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 Neil. Show all posts
Showing posts with label Neil. Show all posts
Tuesday, August 3, 2010
Monday, August 2, 2010
Jeb, Marvin & Neil - 3 Profiteering Bush Brothers
Independent Media TV
January 28, 2005
Evelyn Pringle
It's time to take a closer look at First Brothers, Jeb, Neil, and Marvin Bush, and see how much they stand to benefit from W's presidency and his perpetual war on the world.
First, there's brother Marvin. He's the quietest member of the Bush clan. Marvin is co-founder and partner in Winston Partners, a private investment firm. In turn, Winston Partners is part of a larger firm called the Chatterjee Group.
Here's where it gets complicated. Marvin is obviously the family member with a sound criminal mind. He has managed to bury almost all the evidence of his profiteering profits inside a host of corporations and entities, with many being located offshore. Its not easy to track the money through such a tangled web. But it can be done.
SEC filings show that the Chatterjee Group consists of Winston Partners, LP; Chatterjee Fund Management, LP; Winston Partners II LDC, a Cayman Islands-based company; Winston Partners II LLC; Chatterjee Advisors LLC; Chatterjee Management Company; Mr. Chatterjee himself; and Furxedown Trading Limited, a company organized under the laws of the Isle of Man. The address for Winston Partners II LDC is in the Netherlands Antilles. The other subsidiaries were organized in Delaware
Marvin is not the only family member plugged into the group. Brother Jeb is also an investor in the Winston Capital Fund, which happens to be managed by Marvin's firm.
Profits From Iraq
Following the tangled web of Winston this and Winston that, is difficult in itself, but tracing the links to Iraq is even more difficult. A good place to start is with a company known as Nour USA. According to the Sept 30, 2003, issue of Mother Jones, an $80 million Iraq contract was awarded to Nour, a company with ties to Winston Partners.
Nour set up shop in May 2003, right in time to cash in on the war in Iraq. When it opened for business, the firm's website described the company 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."
Nour had ties to several companies, backed or owned, by Marvin's Winston Partners, including Hobart West, a Fortune 500 personnel-services company; LogoTel, a clothing company; and Axolotl, a computer-services company in medical care.
In January, 2004, Nour was awarded another contract, worth a whopping $327 million, to equip the Iraqi armed forces and Civil Defense Corps. However, not long after it was awarded, Nour came under heavy scrutiny because of a financial scam involving the company's president and Ahmed Chalabi, the leader of the US appointed Iraqi Governing Council (the neocon's all time favorite fellow until they booted him out of the club).
Newsday reported that Chalabi received a $2 million "fee" for helping to arrange a $80 million contract, that was actually awarded to a firm called Erinys International to begin with. The problem arose, according to Newsday, because "within days" of being granted the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract came under investigation after it was revealed that Nour had no prior experience whatsoever in providing military equipment. When confronted with that fact, Nour claimed that it planned to subcontract its weapons procurement to the Polish firm, Ostrowski Arms. However, the army soon determined that Ostrowski didn't even have a license to export weapons.
Soon thereafter in March 2004, there was a sad turn of events for the First Brothers, when the Army decided to terminate the contract after six of the 17 firms that bid on the project, complained that Nour's winning bid was ridiculously low.
It seems a review of all bids revealed that some bids were as much as $700 million apart. "That was a pretty clear indication that the industry did not have a good understanding of the procurement," said an Army official.
During a House Government Reform Committee hearing on Iraq contracts on March 11, 2004, some members of Congress tried to raise questions about private connections behind some of the contracts. However, committee Chairman Tom Davis, (R-Va), cut off the questions before the witnesses could answer.
But at least the Bush gang lost control of the profits from the next contract. The first Nour contract was awarded by Bremer and the CPA in Baghdad, but the process of re-bidding was turned over to the Army Material Command.
Iraq Not Sole Source Of Profits
But not to worry, the First Brothers profits are by no means limited to Iraq. They have irons in the fire all over the map.
For instance, Winston Partners' portfolio includes another military contractor, the Amsec Corp. In 2001, Amsec was awarded $37,722,000 in contracts from the Navy. Marvin's long-time business partner, Scott Andrews, sits on the Amsec board of directors, and the firm's CEO in the relevant time-frame was Michael Braham, who used to work for none other than Paul Bremer, the top dog with the Coalition Provisional Authority (CPA), which was then responsible for awarding contracts in Iraq.
In addition, the Chatterjee Group also owns 5.5 million shares in a security company known as Sybase. SEC filings show the shares as being divided up between, Winston Partners LP with 1,036,075 shares; Winston Partners LDC holding 1,317,825 shares; and Winston Partners LLC owning 1,221,837 shares.
And thanks to brother George W, there would be plenty of profits for this security company. Obviously armed with insider knowledge from the White House, Sybase geared up to make big money off the Patriot Act long before it was passed.
The Act was designed in part, to prevent money laundering by terrorists. As soon as news of the pending law became public, all kinds of companies began developing new products that would soon to be a requirement for financial institutions that had to comply with the Patriot Act.
However, to no one's surprise I'm sure, the most aggressive marketer out of the box, was probably Sybase, with a product called the "Sybase PATRIOT Compliance Solution." In fact, the company was so quick on the draw that it already had a deal with the People's Bank of China, and the Sumitomo Mitsui Bank, by the time the October 2002 compliance deadline rolled around.
Which proves there's much to be said for benefits derived from a direct link to information about what the US government is up to and how much it plans to spend.
In addition, according to Progressive Populist, the PATRIOT Act is not Sybase's only federal conduit. The company is also a significant government contractor, with contracts from the Agriculture Department, the Navy ($2.9 million in 2001), the Army ($1.8 million in 2001), the Department of Defense ($5.3 million in 2001), Commerce, the Treasury and the General Services Administration, among others. The federal procurement database lists Sybase's total awards for 2001 as $14,754,000.
But then, making money off wars in the Middle East is nothing new for Marvin. Back in 1993, after the first gulf war, he joined his father (3 months out of office), on a trip to Kuwait. Where, according to the March 16, 2001 Austin Chronicle, "Marvin was representing U.S. defense firms selling electronic fences to the Kuwaiti Defense Ministry."
From 1993 to 2000, Marvin was also a major shareholder in the Kuwait-American Corp, which had holdings in a wide variety of US defense, aviation and industrial security companies.
No doubt about it, W's perpetual war on terror, is very profitable for the Bush Boys.
Almost Forgot Romeo
How could I ever forget little brother Neil? Until recently, he was best-known for his role in the collapse of the Silverado Savings and Loan which left a bill of $1.3 billion for tax payers to repay, as the culprit, Neil, walked away without ever seeing the inside of a police station, much less a jail cell.
I say until recently because last year, his testimony in a divorce deposition revealed a $2 million consultant contract between Neil and a Chinese computer chip company, which apparently came with perks consisting of women showing up at his motel room door wanting to have sex.
I've since nicknamed him Romeo.
But all kidding aside, the guy has really come along way since the Silverado days, thanks to his brother in the White House. According to the Nov 28, 2003, Financial Times, "Neil Bush, a younger brother of US President ... has had a $60,000-a-year employment contract with a top adviser to a Washington-based consulting firm set up this year to help companies secure contracts in Iraq," it reported.
Neil disclosed the contract during the deposition. He said he was co-chairman of Crest Investment Corporation and received $15,000 every three months for working an average three or four hours a week.
The Times went on to report, "The other co-chairman and principal of Crest is Jamal Daniel, who is an advisory board member of New Bridge Strategies, a company set up this year by a group of businessmen with close links to the Bush family or administrations. Its chairman is Joe Allbaugh, George W. Bush's campaign director in the 2000 presidential elections."
On December 11, 2003, the Times reported that "two businessmen instrumental in setting up New Bridge Strategies, a ... 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," an FT investigation has found.
Daniel's investment fund, Crest, also helped fund Neil's educational software company, Ignite!, which was no doubt set up as a conduit to funnel tax dollars through public schools via W's No Child Left Behind Act. In fact, according to the Times, Daniel sometimes introduces himself as a founding backer of Bush's company, and has persuaded the families of prominent leaders in Middle East to invest, it notes.
Daniel, Neil and Howland have also been directors of Silvermat, a Swiss company controlled by Crest, that supplies the hospitality industry and has had financial and industrial relations problems.
When asked the specifics of his position with Crest, Neil testified that he was responsible for "answering phone calls when Jamal Daniel, the other co-chairman, when he called and asked for advice."
However, Neil's is not merely a receptionist at Crest. He can obviously type as well, because three people contacted by the Financial Times have seen letters written by Neil that recommend business ventures promoted by New Bridges in the Middle East. So here again, we have Brother Neil being paid to "help companies secure contracts in Iraq," the Financial Times reports.
Neil & Marvin Hit The Jackpot In China
On still another front, many people were alarmed when W came down in favor of the People's Republic of China, against a democratic referendum in Taiwan. But his support of China became suspect after it was discovered that well-connected Chinese firms were funneling huge amounts of money to his brothers, Neil and Marvin, according to Margie Burn in the Dec 16, 2003 Online Journal.
Soon after Neil's deposition, the media began reporting that the computer chip company, Grace Semiconductor had entered into a $2 million contract with Neil.
The world business press reported that by hiring Neil, Grace hoped to influence US limits on exporting technology to China and repeal restrictions designed to keep gear from being used by the Chinese military.
And who knows, Neil may have come through, because on Oct 29, 2004, Electronic Engineering Times, reported that Grace was in the final stages of negotiating a technology transfer for a manufacturing process from a US manufacturer, which if "brought about ... would signal the further erosion of a post-Cold War-era pact - known as the Wassenaar Arrangement - set up to limit the dissemination of technology that could have potential military use."
The Wassenaar Arrangement is a real headache for Grace because in order to make advanced semiconductors, it has to rely on imports that require prior approval. So exactly who is this US manufacturer, and what, if any, connections does it have to Neil Bush? According to EET, Grace refuses to disclose the name of the company, which leads me to wonder why the secrecy, and as usual where is the US media?
Of course EET had to remind the world of the connection between Neil and his foreign buddies, and that he was paid $2 mill. "In the U.S., it has reportedly agreed to pay $2 million for consulting services from semiconductor neophyte Neil Bush, the younger brother of President George W. Bush. In China, one of Grace's founders is Jiang Mianheng, the son of former Chinese President Jiang Zemin, and in Taiwan, its other founder is Winston Wang, scion of a powerful petrochemical magnate.
This deal would have never been disclosed if not for Neil's divorce. But while everybody was paying attention to Neil, an even bigger Chinese company was making deals that would benefit that quiet little mouse Marvin, and almost nobody noticed.
Cheung Kong Holdings, is a gigantic real estate and investment company in Hong Kong. How big is it? Well, according to the company's own estimates, "combined market capitalization of the Cheung Kong Group amounts to HK$515 billion," or better yet picture this, "approximately 11.5 percent of the total market capitalization of the Hong Kong stock market." That is big with a capital B.
Cheung Kong's expanded its portfolio, which now includes a company known as Critical Path, Inc, a software and Internet-messaging service firm. And guess who the company's SEC filings list as a major shareholder in Critical Path? Mr Purnendu Chatterjee, acting for Winston Partners LP, owned by none other than Marvin Bush and Scott Andrews.
SEC filings show the Chatterjee's group, including Winston Partners, owns approximately 5.5 million shares in the company. Which means, Cheung Kong's investment had to boost profits for Winston Partners.
Thanks to the US Media, and to the fact that none of the Bush brothers are named Roger Clinton, few Americans seem to know about these deals. But the international business community sure does. Cheung Kong and Grace are both major players in China's entangled economy made up of public and private partnerships.
For W to allow his brothers to profit from deals with these firms is bad enough. But to follow up with a major shift of support to China, and discourage a democratic referendum in Taiwan, is worse. The whole world cannot help but view this turn of events as one big Bush payoff.
Whenever I write about the profiteering First Family, I like to remind readers of what Bush told reporters when the Clinton pardon scandal hit the headlines with charges that brother-in-law Hugh Rodham had accepted $400,000 to lobby for clemency for two felons. When reporters asked George W what advice he would give to his own family members, he said: "My guidance to them is, 'Behave yourself.' And they will."
Yea right.
January 28, 2005
Evelyn Pringle
It's time to take a closer look at First Brothers, Jeb, Neil, and Marvin Bush, and see how much they stand to benefit from W's presidency and his perpetual war on the world.
First, there's brother Marvin. He's the quietest member of the Bush clan. Marvin is co-founder and partner in Winston Partners, a private investment firm. In turn, Winston Partners is part of a larger firm called the Chatterjee Group.
Here's where it gets complicated. Marvin is obviously the family member with a sound criminal mind. He has managed to bury almost all the evidence of his profiteering profits inside a host of corporations and entities, with many being located offshore. Its not easy to track the money through such a tangled web. But it can be done.
SEC filings show that the Chatterjee Group consists of Winston Partners, LP; Chatterjee Fund Management, LP; Winston Partners II LDC, a Cayman Islands-based company; Winston Partners II LLC; Chatterjee Advisors LLC; Chatterjee Management Company; Mr. Chatterjee himself; and Furxedown Trading Limited, a company organized under the laws of the Isle of Man. The address for Winston Partners II LDC is in the Netherlands Antilles. The other subsidiaries were organized in Delaware
Marvin is not the only family member plugged into the group. Brother Jeb is also an investor in the Winston Capital Fund, which happens to be managed by Marvin's firm.
Profits From Iraq
Following the tangled web of Winston this and Winston that, is difficult in itself, but tracing the links to Iraq is even more difficult. A good place to start is with a company known as Nour USA. According to the Sept 30, 2003, issue of Mother Jones, an $80 million Iraq contract was awarded to Nour, a company with ties to Winston Partners.
Nour set up shop in May 2003, right in time to cash in on the war in Iraq. When it opened for business, the firm's website described the company 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."
Nour had ties to several companies, backed or owned, by Marvin's Winston Partners, including Hobart West, a Fortune 500 personnel-services company; LogoTel, a clothing company; and Axolotl, a computer-services company in medical care.
In January, 2004, Nour was awarded another contract, worth a whopping $327 million, to equip the Iraqi armed forces and Civil Defense Corps. However, not long after it was awarded, Nour came under heavy scrutiny because of a financial scam involving the company's president and Ahmed Chalabi, the leader of the US appointed Iraqi Governing Council (the neocon's all time favorite fellow until they booted him out of the club).
Newsday reported that Chalabi received a $2 million "fee" for helping to arrange a $80 million contract, that was actually awarded to a firm called Erinys International to begin with. The problem arose, according to Newsday, because "within days" of being granted the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract came under investigation after it was revealed that Nour had no prior experience whatsoever in providing military equipment. When confronted with that fact, Nour claimed that it planned to subcontract its weapons procurement to the Polish firm, Ostrowski Arms. However, the army soon determined that Ostrowski didn't even have a license to export weapons.
Soon thereafter in March 2004, there was a sad turn of events for the First Brothers, when the Army decided to terminate the contract after six of the 17 firms that bid on the project, complained that Nour's winning bid was ridiculously low.
It seems a review of all bids revealed that some bids were as much as $700 million apart. "That was a pretty clear indication that the industry did not have a good understanding of the procurement," said an Army official.
During a House Government Reform Committee hearing on Iraq contracts on March 11, 2004, some members of Congress tried to raise questions about private connections behind some of the contracts. However, committee Chairman Tom Davis, (R-Va), cut off the questions before the witnesses could answer.
But at least the Bush gang lost control of the profits from the next contract. The first Nour contract was awarded by Bremer and the CPA in Baghdad, but the process of re-bidding was turned over to the Army Material Command.
Iraq Not Sole Source Of Profits
But not to worry, the First Brothers profits are by no means limited to Iraq. They have irons in the fire all over the map.
For instance, Winston Partners' portfolio includes another military contractor, the Amsec Corp. In 2001, Amsec was awarded $37,722,000 in contracts from the Navy. Marvin's long-time business partner, Scott Andrews, sits on the Amsec board of directors, and the firm's CEO in the relevant time-frame was Michael Braham, who used to work for none other than Paul Bremer, the top dog with the Coalition Provisional Authority (CPA), which was then responsible for awarding contracts in Iraq.
In addition, the Chatterjee Group also owns 5.5 million shares in a security company known as Sybase. SEC filings show the shares as being divided up between, Winston Partners LP with 1,036,075 shares; Winston Partners LDC holding 1,317,825 shares; and Winston Partners LLC owning 1,221,837 shares.
And thanks to brother George W, there would be plenty of profits for this security company. Obviously armed with insider knowledge from the White House, Sybase geared up to make big money off the Patriot Act long before it was passed.
The Act was designed in part, to prevent money laundering by terrorists. As soon as news of the pending law became public, all kinds of companies began developing new products that would soon to be a requirement for financial institutions that had to comply with the Patriot Act.
However, to no one's surprise I'm sure, the most aggressive marketer out of the box, was probably Sybase, with a product called the "Sybase PATRIOT Compliance Solution." In fact, the company was so quick on the draw that it already had a deal with the People's Bank of China, and the Sumitomo Mitsui Bank, by the time the October 2002 compliance deadline rolled around.
Which proves there's much to be said for benefits derived from a direct link to information about what the US government is up to and how much it plans to spend.
In addition, according to Progressive Populist, the PATRIOT Act is not Sybase's only federal conduit. The company is also a significant government contractor, with contracts from the Agriculture Department, the Navy ($2.9 million in 2001), the Army ($1.8 million in 2001), the Department of Defense ($5.3 million in 2001), Commerce, the Treasury and the General Services Administration, among others. The federal procurement database lists Sybase's total awards for 2001 as $14,754,000.
But then, making money off wars in the Middle East is nothing new for Marvin. Back in 1993, after the first gulf war, he joined his father (3 months out of office), on a trip to Kuwait. Where, according to the March 16, 2001 Austin Chronicle, "Marvin was representing U.S. defense firms selling electronic fences to the Kuwaiti Defense Ministry."
From 1993 to 2000, Marvin was also a major shareholder in the Kuwait-American Corp, which had holdings in a wide variety of US defense, aviation and industrial security companies.
No doubt about it, W's perpetual war on terror, is very profitable for the Bush Boys.
Almost Forgot Romeo
How could I ever forget little brother Neil? Until recently, he was best-known for his role in the collapse of the Silverado Savings and Loan which left a bill of $1.3 billion for tax payers to repay, as the culprit, Neil, walked away without ever seeing the inside of a police station, much less a jail cell.
I say until recently because last year, his testimony in a divorce deposition revealed a $2 million consultant contract between Neil and a Chinese computer chip company, which apparently came with perks consisting of women showing up at his motel room door wanting to have sex.
I've since nicknamed him Romeo.
But all kidding aside, the guy has really come along way since the Silverado days, thanks to his brother in the White House. According to the Nov 28, 2003, Financial Times, "Neil Bush, a younger brother of US President ... has had a $60,000-a-year employment contract with a top adviser to a Washington-based consulting firm set up this year to help companies secure contracts in Iraq," it reported.
Neil disclosed the contract during the deposition. He said he was co-chairman of Crest Investment Corporation and received $15,000 every three months for working an average three or four hours a week.
The Times went on to report, "The other co-chairman and principal of Crest is Jamal Daniel, who is an advisory board member of New Bridge Strategies, a company set up this year by a group of businessmen with close links to the Bush family or administrations. Its chairman is Joe Allbaugh, George W. Bush's campaign director in the 2000 presidential elections."
On December 11, 2003, the Times reported that "two businessmen instrumental in setting up New Bridge Strategies, a ... 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," an FT investigation has found.
Daniel's investment fund, Crest, also helped fund Neil's educational software company, Ignite!, which was no doubt set up as a conduit to funnel tax dollars through public schools via W's No Child Left Behind Act. In fact, according to the Times, Daniel sometimes introduces himself as a founding backer of Bush's company, and has persuaded the families of prominent leaders in Middle East to invest, it notes.
Daniel, Neil and Howland have also been directors of Silvermat, a Swiss company controlled by Crest, that supplies the hospitality industry and has had financial and industrial relations problems.
When asked the specifics of his position with Crest, Neil testified that he was responsible for "answering phone calls when Jamal Daniel, the other co-chairman, when he called and asked for advice."
However, Neil's is not merely a receptionist at Crest. He can obviously type as well, because three people contacted by the Financial Times have seen letters written by Neil that recommend business ventures promoted by New Bridges in the Middle East. So here again, we have Brother Neil being paid to "help companies secure contracts in Iraq," the Financial Times reports.
Neil & Marvin Hit The Jackpot In China
On still another front, many people were alarmed when W came down in favor of the People's Republic of China, against a democratic referendum in Taiwan. But his support of China became suspect after it was discovered that well-connected Chinese firms were funneling huge amounts of money to his brothers, Neil and Marvin, according to Margie Burn in the Dec 16, 2003 Online Journal.
Soon after Neil's deposition, the media began reporting that the computer chip company, Grace Semiconductor had entered into a $2 million contract with Neil.
The world business press reported that by hiring Neil, Grace hoped to influence US limits on exporting technology to China and repeal restrictions designed to keep gear from being used by the Chinese military.
And who knows, Neil may have come through, because on Oct 29, 2004, Electronic Engineering Times, reported that Grace was in the final stages of negotiating a technology transfer for a manufacturing process from a US manufacturer, which if "brought about ... would signal the further erosion of a post-Cold War-era pact - known as the Wassenaar Arrangement - set up to limit the dissemination of technology that could have potential military use."
The Wassenaar Arrangement is a real headache for Grace because in order to make advanced semiconductors, it has to rely on imports that require prior approval. So exactly who is this US manufacturer, and what, if any, connections does it have to Neil Bush? According to EET, Grace refuses to disclose the name of the company, which leads me to wonder why the secrecy, and as usual where is the US media?
Of course EET had to remind the world of the connection between Neil and his foreign buddies, and that he was paid $2 mill. "In the U.S., it has reportedly agreed to pay $2 million for consulting services from semiconductor neophyte Neil Bush, the younger brother of President George W. Bush. In China, one of Grace's founders is Jiang Mianheng, the son of former Chinese President Jiang Zemin, and in Taiwan, its other founder is Winston Wang, scion of a powerful petrochemical magnate.
This deal would have never been disclosed if not for Neil's divorce. But while everybody was paying attention to Neil, an even bigger Chinese company was making deals that would benefit that quiet little mouse Marvin, and almost nobody noticed.
Cheung Kong Holdings, is a gigantic real estate and investment company in Hong Kong. How big is it? Well, according to the company's own estimates, "combined market capitalization of the Cheung Kong Group amounts to HK$515 billion," or better yet picture this, "approximately 11.5 percent of the total market capitalization of the Hong Kong stock market." That is big with a capital B.
Cheung Kong's expanded its portfolio, which now includes a company known as Critical Path, Inc, a software and Internet-messaging service firm. And guess who the company's SEC filings list as a major shareholder in Critical Path? Mr Purnendu Chatterjee, acting for Winston Partners LP, owned by none other than Marvin Bush and Scott Andrews.
SEC filings show the Chatterjee's group, including Winston Partners, owns approximately 5.5 million shares in the company. Which means, Cheung Kong's investment had to boost profits for Winston Partners.
Thanks to the US Media, and to the fact that none of the Bush brothers are named Roger Clinton, few Americans seem to know about these deals. But the international business community sure does. Cheung Kong and Grace are both major players in China's entangled economy made up of public and private partnerships.
For W to allow his brothers to profit from deals with these firms is bad enough. But to follow up with a major shift of support to China, and discourage a democratic referendum in Taiwan, is worse. The whole world cannot help but view this turn of events as one big Bush payoff.
Whenever I write about the profiteering First Family, I like to remind readers of what Bush told reporters when the Clinton pardon scandal hit the headlines with charges that brother-in-law Hugh Rodham had accepted $400,000 to lobby for clemency for two felons. When reporters asked George W what advice he would give to his own family members, he said: "My guidance to them is, 'Behave yourself.' And they will."
Yea right.
Thursday, July 29, 2010
Congress Must Cut Off Bush Family War Profits
April 13, 2007
Evelyn Pringle
Monday, the Boston Herald reported that the US military had announced the Easter weekend deaths of 10 more American soldiers, including six killed on Sunday. The Associated Press reported that since the war began in March 2003 over 3,000 members of the US military have been killed in Iraq.
The military reported the deaths of four more US soldiers on Tuesday.
Its nearly impossible to estimate the number of deaths of civilians in Iraq, but the Herald reports that at least 47 people were killed or found dead in violence on Easter Sunday, including 17 execution victims dumped in the capital.
News releases out of Iraq also report that a woman wearing a black veil and strapped with explosives blew herself up outside a police station in Iraq on Tuesday, killing 16 people.
According to the January 14 Los Angeles Times, Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments in Washington, says that, starting with the anti-terrorism appropriation a week after the 9/11 attacks, he estimates the US has spent $400 billion fighting terrorism through fiscal 2006, which ended on September 30, 2006.
In January, Marine Corps spokeswoman, Lt Col Roseann Lynch, told Reuters that the war in Iraq is costing about $4.5 billion a month for military “operating costs,” which did not include new weapons or equipment.
Since this “war on terror” was declared following 9/11, the pay levels for the CEOs of the top 34 defense contractors have doubled. From 1998-2001, the average compensation rose from $3.6 million to $7.2 million from 2002-2005, according to an August 2006, report, “Executive Excess 2006,” by the Washington-based, Institute for Policy Studies, and the Boston-based United for a Fair Economy.
This study found that since 9/11, the 34 defense CEOs have pocketed a combined total of $984 million, or enough, the report says, to cover the wages for more than a million Iraqis for a year. In 2005, the average total compensation for the CEOs of large US corporations was only 6 percent above 2001 figures, while defense CEOs pay was 108 percent higher.
But the last name of one family, which is literally amassing a fortune on the backs of our dead troops, matches that of the man holding the purse strings in the White House. On December 11, 2003, the Financial Times reported that three people had told the Times that they had seen letters written by Neil Bush that recommended business ventures in the Middle East, promoted by New Bridges Strategies, a firm set up by President Bush’s former campaign manager, Joe Allbaugh, who quit his Bush appointed government job as the head of FEMA, three weeks before the war in Iraq began.
Neil Bush was paid an annual fee to “help companies secure contracts in Iraq,” the Times said.
But Neil Bush is by no means the only Bush profiting from the “war on terror.” The first President Bush is so entangled with entities that have profited greatly that it’s difficult to even know where to begin. Bush joined the Carlyle Group in 1993 and became a member of the firm’s Asian Advisory Board.
The Carlyle Group was best known for buying defense companies and doubling or tripling their value and was already heavily supported by defense contracts. But, in 2002, the firm received $677 million in government contracts, and by 2003 its contracts were worth $2.1 billion.
Prior to 9/11, some Carlyle companies were not doing so well. For instance, the future of Vought Aircraft looked dismal when the company laid off 20 percent of its employees. But business was booming shortly after the wars in Afghanistan and Iraq began, and the company received over $1 billion in defense contracts.
The Bush family’s connections to Osama bin Laden’s family seem almost surreal. On September 28, 2001, two weeks after 9/11, the Wall Street Journal (WSJ) reported that, “George H.W. Bush, the father of President Bush, works for the bin Laden family business in Saudi Arabia through the Carlyle Group, an international consulting firm.”
As a representative of Carlyle, one of the investors that Bush brought to Carlyle was the Bin Laden Group, a construction company owned by Osama’s family. The bin Ladens have been called the Rockefellers of the Middle East, and the father, Mohammed, has reportedly amassed a $5 billion empire. According the WSJ, Bush convinced Shafiq bin Laden to invest $2 million with Carlyle.
The WSJ found that Bush had met with the bin Ladens at least twice between 1998 and 2000. On September 27, 2001, the WSJ reported that it had confirmed that a meeting took place between Bush Senior and the bin Laden family through Senior’s chief of staff, Jean Becker, but only after the reporter showed her a thank you note that was written and sent by Bush to the bin Ladens after the meeting.
The current president’s little publicized affiliation with the bin Laden family goes back to his days with Arbusto Energy, when Salem bin Laden funneled money through James Bath to bail out that particular failed company.
Probably the most eerie report about this strange group of bedfellows is that on 9/11, the day that served as a kick-off for the highly profitable “war on terror,” Shafiq bin Laden attended a meeting in the office of the Carlyle Group, and stood watching TV with other members of the firm as the World Trade Center collapsed.
The fact that so many Saudis, including many bin Ladens, were allowed to fly out of the country right after 9/11, while Americans were still grounded, has always seemed a bit strange to most people, especially when nobody in the Bush administration was able to explain who gave permission for the flights.
About a month after 9/11, in October 2001, the Carlyle Group severed its ties with the Bin Laden Group, but the Bush family did not. In January 2002, Neil Bush took a trip to Saudi Arabia that was sponsored by the Bin Laden Construction Company and Prince Alwaleed bin Talal, the same prince who offered New York Mayor Rudy Giuliani $10 million to help the 9/11 victims, a gesture that Rudy refused.
In the fall of 2003, Bush Senior finally resigned from the Carlyle Group as the accusations of family war profiteering grew louder. However, according to the Washington Post, he still retained stock in the firm and gave speeches on its behalf for a fee of $500,000.
Carlyle companies have also scored big in the Homeland Security bonanza. Federal Data Systems and US Investigations Services hold multi-billion- dollar contracts to provide background checks for airlines, the Pentagon, the CIA and the Department of Homeland Security. US Investigations used to be a federal agency, until it was privatized in 1996 and taken over by Carlyle.
Marvin and Jeb Bush are also highly successful members of the family war profiteering team. Marvin is a co-founder and partner in Winston Partners, a private investment firm, and Jeb is an investor in the Winston Capital Fund, which is managed by Marvin.
Winston Partners is part of the Chatterjee Group, which owned 5.5 million shares in a company called Sybase in 2001, a firm that had contracts worth $2.9 million with the Navy, $1.8 million with the Army and $5.3 million with the Department of Defense. The federal procurement database listed the total of the firm’s contracts that year as $14,754,000.
And, Sybase was not the only company delivering war profits to Marvin and Jeb. The portfolio of Winston Partners also included the Amsec Corp, which, in 2001, was awarded $37,722,000 in Navy contracts.
Marvin’s business partner, Scott Andrews, sat on the board of directors at AMSEC, and the company’s CEO was Michael Braham, who formerly worked for L. Paul Bremer, the administrator of the Coalition Provisional Authority, which was responsible for handing out contracts in Iraq.
This is the same L. Paul Bremer who used Iraqi money from the Development Fund for Iraq to award five no-bid contracts to Dick Cheney’s cash cow, Halliburton -- contracts worth $222 million, $325 million, $180 million, and $194 million combined for the last two, according to a July 28, 2004, report by the CPA Inspector General Stuart Bowen, entitled “Comptroller Cash Management Controls over the Development Fund for Iraq.”
As it turns out, Halliburton received 60 percent of all contracts paid for with Iraqi money. In a January 2005 report, Inspector Bowen concluded that occupation authorities accounted poorly for $8.8 billion in Iraqi funds, and said, “The CPA did not implement adequate financial controls.”
The president’s uncle, William (Bucky) Bush, is the most visible war profiteer on the team. He sat on the board of a major military contractor, Engineered Support Systems. Six months before the war in Iraq began, on September 16, 2002, CNN/Money Magazine called ESS one of “seven defense stocks that fund managers like,” and one fund manager said ESS was one of two companies that “would gain the most from a war from Iraq.”
As a director, Uncle William received a monthly fee and held stock options. In January 2003, before the Iraq war began, he owned 33,750 shares of stock, but a year later, in January 2004, he owned 56,251.
The fact that Uncle William had an inside line to the White House can hardly be disputed. On March 25, 2003, Bush asked Congress for funding, “to cover military operations, relief and reconstruction activities in Iraq, and ongoing operations in the global war on terrorism,” and the very next day, ESS announced a large order from the Army for its Chemical Biological Protected Shelter systems.
Uncle William has become a very rich man since his nephew took office. In January 2005, SEC filings show that he made about $450,000 by selling ESS stock. But he did even better the next year.
According to the Excess Report, through a series of defense contracts, ESS earnings reached record levels and set the stage for the sale of the firm to another defense contractor, DRS Technologies, in January 2006, and among the beneficiaries of the deal was Uncle William, who cleared $2.7 million in cash and stock from the sale.
It's time for Congress to stop the direct deposits of tax dollars into the Bush bank accounts. Lawmakers need to notify the White House that all funding for Iraq is done, other than what is needed for the immediate removal of our troops from this disgusting war profiteering scheme.
Evelyn Pringle
Monday, the Boston Herald reported that the US military had announced the Easter weekend deaths of 10 more American soldiers, including six killed on Sunday. The Associated Press reported that since the war began in March 2003 over 3,000 members of the US military have been killed in Iraq.
The military reported the deaths of four more US soldiers on Tuesday.
Its nearly impossible to estimate the number of deaths of civilians in Iraq, but the Herald reports that at least 47 people were killed or found dead in violence on Easter Sunday, including 17 execution victims dumped in the capital.
News releases out of Iraq also report that a woman wearing a black veil and strapped with explosives blew herself up outside a police station in Iraq on Tuesday, killing 16 people.
According to the January 14 Los Angeles Times, Steven Kosiak, director of budget studies at the Center for Strategic and Budgetary Assessments in Washington, says that, starting with the anti-terrorism appropriation a week after the 9/11 attacks, he estimates the US has spent $400 billion fighting terrorism through fiscal 2006, which ended on September 30, 2006.
In January, Marine Corps spokeswoman, Lt Col Roseann Lynch, told Reuters that the war in Iraq is costing about $4.5 billion a month for military “operating costs,” which did not include new weapons or equipment.
Since this “war on terror” was declared following 9/11, the pay levels for the CEOs of the top 34 defense contractors have doubled. From 1998-2001, the average compensation rose from $3.6 million to $7.2 million from 2002-2005, according to an August 2006, report, “Executive Excess 2006,” by the Washington-based, Institute for Policy Studies, and the Boston-based United for a Fair Economy.
This study found that since 9/11, the 34 defense CEOs have pocketed a combined total of $984 million, or enough, the report says, to cover the wages for more than a million Iraqis for a year. In 2005, the average total compensation for the CEOs of large US corporations was only 6 percent above 2001 figures, while defense CEOs pay was 108 percent higher.
But the last name of one family, which is literally amassing a fortune on the backs of our dead troops, matches that of the man holding the purse strings in the White House. On December 11, 2003, the Financial Times reported that three people had told the Times that they had seen letters written by Neil Bush that recommended business ventures in the Middle East, promoted by New Bridges Strategies, a firm set up by President Bush’s former campaign manager, Joe Allbaugh, who quit his Bush appointed government job as the head of FEMA, three weeks before the war in Iraq began.
Neil Bush was paid an annual fee to “help companies secure contracts in Iraq,” the Times said.
But Neil Bush is by no means the only Bush profiting from the “war on terror.” The first President Bush is so entangled with entities that have profited greatly that it’s difficult to even know where to begin. Bush joined the Carlyle Group in 1993 and became a member of the firm’s Asian Advisory Board.
The Carlyle Group was best known for buying defense companies and doubling or tripling their value and was already heavily supported by defense contracts. But, in 2002, the firm received $677 million in government contracts, and by 2003 its contracts were worth $2.1 billion.
Prior to 9/11, some Carlyle companies were not doing so well. For instance, the future of Vought Aircraft looked dismal when the company laid off 20 percent of its employees. But business was booming shortly after the wars in Afghanistan and Iraq began, and the company received over $1 billion in defense contracts.
The Bush family’s connections to Osama bin Laden’s family seem almost surreal. On September 28, 2001, two weeks after 9/11, the Wall Street Journal (WSJ) reported that, “George H.W. Bush, the father of President Bush, works for the bin Laden family business in Saudi Arabia through the Carlyle Group, an international consulting firm.”
As a representative of Carlyle, one of the investors that Bush brought to Carlyle was the Bin Laden Group, a construction company owned by Osama’s family. The bin Ladens have been called the Rockefellers of the Middle East, and the father, Mohammed, has reportedly amassed a $5 billion empire. According the WSJ, Bush convinced Shafiq bin Laden to invest $2 million with Carlyle.
The WSJ found that Bush had met with the bin Ladens at least twice between 1998 and 2000. On September 27, 2001, the WSJ reported that it had confirmed that a meeting took place between Bush Senior and the bin Laden family through Senior’s chief of staff, Jean Becker, but only after the reporter showed her a thank you note that was written and sent by Bush to the bin Ladens after the meeting.
The current president’s little publicized affiliation with the bin Laden family goes back to his days with Arbusto Energy, when Salem bin Laden funneled money through James Bath to bail out that particular failed company.
Probably the most eerie report about this strange group of bedfellows is that on 9/11, the day that served as a kick-off for the highly profitable “war on terror,” Shafiq bin Laden attended a meeting in the office of the Carlyle Group, and stood watching TV with other members of the firm as the World Trade Center collapsed.
The fact that so many Saudis, including many bin Ladens, were allowed to fly out of the country right after 9/11, while Americans were still grounded, has always seemed a bit strange to most people, especially when nobody in the Bush administration was able to explain who gave permission for the flights.
About a month after 9/11, in October 2001, the Carlyle Group severed its ties with the Bin Laden Group, but the Bush family did not. In January 2002, Neil Bush took a trip to Saudi Arabia that was sponsored by the Bin Laden Construction Company and Prince Alwaleed bin Talal, the same prince who offered New York Mayor Rudy Giuliani $10 million to help the 9/11 victims, a gesture that Rudy refused.
In the fall of 2003, Bush Senior finally resigned from the Carlyle Group as the accusations of family war profiteering grew louder. However, according to the Washington Post, he still retained stock in the firm and gave speeches on its behalf for a fee of $500,000.
Carlyle companies have also scored big in the Homeland Security bonanza. Federal Data Systems and US Investigations Services hold multi-billion- dollar contracts to provide background checks for airlines, the Pentagon, the CIA and the Department of Homeland Security. US Investigations used to be a federal agency, until it was privatized in 1996 and taken over by Carlyle.
Marvin and Jeb Bush are also highly successful members of the family war profiteering team. Marvin is a co-founder and partner in Winston Partners, a private investment firm, and Jeb is an investor in the Winston Capital Fund, which is managed by Marvin.
Winston Partners is part of the Chatterjee Group, which owned 5.5 million shares in a company called Sybase in 2001, a firm that had contracts worth $2.9 million with the Navy, $1.8 million with the Army and $5.3 million with the Department of Defense. The federal procurement database listed the total of the firm’s contracts that year as $14,754,000.
And, Sybase was not the only company delivering war profits to Marvin and Jeb. The portfolio of Winston Partners also included the Amsec Corp, which, in 2001, was awarded $37,722,000 in Navy contracts.
Marvin’s business partner, Scott Andrews, sat on the board of directors at AMSEC, and the company’s CEO was Michael Braham, who formerly worked for L. Paul Bremer, the administrator of the Coalition Provisional Authority, which was responsible for handing out contracts in Iraq.
This is the same L. Paul Bremer who used Iraqi money from the Development Fund for Iraq to award five no-bid contracts to Dick Cheney’s cash cow, Halliburton -- contracts worth $222 million, $325 million, $180 million, and $194 million combined for the last two, according to a July 28, 2004, report by the CPA Inspector General Stuart Bowen, entitled “Comptroller Cash Management Controls over the Development Fund for Iraq.”
As it turns out, Halliburton received 60 percent of all contracts paid for with Iraqi money. In a January 2005 report, Inspector Bowen concluded that occupation authorities accounted poorly for $8.8 billion in Iraqi funds, and said, “The CPA did not implement adequate financial controls.”
The president’s uncle, William (Bucky) Bush, is the most visible war profiteer on the team. He sat on the board of a major military contractor, Engineered Support Systems. Six months before the war in Iraq began, on September 16, 2002, CNN/Money Magazine called ESS one of “seven defense stocks that fund managers like,” and one fund manager said ESS was one of two companies that “would gain the most from a war from Iraq.”
As a director, Uncle William received a monthly fee and held stock options. In January 2003, before the Iraq war began, he owned 33,750 shares of stock, but a year later, in January 2004, he owned 56,251.
The fact that Uncle William had an inside line to the White House can hardly be disputed. On March 25, 2003, Bush asked Congress for funding, “to cover military operations, relief and reconstruction activities in Iraq, and ongoing operations in the global war on terrorism,” and the very next day, ESS announced a large order from the Army for its Chemical Biological Protected Shelter systems.
Uncle William has become a very rich man since his nephew took office. In January 2005, SEC filings show that he made about $450,000 by selling ESS stock. But he did even better the next year.
According to the Excess Report, through a series of defense contracts, ESS earnings reached record levels and set the stage for the sale of the firm to another defense contractor, DRS Technologies, in January 2006, and among the beneficiaries of the deal was Uncle William, who cleared $2.7 million in cash and stock from the sale.
It's time for Congress to stop the direct deposits of tax dollars into the Bush bank accounts. Lawmakers need to notify the White House that all funding for Iraq is done, other than what is needed for the immediate removal of our troops from this disgusting war profiteering scheme.
How Iraq was Looted
Evelyn Pringle April 21, 2007
When Bremer Ruled Baghdad
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 Bremer Ruled Baghdad
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.
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