Evelyn Pringle April 25, 2007
When President Bush announced "Mission Accomplished," and the end of the war in May 2003, he also said we would help the citizens of Iraq rebuild their country. "Now that the dictator's gone," he stated, "we and our coalition partners are helping Iraqis to lay the foundations of a free economy."
Apparently he was referring to the Coalition Provisional Authority that took up residence in Saddam's luxurious palace in May 2003, with the newly appointed King, Paul Bremer. The CPA was granted the authority to award reconstruction contracts in Iraq and it used that authority to implement what will go down in the history books as the most blatant war profiteering scheme of all time.
In large part, the masterminds of the reconstruction disaster that would occur after the CPA took over Iraq were Secretary of Defense, Donald Rumsfeld, and Undersecretary of Defense, Douglas Feith.
But to ensure control of the contracting process on the ground in Iraq, Bush filled the top slots of the CPA with the administration cronies. For instance, a friend of Cheney's, Peter McPherson, took a leave of absence as president of Michigan State University to serve as Bremer's economic deputy.
The leader of the CPA's private development sector was Thomas Foley, an old college classmate of Bush, who served as finance chairman for his Presidential campaign in Connecticut and also raised more than $100,000 for Bush.
Relatives of the administration were also given jobs, such as Ari Fleischer's brother Michael, and Simone Ledeen, the daughter of Michael Ledeen. Cheney's daughter Liz, also did a short stint. However, it should be noted that none of them lounged around for too long in what soon became a hellhole in Iraq.
On May 16, 2003, the CPA issued its first regulation and described its authority in no uncertain terms stating:
"The CPA is vested with all executive, legislative, and judicial authority necessary to achieve its objectives, to be exercised under relevant U.N. Security Council resolutions, including resolution 1483 (2003), and the laws and usages of war. This authority shall be exercised by the CPA Administrator."
With one swipe of the pen, Bremer granted himself the authority to run the government ministries, appoint Iraqi officials and award contracts for reconstruction. Next he fired 500,000 Iraqis, most of them soldiers, but pink slips also went out to many doctors, nurses, teachers and other public employees as well.
For the most part, the CPA financed its activities with billions of dollars that belonged to the Iraqis. On May 22, 2003, a UN Security Council passed a resolution that directed the proceeds from Iraqi oil to be placed in a Development Fund for Iraq, and the CPA was granted authority to control the fund and decide which profiteers would get contracts.
During the year that Bremer controlled the purse strings, the Iraqi Development Fund received $20.2 billion, including $8.1 billion from the UN's oil-for-food program, $10.8 billion from Iraqi oil, and the rest from repatriated funds, vested assets and donations.
The CPA accounting system was cash and carry and a steady stream of cash was flown into Bagdad from the US. Inspector General, Stuart Bowen later said that he knew of one $2 billion flight.
A report released by the House Government Reform Committee in February 2007, shows that in the 13 months that Bremer ruled, from May 2003 to June 2004, the Federal Reserve Bank in New York shipped nearly $12 billion in a cash to Iraq.
One can only imagine the Bank service charges associated with these shipments because to accomplish this feat, according to the Democratic chairman of the Reform Committee, Henry Waxman, the cash weighed 363 tons and the Bank had to count and pack 281 million individual bills, including more than 107 million $100 bills, and then load them onto wooden pallets to be shipped to Bagdad on C-130 cargo planes.
Inspector Bowen later said that he determined that some of this cash went to pay salaries for thousands of "ghost employees" and Iraqi civil servants who did not exist.
Within a few months of the CPA's arrival in Iraq reports of corruption in the contracting process began appearing in the media. A British adviser to the Iraqi Governing Council told the BBC that officials in the CPA were demanding bribes of up to $300,000 in return for contracts.
Reports of flat out-fraud remained steady throughout Bremer's reign in Iraq. One audit showed that the CPA Ministry of Finance could not provide documentation for about $17 million spent on employee salaries in February 2004, and a CPA Advisor to the Ministry of the Interior said the Ministry was paid for 8,602 guards but only 602 could be verified.
A CPA advisor to the Ministry of Finance was so concerned about payroll corruption that he submitted a formal complaint that stated in part: "Of the 1.6 million government employees currently on payroll, credible estimates put the number of ghost workers at somewhere between 250,000-300,000 employees."
An October 2004, audit performed for the International Advisory and Monitoring Board, created by the UN to monitor the spending of Iraqi money, found one case where a payment of $2.6 million was authorized by a CPA senior adviser to the Ministry of Oil, and auditors were unable to obtain an underlying contract or any evidence that the services had been rendered.
The auditors in this group found 37 cases where files could not be located for contracts worth $185 million all total. In another 52 cases, there was no record that goods had been received for a total of $87.9 million.
People on the ground in Iraq said that doing business with the CPA was reminiscent of the Wild West. Former CPA employees told a congressional committee that sackfuls of cash were tossed around like footballs. Franklin Willis, showed pictures of himself and others holding up bundles of $100 notes totaling $2 million, which he said was used to pay the contractor Custer Battles. "We told them to come in and bring a bag," Willis said.
He also testified that millions of dollars in $100 bills were stored in the basement of the CPA offices and distributed to favored contractors with little accounting discipline. For instance, in the year that the CPA ruled, Custer was awarded contracts worth more than $100 million.
Two former Custer employees ended up filing a lawsuit under the Federal False Claims Act, saying Custer had swindled $50 million from the CPA with scams like double-billing for salaries and repainting the forklifts found at the Baghdad airport and then leasing them back to the US government.
The employees said the CPA paid the Custer $15 million to provide security for Iraq's civilian airline, when no services were needed because the airline was grounded during the time covered by the contract.
These employees said they kept informing the CPA about Custer's fraudulent conduct for more than a year and when they asked why the firm continued to get contracts, they were told: "Battles is very active in the Republican party, and speaks to individuals he knows in the Whitehouse almost daily."
In June 2004, the Government Accounting Office estimated that more than $1 billion in had been wasted due to illegal overcharges by contractors since the war began. A later audit by the Iraqi government found that as much as $1.27 billion was lost to accounting irregularities between June 2004 and February 2005.
Inspector Bowen cited two examples of poor oversight in a November 3, 2005 interview on National Public Radio where $28 million was paid to build 5 power plants and $1.8 million was paid to rebuild a library, but the work was never performed and the money
"simply disappeared," he said.
A recent report by Bowen says DynCorp was paid $43.8 million for a residential camp for police training personnel and has been empty for months and that the company may also have billed $18 million in other unjustified costs.
About $4.2 million, he says, was improperly spent on 20 VIP trailers and an Olympic-size pool and an additional $36.4 million in spending for weapons such as armored vehicles, body armor and communications equipment that cannot be accounted for.
Not surprisingly, Cheney's Halliburton remained the top profiteer under Bremer's rule. A July 23, 2004, audit conducted by Bowen, showed the company had received 60% of all contracts paid for with Iraq money, including 5 no-bid contracts worth $222 million, $325 million, $180 million, and the last 2 together totaled $194 million for the last two. In comparison, the audit showed that the CPA awarded only 2% of the reconstruction contracts to Iraqi companies.
In one example of blatant fraud, an audit found that Halliburton was charging for more than 41,000 meals a day for soldiers when only about 14,000 were served.
By the fall of 2003, the country was realizing that the rational for war was based on lies and that the only ones drawing any benefits were the profiteers. So when Bush asked Congress for another $20 billion for the CPA, Bremer was summoned to Washington to explain where all the money was going and of course he testified in full stonewall mode.
Before the Appropriations Committee on September 22, 2003, Bremer said the CPA had detailed records of all its receipts and outlays that could be audited by Congress. But when he testified before the Armed Services Committee 3 days later he said the Office of Management and Budget was responsible for maintaining the CPA records and that Congress would have to go to the White House to access the records.
That arrogant assertion went over like a lead balloon with many members of Congress. Senator Robert Byrd said he was outraged over the inability to monitor CPA spending. "There is no reason why any arm of the executive branch charged with making such significant spending decisions," he said, "should not be working directly with Congress."
"When we're talking about handing over another $20 billion to the CPA," he said, "there is a real need for Congress to confirm that the CPA has its finances in order and that it is managing the taxpayer's money responsibly."
"We don't even know how much of the $20 billion," Byrd said, "will flow to government contractors in Iraq."
"Whatever the amount is," he noted, "we know that the size and scope of the profits being made will be enormous."
"Former Bush Administration officials," he warned fellow Senators, "are even setting up consulting firms to act as middlemen for contractors hoping to take part in the bonanza."
"Are we turning the U.S. Treasury into a grab bag for favorite campaign contributors to be financed at taxpayer expense?" he asked.
The answer was yes, and what a grab bag it was. Media reports revealed that Bush's ex-campaign manager and Feith's former law partner had set up consulting firms to profit off the war by lining up contracts for clients through their partners in crime within the CPA.
Other reports revealed that contracts worth $407 were awarded to a firm called Nour that was formed less than 2 months after the war began. The names linked to the profits from Nour, among many others, included former Secretary of Defense, William Cohen, Ahmad Chalabi via a $2 million kickback, his nephew Salam Chalabi as the attorney handling the deal, and the money trail even led to the First Brothers, Marvin and Jeb Bush.
But come to find out, Doug Feith the ringleader on the ground in Washington, had awarded a batch of no-bid contracts to a favored company the month before the war began for the purpose of controlling the media in post-war Iraq.
In October 2003, the Center for Public Integrity obtained copies of 7 contracts awarded to the San Diego-based Science Applications. The total value of the contracts was redacted but the Center was able to determine that they were all awarded in February 2003, and called for the work to be directed by Feith.
However, the Center's most stunning discovery was that when the contracts were awarded, Feith's top deputy at the time, Christopher "Ryan" Henry, had been a senior vice president at SAIC until October 2002.
In addition, one of SAIC's board members was Army General, Wayne Downing, who ran counterterrorism in the Bush administration for almost a year after 9/11, and had even went to the CIA with Cheney to discuss intelligence on Iraq. Downing had also served as an advisor to Ahmed Chalabi and the Iraqi National Congress, and was well-known advocate for a war against Saddam.
Some of the SAIC contracts required that specific persons referred to as "executive management consultants" be hired and the pay range listed went as high as $209 and $273 per hour. The Center said congressional sources estimated the value of the media contract as $38 million for the first year and as high $90 million in 2004.
The SAIC had no special expertise to justify the award of these contracts. One company executive, quoted in the media, said the firm's only credential for setting up an independent media, supposedly modeled after the BBC, was military work in "informational warfare"-signal jamming, "perception management," and the like.
Under these contracts, the Iraq Media Network (IMN) was established and journalist, Mark North, who covered the Iraq invasion for National Public Radio, was hired to train Iraqi journalists to report for the IMN.
In one of the many Congressional hearings, North testified about the control of the IMN by the CPA and said CPA officials regularly directed and censored the activities of the news station and provided "a laundry list of CPA activities" to cover in the news reports instead of stories about security or the lack of electricity and jobs
While testifying, he also described the CPA's shabby treatment of Iraqi employees and its refusal to pay their wages. "For the first two months," North said, "the local staff of about 200 journalists and technicians were not paid their salaries."
When the staffers went on strike in attempt to get paid, he said, the CPA told the Iraqis to get back to work or the US Army would remove them from the studios.
All total, the CPA had control of Iraqi money for one year between June 2003 and June 2004, but unfortunately no auditors arrived to take a look at the agency's spending until April 2004, two months before the CPA's rule was scheduled to end.
And as so often happens when it comes to giving solid advice or warnings, the senior Senator from Virginia was absolutely right. It was far too late for audits, because the CPA and its gang of profiteers had already robbed the Iraqis blind.
The favored companies enjoyed a fraud-free-all. For instance, Halliburton said it had lost over $60 million worth of government property including trucks, office furniture and computers. Inspector Bowen reported that 6,975 items valued at $61.1 million were lost, and in June 2005, the Defense Contract Audit Agency reported that the Halliburton had overcharged or presented questionable bills for close to $1.5 billion.
In the end, Bowen's audit concluded that "the CPA's internal controls for approximately $8.8 billion in DFI funds disbursed to Iraqi ministries through the national budget process failed to provide sufficient accountability for the use of those funds."
As of February 2007, according to Bowen, audits of the CPA have resulted in 300 criminal and civil investigations, 5 arrests and convictions, and another 23 cases are currently under prosecution at the DOJ, and he is working on 76 on-going investigations.
One of the convictions involved Robert Stein, a former CPA comptroller and funding officer, who recently pleaded guilty to 5 felony counts including conspiracy, money laundering, and bribery in stealing more than $2 million of reconstruction funds and taking more than $1 million in kickbacks to rig the bids on contracts that exceeded $8 million.
The whistleblower case against Custer Battle went to trial and a jury found that Custer had committed 37 acts of fraud and filed $3 million in false claims, and rendered a verdict with a $10 million penalty. However, the verdict was overturned by Republican appointed US District Court Judge TS Ellis III, who ruled that the CPA was not a US entity and therefore the false claims act does not apply to it.
In the ruling, the judge said Custer's accusers "failed to prove that the U.S. government was ever defrauded. Any fraud that occurred was perpetrated instead against the Coalition Provisional Authority, formed to run Iraq until a government was established."
Legal experts say this ruling is great news for the CPA and contractors because from now on anyone charged with any act of fraud related to the Iraqi money doled out by the CPA in Bagdad will use it in attempt to avoid civil or criminal prosecution.
Showing posts with label Nour. Show all posts
Showing posts with label Nour. Show all posts
Tuesday, August 3, 2010
Monday, August 2, 2010
Iraq Money Trail to Bush Cronies Must End
Evelyn Pringle April 2007
It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.
It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, “There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation.”
“As long as we are there,” he warned, “we are the number one public enemy for the Muslim-Arab world.”
“We were after all,” he points out, “a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster.”
This decorated combat veteran says Bush's strategy will never work. “We did not go to Iraq originally,” he explains, “to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become.”
After Bush's speech, military families also spoke out publicly against the decision to send more troops. “I don’t have words for it,” said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.
“This is a war,” she said, “that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable.”
An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.
This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.
The only people who are benefiting from Bush’s war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.
The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.
Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.
Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. “Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."
"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years.”
Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.
In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.
"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.
Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.
For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.
Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."
At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
According to its web site back then, the IILG was made up of lawyers and businessmen who “dared to take the lead in bringing private sector investment and experience” to the war-torn country and offered to “be your Professional Gateway to the New Iraq.”
"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.
For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.
Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.
In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.
Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.
In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.
Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.
The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.
Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."
Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."
However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.
From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.
In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.
The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.
In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."
When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.
Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush‘s former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.
“First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this.”
He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.
Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.
In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.
And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.
The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. “Getting the rights to distribute Procter & Gamble products can be a gold mine,” one of the firm’s partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.
“One well-stocked 7-Eleven,” the partner said, “could knock out thirty Iraqi stores; a Wal-Mart could take over the country.”
There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.
However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.
The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.
It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.
On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.
Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."
In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.
According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.
However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.
So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."
According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."
Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.
However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."
Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.
However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.
In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.
Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.
And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.
For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it’s a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.
And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.
We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.
It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.
It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, “There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation.”
“As long as we are there,” he warned, “we are the number one public enemy for the Muslim-Arab world.”
“We were after all,” he points out, “a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster.”
This decorated combat veteran says Bush's strategy will never work. “We did not go to Iraq originally,” he explains, “to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become.”
After Bush's speech, military families also spoke out publicly against the decision to send more troops. “I don’t have words for it,” said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.
“This is a war,” she said, “that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable.”
An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.
This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.
The only people who are benefiting from Bush’s war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.
The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.
Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.
Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. “Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."
"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years.”
Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.
In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.
"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.
Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.
For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.
Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."
At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
According to its web site back then, the IILG was made up of lawyers and businessmen who “dared to take the lead in bringing private sector investment and experience” to the war-torn country and offered to “be your Professional Gateway to the New Iraq.”
"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.
For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.
Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.
In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.
Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.
In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.
Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.
The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.
Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."
Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."
However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.
From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.
In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.
The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.
In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."
When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.
Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush‘s former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.
“First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this.”
He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.
Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.
In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.
And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.
The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. “Getting the rights to distribute Procter & Gamble products can be a gold mine,” one of the firm’s partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.
“One well-stocked 7-Eleven,” the partner said, “could knock out thirty Iraqi stores; a Wal-Mart could take over the country.”
There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.
However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.
The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.
It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.
On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.
Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."
In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.
According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.
However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.
So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."
According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."
Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.
However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."
Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.
However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.
In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.
Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.
And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.
For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it’s a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.
And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.
We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.
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
The Iraq Money Trail
Evelyn Pringle April 17, 2007
The Inexplicable Enrichment of Bush Cronies
It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.
It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, "There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation."
"As long as we are there," he warned, "we are the number one public enemy for the Muslim-Arab world."
"We were after all," he points out, "a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster."
This decorated combat veteran says Bush's strategy will never work. "We did not go to Iraq originally," he explains, "to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become."
After Bush's speech, military families also spoke out publicly against the decision to send more troops. "I don't have words for it," said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.
"This is a war," she said, "that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable."
An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.
This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.
The only people who are benefiting from Bush's war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.
The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.
Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.
Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. "Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."
"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years."
Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.
In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.
"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.
Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.
For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.
Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."
At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
According to its web site back then, the IILG was made up of lawyers and businessmen who "dared to take the lead in bringing private sector investment and experience" to the war-torn country and offered to "be your Professional Gateway to the New Iraq."
"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.
For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.
Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.
In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.
Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.
In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.
Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.
The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.
Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."
Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."
However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.
From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.
In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.
The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.
In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."
When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.
Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush's former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.
"First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this."
He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.
Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.
In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.
And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.
The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. "Getting the rights to distribute Procter & Gamble products can be a gold mine," one of the firm's partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.
"One well-stocked 7-Eleven," the partner said, "could knock out thirty Iraqi stores; a Wal-Mart could take over the country."
There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.
However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.
The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.
It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.
On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.
Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."
In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.
According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.
However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.
So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."
According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."
Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.
However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."
Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.
However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.
In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.
Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.
And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.
For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it's a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.
And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.
We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.
The Inexplicable Enrichment of Bush Cronies
It's time for Americans to face the cold hard truth that nothing will be accomplished by allowing the daily carnage in Iraq to continue, and if Bush has his way, our young people will be dying in this war profiteering scheme until hell freezes over. Congress needs to authorize funding to pull our troops out of that deathtrap and not one dime more.
It apparent that Bush is a madman who will listen to no one. After Bush's speech on January 10, 2007, about the plan to send more troops, retired Army Col Doug McGreggor, a former advisor to Don Rumsfeld in 2003, said in a broadcast interview, "There seems to be a complete failure to understand that we have been trying to suppress a rebellion against our occupation."
"As long as we are there," he warned, "we are the number one public enemy for the Muslim-Arab world."
"We were after all," he points out, "a Christian army occupying a Muslim Arab country, something which in the Middle East, is essentially a disaster."
This decorated combat veteran says Bush's strategy will never work. "We did not go to Iraq originally," he explains, "to dismantle the state, dismantle the army, the police, and the government, to occupy the place with the object of changing the people that lived there into something they did not want to become."
After Bush's speech, military families also spoke out publicly against the decision to send more troops. "I don't have words for it," said Nancy Lessin, of Military Families Speak Out, a group of 3,100 families, including 100 who have lost a loved one in the war.
"This is a war," she said, "that should never have happened, that has wreaked so much havoc on our loved ones, Iraqi children, women and men, and now to be facing, almost four years into it, this news of an escalation of the war, is just unbearable."
An Associated Press-Ipsos poll showed that 70% of Americans opposed sending more troops, but Bush went right ahead and did it anyways. And then to make matters worse, this month he announces the plan to extend the 12-month tours to 15-months to allow his 30,000-troop buildup in Baghdad to stay for another year.
This war is going to bankrupt the US. A January 2007 study by Columbia University economist Joseph Stiglitz, who won a Nobel Prize in economics in 2001, and Harvard lecturer Linda Bilmes, estimated that the total costs of the Iraq war could be more than $2 trillion when the long-term medical costs for the soldiers injured so far are factored in.
The only people who are benefiting from Bush's war on terror are members of the Military Industrial Complex. Since 9/11, the pay for the CEOs of the top 34 defense contractors in the US has doubled, according to the August 2006 report, "Executive Excess 2006," by the Institute for Policy Studies, and the United for a Fair Economy.
The bill is rising so fast because the level of war profiteering is unprecedented. The Excess Report lists George David, CEO of United Technologies, as the top earner, making more than $200 million since 9/11, despite investigations into the poor quality of the firm's Black Hawk helicopters.
Halliburton CEO David Lesar made $26.6 million in 2005, and nearly $50 million since 9/11, an amount that even beats the $24 million that Dick Cheney received in exchange for the guarantee that Halliburton would be the number one military contractor during the Bush administration.
Cheney himself is also taking in war profits, contrary to what he told Tim Russert on "Meet the Press" in 2003, when he denied making any money off his former employer. "Since I left Halliburton to become George Bush's vice president," he said, "I've severed all my ties with the company, gotten rid of all my financial interest."
"I have no financial interest in Halliburton," Cheney told Tim, "of any kind and haven't had, now, for over three years."
Those statements were proven false when financial disclosure forms showed that Cheney had received a deferred salary from Halliburton of $205,298 in 2001, $262,392 in 2002, $278,437 in 2003, and $294,852 in 2004.
In 2005, an analysis released by Senator Frank Lautenberg (D-NJ), reported that Cheney continued to hold over 300,000 Halliburton stock options and said their value had risen 3,281% over the previous year, from $241,498 to more than $8 million.
"It is unseemly for the Vice President to continue to benefit from this company at the same time his Administration funnels billions of dollars to it," Senator Lautenberg said.
Cheney may be the most visible profiteer to those who find it difficult to follow the war on terror money trail, but many other members of the administration with insider knowledge set themselves up to profit early on as well.
For instance, there was the Undersecretary of Defense, Doug Feith, largely credited for fabricating the tales that got the US into the war to begin with, along with his fellow neocons and best buddy, Ahmed Chalabi.
Feith was a partner with Marc Zell, in the Feith & Zell, DC law firm before joining the administration. After he left for the White House, Zell renamed the firm, Zell, Goldberg & Co, and teamed up with Salem Chalabi, Ahmed nephew, to solicit contracts for clients in Iraq. This scam operated under the name, "Iraqi International Law Group."
At the time, the National Journal quoted Salem as saying that Marc Zell was the firm's "marketing consultant" and had been contacting law firms in Washington and New York to ask if they had clients interested in doing business in Iraq.
According to its web site back then, the IILG was made up of lawyers and businessmen who "dared to take the lead in bringing private sector investment and experience" to the war-torn country and offered to "be your Professional Gateway to the New Iraq."
"The simple fact is," the site stated, "you cannot adequately advise about Iraq unless you are here day in and day out, working closely with officials at the CPA, the newly constituted governing council and the few functioning civilian ministries [oil, labor and social welfare, etc]."
It is highly likely that the preceding statement was absolutely true when made because Feith helped set up the Coalition Provisional Authority in May 2003, with its leader Paul Bremer, and Feith's office and the CPA were in charge of awarding reconstruction contracts with Iraqi money.
For his part, Salem was a legal adviser to Iraq's governing council, of which his Uncle was a member, and Bremer even tried to appoint him to lead the tribunal that would try Saddam.
Uncle Chabali footprints in the profiteering racket can be traced back to September 2003, when the CPA awarded an $80 million contract to Nour USA, a company with ties to Winston Partners, which is a whole other story in itself because Winston Partners is headed by none other than Marvin Bush, the brother to the president.
In May 2003, Nour was founded by, Abul Huda Farouki, whose financial ties to Ahmed Chalabi date back to 1989, when Chalabi was CEO of the Petra Bank, and helped Farouqi finance projects around the world.
Nour's website at the time described the firm as an "international investment and development company" with more than 100 employees based in Iraq, and listed expertise in telecommunications, agribusiness, internet development, recruitment, construction materials, oil and power services, pharmaceuticals and fashion apparel.
In January 2004, Nour picked up another contract to equip the Iraqi armed forces and police worth $327 million. However, shortly thereafter, Nour came under fire when a shady deal surfaced involving the first $80 million contract and Ahmed Chalabi.
Newsday reported that Chalabi had received $2 million for helping to arrange the contract, but as it turned out, the contract was actually awarded to Erinys International, a firm set up in Iraq immediately after the invasion. The problem arose, Newsday said, because within days of receiving the contract, Erinys became a joint venture operation with Nour.
Next, the $327 million contract was in jeopardy after it was revealed that Nour had no experience providing military equipment and Nour claimed that it planned to subcontract its weapons procurement to Ostrowski Arms. However, the army soon learned that Ostowski had no license to export weapons.
The contract was finally axed in March 2004, after six of the 17 firms that bid on it complained that Nour's winning bid was impossibly low.
Following the money trail on this insider deal turned up the names of a few more suspects. According to the National Journal, a Nour executive said the Cohen Group "introduced us to people in the U.S. government who were involved in oil-industry security."
Former Republican Congressman and Secretary of Defense under President Clinton, William Cohen, sits at the helm of the Cohen Group, and according to a report by David Hilzenrath in the Washington Post on May 28, 2006, when he left office in January 2001, Cohen was saddled with debt and his final financial disclosure form, "listed tens of thousands of dollars of charge-account debts at interest rates as high as about 25 percent."
However, within a matter of weeks Cohen and his wife were residing in a $3.5 million mansion. It seems Cohen had wanted this house but was still in office and had no way to finance the purchase, so Frank Zarb, then chairman of the Nasdaq Stock Market, sold the house to Michael Ansari, chairman and CEO of defense contractor MIC Industries, in October 2000, and the Cohen took up residence in January or February of 2001, according to the Post.
From there, Cohen went on to join the board and audit committee of the Nasdaq Stock Market, and 11 days after he left office, MIC announced Cohen's appointment as chairman of its board of advisers in a press release.
In no time at all the Cohen Group was raking in mega-bucks. In applying for one contract, that earned the Group $490,000 over seven months, the firm bragged that it had helped Lockheed win a $3.6 billion contract for the sale of F-16 fighter jets to Poland, financed by the US government.
The Group's proposal said its efforts for the Lockheed deal included "advocacy with key decision-makers in the White House, Office of the Vice President, National Security Council, Department of Defense and the State Department during an 18-month campaign," according to the Post.
In regard to helping Nour get contracts in Iraq, according to the Post, where the government disclosure form for Nour asks the firm to identify "Specific lobbying issues," the Group's filings say: "Exploring overseas business opportunities."
When it comes to war profiteering, members of the Bush administration have given a whole new meaning to the "revolving door." A whole gang of thugs has been robbing us blind in Iraq since day one and nobody seems to be able to stop it.
Congress knows what's going on. Back on September 30, 2003, during the Senate debate over the first Iraq spending bill, Senator John Edwards said he refused to funnel the $87 billion to Cheney and other Bush cronies after learning that Bush's former campaign manager, Joe Allbaugh, who was later appointed to head FEMA, had quit his job 3 weeks before the bombs began to fall in Iraq to start the consulting firm, New Bridge Strategies, for clients seeking contracts in Iraq.
"First, Vice President Cheney's Halliburton receives more than $2 billion in Iraq reconstruction contracts," he said, "and now this."
He called it outrageous and disrespectful to the young people serving in Iraq. "President Bush should start addressing this credibility gap by calling on Joe Allbaugh and his friends to stop using their influence to secure government contracts in Iraq," he said.
Senator Edwards said there used to be talk about money for Iraq being a blank check but we now "know the president is writing it out to Joe Allbaugh and Halliburton and it's all endorsed by Vice President Cheney," he said.
In hindsight, Edwards should have expressed outrage at a few more people because the profiteering team at New Bridges was stacked with Republicans. The company's address was the same as a lobbying firm run by Haley Barbour, a former chairman of the Republican National Committee that went under the name of Barbour Griffith & Rogers.
And as luck would have it, Lanny Griffith was the CEO of New Bridge, and Ed Rogers was the vice president.
The firm's initial web site told potential clients, "the opportunities evolving in Iraq today are of such an unprecedented nature and scope that no other existing firm has the necessary skills and experience to be effective both in Washington, D.C., and on the ground in Iraq."
And these greedy thugs were so shameless that they didn't even try to hide their elation over all the money they planned to make in Iraq. "Getting the rights to distribute Procter & Gamble products can be a gold mine," one of the firm's partners told Naomi Klein, quoted in an article in Harper's Magazine in September 2004.
"One well-stocked 7-Eleven," the partner said, "could knock out thirty Iraqi stores; a Wal-Mart could take over the country."
There were rumors that a McDonald's might open, a Starwood hotel was mentioned, and General Motors was said to be planning a factory and according to Ms Klein, Citigroup was preparing to offer loans guaranteed against future sales of Iraqi oil.
However since the war never did end, in 2004, Joe Allbaugh abandoned the quest for reconstruction gold mine in Iraq and started a consulting firm with the former director of Cheney's secret energy task force, Andrew Lundquist, and their first client was Lockheed Martin.
The marriage between the ex-campaign manager, Cheney's buddy, and Lockheed apparently worked out much better than the plan to build 7-Elevens in Iraq, because Lockheed stock value has doubled since 2001, and according to the Excess Report, the firm's CEO has made $50 million since 9/11.
It may well have been that Joe's new firm was simply an outgrowth from the many other firms set up by this same gang because Haley Barbour had already worked as a lobbyist for a Lockheed.
On thing is certain, Lockheed was not lacking for administration insiders when Allbaugh came knocking. For instance, before Cheney took over as VP, his wife, Lynne served on the board of Lockheed, receiving deferred compensation to the tune of half a million dollars in stock and fees, according to a January 16, 2007 report by Richard Cummings.
Cummings notes that Cheney's "2004 financial disclosure statement lists Lockheed stock options and $50,000 in Lockheed stock."
In addition, Cheney's son-in-law, Philip Perry, Cummings says, was appointed to serve as general counsel to the Department of Homeland Security, and he had been a registered lobbyist for Lockheed who had worked for a law firm representing Lockheed with the Department of Homeland Security.
According to Cummings, less than a month after 9/11, in October of 2001, the Pentagon announced a $20 billion contract for Lockheed for the development of the Joint Strike Fighter, called the F-35. At the time, Edward Aldridge was Undersecretary of Defense for acquisitions, technology and logistics, which was responsible for the approval of the contract. Aldridge left his government post in 2003, and he now just happens to serve on Lockheed's board of directors.
However, the most stunning revelation in the Cummings report, is that in November 2002, Stephen Hadley, deputy national security advisor at the time, called Lockheed employee, Bruce Jackson, to a meeting at the White House and told him that the US was definitely going to war in Iraq but there was one small hitch, the administration could not decide what reason to use to justify it.
So Jackson formed the "Committee for the Liberation of Iraq," and its mission statement said it was "formed to promote regional peace, political freedom and international security by replacing the Saddam Hussein regime with a democratic government that respects the rights of the Iraqi people and ceases to threaten the community of nations."
According to Cummings, the "pressure group began pushing for regime change - that is, military action to remove Hussein - in the usual Washington ways, lobbying members of congress, working with the media and throwing money around."
Jackson told Cummings that he did not see the point of going on about WMDs or an Al Queda link because he thought the human rights issue was enough to justify the war.
However, Hadley did not agree. "The committee's pitch," Cummings says, "or rationale as Hadley would call it, was that Saddam was a monster -- routinely violating human rights -- and a general menace in the Middle East."
Jackson said he closed down the Committee in June 2003 because its human rights rationale had been abandoned. "We were cut out," he told Cummings, "after the whole thing went to Rumsfeld," and Hadley explained that "terrorism and WMDs" were now the rationale for the war, not human rights.
However, Cummings reports that members of the war sales team that served with Jackson have done well for themselves. The president of the Committee, Randy Scheunemann, became the president of the Mercury Group, and lobbied for Lockheed and others, and then set up the firms, Scheunemann and Associates, and Orion Strategies, which, among other things, consults with companies and countries looking to do business in Iraq.
In November 2003, another Committee member, Rend Al-Rahim Francke, was appointed Iraqi ambassador to the US.
Meanwhile back in Iraq goldmine, the Iraqis have nothing to show for all the torture that they have endured for the past 4 years. On average, Iraqis still get only about two hours of electricity a day, and the situation won't be improving anytime soon because the US has not built a single major power plant.
And despite the $22 billion funneled to the war profiteers for reconstruction, a US official recently said, Baghdad may not have continuous 24-hour electricity until the year 2013.
For the people drawn to Iraq to fight against the occupation, this is not a war against Americans; it's a war against Bush. He tore this country apart for no reason and then just as the Iraqis predicted, the greedy gang of thugs swooped in and ripped everybody off.
And there is no reason to believe that the thievery has ended or the situation in Iraq will get better because an audit released on January 31, 2007, by Inspector General, Stuart Bowen, reported that the $300 billion war and reconstruction effort continues to be plagued with waste and corruption, and yet Bush now wants us to hand over another $100 billion to be funneled through Iraq to the exact same gangsters.
We will never win in Iraq no matter how long we stay because the other side will always have more people willing to die for the cause, and it doesn't take a genius to figure out that if the number of daily attacks continues to escalate as they have for the last 4 years, the US will run out of troops before they do.
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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