration had definitely reduced Feith's authority over the past 2 years.
In announcing his departure, Feith claimed he was leaving for personal reasons, citing the desire to spend more time with his children. "For the last four years, they haven't seen me a lot," he told the Post.
He used the standard administration exit line. Sort of like the noticeably absent in light of Katrina, ex-FEMA director, Joe Albaugh, who left his job to spend time with his family. Joe was Bush’s chief of staff when he was governor of Texas and his campaign manager in 2000. Once Bush took office, Joe accepted a gig as director of FEMA.
Like Feith, when he announced his resignation, Joe said, "Now I am going to take the opportunity to spend some time with my wife and children."
I sure hope Doug spends more time with his kids than Joe did, because judging from hindsight, Joe should have been a psychic. He somehow knew at the beginning of March 2003, that he should quit FEMA and go into the business of securing reconstruction contracts in Iraq for wealthy clients before the first bomb was dropped. And his family could not have enjoyed much quality time at all with Joe, being he opened up New Bridge Strategies for business within a few short weeks of leaving the White House.
At the time, Josh Marshall, who writes a column for the Washington newspaper, The Hill, said that he believed that each new piece of legislation needs a catchy title, and came up with title "The Bush Crony Full-Employment Act of 2003," for the $87 billion allocated for rebuilding Iraq.
According to Josh, New Bridge was actually an outgrowth of Haley Barbour’s lobbying firm, Barbour Griffith & Rogers. Josh says he reached that conclusion after he learned that both firms were located in the same office space. And also because Lanny Griffith was the CEO of New Bridge and Ed Rogers was the vice president. Sounds like a logical conclusion to me.
When the company began, the New Bridges official web site said, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq." That phrasing was quickly changed.
How could it get any sweeter than this? Joe quits FEMA, moves into the office space of one of the most successful and powerful GOP lobbying firms in the country and starts advertising for clients who want to win reconstruction contracts in Iraq.
First Brother, Neil Bush, also jumped on this money train and landed a $60,000 a year consultant contract with a principal in New Bridge. According to Neil's testimony in his divorce deposition in March 2004, in return for his salary, he took phone messages for about 3 hours a week.
However, 3 people contacted by the Financial Times of London reported seeing letters written by Neil that recommend business ventures promoted by New Bridges in the Middle East. So we had Neil being paid an annual fee to "help companies secure contracts in Iraq," the Times reported.
I'm not too worried about Doug Feith ending up in the unemployment lines because following in Joe's footsteps, Feith and his law partner stayed very busy behind the scenes planning for Feith's retirement when it came time to leave the White House.
The Iraqi International Law Group
Before Feith was inducted into the Bush administration, he was the Feith half of the Feith & Zell, law firm in Washington. His partner, Marc Zell, simply renamed the firm, Zell, Goldberg & Co, when they decided to set up shop to start cashing in on the Iraq contracting business.
According to The Hill, Zell, was helping with international marketing for a concern called the Iraqi International Law Group. Billing itself as a group of lawyers and businessmen interested in helping investors in Iraq, the venture was run by Ahmed Chalabi's nephew Salem, who doubled as a legal adviser to Iraq's governing council, of which his uncle was a member.
How powerful was Feith in awarding contracts? Extremely. According to a June, 2004, by an article in Time Magazine entitled, "The Paper Trail: Did Cheney Okay a Deal? Feith is the person who approved the controversial no-bid contract for Halliburton in Iraq.
Time Magazine quoted an email sent by Stephen Browning of 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.
Browning, later said in an interview that he wrote the memo after he and retired Lt Gen. Jay Garner met with Feith. 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 with no bids tendered by any other companies.
If he could pull this off for Halliburton, what he could do for the IILG, goes without saying. According to its web site, the IILG was made up of lawyers and businessmen who claimed to have, "dared to take the lead in bringing private sector investment and experience" to the war-torn country and offered to "be your Professional Gateway to the New Iraq."
The way it was set up, nephew Salem was charge of the IILG and Feith's partner, Zell, was in charge of international marketing. The IILG's website claimed that it was the only firm worth consulting. "At IILG, our task is to provide foreign enterprise with the information and tools it needs to enter the emerging Iraq and to succeed," it said.
"Our clients number among the largest corporations and institutions on the planet" it said, "They have chosen IILG to provide them with real-time, on the ground intelligence they cannot get from inexperienced local firms or from overburdened coalition and local government officials."
Imagine that, the top firms on the planet.
"Many firms outside the country purport to counsel companies about doing business in Iraq," the web site read. "The simple fact is: you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
The truth is, the IILG was nothing more than another one of many front companies, in a web-like profiteering network, that was specifically set up to funnel tax dollars through Iraq and back into the pockets of the Bush gang.
And talk about blatant. When the company was set up, its website was not registered to Salem Chalabi; it was registered under the name of Marc Zell, located at the very same address as Zell, Goldberg & Co.
According to Salem, quoted in the National Journal, Zell was IILG's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
This tied in with an announcement by Zell, Goldberg & Co, that it had set up a "task force" dealing with issues and opportunities relating to the "recently ended" war in Iraq, and to assist companies "in their relations with the United States government in connection with Iraqi reconstruction projects as prime contractors and consultants."
Of course Zell made no mention of the firm's ties to the infamous nephew Salem or the IILG. Zell said it was working with the Federal Market Group, an organization which specialized in helping companies win government contracts, which boasted of having a 90% success rate.
Considering all of its boasting about high level connections, IILG was also rather modest about the family ties of its founder. The website did not mention that he was the nephew of Ahmed Chalabi even once. Geez, I wonder why.
Implementing The Iraq Profiteering Scheme
Feith had been pushing for the ouster of Saddam for years. In 1998, him and Richard Perle sent a letter to President Bill Clinton proposing that the US team up with Ahmed Chalabi's Iraqi National Congress to get rid of Saddam. Clinton refused.
As we all know, Ahmed had strong support within the Pentagon. In fact, two of his staunchest supporters were Feith, and Perle, chairman of the Defense Policy Board.
Perle, an assistant defense secretary during the Reagan administration, was appointed by his old crony, Donald Rumsfeld, to lead the board in 2001. Its a well-known fact that the board exerts tremendous influence when it comes to war policies.
As soon as Bush took office, Perle, Feith and Ahmed Chalabi all started working diligently together to get the war in Iraq off the ground, with Ahmed providing bogus intelligence about WMDs and bragging about a secret network within Iraq which could take over running the country after the invasion.
"There was a close personal bond, too, between Chalabi and Wolfowitz and Perle, dating back many years," according to Seymour Hersh in the May 5, 2003 the New Yorker.
"Their relationship deepened after the Bush Administration took office, and Chalabi’s ties extended to others in the Administration, including Rumsfeld; Douglas Feith, the Under-Secretary of Defense for Policy; and I. Lewis Libby, Vice-President Dick Cheney’s chief of staff," Hersh wrote.
"With the Pentagon’s support, Chalabi’s group worked to put defectors with compelling stories in touch with reporters in the United States and Europe," Hersh said, "The resulting articles had dramatic accounts of advances in weapons of mass destruction or told of ties to terrorist groups. In some cases, these stories were disputed in analyses by the C.I.A." he noted.
Almost immediately after September 11th, "the I.N.C. began to publicize the stories of defectors who claimed that they had information connecting Iraq to the attacks, Hersh said.
For example, in a October 14, 2001, interview on PBS "Frontline," Sabah Khodada, an Iraqi Army captain, said that the 9/11 attack "was conducted by people who were trained by Saddam," and that Iraq had a program to instruct terrorists in the art of hijacking. Another defector, who was identified as a retired lieutenant general in the Iraqi intelligence service, said that in 2000 he witnessed Arab students being given lessons in hijacking on a Boeing 707 parked at an Iraqi training camp near the town of Salman Pak, south of Baghdad.
Feith then fed this type of INC data into a fabrication mill operating at top speed known as the Office of Special Plans and some of the information processed through the OSP was not even shared with official intelligence agencies. In many instances it was passed on to the National Security Council, Cheney, and Bush without having been vetted by anyone besides this group of nitwits.
And they had to know that much of the information was false. A former high-level intelligence official told Hersh that American Special Forces units had been sent into Iraq in mid-March 2003, before the start of the war, to investigate sites suspected of being missile or chemical- and biological-weapon storage depots. "They came up with nothing," the official told Hersh. "Never found a single Scud."
A 46 page report, based on a 15-month investigation, titled, Report of an Inquiry into the Alternative Analysis of the Issue of an Iraq-al Qaeda Relationship, was released on October 21, 2004, which said, "There is ample evidence that the Bush Administration had a predisposition to overthrow Saddam Hussein before the 9/11 attacks."
The report accused Feith's office of compiling "selective reinterpretations of intelligence" that went beyond the views of American spy agencies in order to help make the case for an invasion of Iraq.
The report concluded that Feith and his staff were convinced that a relationship existed between Saddam and Al Qaeda, and that the office had advanced that perspective by trying to change the intelligence community's views and "by taking its interpretation straight to policymakers."
"That alleged relationship," the report said, "coupled with the assertion that Iraq possessed stockpiles of weapons of mass destruction (WMD), was the major argument presented by the Administration for invading Iraq."
Relying on selective reporting, irrespective of credibility and reliability, Feith’s briefing concluded the following:
• Iraq had "more than a decade of numerous contacts" with al Qaeda;
• there were "multiple areas of cooperation" between Iraq and al Qaeda;
• Iraq and al Qaeda had a "shared interest and pursuit of WMD;" and
• there was "[o]ne indication of Iraq coordination with al Qaeda specifically related to 9/11," presumably a reference to the alleged (but doubted by the IC) Atta meeting in Prague.
The report states that there are no known intelligence reports, other than those provided by Feith's office, that could explain where this view originated. "A pattern emerges of senior administration officials exaggerating the extent of the relationship in public statements which more closely reflect the Feith analysis" than those of the intelligence community, it said.
As an obvious example, the report said Feith's office repeatedly asserted in the months leading up to the war that lead hijacker Mohammed Atta had met with an Iraqi intelligence agent in Prague in the spring before the September 11 attacks, an account that the CIA dismissed because evidence existed that Atta was elsewhere at the time.
And in at least one case, according to the report, the Pentagon office included the purported meeting in a report sent to the White House, but omitted it from the version of the same report sent to the CIA.
The meeting was then constantly referred to by senior administration officials, and especially Cheney, as evidence of a possible Saddam link to 9/11. In fact, Cheney said the Feith analysis was the "best source of information," according to the report.
However, not only had the alleged meeting never been "known," at the time of the briefing to the White House, the Intelligence Community was skeptical in late spring 2002 that such a meeting ever took place. Yet in September of 2002, Feith called the meeting a "known contact" in a crucial misstatement about the intelligence, since it indicated a link which did not exist.
"The professional objectivity and independence required in the assessment of the Iraq-Al Qaeda relationship, a major reason given for going to war, were compromised to support a predetermined policy -- to present the government of Saddam Hussein as a serious threat to the security of the United States" the report wrote.
Finally, relative to the attacks, the final 911 Commission Report itself said that the "Intelligence Community has no credible information that Baghdad had foreknowledge of the 11 September attacks or any other al-Qaida strike."
Inventing bogus intelligence was bad enough but during the pre-war planning, the military experts were systematically excluded from participating in that process as well. In the end, Feith and the OSP had so grossly underestimated the Iraqi resistance that it caused General Tommy Franks, who led the invasion in Iraq, to call Feith "the fucking stupidest guy on the face of the earth," according Bob Woodward's book Plan of Attack.
Feith and the Defense Policy Board
The DPB is a group of 30 people, who for the most part were chosen by Rumsfeld and Feith, that advises officials on whether to go to war or not. Many of its members are literally making a fortune off a war which they had been promoting for years. At least 9 members have ties to companies that won more than $76 billion in defense contracts during 2001 and 2002.
Feith excluded many top Middle East experts from the State Department from playing any meaningful role in the Coalition Provisional Authority (CPA). Feith's office and the CPA were tasked with awarding reconstruction contracts in Iraq.
So this was another sweet setup. Feith was deciding who would get contracts, at the same time that his middleman law partner, Zel, was hustling up business deals in Iraq for rich clients. Of course, for members of the Bush war profiteering club, this was merely business as usual.
Among the firms that have profited the most, are those with consultants serving on the DPB, many of which were hand-picked by Feith.
Some of the construction and defense companies with direct ties to DPB members include Boeing, Bechtel, TRW, Northrop Grumman, Lockheed Martin and Booz Allen Hamilton, along with smaller players like Symantec Corp, Technology Strategies and Alliance Corp, and Polycom Inc.
How much money was up for grabs when it came to doling out defense contracts? For starters, during the major combat phase of the war, the US military launched over 800 Tomahawk cruise missiles at Iraqi forces, according to figures released by the US Navy.
At a price of about $569,000 each, replacing those missiles no doubt generated a lofty amount for Raytheon Systems, the Pentagon contractor for Tomahawks. Close to a 100 more missiles were fired during Operation Enduring Freedom in Afghanistan.
Occupation forces later launched over 19,000 guided munitions in Iraq, most of which came from the US, according to a report on Operation Iraqi Freedom published by the US Central Command Air Forces on 30 April 2003.
There was a $10.3 billion proposal for the development of a missile defense program in Bush’s 2005 defense spending budget, of which Lockheed Martin would be heavily involved in, according to a report from the World Policy Institute.
Northrop Grumman, the country's third largest defense contractor, secured contracts to build new weapons systems such as the unmanned predator drones. The firm is the prime contractor for the Global Hawk Unmanned Aerial Vehicle (UAV). Bush proposed $12 billion for UAV development for the years between 2004 - 2009. Northrop earned a company record of $11.1 billion in defense contracts in 2003.
And Bush is funneling our tax dollars to known crooks. Northrop's Vinnell subsidiary was awarded a $48 million contract to train the new Iraqi Army, even though Northrop was forced to pay $191.7 million in penalties over the previous 4 years.
In less than a year after he took office, Bush got rid of regulations implemented by President Clinton that barred contracts for companies convicted or penalized for crimes during the previous 3 years. Clinton strengthened the rules before leaving office, and said that repeated violations would make a company ineligible for new contracts. Bush suspended the regulations within his first 3 months in office. By December 2001, he had revoked them entirely.
Who Else Is Raking In War Profits?
Lets look at a couple members of the Defense Policy Board. Former CIA Director, James Woolsey, is a prime example of how the revolving door never stops spinning for this gang of war profiteers. After he left the CIA, Woolsey remained a senior advisor on intelligence and national security issues, and specifically the war in Iraq. When the war began, he worked for two private companies that did business in Iraq, and was a partner in a company that invested in firms that provide security and anti-terrorism services.
At the time, Woolsey was a vice president at Booz Allen Hamilton. In that role, less than 2 months after the war began, he was a featured speaker at a May 2003 conference titled "Companies on the Ground: The Challenge for Business in Rebuilding Iraq," at which 80 corporate executives paid $1,100 to attend. He spoke about the many potential business opportunities in Iraq and about Bush's decision to steer reconstruction contracts to US firms.
With Woolsey in a Vice President position, Booz Allen became a subcontractor for a $75-million telecommunications contract in Iraq. Of course in true Dick Cheney style, Woolsey denies any involvement in that work. But then, it really does not matter whether he was directly involved or not because as VP of the company he would get a cut of the profits resulting from any contracts the firm enters into.
Soon after 9/11, Woolsey wrote an op ed piece in the Wall Street Journal saying a foreign state had aided Al Qaeda in preparing the attacks and named Iraq as the leading culprit. In October 2001, Deputy Secretary of Defense Wolfowitz sent Woolsey to the UK to hunt for evidence to link Saddam to the attacks.
Before the war, Woolsey was up to his neck in war planning. In addition to sitting on the DPB and giving direct advice to Rumsfeld, he was a founding member of the Committee for the Liberation of Iraq (CLI), an organization set up by the WH in 2002 to help garner public support for going to war in Iraq.
They actually put together a promotion team to rally support for the war funded with our tax dollars no less. Tell me this scheme wasn't well planned and directed.
Before the war, another DPB member, Margaret Bartel, managed the funds channeled to Amhed Chalabi's exile group, the INC, including funds for its bogus prewar intelligence program on WMDs. Once it began, Bartel went on to head a consulting firm which helped investors find Iraqi partners.
Bartel established Global Positioning and told the LA Times that the firm's primary purpose was to "introduce clients to the Iraqi market, help them find potential Iraqi partners, set up meetings with government officials … and provide on-the-ground support for their business interests." So here was another sweet set up.
As for the chairman of the DPB, Richard Perle was a "special government employee," subject to federal ethics rules, including the rule that bars the chairman from using his public office for private gain.
Perle decided to resign as chairman after a little ethical problem came under scrutiny in March 2003. It was discovered that at the same time that he was advising the Pentagon on war policies, Perle had been retained by the telecommunications company Global Crossing to help overcome opposition by the Department of Defense and the FBI to the firms proposed sale to a Chinese company.
The agencies objected to the sale citing national security and law enforcement problems, because it would put Global's fiber-optic network, used by the US government, under Chinese ownership.
According to a legal notice that Global was preparing to file in bankruptcy court at the time, Perle was set to make $725,000, including $600,000 if the government approved the sale of the firm to the joint venture of Hutchison Whampoa Ltd, and Singapore Technologies Telemedia Pte, a company controlled by the Singapore government.
Perle was quick to pipe up to reporters and make the distinction that he was not involved in the lobbying of Defense Department officials, that his job was merely to advise Global on the process of gaining approval. That sure put my mind at ease.
In the end, I don't think its likely that Feith will end up in the welfare lines. Due to careful post-White House planning, I think its safe to say that Feith and his band of cronies will enjoy financial benefits for life, just so long as their never-ending war policies are carried on by their successor.
Douglas Feith, the recently resigned undersecretary of defense, who just happened to be one of the main people who for years on end advocated for a war in Iraq, and who in large part developed the disastrous policies for the war in Iraq, planned ahead for his retirement and will not be seen in the unemployment line.
On January 27, 2005, the Washington Post announced: "A principal architect of the Defense Department's postwar strategy in Iraq ... will leave his post this summer."
The announcement came after years of rumors that top administration officials had decided that Feith had to go, but were dissuaded by Donald Rumsfeld who argued that his ouster would be viewed as an admission that the war in Iraq was a mistake. But the administration had definitely reduced Feith's authority over the past 2 years.
In announcing his departure, Feith claimed he was leaving for personal reasons, citing the desire to spend more time with his children. "For the last four years, they haven't seen me a lot," he told the Post.
He used the standard administration exit line. Sort of like the noticeably absent in light of Katrina, ex-FEMA director, Joe Albaugh, who left his job to spend time with his family. Joe was Bush’s chief of staff when he was governor of Texas and his campaign manager in 2000. Once Bush took office, Joe accepted a gig as director of FEMA.
Like Feith, when he announced his resignation, Joe said, "Now I am going to take the opportunity to spend some time with my wife and children."
I sure hope Doug spends more time with his kids than Joe did, because judging from hindsight, Joe should have been a psychic. He somehow knew at the beginning of March 2003, that he should quit FEMA and go into the business of securing reconstruction contracts in Iraq for wealthy clients before the first bomb was dropped. And his family could not have enjoyed much quality time at all with Joe, being he opened up New Bridge Strategies for business within a few short weeks of leaving the White House.
At the time, Josh Marshall, who writes a column for the Washington newspaper, The Hill, said that he believed that each new piece of legislation needs a catchy title, and came up with title "The Bush Crony Full-Employment Act of 2003," for the $87 billion allocated for rebuilding Iraq.
According to Josh, New Bridge was actually an outgrowth of Haley Barbour’s lobbying firm, Barbour Griffith & Rogers. Josh says he reached that conclusion after he learned that both firms were located in the same office space. And also because Lanny Griffith was the CEO of New Bridge and Ed Rogers was the vice president. Sounds like a logical conclusion to me.
When the company began, the New Bridges official web site said, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq." That phrasing was quickly changed.
How could it get any sweeter than this? Joe quits FEMA, moves into the office space of one of the most successful and powerful GOP lobbying firms in the country and starts advertising for clients who want to win reconstruction contracts in Iraq.
First Brother, Neil Bush, also jumped on this money train and landed a $60,000 a year consultant contract with a principal in New Bridge. According to Neil's testimony in his divorce deposition in March 2004, in return for his salary, he took phone messages for about 3 hours a week.
However, 3 people contacted by the Financial Times of London reported seeing letters written by Neil that recommend business ventures promoted by New Bridges in the Middle East. So we had Neil being paid an annual fee to "help companies secure contracts in Iraq," the Times reported.
I'm not too worried about Doug Feith ending up in the unemployment lines because following in Joe's footsteps, Feith and his law partner stayed very busy behind the scenes planning for Feith's retirement when it came time to leave the White House.
The Iraqi International Law Group
Before Feith was inducted into the Bush administration, he was the Feith half of the Feith & Zell, law firm in Washington. His partner, Marc Zell, simply renamed the firm, Zell, Goldberg & Co, when they decided to set up shop to start cashing in on the Iraq contracting business.
According to The Hill, Zell, was helping with international marketing for a concern called the Iraqi International Law Group. Billing itself as a group of lawyers and businessmen interested in helping investors in Iraq, the venture was run by Ahmed Chalabi's nephew Salem, who doubled as a legal adviser to Iraq's governing council, of which his uncle was a member.
How powerful was Feith in awarding contracts? Extremely. According to a June, 2004, by an article in Time Magazine entitled, "The Paper Trail: Did Cheney Okay a Deal? Feith is the person who approved the controversial no-bid contract for Halliburton in Iraq.
Time Magazine quoted an email sent by Stephen Browning of 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.
Browning, later said in an interview that he wrote the memo after he and retired Lt Gen. Jay Garner met with Feith. 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 with no bids tendered by any other companies.
If he could pull this off for Halliburton, what he could do for the IILG, goes without saying. According to its web site, the IILG was made up of lawyers and businessmen who claimed to have, "dared to take the lead in bringing private sector investment and experience" to the war-torn country and offered to "be your Professional Gateway to the New Iraq."
The way it was set up, nephew Salem was charge of the IILG and Feith's partner, Zell, was in charge of international marketing. The IILG's website claimed that it was the only firm worth consulting. "At IILG, our task is to provide foreign enterprise with the information and tools it needs to enter the emerging Iraq and to succeed," it said.
"Our clients number among the largest corporations and institutions on the planet" it said, "They have chosen IILG to provide them with real-time, on the ground intelligence they cannot get from inexperienced local firms or from overburdened coalition and local government officials."
Imagine that, the top firms on the planet.
"Many firms outside the country purport to counsel companies about doing business in Iraq," the web site read. "The simple fact is: you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
The truth is, the IILG was nothing more than another one of many front companies, in a web-like profiteering network, that was specifically set up to funnel tax dollars through Iraq and back into the pockets of the Bush gang.
And talk about blatant. When the company was set up, its website was not registered to Salem Chalabi; it was registered under the name of Marc Zell, located at the very same address as Zell, Goldberg & Co.
According to Salem, quoted in the National Journal, Zell was IILG's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
This tied in with an announcement by Zell, Goldberg & Co, that it had set up a "task force" dealing with issues and opportunities relating to the "recently ended" war in Iraq, and to assist companies "in their relations with the United States government in connection with Iraqi reconstruction projects as prime contractors and consultants."
Of course Zell made no mention of the firm's ties to the infamous nephew Salem or the IILG. Zell said it was working with the Federal Market Group, an organization which specialized in helping companies win government contracts, which boasted of having a 90% success rate.
Considering all of its boasting about high level connections, IILG was also rather modest about the family ties of its founder. The website did not mention that he was the nephew of Ahmed Chalabi even once. Geez, I wonder why.
Implementing The Iraq Profiteering Scheme
Feith had been pushing for the ouster of Saddam for years. In 1998, him and Richard Perle sent a letter to President Bill Clinton proposing that the US team up with Ahmed Chalabi's Iraqi National Congress to get rid of Saddam. Clinton refused.
As we all know, Ahmed had strong support within the Pentagon. In fact, two of his staunchest supporters were Feith, and Perle, chairman of the Defense Policy Board.
Perle, an assistant defense secretary during the Reagan administration, was appointed by his old crony, Donald Rumsfeld, to lead the board in 2001. Its a well-known fact that the board exerts tremendous influence when it comes to war policies.
As soon as Bush took office, Perle, Feith and Ahmed Chalabi all started working diligently together to get the war in Iraq off the ground, with Ahmed providing bogus intelligence about WMDs and bragging about a secret network within Iraq which could take over running the country after the invasion.
"There was a close personal bond, too, between Chalabi and Wolfowitz and Perle, dating back many years," according to Seymour Hersh in the May 5, 2003 the New Yorker.
"Their relationship deepened after the Bush Administration took office, and Chalabi’s ties extended to others in the Administration, including Rumsfeld; Douglas Feith, the Under-Secretary of Defense for Policy; and I. Lewis Libby, Vice-President Dick Cheney’s chief of staff," Hersh wrote.
"With the Pentagon’s support, Chalabi’s group worked to put defectors with compelling stories in touch with reporters in the United States and Europe," Hersh said, "The resulting articles had dramatic accounts of advances in weapons of mass destruction or told of ties to terrorist groups. In some cases, these stories were disputed in analyses by the C.I.A." he noted.
Almost immediately after September 11th, "the I.N.C. began to publicize the stories of defectors who claimed that they had information connecting Iraq to the attacks, Hersh said.
For example, in a October 14, 2001, interview on PBS "Frontline," Sabah Khodada, an Iraqi Army captain, said that the 9/11 attack "was conducted by people who were trained by Saddam," and that Iraq had a program to instruct terrorists in the art of hijacking. Another defector, who was identified as a retired lieutenant general in the Iraqi intelligence service, said that in 2000 he witnessed Arab students being given lessons in hijacking on a Boeing 707 parked at an Iraqi training camp near the town of Salman Pak, south of Baghdad.
Feith then fed this type of INC data into a fabrication mill operating at top speed known as the Office of Special Plans and some of the information processed through the OSP was not even shared with official intelligence agencies. In many instances it was passed on to the National Security Council, Cheney, and Bush without having been vetted by anyone besides this group of nitwits.
And they had to know that much of the information was false. A former high-level intelligence official told Hersh that American Special Forces units had been sent into Iraq in mid-March 2003, before the start of the war, to investigate sites suspected of being missile or chemical- and biological-weapon storage depots. "They came up with nothing," the official told Hersh. "Never found a single Scud."
A 46 page report, based on a 15-month investigation, titled, Report of an Inquiry into the Alternative Analysis of the Issue of an Iraq-al Qaeda Relationship, was released on October 21, 2004, which said, "There is ample evidence that the Bush Administration had a predisposition to overthrow Saddam Hussein before the 9/11 attacks."
The report accused Feith's office of compiling "selective reinterpretations of intelligence" that went beyond the views of American spy agencies in order to help make the case for an invasion of Iraq.
The report concluded that Feith and his staff were convinced that a relationship existed between Saddam and Al Qaeda, and that the office had advanced that perspective by trying to change the intelligence community's views and "by taking its interpretation straight to policymakers."
"That alleged relationship," the report said, "coupled with the assertion that Iraq possessed stockpiles of weapons of mass destruction (WMD), was the major argument presented by the Administration for invading Iraq."
Relying on selective reporting, irrespective of credibility and reliability, Feith’s briefing concluded the following:
• Iraq had "more than a decade of numerous contacts" with al Qaeda;
• there were "multiple areas of cooperation" between Iraq and al Qaeda;
• Iraq and al Qaeda had a "shared interest and pursuit of WMD;" and
• there was "[o]ne indication of Iraq coordination with al Qaeda specifically related to 9/11," presumably a reference to the alleged (but doubted by the IC) Atta meeting in Prague.
The report states that there are no known intelligence reports, other than those provided by Feith's office, that could explain where this view originated. "A pattern emerges of senior administration officials exaggerating the extent of the relationship in public statements which more closely reflect the Feith analysis" than those of the intelligence community, it said.
As an obvious example, the report said Feith's office repeatedly asserted in the months leading up to the war that lead hijacker Mohammed Atta had met with an Iraqi intelligence agent in Prague in the spring before the September 11 attacks, an account that the CIA dismissed because evidence existed that Atta was elsewhere at the time.
And in at least one case, according to the report, the Pentagon office included the purported meeting in a report sent to the White House, but omitted it from the version of the same report sent to the CIA.
The meeting was then constantly referred to by senior administration officials, and especially Cheney, as evidence of a possible Saddam link to 9/11. In fact, Cheney said the Feith analysis was the "best source of information," according to the report.
However, not only had the alleged meeting never been "known," at the time of the briefing to the White House, the Intelligence Community was skeptical in late spring 2002 that such a meeting ever took place. Yet in September of 2002, Feith called the meeting a "known contact" in a crucial misstatement about the intelligence, since it indicated a link which did not exist.
"The professional objectivity and independence required in the assessment of the Iraq-Al Qaeda relationship, a major reason given for going to war, were compromised to support a predetermined policy -- to present the government of Saddam Hussein as a serious threat to the security of the United States" the report wrote.
Finally, relative to the attacks, the final 911 Commission Report itself said that the "Intelligence Community has no credible information that Baghdad had foreknowledge of the 11 September attacks or any other al-Qaida strike."
Inventing bogus intelligence was bad enough but during the pre-war planning, the military experts were systematically excluded from participating in that process as well. In the end, Feith and the OSP had so grossly underestimated the Iraqi resistance that it caused General Tommy Franks, who led the invasion in Iraq, to call Feith "the fucking stupidest guy on the face of the earth," according Bob Woodward's book Plan of Attack.
Feith and the Defense Policy Board
The DPB is a group of 30 people, who for the most part were chosen by Rumsfeld and Feith, that advises officials on whether to go to war or not. Many of its members are literally making a fortune off a war which they had been promoting for years. At least 9 members have ties to companies that won more than $76 billion in defense contracts during 2001 and 2002.
Feith excluded many top Middle East experts from the State Department from playing any meaningful role in the Coalition Provisional Authority (CPA). Feith's office and the CPA were tasked with awarding reconstruction contracts in Iraq.
So this was another sweet setup. Feith was deciding who would get contracts, at the same time that his middleman law partner, Zel, was hustling up business deals in Iraq for rich clients. Of course, for members of the Bush war profiteering club, this was merely business as usual.
Among the firms that have profited the most, are those with consultants serving on the DPB, many of which were hand-picked by Feith.
Some of the construction and defense companies with direct ties to DPB members include Boeing, Bechtel, TRW, Northrop Grumman, Lockheed Martin and Booz Allen Hamilton, along with smaller players like Symantec Corp, Technology Strategies and Alliance Corp, and Polycom Inc.
How much money was up for grabs when it came to doling out defense contracts? For starters, during the major combat phase of the war, the US military launched over 800 Tomahawk cruise missiles at Iraqi forces, according to figures released by the US Navy.
At a price of about $569,000 each, replacing those missiles no doubt generated a lofty amount for Raytheon Systems, the Pentagon contractor for Tomahawks. Close to a 100 more missiles were fired during Operation Enduring Freedom in Afghanistan.
Occupation forces later launched over 19,000 guided munitions in Iraq, most of which came from the US, according to a report on Operation Iraqi Freedom published by the US Central Command Air Forces on 30 April 2003.
There was a $10.3 billion proposal for the development of a missile defense program in Bush’s 2005 defense spending budget, of which Lockheed Martin would be heavily involved in, according to a report from the World Policy Institute.
Northrop Grumman, the country's third largest defense contractor, secured contracts to build new weapons systems such as the unmanned predator drones. The firm is the prime contractor for the Global Hawk Unmanned Aerial Vehicle (UAV). Bush proposed $12 billion for UAV development for the years between 2004 - 2009. Northrop earned a company record of $11.1 billion in defense contracts in 2003.
And Bush is funneling our tax dollars to known crooks. Northrop's Vinnell subsidiary was awarded a $48 million contract to train the new Iraqi Army, even though Northrop was forced to pay $191.7 million in penalties over the previous 4 years.
In less than a year after he took office, Bush got rid of regulations implemented by President Clinton that barred contracts for companies convicted or penalized for crimes during the previous 3 years. Clinton strengthened the rules before leaving office, and said that repeated violations would make a company ineligible for new contracts. Bush suspended the regulations within his first 3 months in office. By December 2001, he had revoked them entirely.
Who Else Is Raking In War Profits?
Lets look at a couple members of the Defense Policy Board. Former CIA Director, James Woolsey, is a prime example of how the revolving door never stops spinning for this gang of war profiteers. After he left the CIA, Woolsey remained a senior advisor on intelligence and national security issues, and specifically the war in Iraq. When the war began, he worked for two private companies that did business in Iraq, and was a partner in a company that invested in firms that provide security and anti-terrorism services.
At the time, Woolsey was a vice president at Booz Allen Hamilton. In that role, less than 2 months after the war began, he was a featured speaker at a May 2003 conference titled "Companies on the Ground: The Challenge for Business in Rebuilding Iraq," at which 80 corporate executives paid $1,100 to attend. He spoke about the many potential business opportunities in Iraq and about Bush's decision to steer reconstruction contracts to US firms.
With Woolsey in a Vice President position, Booz Allen became a subcontractor for a $75-million telecommunications contract in Iraq. Of course in true Dick Cheney style, Woolsey denies any involvement in that work. But then, it really does not matter whether he was directly involved or not because as VP of the company he would get a cut of the profits resulting from any contracts the firm enters into.
Soon after 9/11, Woolsey wrote an op ed piece in the Wall Street Journal saying a foreign state had aided Al Qaeda in preparing the attacks and named Iraq as the leading culprit. In October 2001, Deputy Secretary of Defense Wolfowitz sent Woolsey to the UK to hunt for evidence to link Saddam to the attacks.
Before the war, Woolsey was up to his neck in war planning. In addition to sitting on the DPB and giving direct advice to Rumsfeld, he was a founding member of the Committee for the Liberation of Iraq (CLI), an organization set up by the WH in 2002 to help garner public support for going to war in Iraq.
They actually put together a promotion team to rally support for the war funded with our tax dollars no less. Tell me this scheme wasn't well planned and directed.
Before the war, another DPB member, Margaret Bartel, managed the funds channeled to Amhed Chalabi's exile group, the INC, including funds for its bogus prewar intelligence program on WMDs. Once it began, Bartel went on to head a consulting firm which helped investors find Iraqi partners.
Bartel established Global Positioning and told the LA Times that the firm's primary purpose was to "introduce clients to the Iraqi market, help them find potential Iraqi partners, set up meetings with government officials … and provide on-the-ground support for their business interests." So here was another sweet set up.
As for the chairman of the DPB, Richard Perle was a "special government employee," subject to federal ethics rules, including the rule that bars the chairman from using his public office for private gain.
Perle decided to resign as chairman after a little ethical problem came under scrutiny in March 2003. It was discovered that at the same time that he was advising the Pentagon on war policies, Perle had been retained by the telecommunications company Global Crossing to help overcome opposition by the Department of Defense and the FBI to the firms proposed sale to a Chinese company.
The agencies objected to the sale citing national security and law enforcement problems, because it would put Global's fiber-optic network, used by the US government, under Chinese ownership.
According to a legal notice that Global was preparing to file in bankruptcy court at the time, Perle was set to make $725,000, including $600,000 if the government approved the sale of the firm to the joint venture of Hutchison Whampoa Ltd, and Singapore Technologies Telemedia Pte, a company controlled by the Singapore government.
Perle was quick to pipe up to reporters and make the distinction that he was not involved in the lobbying of Defense Department officials, that his job was merely to advise Global on the process of gaining approval. That sure put my mind at ease.
In the end, I don't think its likely that Feith will end up in the welfare lines. Due to careful post-White House planning, I think its safe to say that Feith and his band of cronies will enjoy financial benefits for life, just so long as their never-ending war policies are carried on by their successor.
Iraqis To Bush - Where Did All Our Money Go?
September 12, 2005
Evelyn Pringle
I have come to the conclusion that even if I live to be 100, I will never be able to track down every Bush-connected profiteer involved in this phony war on terror scheme. According to a report released in March 2005, by Transparency International (TI), an international organization that focuses on matters of corruption, Iraq could become "the biggest corruption scandal in history."
"I can see all sorts of levels of corruption in Iraq," report contributor Reinoud Leenders told the Christian Science Monitor, "starting from petty officials asking for bribes to process a passport, way up to contractors delivering shoddy work and the kind of high-level corruption involving ministers and high officials handing out contracts to their friends and clients."
One of the top ten crooks, has got to be Ahmed Chalabi. A former banker in Jordon, Chalabi was forced to flee the country in 1989 before he could be arrested for his involvement in a $200 million financial scam. He was later tried and found guilty in his absence, and sentenced to 22 years in prison for more than 30 charges of theft, embezzlement, misuse of depositor funds, and currency speculation.
However, a little criminal history obviously didn't bother the Bush gang, because Chalabi was one of the first Iraqis flown into Iraq by the Pentagon during the 2003 invasion, supposedly so he could solidify his political base, which pretty much has proved to be non-existent.
By now, I cannot believe that anyone could possibly doubt Chalabi's role in the plot to take over Iraq. He was very much in the loop from day one, according to a March 17, 2005, report by BBC's Newsnight which said, "the Bush administration made plans for war and for Iraq's oil before the 9/11 attacks sparking a policy battle between neo-cons and Big Oil." Insiders told Newsnight that the planning began "within weeks" of Bush taking office.
An Iraqi-born oil industry consultant, Falah Aljibury, told Newsnight that he took part in secret meetings in California, Washington and the Middle East. He described a State Department plan for a forced coup d'etat. Aljibury said that he had even interviewed potential successors for Saddam on behalf of the Bush administration.
However, "The industry-favored plan was pushed aside by yet another secret plan," wrote Newnight, "drafted just before the invasion in 2003, which called for the sell-off of all of Iraq's oil fields."
The sell-off plan was given the OK at a secret meeting headed by none other that Ahmed Chalabi, shortly after the invasion of Baghdad, according to Robert Ebel, a former Energy and CIA oil analyst. He attended the London meeting at the request of the State Department, Ebel told Newsnight.
Falah Aljibury contends that it was the plan to sell off Iraq's oil, which ultimately led to the insurgency and attacks on US occupying forces. "We saw an increase in the bombing of oil facilities, pipelines, built on the premise that privatization is coming," he reported.
Of course it probably didn't help matters when the Iraqis were forced to watch as Halliburton's fortunes increased with money from the Development Fund for Iraq, through the award of 5 no-bid contracts, by the Coalition Provisional Authority, to the tune of $222 million, $325 million, $180 million, and a total of $194 million for the last two, which I just happened to find listed back in the Appendix to a July 28, 2004, report by the CPA Inspector General, titled "Comptroller Cash Management Controls over the Development Fund for Iraq."
The CPA Office of the Inspector General (CPA-IG) was established by Congress on November 6, 2003, to serve as “as an independent, objective evaluator of the operations and activities of the CPA,” according to the official web site. The CPA-IG reported directly to Administrator Paul Bremer, although it had independent authority to conduct audits and investigations without the Administrator’s approval.
A report in January 2005, by CPA Inspector General, Stuart Bowen, concluded that occupation authorities accounted poorly for $8.8 billion in Iraqi funds. "The CPA did not implement adequate financial controls," Bowen said.
That was definitely an understatement. A former CPA senior adviser, Franklin Willis, compared Iraq to the "Wild West," saying he delivered one $2 million payment to one company, Custer Battles, in bricks of cash.
"We called Mike Battles in and said, 'Bring a bag'," Willis said in testimony before Congress in February 2005.
Custer was another piece of work. Two former employees turned whistleblowers filed a law suit against the company with a complaint that said among other things, that Custer Battles double-billed for salaries and repainted the Iraqi Airways forklifts they found at the Baghdad airport, which Custer was hired to secure, and then leased them back to the US government. The two former employees, Pete Baldwin and Robert Isakson, claim Custer swindled the CPA out of about $50 million.
Bush was quick to criticize the UN over millions of dollars stolen from the Oil-for-Food Program under Saddam. But the CPA, as the successor to Oil-for-Food Program, aka Development Fund for Iraq, involves the swindling of billions of dollars.
And Custer represents only one crooked contractor. The investigation by the CPA-IG which resulted in the Comptroller Cash Management Report, determined that when it came to Iraqi cash, proper accountability was not maintained, physical security was inadequate, records were incomplete, and fund managers’ responsibilities were not assigned properly.
The auditors who participated in the investigation were unable to reconcile financial statements for the DFI, in large part due to the CPA’s decision to use cash basis accounting, which is more difficult to track than accrual accounting.
The investigators also found poor oversight of the fund managers who were responsible for transferring payments. While examining 15 disbursement locations, the auditors found that officials routinely failed to properly document advances to paying agents and receipts. For example, officials at 14 of the sites did not even maintain a register of cleared receipts. In examining 26 paid receipts, they found 25 had no supporting invoices, and all 26 were missing one or more of the required signatures.
They determined that of $400 million available for disbursement, as much as $50 million was handed out without proper receipts. “During the review, we found that there were no supporting receipts for some invoices; receipts were cleared with limited explanations of services or materiel received; and funds were disbursed for services that were contradictory to the allowable expenses,” the Inspector General said in the report.
Similarly, a United Nations sanctioned audit concluded that about half of the $5 billion in Iraq reconstruction funds could not be accounted for because of poor financial controls, according to the “Development Fund of Iraq-Report of Factual Findings in connection with Disbursements from January 1, 2004 to 28 June 2004, by the International Advisory and Monitoring Board, in September 2004
Until the summer of 2004, the CPA refused to release the names of companies that were awarded contracts paid for with Iraqi funds. Although information was available about US funded contracts, there was no public information available about companies paid with Iraqi money. In August 2004, information was finally made available for contracts valued at more than $5 million. But to this day, no details have been released about contracts worth less than $5 million.
An analysis of the data released in August 2004, showed that the CPA had awarded 85% of the contracts to US and UK firms. By contrast, Iraqi companies received a mere 2% of the contracts paid for with Iraqi funds.
A March 18, 2004 audit report by the Department of Defense Office of the Inspector General, titled, “Acquisition: Contracts Awarded by the Coalition Provisional Authority by the Defense Contracting Command-Washington," determined that the CPA and its predecessor, the Office for Reconstruction and Humanitarian Assistance (ORHA), had circumvented federal contracting procedures since the early days of the occupation.
The audit found that federal procurement rules were not followed in 22 of 24 contracts awarded by the Defense Contracting Command and that defense department personnel conducted “inadequate surveillance” on more than half of the contracts; did not “perform or support price reasonableness determinations;” and allowed activity that was “out-of-scope” of the original contracts.
The audit said that the DoD cannot be assured that it either “provided the best contracting solution or paid fair and reasonable prices for the goods and services purchased” during the reconstruction process.
However, not only did the CPA fail to follow DoD reporting rules, it failed to follow its own rules. CPA regulation Number 2 required the CPA to retain an independent certified public accounting firm to ensure that the Development Fund of Iraq was being used transparently and for the benefit of the Iraqi people.
But instead of hiring a certified public accounting firm, the CPA awarded a $1.4 million contract to North Star Consultants, a financial services firm, to review its internal controls for the DFI. In the end, neither North Star, nor any other firm, ever performed a review, because the Comptroller “verbally modified the contract and employed the contractor to primarily perform accounting tasks in the Comptroller’s office,” the report said.
In response to the report, the CPA claimed the reason that North Star did not perform a review was because the contract was not signed until shortly before the CPA was dissolved. Although it acknowledged that the contract “should have been modified to reflect the change,” the CPA did not bother to explain why it would award a contract to review its control of the DFI if the organization was about to be dissolved.
The truth is, that the CPA' shabby accounting procedures left all doors open to fraud, waste, bribery, and the misappropriation of funds, and nobody will ever be able to figure out what exactly happened to the Iraqi money.
But the fact remains that Halliburton received 60% of all contracts paid for with Iraqi money, even after it was proven time and time again that its projects involved fraud on every front, from paying over $6 million in kickbacks to a Kuwaiti contractor; to charging for three times as many meals as the company actually served to soldiers; to spending millions on laundry and monogrammed towels; to running up costs by driving empty trucks back and forth across Iraq; to leasing overpriced vehicles from Kuwaiti purchasing offices.
In 2003, Halliburton was delivering gasoline, through the Kuwait subcontractor, Altanmia Commercial Marketing Company, for an average price of $2.65 per gallon. In the spring of 2004, the contract was canceled and the new Iraqi Interim government gave an identical contract to Lloyd Owens International, a British company that manages 700 trucks from 7 separate subcontractors, which left Halliburton resentful toward the new company because of losing the contract.
LOI and its partners, Geotech Environmental Services of Kuwait, only charged 18 cents a gallon to haul the gasoline to the same sites.
An oversight hearing on "Waste, Fraud, and Abuse in U.S. Government Contracting in Iraq" was held on June 27, 2005, conducted by Senator Byron Dorgan of North Dakota, chairman of the Democratic Policy Committee.
Alan Waller, CEO of Lloyd Owens International, and his business partner, Gary Butters, flew to the US to testify at the hearing.
Waller said that over the past year while working in southern Iraq, he had encountered only one Halliburton worker and that every fuel station set up to provide gasoline to the Iraqis was in bad shape, including those that Halliburton was supposed to have repaired.
"As Lloyd-Owen delivers fuel to nearly every refinery or depot in southern Iraq, we find ourselves frequently encountering examples of poor equipment, no equipment or complaints from Iraqi staff," Waller said.
Waller and Butters told lawmakers at the hearing that every morning the drivers of 120 trucks who line up at the Kuwait-Iraq border to deliver gasoline have to cross the border at dawn because if they wait too long, KBR employees who patrol the border during the day, will subject them to far-reaching inspections and effectively shut down the operation.
The LOI also reported that on June 9th, 2005, a convoy of LOI trucks that was on its way to deliver construction materials for a Halliburton dining facility at an army base near Fallujah, came under attack and 3 drivers were presumed dead and six trucks had to be abandoned.
The surviving drivers limped to a military base, expecting to get help from the Halliburton staff running the facility, but instead got the cold shoulder. When the drivers tried to leave Iraq, they hit a roadside bomb and another man was killed.
Waller said Halliburton employees were instructed not to help the drivers and that the company had failed to warn LOI that two other convoy had been attacked in the same area the previous week.
At the start of the hearing, Congressman, Henry Waxman, (D-CA), introduced a new study based mostly on confidential reports originating from the Defense Contract Audit Agency (DCAA).
The study revealed that overall, Halliburton had received roughly 52% of the $25.4 billion that has been paid out to private contractors in Iraq. The 52% was divided between two different contracts. The first, known as LOGCAP, was to provide logistical support like cooking and cleaning for the troops, and was outsourced to civilian workers, for which Halliburton had been paid $8.6 billion.
On the LOGCAP contract, the company was paid for its actual costs, plus an additional commission of between 1 to 3 percent, depending on its performance.
The "Restoring Iraq Oil" contract covered the repair of Iraqi oil fields in the immediate aftermath of the 2003 invasion and imports of consumer fuel. The RIO contract is now complete and ended up costing $2.5 billion. A second RIO contract is now underway.
New evidence of fraud and contract abuse, was released right before the hearing and showed that KGB:
1) Had overcharged or presented questionable bills for close to $1.5 billion, almost four times the previous amount disclosed.
2) Had lost 12 pre-fabricated bases worth over $75 million which could have housed as many as 6,600 soldiers.
3) Had billed $152,000 to provide a movie library for 2,500 soldiers
4) Had billed inconsistently across the board. Eg, Video cassette players cost $300 in some instances, and $1000 in others; the company charged $2.31 for towels on one day and $5 for the same towels on another.
Rory Maryberry, a former Halliburton contractor, who worked at the dining facilities at the largest military base in Iraq, also testified at the hearing. Mayberry said the company charged the government for serving 20,000 meals a day when it was only serving 10,000 and that he was sent to a more dangerous post as punishment for speaking to auditors.
In a video-taped deposition testimony played at the hearing, Mayberry told how Halliburton would sometimes supply food that was more than a year past the expiration date or that had spoiled due to poor refrigeration. The few times the military refused to accept the spoiled food, Maryberry said truckers were told to deliver it to the next base in the hope that they would escape scrutiny.
He said that Halliburton was also supposed to serve 600 meals to Turkish and Filipino workers in Iraq, and "although KBR charged for this service, it didn't prepare the meals. Instead, these workers were given leftover food in boxes and garbage bags after the troops ate. Sometimes there were not leftovers to give them," he said.
According to Mayberry, "Iraqi drivers of food convoys that arrived on the base were not fed. They were given Meals Ready to Eat, with pork, which they couldn't eat for religious reasons."
"As a result, the drivers would raid the trucks for food," he said.
The star witness at the hearing was Bunnatine Greenhouse, a former math teacher, who moved up the latter to become the highest ranked civilian employee in the Army Corps of Engineers, responsible for signing off on Iraq contracts. She testified that her superiors forced her to sign no-bid contracts for Halliburton on the eve of the invasion of Iraq.
She filed a complaint against her superiors for harassment but the harassment has not ceased. She said Pentagon attorneys had to tried to talk her out of testifying at the hearing three days before the hearing date.
"I have agreed to voluntarily appear at this hearing in my personal capacity because I have exhausted all internal avenues to correct contracting abuse I observed while serving this great nation as the United States Army Corps of Engineers senior procurement executive," Greenhouse said. "In order to remain true to my oath of office, I must disclose to appropriate members of Congress serious and ongoing contract abuse I cannot address internally," she said.
"I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career," she said in her testimony.
Members of Congress at the hearing reacted strongly to Greenhouse's revelations. "This testimony doesn't just call for Congressional oversight -- it screams for it," Senator Dorgan said.
Hover, I have not heard of any oversight hearings in response to Greenhouse's testimony. Instead, about a short time after the hearing I read the August 29, 2005 New York Times which said: "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."
In fact, none of testimony by any witness phased the top brass at the Pentagon one bit. On May 1, 2005, the Army quietly awarded the company a new contract worth nearly $5 billion to continue on with its wonderful logistical support of the soldiers in Iraq, and last I knew, the contract is as good as money in the bank for KBR.
But then what the hell. People have been nagging Halliburton of war profiteering for over 40 years. In 1966, a Republican member of the House of Representatives from Illinois, demanded to know about the 30-year association between Halliburton Chairman George R. Brown and Lyndon B. Johnson. Brown had contributed $23,000 to the President’s Club while the Congress was considering whether to continue another multimillion-dollar Brown & Root Services project, according a report by the Center for Public Integrity, on August 2, 2001. “Why this huge contract has not been and is not now being adequately audited is beyond me. The potential for waste and profiteering under such a contract is substantial,” the indignant Republican Congressman, Donald Rumsfeld said.
In 1982, the GAO reported that the company lost accounting control of $120 million and that its security was so poor that millions of dollars worth of equipment had been stolen.
For those readers who may hoping that the millions of tax dollar spent on all the investigations and hearings discussed in this report might result in a turn-around by contractors in Iraq, here is a discomforting tidbit. According to the July 15, 2005 Boston Globe, "The federal government's chief investigator yesterday blasted the Pentagon for its 'atrocious financial management,'" saying the Defense Department was not able to give federal oversight officials a full accounting of the $1 billion being spent each week on the war in Iraq."
I'm not sure whether the Americans or the Iraqis are picking up the tab for the billion a week, but I think it must the Iraqis in light of the latest announcement by officials in Iraq. On September 9, 2005, the Guardian reported that, "Key rebuilding projects in Iraq are grinding to a halt because American money is running out and security has diverted funds intended for electricity, water and sanitation, according to US officials."
There are an estimated 20,000 foreign security contractors currently in Iraq, with some being paid more than $1,000 a day. According to IG, Stuart Bowen, $5 billion of the $18.4 billion appropriated by Congress for reconstruction, has been diverted to security.
A GAO report said that "attacks, threats and intimidation against project contractors and subcontractors" were to blame.
For those wondering what kind of bang the Iraqis got for their big bucks, some areas of Iraq still only get less than four hours of electricity a day. The estimated cost of providing enough electricity for the country by 2010 is $20 billion, according to the Guardian.
Water and sanitation projects have been hit hard. According to a report published early this month by the GAO, so far, $2.6 billion has been spent on water projects, but that amount equals only half the sum allocated for the work, because the remainder was spent for security and other uses.
A quarter of the $200 million worth of completed water projects handed over to the Iraqi authorities no longer work properly because of "looting, unreliable electricity or inadequate Iraqi staff and supplies," the GAO report said. There has be a surge in cases of dehydration and diarrhea among children and the elderly.
Shortages of fuel have produced lines a mile long at gas stations. Crude oil production is averaging around 2.2 million barrels a day, still below its pre-war peaks, according to the Brookings Institution in Washington.
As for Halliburton, it is currently facing a number of investigations for overcharging in Iraq, according to a report released in March 2005, by Rep Henry Waxman (D-CA).
But hey, what better choice could Bush have made than for Halliburton to get the $700 million reconstruction contract to repair the damage caused by Katrina? I mean, look what the firm has done for the Iraqis.
And just think how thankful the Iraqis must feel toward Bush, especially the ones who have managed to stay alive.
Evelyn Pringle
I have come to the conclusion that even if I live to be 100, I will never be able to track down every Bush-connected profiteer involved in this phony war on terror scheme. According to a report released in March 2005, by Transparency International (TI), an international organization that focuses on matters of corruption, Iraq could become "the biggest corruption scandal in history."
"I can see all sorts of levels of corruption in Iraq," report contributor Reinoud Leenders told the Christian Science Monitor, "starting from petty officials asking for bribes to process a passport, way up to contractors delivering shoddy work and the kind of high-level corruption involving ministers and high officials handing out contracts to their friends and clients."
One of the top ten crooks, has got to be Ahmed Chalabi. A former banker in Jordon, Chalabi was forced to flee the country in 1989 before he could be arrested for his involvement in a $200 million financial scam. He was later tried and found guilty in his absence, and sentenced to 22 years in prison for more than 30 charges of theft, embezzlement, misuse of depositor funds, and currency speculation.
However, a little criminal history obviously didn't bother the Bush gang, because Chalabi was one of the first Iraqis flown into Iraq by the Pentagon during the 2003 invasion, supposedly so he could solidify his political base, which pretty much has proved to be non-existent.
By now, I cannot believe that anyone could possibly doubt Chalabi's role in the plot to take over Iraq. He was very much in the loop from day one, according to a March 17, 2005, report by BBC's Newsnight which said, "the Bush administration made plans for war and for Iraq's oil before the 9/11 attacks sparking a policy battle between neo-cons and Big Oil." Insiders told Newsnight that the planning began "within weeks" of Bush taking office.
An Iraqi-born oil industry consultant, Falah Aljibury, told Newsnight that he took part in secret meetings in California, Washington and the Middle East. He described a State Department plan for a forced coup d'etat. Aljibury said that he had even interviewed potential successors for Saddam on behalf of the Bush administration.
However, "The industry-favored plan was pushed aside by yet another secret plan," wrote Newnight, "drafted just before the invasion in 2003, which called for the sell-off of all of Iraq's oil fields."
The sell-off plan was given the OK at a secret meeting headed by none other that Ahmed Chalabi, shortly after the invasion of Baghdad, according to Robert Ebel, a former Energy and CIA oil analyst. He attended the London meeting at the request of the State Department, Ebel told Newsnight.
Falah Aljibury contends that it was the plan to sell off Iraq's oil, which ultimately led to the insurgency and attacks on US occupying forces. "We saw an increase in the bombing of oil facilities, pipelines, built on the premise that privatization is coming," he reported.
Of course it probably didn't help matters when the Iraqis were forced to watch as Halliburton's fortunes increased with money from the Development Fund for Iraq, through the award of 5 no-bid contracts, by the Coalition Provisional Authority, to the tune of $222 million, $325 million, $180 million, and a total of $194 million for the last two, which I just happened to find listed back in the Appendix to a July 28, 2004, report by the CPA Inspector General, titled "Comptroller Cash Management Controls over the Development Fund for Iraq."
The CPA Office of the Inspector General (CPA-IG) was established by Congress on November 6, 2003, to serve as “as an independent, objective evaluator of the operations and activities of the CPA,” according to the official web site. The CPA-IG reported directly to Administrator Paul Bremer, although it had independent authority to conduct audits and investigations without the Administrator’s approval.
A report in January 2005, by CPA Inspector General, Stuart Bowen, concluded that occupation authorities accounted poorly for $8.8 billion in Iraqi funds. "The CPA did not implement adequate financial controls," Bowen said.
That was definitely an understatement. A former CPA senior adviser, Franklin Willis, compared Iraq to the "Wild West," saying he delivered one $2 million payment to one company, Custer Battles, in bricks of cash.
"We called Mike Battles in and said, 'Bring a bag'," Willis said in testimony before Congress in February 2005.
Custer was another piece of work. Two former employees turned whistleblowers filed a law suit against the company with a complaint that said among other things, that Custer Battles double-billed for salaries and repainted the Iraqi Airways forklifts they found at the Baghdad airport, which Custer was hired to secure, and then leased them back to the US government. The two former employees, Pete Baldwin and Robert Isakson, claim Custer swindled the CPA out of about $50 million.
Bush was quick to criticize the UN over millions of dollars stolen from the Oil-for-Food Program under Saddam. But the CPA, as the successor to Oil-for-Food Program, aka Development Fund for Iraq, involves the swindling of billions of dollars.
And Custer represents only one crooked contractor. The investigation by the CPA-IG which resulted in the Comptroller Cash Management Report, determined that when it came to Iraqi cash, proper accountability was not maintained, physical security was inadequate, records were incomplete, and fund managers’ responsibilities were not assigned properly.
The auditors who participated in the investigation were unable to reconcile financial statements for the DFI, in large part due to the CPA’s decision to use cash basis accounting, which is more difficult to track than accrual accounting.
The investigators also found poor oversight of the fund managers who were responsible for transferring payments. While examining 15 disbursement locations, the auditors found that officials routinely failed to properly document advances to paying agents and receipts. For example, officials at 14 of the sites did not even maintain a register of cleared receipts. In examining 26 paid receipts, they found 25 had no supporting invoices, and all 26 were missing one or more of the required signatures.
They determined that of $400 million available for disbursement, as much as $50 million was handed out without proper receipts. “During the review, we found that there were no supporting receipts for some invoices; receipts were cleared with limited explanations of services or materiel received; and funds were disbursed for services that were contradictory to the allowable expenses,” the Inspector General said in the report.
Similarly, a United Nations sanctioned audit concluded that about half of the $5 billion in Iraq reconstruction funds could not be accounted for because of poor financial controls, according to the “Development Fund of Iraq-Report of Factual Findings in connection with Disbursements from January 1, 2004 to 28 June 2004, by the International Advisory and Monitoring Board, in September 2004
Until the summer of 2004, the CPA refused to release the names of companies that were awarded contracts paid for with Iraqi funds. Although information was available about US funded contracts, there was no public information available about companies paid with Iraqi money. In August 2004, information was finally made available for contracts valued at more than $5 million. But to this day, no details have been released about contracts worth less than $5 million.
An analysis of the data released in August 2004, showed that the CPA had awarded 85% of the contracts to US and UK firms. By contrast, Iraqi companies received a mere 2% of the contracts paid for with Iraqi funds.
A March 18, 2004 audit report by the Department of Defense Office of the Inspector General, titled, “Acquisition: Contracts Awarded by the Coalition Provisional Authority by the Defense Contracting Command-Washington," determined that the CPA and its predecessor, the Office for Reconstruction and Humanitarian Assistance (ORHA), had circumvented federal contracting procedures since the early days of the occupation.
The audit found that federal procurement rules were not followed in 22 of 24 contracts awarded by the Defense Contracting Command and that defense department personnel conducted “inadequate surveillance” on more than half of the contracts; did not “perform or support price reasonableness determinations;” and allowed activity that was “out-of-scope” of the original contracts.
The audit said that the DoD cannot be assured that it either “provided the best contracting solution or paid fair and reasonable prices for the goods and services purchased” during the reconstruction process.
However, not only did the CPA fail to follow DoD reporting rules, it failed to follow its own rules. CPA regulation Number 2 required the CPA to retain an independent certified public accounting firm to ensure that the Development Fund of Iraq was being used transparently and for the benefit of the Iraqi people.
But instead of hiring a certified public accounting firm, the CPA awarded a $1.4 million contract to North Star Consultants, a financial services firm, to review its internal controls for the DFI. In the end, neither North Star, nor any other firm, ever performed a review, because the Comptroller “verbally modified the contract and employed the contractor to primarily perform accounting tasks in the Comptroller’s office,” the report said.
In response to the report, the CPA claimed the reason that North Star did not perform a review was because the contract was not signed until shortly before the CPA was dissolved. Although it acknowledged that the contract “should have been modified to reflect the change,” the CPA did not bother to explain why it would award a contract to review its control of the DFI if the organization was about to be dissolved.
The truth is, that the CPA' shabby accounting procedures left all doors open to fraud, waste, bribery, and the misappropriation of funds, and nobody will ever be able to figure out what exactly happened to the Iraqi money.
But the fact remains that Halliburton received 60% of all contracts paid for with Iraqi money, even after it was proven time and time again that its projects involved fraud on every front, from paying over $6 million in kickbacks to a Kuwaiti contractor; to charging for three times as many meals as the company actually served to soldiers; to spending millions on laundry and monogrammed towels; to running up costs by driving empty trucks back and forth across Iraq; to leasing overpriced vehicles from Kuwaiti purchasing offices.
In 2003, Halliburton was delivering gasoline, through the Kuwait subcontractor, Altanmia Commercial Marketing Company, for an average price of $2.65 per gallon. In the spring of 2004, the contract was canceled and the new Iraqi Interim government gave an identical contract to Lloyd Owens International, a British company that manages 700 trucks from 7 separate subcontractors, which left Halliburton resentful toward the new company because of losing the contract.
LOI and its partners, Geotech Environmental Services of Kuwait, only charged 18 cents a gallon to haul the gasoline to the same sites.
An oversight hearing on "Waste, Fraud, and Abuse in U.S. Government Contracting in Iraq" was held on June 27, 2005, conducted by Senator Byron Dorgan of North Dakota, chairman of the Democratic Policy Committee.
Alan Waller, CEO of Lloyd Owens International, and his business partner, Gary Butters, flew to the US to testify at the hearing.
Waller said that over the past year while working in southern Iraq, he had encountered only one Halliburton worker and that every fuel station set up to provide gasoline to the Iraqis was in bad shape, including those that Halliburton was supposed to have repaired.
"As Lloyd-Owen delivers fuel to nearly every refinery or depot in southern Iraq, we find ourselves frequently encountering examples of poor equipment, no equipment or complaints from Iraqi staff," Waller said.
Waller and Butters told lawmakers at the hearing that every morning the drivers of 120 trucks who line up at the Kuwait-Iraq border to deliver gasoline have to cross the border at dawn because if they wait too long, KBR employees who patrol the border during the day, will subject them to far-reaching inspections and effectively shut down the operation.
The LOI also reported that on June 9th, 2005, a convoy of LOI trucks that was on its way to deliver construction materials for a Halliburton dining facility at an army base near Fallujah, came under attack and 3 drivers were presumed dead and six trucks had to be abandoned.
The surviving drivers limped to a military base, expecting to get help from the Halliburton staff running the facility, but instead got the cold shoulder. When the drivers tried to leave Iraq, they hit a roadside bomb and another man was killed.
Waller said Halliburton employees were instructed not to help the drivers and that the company had failed to warn LOI that two other convoy had been attacked in the same area the previous week.
At the start of the hearing, Congressman, Henry Waxman, (D-CA), introduced a new study based mostly on confidential reports originating from the Defense Contract Audit Agency (DCAA).
The study revealed that overall, Halliburton had received roughly 52% of the $25.4 billion that has been paid out to private contractors in Iraq. The 52% was divided between two different contracts. The first, known as LOGCAP, was to provide logistical support like cooking and cleaning for the troops, and was outsourced to civilian workers, for which Halliburton had been paid $8.6 billion.
On the LOGCAP contract, the company was paid for its actual costs, plus an additional commission of between 1 to 3 percent, depending on its performance.
The "Restoring Iraq Oil" contract covered the repair of Iraqi oil fields in the immediate aftermath of the 2003 invasion and imports of consumer fuel. The RIO contract is now complete and ended up costing $2.5 billion. A second RIO contract is now underway.
New evidence of fraud and contract abuse, was released right before the hearing and showed that KGB:
1) Had overcharged or presented questionable bills for close to $1.5 billion, almost four times the previous amount disclosed.
2) Had lost 12 pre-fabricated bases worth over $75 million which could have housed as many as 6,600 soldiers.
3) Had billed $152,000 to provide a movie library for 2,500 soldiers
4) Had billed inconsistently across the board. Eg, Video cassette players cost $300 in some instances, and $1000 in others; the company charged $2.31 for towels on one day and $5 for the same towels on another.
Rory Maryberry, a former Halliburton contractor, who worked at the dining facilities at the largest military base in Iraq, also testified at the hearing. Mayberry said the company charged the government for serving 20,000 meals a day when it was only serving 10,000 and that he was sent to a more dangerous post as punishment for speaking to auditors.
In a video-taped deposition testimony played at the hearing, Mayberry told how Halliburton would sometimes supply food that was more than a year past the expiration date or that had spoiled due to poor refrigeration. The few times the military refused to accept the spoiled food, Maryberry said truckers were told to deliver it to the next base in the hope that they would escape scrutiny.
He said that Halliburton was also supposed to serve 600 meals to Turkish and Filipino workers in Iraq, and "although KBR charged for this service, it didn't prepare the meals. Instead, these workers were given leftover food in boxes and garbage bags after the troops ate. Sometimes there were not leftovers to give them," he said.
According to Mayberry, "Iraqi drivers of food convoys that arrived on the base were not fed. They were given Meals Ready to Eat, with pork, which they couldn't eat for religious reasons."
"As a result, the drivers would raid the trucks for food," he said.
The star witness at the hearing was Bunnatine Greenhouse, a former math teacher, who moved up the latter to become the highest ranked civilian employee in the Army Corps of Engineers, responsible for signing off on Iraq contracts. She testified that her superiors forced her to sign no-bid contracts for Halliburton on the eve of the invasion of Iraq.
She filed a complaint against her superiors for harassment but the harassment has not ceased. She said Pentagon attorneys had to tried to talk her out of testifying at the hearing three days before the hearing date.
"I have agreed to voluntarily appear at this hearing in my personal capacity because I have exhausted all internal avenues to correct contracting abuse I observed while serving this great nation as the United States Army Corps of Engineers senior procurement executive," Greenhouse said. "In order to remain true to my oath of office, I must disclose to appropriate members of Congress serious and ongoing contract abuse I cannot address internally," she said.
"I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career," she said in her testimony.
Members of Congress at the hearing reacted strongly to Greenhouse's revelations. "This testimony doesn't just call for Congressional oversight -- it screams for it," Senator Dorgan said.
Hover, I have not heard of any oversight hearings in response to Greenhouse's testimony. Instead, about a short time after the hearing I read the August 29, 2005 New York Times which said: "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."
In fact, none of testimony by any witness phased the top brass at the Pentagon one bit. On May 1, 2005, the Army quietly awarded the company a new contract worth nearly $5 billion to continue on with its wonderful logistical support of the soldiers in Iraq, and last I knew, the contract is as good as money in the bank for KBR.
But then what the hell. People have been nagging Halliburton of war profiteering for over 40 years. In 1966, a Republican member of the House of Representatives from Illinois, demanded to know about the 30-year association between Halliburton Chairman George R. Brown and Lyndon B. Johnson. Brown had contributed $23,000 to the President’s Club while the Congress was considering whether to continue another multimillion-dollar Brown & Root Services project, according a report by the Center for Public Integrity, on August 2, 2001. “Why this huge contract has not been and is not now being adequately audited is beyond me. The potential for waste and profiteering under such a contract is substantial,” the indignant Republican Congressman, Donald Rumsfeld said.
In 1982, the GAO reported that the company lost accounting control of $120 million and that its security was so poor that millions of dollars worth of equipment had been stolen.
For those readers who may hoping that the millions of tax dollar spent on all the investigations and hearings discussed in this report might result in a turn-around by contractors in Iraq, here is a discomforting tidbit. According to the July 15, 2005 Boston Globe, "The federal government's chief investigator yesterday blasted the Pentagon for its 'atrocious financial management,'" saying the Defense Department was not able to give federal oversight officials a full accounting of the $1 billion being spent each week on the war in Iraq."
I'm not sure whether the Americans or the Iraqis are picking up the tab for the billion a week, but I think it must the Iraqis in light of the latest announcement by officials in Iraq. On September 9, 2005, the Guardian reported that, "Key rebuilding projects in Iraq are grinding to a halt because American money is running out and security has diverted funds intended for electricity, water and sanitation, according to US officials."
There are an estimated 20,000 foreign security contractors currently in Iraq, with some being paid more than $1,000 a day. According to IG, Stuart Bowen, $5 billion of the $18.4 billion appropriated by Congress for reconstruction, has been diverted to security.
A GAO report said that "attacks, threats and intimidation against project contractors and subcontractors" were to blame.
For those wondering what kind of bang the Iraqis got for their big bucks, some areas of Iraq still only get less than four hours of electricity a day. The estimated cost of providing enough electricity for the country by 2010 is $20 billion, according to the Guardian.
Water and sanitation projects have been hit hard. According to a report published early this month by the GAO, so far, $2.6 billion has been spent on water projects, but that amount equals only half the sum allocated for the work, because the remainder was spent for security and other uses.
A quarter of the $200 million worth of completed water projects handed over to the Iraqi authorities no longer work properly because of "looting, unreliable electricity or inadequate Iraqi staff and supplies," the GAO report said. There has be a surge in cases of dehydration and diarrhea among children and the elderly.
Shortages of fuel have produced lines a mile long at gas stations. Crude oil production is averaging around 2.2 million barrels a day, still below its pre-war peaks, according to the Brookings Institution in Washington.
As for Halliburton, it is currently facing a number of investigations for overcharging in Iraq, according to a report released in March 2005, by Rep Henry Waxman (D-CA).
But hey, what better choice could Bush have made than for Halliburton to get the $700 million reconstruction contract to repair the damage caused by Katrina? I mean, look what the firm has done for the Iraqis.
And just think how thankful the Iraqis must feel toward Bush, especially the ones who have managed to stay alive.
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