Friday, January 18, 2008
The War Service Industry's Future Financial Health: "Easily" Ten More Years in Iraq

In response to Senator John McCain's flip comments of spending thousands of years in Iraq, President Bush gave the war service industry a big boost to their financial bottom line. He said that the US could "easily" spend ten more years in Iraq.

This is music to the war service industry's ears. And to add icing to the cake, DOD Secretary Gates is considering sending 3000 more troops into Afghanistan to blunt any spring offensive by the Taliban. Since the US Army has contracted out more vital logistics than any other war in history, the war service industry will continue to rake in the government's money as long as we stay in Iraq and Afghanistan.

There have been jabs at reform but most are on hold. The Democratic Senate Freshman have succeeded in passing some impressive reforms and a commission to look at the war service industry but these measures were in the 2008 defense authorization bill that Bush has vetoed (because of another provision) and it is unknown if these reforms will survive the next round. In fact, Blackwater and other war service industry companies have ramped up their lobbying effort in DC and this does not bode well for reform.

The Army attempted, under pressure from the Congress and the media, to change the mother of all logistics contracts, the LOGCAP III contract with KBR, which is billing at least a half a billion a month to the government. The Army broke the contract out to three contractors, KBR being one, and had a contractor to oversee the other contractors. Although this LOGCAP IV contract was only marginally better for the US government, contractors who lost won an appeal to put the contract on hold. So the extremely expensive and wasteful LOGCAP III contract continues to be in effect with KBR billing at a breathtaking rate. In fact, the Center for Public Integrity recently released a report that found that "U.S. government contracts for work in Iraq and Afghanistan have grown more than 50 percent annually, from $11 billion in 2004 to almost $17 billion in 2005 and more than $25 billion in 2006."

This growth occurred before and after the recent troop surge so the number of troops in Iraq and Afghanistan doesn't seem to matter. Time is on the contractors' side, the longer we are there, the more they can bill, regardless whether the work has actually increased.

With the likes of Senator Ted Stevens admitting that the wars in Iraq and Afghanistan (apparently the new contractor growth area) are costing $15 billion a month, we may have found that the war service industry may be the best recession proof industry now in America. The longer they go unchecked and are allowed to infiltrate the Congress with lobbyists and lure experienced men out of our military, the harder they will be for the Congress to control. The cynics will invest in these companies to make money. Let's just hope that the reformers will get their reforms through and not fade in the face of the war service industry's increasingly powerful Washington presence. Every month in Iraq is putting a brutal crunch on our nation's money resources and the war service industry grows more powerful.

Dina Rasor
4:50 pm pst


Thursday, January 3, 2008
Do As We Say, Not As We Do: How financial corruption will cripple Middle East fledgling democracies.

By now, many know the story of how the US lost track of around $9 billion in Iraqi assets and how corruption by US contractors and the Iraqi government has prevented much of the meaningful rebuilding of the Iraqi infrastructure. Now, according to a story in the New York Times, Pakistan has misused funds and inflated bills on the $10 billion that we have given them to assist in the war on terror. The Times article claims that the US supplies an amazing one quarter of the Pakistani military budget.

From the Times:

In interviews in Islamabad and Washington, Bush administration and military officials said they believed that much of the American money was not making its way to frontline Pakistani units. Money has been diverted to help finance weapons systems designed to counter India, not Al Qaeda or the Taliban, the officials said, adding that the United States has paid tens of millions of dollars in inflated Pakistani reimbursement claims for fuel, ammunition and other costs.

One's first reaction may be ho-hum because the government of Sadam and the current government of Pakistan have a history of corruption. I have had military people tell me that corruption is just the way that "those" societies work. But our country is the hypocrite on two levels: one, we lecture to them that a working democracy needs financial transparency to effectively win the confidence of the people and two, we have allowed our own DOD and State department private contractors to unmercifully rip off our government due to corruption and a woeful lack of oversight.

If we expect these governments in the Middle East to have a true working democracy, they have to overcome their old systems. We are pressuring them to reform but can we expect them to take anything we say seriously when they watch the fraud we allow in our own military system? Iraq and Pakistan must see the irony and dismiss our hollow lecturing about democracy.

Transparency International, a non-profit group that measures corruption around the world, ranked 180 countries around the world. Denmark ranked number one as the least corrupt. As would be expected, Iraq is near the bottom with a low ranking of 178 and Pakistan is ranked at 128. But the United States, which holds itself to being one of the most successful democracies in history, only makes a ranking of 20, behind Singapore and Hong Kong.

Senator Clinton and others say that they want to look into this and find out where the money went. It is a start but aren't we just trying to close the barn door after the horse has escaped? By investigating the claims now, the US will enrage and embarrass Pakistan and will further rock a very delicate diplomatic situation.

When will our government be serious about corruption in our military and our military aid and put in the safe guards that we need? The Congress has tried to pass some reforms (more on that in my next post) but until the US government has no tolerance of fraud and corruption in our system, we can't expect the world, especially countries experimenting with democracy, to take us seriously when it comes to transparency and accountability. We need to raise our Transparency International ranking in the world through serious reform, especially since even Senator Ted Stevens claims we are spending $15 billion a month on the war on terror. Which candidate will embrace this challenge?

Dina Rasor
1:27 pm pst



Wednesday, December 19, 2007
Jamie Leigh Jones and the Alleged KBR Rape Case: Lack of Accountability Taken to the Extreme

Today, the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security will hold hearings on the alleged gang rape of former KBR employee Jamie Leigh Jones by her fellow KBR employees in Iraq. If true, this young woman's rape case is twice the tragedy: first the rape and then the lack of legal jurisdiction to criminally prosecute the rapists.

This is another unintended consequence of contracting out the logistics and security of this war to private companies. This has placed US citizens and foreign national civilians in peril in a war zone with little protection. The on-going lack of accountability of KBR and other contractors has set up this "anything goes" atmosphere which has resulted in greatly inflated bills, denying of vital supplies to soldiers who are not near bases, and, in the case of KBR, a brazen willingness to threaten work stoppages in the middle of a war zone. Once this case broke, another woman who worked for KBR claimed that women could not advance in the company unless they slept their way to promotions. The sad reality is that the Army and the DOD have been willing, up to this point, to tolerate this behavior.

In researching my book, Betraying Our Troops: The Destructive Results of Privatizing War, I had troops coming back from Iraq telling me stories that set the stage for this type of attitude and behavior. Consider the observations of one officer in the book at the very beginning of the war:

In addition to the logistics problems, Lamberth also discovered that some KBR managers who had been in Kosovo with the contractor had brought their Balkan girlfriends with them to Kuwait. Lamberth saw the influx of women at the Khalifa resort and managed to talk to some of them. They told him they were on KBR's payroll as "logistics coordinators" and "administrative assistants." Some of the women also bragged to Lamberth they took two-hour lunches and were able to go shopping using contractor-leased vehicles. Occasionally, Lamberth observed, they would track down a part, but mostly they would be at the Khalifa pool or shopping downtown. Lamberth complained to KBR managers about the issue, but was told to keep it to himself.



This kind of attitude on the part of KBR and their employees set the stage for the case that the subcommittee will hear today. Ms. Jones' only current recourse is to sue KBR in civil court. Scott Horton, an attorney who has been following the gaps in the law concerning contractors, will testify to the committee about the legal hole that the DOD has allowed itself to fall into concerning the contractors. Because the Army has contracted out so many of its vital logistics and services, it has become a monetary and legal hostage to KBR and other contractors. Meanwhile, KBR is billing the government approximately a half a billion a month for services in Iraq.

KBR will be able to afford their legal defense. According to the Associated Press, "Last month, KBR said its third-quarter profit surged from a year ago in part from its military contracts in Iraq, but its energy and chemicals arm posted flat results." This is the war that feeds them and they will spend whatever is necessary on attorneys and lobbyists to keep the money flowing. It is estimated that their contract, called LOGCAP III, has accrued $26 billion dollars.

Meanwhile, as the scandals against contractors continue to grow, the DOD is shackled to KBR and these other contractors because they can't relieve KBR and others of their logistics work. Furthermore, the commands of the Army that used to do these tasks have atrophied. According to the Center for Public Integrity, "U.S. government contracts for work in Iraq and Afghanistan have grown more than 50 percent annually, from $11 billion in 2004 to almost $17 billion in 2005 and more than $25 billion in 2006."

In the face of that amount of contract growth, even when troop levels have barely changed, who cares about disposable employees and a case of rape? Especially since if they lose, KBR will only have to pay a civil fine....that is just the cost of doing very good business. If any managers or officers in the company faced criminal neglect charges, you might have gotten their attention, but right now they are in the driver's seat. Let's hope that the DOD and the Congress will be outraged enough about the possibility of this gang rape of a young woman not being prosecuted to do something to interject accountability in the current situation. After that, maybe they will also get serious about the flood of unaccountable money.

Dina Rasor
9:33 am pst



Wednesday, December 12, 2007
Contractors Say They Will Stay Despite Lack of Immunity: Want to Bet Our Soldiers' Lives On It?

Right now, Iraq's parliament is considering removing immunity from US security contractors or possibly all US contractor personnel. Some contractor employees have told the Los Angeles Times that they would stay and work anyway. Want to bet our troops lives on it? After the Iraqi police throw the first US contractor employee into the lovely Iraqi prison system, there could be an employee flight out of Iraq.

How do I know this? Contractor employees have left vital posts before when danger loomed. Consider this incident, which is explored in my book, Betraying Our Troops: The Destructive Result of Privatizing War. KBR and other contractor truck drivers quit their job or refused to cross the border from Kuwait into Iraq when one of the KBR convoys was ambushed in April 2004. Employees were killed and KBR truck driver Tommy Hamill was kidnapped and showed up on the nightly news with a gun in his face. This incident ground the truck convoys, carrying vital supplies for the troops, to a virtual halt and lasted long enough that even government people in the Green Zone had to start rationing food.

If Iraq does eliminate immunity and a contactor employee does get thrown in Iraqi jail, there could be a crippling flight of employee personnel out of the country in rapid order. The companies will tell you that they can get foreign nationals to stay and do the work. There are a larger number of them than Americans in many of these jobs. But the supervisory management people, who are mostly American, could leave and the logistics and security of the US forces could be put a great risk, right when people think that we may have turned a corner in Iraq.

Why would this happen? Because the employees have the constitutional right to quit their job and go home. Even though Congress passed a law to put the DOD contractors under the military's Uniform Code of Military Justice, many military attorneys believe that it won't pass a constitutional test. They believe that because the contractors have not taken the same oath as the armed service personnel, they have not voluntarily given up their constitutional right to quit a job. Is the DOD realistically going to criminally go after American citizens that quit their job in Iraq and go home? It is unlikely, legally or politically, that the government would go that far.

So this has been the Achilles' heel in using contractors to such a large extent in Iraq. If this American worker flight home grew big enough, the troops face lack of all logistics and no one to feed them. The Army would have to scramble to find enough military people to get the trucks through, and the personnel are just not there. The bigger problem is that the insurgency could see this as a weakness and an opening for them to attack the troops and the bases.

The contractors will tell you that they would find the personnel to do the job. But KBR is advertising for 942 job openings in Iraq today on their website. Do you really think that they could replace all the people who would decide that that they don't want to risk an Iraqi jail experience?

The Army was warned about this for years. A 1991 DOD Inspector General Report warned about the problems that the services could have if the contractors would leave or not work in emergency situations. This report says that the problem was exposed in a 1988 DOD Inspector General report but firm plans had not been established. The report also warned that a DOD instruction written in 1990 (updated in 1996) was not being followed. Section 4.4 of that instruction states:

For situations where the cognizant DoD Component Commander has a reasonable doubt
about the continuation of essential services during crisis situations by the incumbent contractor, the Commander shall prepare a contingency plan for obtaining the essential service from alternate sources (military, DoD civilian, host-nation, other contractor(s)).

At the beginning of the war, in June 2003, the Government Accountability Office warned in a report that the commanders did not have back up plans, as required in the instruction above, on what to do if the contractors did not stay in a hostile area.

This could be a ticking time bomb for the military in Iraq. Now that a KBR employee alleges that she has been raped and the US government has not prosecuted anyone and the Iraq parliament is posed to strip the immunity for contractors and expose them to Iraqi jails, there may be more and more employee flight out of Iraq.

If the situation in Iraq would turn sour (there was a new triple car bombing this morning) and contractors start to get killed in large groups, the military is ill prepared to replace the contractors that could come streaming home. Since the Army has contracted out so much of its logistics, their own logistics arm has atrophied. Not a good place to be in a volatile place such as Iraq.

Dina Rasor
12:40 pm pst




Friday, December 7, 2007
Another Billion in Equipment Lost: Deja Vu All Over Again


Here we go again.

On December 6, the DOD Inspector General released a report showing that the military has lost track of about a billion dollars of equipment that they supplied to the Iraqi Security Forces. Here is another outrage on the war and even the most optimistic of people will agree that some of that equipment probably made its way to the insurgency and was used on American troops.

People are angry now and politicians are reacting to these stories with promises of reform. But where was the outrage at the beginning of the war? I had it because I was researching my book on contractors and the Iraq war. But other than Rep. Henry Waxman, who was just the ranking minority with no committee at the beginning of the war, very few in Congress or the media cared. There was such a sense of cheerleading from our leaders and the media at that time, I could not get any reporters to pay attention to a similar war outrage. The Government Accountability Office (GAO) in a 2003 report found that while transporting US equipment to Kuwait for the Iraq invasion, the DOD could not account for $1.2 billion of the equipment. In other words, over a billion dollars of equipment, including jeeps, radios and other sensitive equipment, was lost somewhere from leaving the US and traveling to a Kuwaiti staging area.

In this 2003 report, the GAO talked about how the equipment was stored in Kuwait in large open areas with little oversight or security. So we were getting ready to launch a war and allowed a huge portion of our equipment, including radios with our sensitive frequencies, to be stolen and passed on to unknown groups. When I hit reporters with this GAO report and the facts of mismanagement and possible corruption, several of them told me that they would like to write about these problems but their editors wouldn't buy it. Nobody wanted to be the first to report such unpleasantness while they were gearing up to go with the troops and watch the great victory. The Congress, which was controlled then by the Republican Party, also didn't seem to worry about these GAO reports that were coming out every few months. I believe that this lack of oversight and care at the beginning of the war set the stage for the contractors and the Iraq government to believe that the DOD wasn't serious about any oversight and it was open season on the US government money.

We are now going to continue to get horror story after horror story until the media and the public are numb about it. But the media and the Congress can't say that they didn't know -- it was under their noses all the time.

But what do we do now? For all the fraud done by contractors in the past, there is the qui tam False Claims Act law that can allow the government to go back and try to recoup some of the money. If you want to know more about it, click here. To stop what is currently going on, the media and the Congress have to be relentless in exposing the fraud, no matter where the path leads and the public has to be fed up enough to start demanding reforms. That is what happened in the 1980s with the spare parts scandals (remember the $7600 coffee brewer and the $436 hammer?) which lead to reforms (now defunct) and an actual freeze on the DOD budget in the middle of the Reagan military buildup. Things won't change unless the outrage becomes high enough that the editors are willing to run story after story, the Congress is willing to have hearing after hearing (covered by the media) and the public is willing to buttonhole every politician in Congress and complain or write a letter. Who will go first? Whoever is willing can become a hero for the country.

Dina Rasor
10:02 am pst

Wednesday, October 10, 2007
Way Beyond Blackwater: The Public is Finally Learning the Truth About Private Security Contractors

Another day, another story on an out of control private security contractor shooting. This time it is an Australian run company, Unity Resources Group, was returning from escorting a USAID subcontractor convoy. They shot two women in a car. The Washington Post reports, “’A vehicle got close to them and they opened fire on it randomly as if they were in the middle of a confrontation. You won't find a head. The brain is scattered on the ground,’ said Ahmed Kadhim Hussein, a police officer at the scene. ‘I am shaking as I am trying to describe to you what happened. We are not able to eat. These were innocent people. Is it so natural for them to shoot innocent people?’”

The public is finally learning about these companies and the havoc that they have been wreaking on the Iraqi citizens for years. Many of these past attacks were not routinely reported or reported on by the media. Since the Blackwater shooting in September, the Iraqi government has found its voice and the press is now paying attention to these attacks.

Private Security Contractors, part of what I call the War Service Industry, don’t just guard diplomats. Except for KBR who has their security provided by the US Army, every contractor in Iraq who delivers a service or builds something needs private security contractors to protect them. So these security contractors escort company convoys of supplies and equipment, protect job sites and escort convoys of personnel. The problem is how they do it. They have a different goal than the US Army. The Army is trying to secure areas and win over various sectarian factions but the private security contractors are just trying to get their job done…such as moving equipment and people from point A to point B and they don’t want to deal with the Iraqis on the road.

While researching my book, I came across Will Hough, a very impressive ex-Marine who was hired as a security guard for the now defunct Custer Battles company. He mainly did convoy work and was very upset on how his company treated the Iraqis while running their convoys. I was so moved by his story that I devoted a whole chapter on his experiences. Here is an excerpt:

"Custer Battles hired Kurdish guards to go along with the American guards on these convoys. Many of the Kurds were barely out of their teens, and Hough worried for them. According to Hough, Custer Battles sometimes would only supply one helmet per SUV, and the American guard usually wore it. Bothered by this, Hough tried to scrounge up enough helmets for the young Kurds. He did not feel right leaving them so unprotected.

When he was traveling with his Kurdish guards through various towns providing protection to convoys, Hough told them not to shoot at any of the civilians unless they were fired upon. They were confused and told him they were taught by the other American guards to shoot randomly at people while going through the town to keep everyone back from the convoys and it was all right to hit civilians with gunfire. It was important to remember that these Kurds had a natural animosity toward Iraqis because of Saddam’s killings and suppression of the Kurds. However, Hough was stricken when he heard this because he knew that would just cause the civilians to attack them the next time the convoys went through the town. He strongly told them not to shoot civilians. He taught them hand signals to show civilians on the street and in cars, they would understand, to 'keep back from the convoy.'”

According to Hough, shortly after that, a leader of one of the convoys told his crew, to not let cars near the convoy on the road and to shoot any care that got near them even if they had families in them. After the mission, one of the crew told Hough he shot up at least four cars with families in them because they came near the convoy and the cars had crashed and burned.

Hough was in Iraq in the summer of 2004. These private security convoys have been breeding hatred throughout the occupation. The stories are now coming out to the public but it is too little, too late to curb them in and convince the Iraqi population and their government that we don’t condone the random shooting of civilians. It has been going on for years. Now Congress is scrambling to find some effective legal solution to the problem. It is another example of unintended consequences in using contractors in the war zone. It was not well thought out by the military and the State Department and now the U.S. is reaping the hatred that the contractors have bred among the Iraqis. How would you like to be a U.S. Army foot soldier who has to patrol a town that the private security contractor had just gone through, firing at civilians?

Dina Rasor
2:02 pm pdt




Friday, October 5, 2007
Maybe Now You Can Put Them in Jail, but What Do you Do When They Quit in the Hostile Zones?

In the past few days, there has been a buzz of activity surrounding the questions that the Blackwater incidents have raised. The House of Representatives has passed a bill putting contractors in Iraq under U.S criminal law and the Senate has introduced a similar measure. The White House says it has grave concerns about the law because of national security implications. Even if the bill gets passed into law, there are no retroactive provisions so all the “losing hearts and minds” work done by Blackwater and others is just water under the bridge.

Just this morning, it has been reported that Secretary Rice has ordered that “special agents from the department’s Bureau of Diplomatic Security now ride with Blackwater security details; the bureau more closely review incidents like the recent shooting, and the convoys communicate with American military units operating in the same area.” We are now going to reinsert government personnel into a situation that we contracted out under the guise of lack of government people to do the job.

This is similar to the situation I found in researching my book. KBR has been contracted to run vital truck convoys from Kuwait to bases in Iraq. According to KBR truck drivers, in the beginning, KBR provided the trucks, the truck drivers and the convoy commander for the convoy and the US Army just supplied the security. But by 2005, Army truck drivers told me that the Army, out of frustration with the performance and safety of KBR, brought in Army trucks and drivers to supplement the KBR trucks and took over the control of the convoy command job in order to make sure that their vital supplies got through. So here is another situation where we contracted out to a contractor to “free up” troops to fight the war but where the Army, out of necessity, had to reinsert themselves. KBR is still getting paid for this job and the Army has had to take valuable men to back up these indispensable convoys.

This new effort for some accountability is a good start but it does not address a much larger, albeit less sexy, problem with contractors in Iraq. If these new bills are passed into law, they cover criminal acts done by contractors and their employees. The much larger problem is what the Army and others do when the contractor, in a hostile area, refuses to do all or some of the work in their contract or contractor employees decide to just quit and go home. As I mentioned in my past blog, the remedies for commanders on the field are to go back to the US and start civil proceedings against the contractor, an impossible situation in a hostile zone when he is relying on the work to be done. The employees have a constitutional right to quit a job and go home, leaving the contractor and the commander short handed to get vital work done, such as supplies, food and water to the troops outside the safe bases.

If the troops were doing the work of the contractors, especially the vital supply lines, under the Uniform Code of Military Justice (UCMJ) they would have to do the work, follow the orders of their commanders or face jail. The US would be hard pressed to try to charge a contractor or its employee under the UCMJ for something that would be a civil matter in the US.

So what is the solution? After much research and review for my book, I have come to the conclusion that you cannot use contractors in hostile areas. Their ability to quit or do less of a job threatens the troops. We have had too many stories of troops doing without because of contractors. In order to make sure that vital supplies and equipment makes it to the troops, the contractors need to be pulled back to Kuwait, to the safe bases and the Green Zone. Relying on KBR and its employees to be the main convoy supplies for the troops will continue to be a problem and potentially a crisis for the mission in Iraq as long as the contractor and his employees can just say no. Congress needs to address this problem which has much more potential consequence on our mission than the Blackwater episodes.
Dina Rasor
2:49 pm pdt




Monday, October 1, 2007
Blackwater Illustrates the Achilles’ Heel of Using Contractors in Hostile Zones

Tomorrow, Representative Henry Waxman, chairman of the House Committee on Oversight and Governmental Reform, will hold hearings on Blackwater, the largest of the private security firms in Iraq. There will be many issues discussed and debated. The committee recently issued a report on the failures of the company when they sent out four of the employees on that ill fated trip to Fallujah which ended with parts of those employees hanging from a bridge in 2004. As I illustrate in my book, this incident, which was shown on national television, forced a strong response from the Army and they stormed Fallujah, killing many of our troops, many civilians and forced the town to empty, causing the suffering of refugees.

Now we have the current situation where the State Department is reliant on Blackwater for their security to moving around the country and even in Baghdad but the Iraq government wants Blackwater out because of the most recent, alleged trigger-happy incident in a Baghdad intersection. The US has kept Blackwater working for them despite the strained relationship with the Iraq government who had ordered the company out of their country.

Blackwater may stay or even be replaced by another company, but their American employees may not. If these private security companies are put under Iraqi law, many of the employees, mainly American employees may quit rather than face the possibility of an Iraqi jail. Their Wild West days may be over and the prospect of being arrested by the angry Iraq justice system could drive them out of the country. The military personnel, who used to do this protection work of diplomats around the world, are under strict rules of engagement and cannot quit. The Uniform Code of Military Justice (UCMJ) prevents them from doing so. Since the US decided to outsource much of this war without a lot of thought and study of the consequences, they have put themselves in a very vulnerable position in a war zone; the contractors and their employees, have a constitutional right to quit and walk out of a bad situation. This leaves the Pentagon and the State Department in a tight spot.

The Congress has tried to put a Band-Aid on this problem but saying that contractors are under UCMJ by law, but many military legal experts will tell you that it won’t pass a constitutional test. Unless you take the oath of the Armed Services and voluntarily give up some of your constitutional rights under the UCMJ, you have the right as an American citizen, to quit any job that you want. There may be some civil contract consequences but is it not a crime like a dereliction of duty or refusing a direct order is for a US soldier. The industry is pushing the Military Extraterritorial Jurisdiction Act (MEJA) law as a remedy but that applies to criminal acts, not quitting a job, and only to contractors with the Department of Defense.

So what does the State Department do for protection in this situation? These private security companies may be able to get some foreign nationals hired to guard our diplomats but do we really want to turn the delicate protection of our diplomats over to foreigners with little American oversight in this day of terrorist infiltration? I’m not sure that Condi Rice wants to put her diplomats and even herself in that situation in volatile Iraq.

Many issues have been raised in the media and Congress about the problems with contractors in Iraq, a group I call the war service industry. But with all the research and interviews I have done for my book and my Follow the Money Project over the past three years, I have yet found anyone who can seriously address the Achilles’ heel of private contractors. What do you do if the contractors and/or their employees just say no and quit? We have seen it in Iraq and it has hurt our military mission and our troops. Now it threatens our diplomatic mission as well. This unintended consequence of using contractors in a hostile zone needs to be explored by Waxman’s committee and others in Congress. Perhaps he should ask Dr. Rice about this dilemma if she will show up to testify.

Dina Rasor
3:37 pm pdt



Blackwater Illustrates the Achilles’ Heel of Using Contractors in Hostile Zones

Friday, September 28, 2007
$189 Billion more for Iraq? Put it on the credit card…Oops! The card was maxed out
We found out this week the Bush Administration wants $189 billion for Iraq and Afghanistan for next year, the most that they have ever asked for in one year. This is on top of the $460 billion for the DOD’s regular budget. The war is costing about half a million dollars per minute. The total cost of just the Iraq war is around $455 billion so far, not counting this newest request.

Don’t worry; we can just put it on the national credit card. Until yesterday, that credit card, also known as the national debt was hitting its legal ceiling. Unlike the rest of us who finally max out on our credit cards, the Federal government can just keep borrowing more. The Senate raised the debt ceiling from $8.965 trillion to $9.815 trillion. This is the fifth time the debt ceiling has been raised under the Bush Administration and in just over six years, the Bush Administration has raised the national debt by almost $4 trillion.

These numbers are mind numbing and depressing but, whether you agree with the war or not, one would assume that the troops are getting all the equipment and food that they need. Hate to break it to you, but we aren’t even doing that with all this money. Just a few weeks ago, a soldier died in Iraq and his parents were talking to NPR. After they told of their sorrow, they also told of how he and his other fellow soldiers could not get enough war fighting supplies and even underwear and socks. The parents, even through their grief, were concerned about the other soldiers in his unit who didn’t have relatives to send them supplies that they needed. This soldier was not based in some obscure area…he was in Mosul. All these high contractor billings are sucking the lifeblood out of the supplemental budget with little oversight. I have documented many of these stories in my book, Betraying Our Troops: The Destructive Results of Privatizing War, and I am very disheartened to still hear the troops and the parents of the troops say that they don’t have enough basic equipment to fight or even to protect themselves.

Now that I have totally depressed you for the day, here is some potential good news. Yesterday, Senator Claire McCaskill and Senator James Webb, along with all the other Democratic freshmen senators, got an amendment unanimously passed by the Senate to create a new Commission on Wartime Contracting. This new commission was inspired by Harry Truman’s wartime committee that investigated WWII contractor fraud which saved over $100 billion in today’s dollars. Now it has to pass the House and, more importantly, appoint people to this commission who really want to shake things up, take names and get some of our money back from fraudulent contractor billings. This new commission must also seriously investigate the deep problems that the military has had using private contractors in a war zone in numbers never seen before.

This is still an uphill battle and the powerful war service industry will fight any serious attempts at investigation. But this, along with the media’s new interest in Blackwater and other contractors, may start peeling back the layers of fraud and waste in this war. If we can successfully expose even just part of the fraud that has been going on in this war, fasten your seatbelts because you may see one of the biggest scandals of our generation.

Dina Rasor
12:51 pm pdt




Monday, September 17, 2007
How a Contractor Triggered Another International Incident

Iraq, a country that our president calls a sovereign nation, wants to expel Blackwater, a private security contractor, from their country. The government of Iraq accuses Blackwater of shooting innocent civilians during a fire fight on Sunday while the company was guarding a diplomatic motorcade. They canceled the company’s license but, according to the rules set up by the Coalition Provisional Authority (CPA), they may not have the right to do so. Paul Bremer, head of the CPA, gave contractors immunity from Iraqi law.

The U.S. State Department, one of biggest customers of Blackwater in Iraq, is now in an awkward position because they rely on this contractor to protect them but don’t want to start another incident of push and pull with the Iraqi government. Since the State Department has a civil contractual relationship with the company, they don’t have total legal control over the company’s actions either. Unlike soldiers who would normally guard diplomats in a foreign country, Blackwater is not under the military’s Uniform Code of Military Justice (UCMJ) and so there is little legal recourse or control over Blackwater’s behavior in Iraq other than canceling their contract. We have placed support and security contractors in a war zone without planning on rules and oversight. We are will continue to reap the problems from this lack of planning and foresight.

Now the State Department has even more problems with the Iraqi government and has to play a delicate legal and diplomatic dance. They have to somehow appease the angry Iraqi government while letting them know that they don’t have any legal control over who shoots up their streets. They also have to keep relying on a potentially errant contractor because they have to have them to function in the country.

This is not the first time that Blackwater has interfered with the military and diplomatic policy between the U.S. and Iraq. As told in my book, Betraying Our Troops: The Destructive Results of Privatizing War and in media accounts and lawsuits, Blackwater triggered an international incident when they sent out allegedly unprepared employees who were ambushed, killed, burned and hung on a bridge in Fallujah during the early part of the occupation.

Here is a description from my book on what happened because of a mistake of this contractor:

“Unfortunately, the incident would have a domino effect leading to an explosion of insurgency violence against the troops and civilians alike and a grave threat to the stability and future of the country itself. Fallujah turned into ‘terrorism central’ exporting car bombs throughout the country. Senior Marine officials on the ground considered the tragedy the result of a tactical error. They intended to eventually restore stability in the area of Fallujah, but it was a tinderbox at the moment, and the Marines were being careful not to reignite it. But President Bush had other plans. America’s resolve was being challenged. ‘We will not be intimidated, we will finish the job,’ he said through his spokesperson. This forced U.S. military commanders to plan retaliation…It was payback time. In April 2004, U.S. and Iraq forces staged an invasion of Fallujah resulting in the deaths of hundreds of Iraqi civilians and a number of Marines, before withdrawing and effectively handing the city back to the insurgents.”

The battle for Fallujah also displaced 300 thousand Iraqis and leveled much of the town. This new incident may drive a wedge between the State Department and the Iraqi government, right at a crucial time when the U.S. is trying to get the Iraqi government to move on a political solution. The Iraqis are angry and tired of seeing private military contractors cowboy their way through Iraqi towns with no consequence and little oversight. The State Department feels compelled to defend their bodyguards but also has to tell the Iraqi government that they don’t have any legal recourse to any potential wrongdoing by contractors with guns in their own country.

We want Iraq to start to take responsibility for their country but insist that our contractors do not have to follow their laws. Do we really expect them to believe that we truly want them to become a sovereign nation? Until the Administration and the Congress start to get legal and financial control over these contractors in Iraq, they will continue to negatively affect the outcome of this war. It is just a matter of time before another incident by a contractor will put us even farther behind in developing a functioning nation in Iraq.
11:45 pm pdt



Wednesday, September 12, 2007
Dr. Gansler, We Need Some Tough Love

In my last blog post, I talked about how the Army planned to have Lt. General Ross Thompson investigate contracts for the Iraq war that were issued in Kuwait, which is small part of the large contractor problem. They also plan to have Dr. Jacques Gansler lead a 45 day commission to look at Iraq contracting as a whole to make sure that the procurement system is working (its not).

Everyone involved in Iraq contracting knows that this is desperately needed. As I outlined in my book, Betraying Our Troops: The Destructive Results of Privatizing War, the contractors have run wild in Iraq with very little oversight and the huge bills are coming in. That might be all right if the troops were getting what they needed but they aren't. If you don't believe me, go to our website, www.followthemoneyproject.org and read some of our blogs and the numerous government reports.

In my last blog entry here, I was concerned that Dr. Gansler was not going to be tough enough on the contractors because his University of Maryland's new Center for Public Policy and Private Enterprise, according to the university, "fosters collaboration among the public, private and nonprofit sectors to promote mutually beneficial public and private interests." His most recent comments on the commission's goals worry me even more

In an interview with Government Executive, Gansler seems to want to only look to the future without getting to the bottom of the systemic fraud from the large contractors for the past four years. The article states: "The leader of a recently announced commission on in-theater Army contracting said Tuesday that the investigation will be forward-looking, not a 'witch hunt' for existing problems. ... Jacques Gansler said his Special Commission on Army Contracting will focus on recommending changes to better prepare the Army to do business during expeditionary engagements."

No, no, no, Dr. Gansler, we need some tough love on these major contractors. The Army has let them run away with the supplemental budget and shortchange the troops. Some contractors have even threatened work stoppages in the battlefield. This has left the troops to do without and made their job even more difficult. The existing problems have become entrenched and will require some very tough reforms within the Army. Even if you suggest drastic and tough measures, you will need the help of the Congress to force the errant Army into doing the right thing with the contractors. Dr. Gansler has been around long enough to know these problems and they have festered during this war.

I am hoping that maybe, just maybe, Dr. Gansler will realize that his commission cannot be another exercise in Washington naval gazing because we have an ongoing war and the troops are counting on the Army. If his commission forces tough reforms, including penalizing contractors for past performance, his commission report due on October 31, will be a treat, not a trick on the troops. If he does nothing, the public and the media will have to force the Congress to take the drastic steps needed to right this horrible wrong done to our troops in a time of war.

Dina Rasor
6:20 pm pdt



Thursday, August 30, 2007
From a Mind Numbing $2 Billion a Week to a Mind Blowing $3 Billion a Week:

On June 12, I wrote a Huffington Post blog called the “Iraq ‘Splurge” and the Never Ending Military Costs,” about how the cost of the surge in Iraq was going to rocket upwards because the costs of the military contractors were out of control. To my horror, my predictions were right. According to a story in yesterday’s Washington Post, the Bush Administration is planning to ask the Congress for another $50 billion on top of the $147 billion still pending in Congress in supplemental money for the war. They feel confident that they will get it. We are going from a mind numbing $2 billion a week to a mind blowing $3 billion a week for the war. And the troops are still not getting what they need while the military contractors in this new war service industry are reaping the benefits of this money.

During the research of my new book, Betraying Our Troops: The Destructive Results of Privatizing War, I was able to follow the experiences of troops and contractor employees and show that the private military contractors were stealing and wasting billions of dollars while not supplying the troops what they needed to fight. Congress has just started to look into what they can do to investigate and get control of the contractor costs. Many reports from government agencies have shown lack of oversight and out of control costs. Senators McCaskill and Webb have introduced legislation to resurrect another Truman Commission to investigate the contractors before the war is over. But something more has to be done now, before committing almost $200 billion with little oversight.

Right now everyone is concentrating on how to exit or wind down the war. That debate needs to go on. In the meantime, even the most optimistic people think that it will take us at least a year to get out of Iraq. At $3 billion a week, that is real money. The Congress needs to scrub these supplemental requests and force the DOD to tighten up the cost controls and oversight on the contractors who are tasked with supporting all these troops. This war is rife with stories of stolen money, unsubstantiated costs being paid by a compliant Army and contractors charging labor costs of 12 hours a day, 7 days a week, regardless of the work being done.

Congress has the ability to stop this through the appropriations process. They can put restrictions on the money and force the DOD to look at the contractor costs in a sane manner. The military will counter that they need unlimited funds to have “the best for our boys.” Their track record on this war will show that they have not done the best for the soldiers but, instead, have been influenced, threatened and bullied to do the best for contractors. Corruption, cronyism, and waste only hurt the soldiers and these contractors have taken advantage of this war in a way that has never been seen before. Their role, which is larger in this war than any before, was supposed to help the soldier and cost the taxpayer less.

At $3 billion a week with troops still complaining that they can’t get what they need, this sick experiment by the military must finally be brought under control. Let the Congress know, whatever your politics are on the war, that they have to do something drastic before giving over another $200 billion over to this underreported scandal.

Dina Rasor
10:42 am pdt

Sunday, August 5, 2007
Out of Control Costs of the Iraq War: The Bridge to Nowhere

Professor Seymour Melman of Columbia was right. He was calling me in the fall of 2004 because he was finishing a new book and I was working on the problem that the DOD had lost track of billions of dollars. He told me that one of the main points in his new book was that America’s infrastructure was falling apart while we were allowing out of control defense budget costs to consume ever larger parts of our national treasury. He told me that he was going to take the American Society of Civil Engineer’s estimates of what it would take to fix our infrastructure for a new report that they planned to publish and contrast it to the billions of dollars that the DOD could not account for. He was known for his work on what he called a permanent war economy and he feared that this new war would further erode our economy with perpetual wasteful and ineffective defense spending.

At the time we spoke, the DOD had been forced by a new law to audit its past transactions and could not account for over a trillion dollars. Melman was intrigued and incensed by these new numbers because it was very close the ASCE’s estimate of what it would take to fix all our infrastructure problems, aviation, bridges, roads & transit, brownfields, dams and levees, drinking water & wastewater and inland waterways.

Unfortunately, Professor Melman died in December 2004 at the age of 89 and his book was not published.

Now, in 2007, we awake to several headlines this week. Earlier in the week, the Deputy Secretary of Defense Gordon England tells the House Budget Committee that they won’t have enough money for the war after October 1 and the Congress needs to be ready to put up more. But he told the committee that he did not have a detailed budget because of the fluid situation. DOD Comptroller Tina Jonas told the committee that if there is a shortfall, they will start taking money out of depo maintenance (the budget that fixes all the broken war equipment) and soldiers’ pay. Not a word about maybe withholding money from the contractors who have run up huge unscrubbed bills while demanding to be paid. The DOD knows that if there are pictures of unfixed Humvees in depos and complaints from soldiers for not getting paid, the Congress will look mighty bad if they don’t pony up whatever the DOD asks for.

The DOD had asked for $147 billion for the war effort but Rep. Jack Murtha thinks the DOD will come back and ask for $30-40 billion more. He is talking about giving them money short term, in two to three month intervals until it is clearer what they really need for the war. He is also skeptical that they really need the money now. “’Their spending is out of control’, he said of senior administration and defense officials.” During this same week, U.S Adm. Michael Mullen, in his confirmation hearings to be the next chairman of the Joint Chiefs of Staff, told Democratic Freshman Senator Claire McCaskill, “You know more than I do,” when she asked him about waste and abuse by military contractors in Iraq. No wonder she and Senator Webb have introduced legislation to form a new Truman Committee to look exclusively at the contractor fraud and waste in this war.

Then we hear about the nightmare bridge collapse in Minnesota. Reporters are racing to go to the ASCE webpage to see what it would take to fix our infrastructure, especially our bridges. Here is what the reporters are finding on the website:

Between 2000 and 2003, the percentage of the nation's 590,750 bridges rated structurally deficient or functionally obsolete decreased slightly from 28.5% to 27.1%. However, it will cost $9.4 billion a year for 20 years to eliminate all bridge deficiencies. Long-term underinvestment is compounded by the lack of a Federal transportation program.

We are spending approximately $10 billion a month in Iraq. Whatever your politics on the war, all of us should agree that we must get control of this spending now. We need to start by reining back the out of control contractor billings so that the predictions that this war will cost $1 trillion will not come true and we can begin to rebuild our country. Professor Melman spent his career warning us about our fraudulent and wasteful war spending. Will we begin to listen now?

DINA RASOR
9:58 am pdt




Friday, July 27, 2007
The Warrior and the Auditor: Can They Buck History and Make This Work?


Senator James Webb (D-VA) and Senator Claire McCaskill (D-MO) have introduced legislation to make a new congressional Truman commission to look at the waste and fraud that has wreaked havoc on the soldier and the taxpayer in our current war. The historical odds are against them. There have been dozens of Executive and Legislative branch commissions, committees and study groups all in the name of getting control of military procurement over the past sixty years. Most of them are either staffed by people who have reasons to keep the lucrative military procurement system in place or by people who are too naïve about the system and soon get rolled by the military bureaucracy and the powerful industry. Traditionally these commissions have produced reports that are still gathering dust in various archives. The last truly successful commission, dubbed the Truman Committee, was run by Harry Truman in the 1940s. These Senators want to pattern there efforts after that commission that actually jailed a general and got taxpayer money back from the companies who defrauded the government.

Something has to be done. A quick look at press stories and accounts this week show us that:

-- soldiers who are not near bases where the contractors work are still struggling just to get the basic needs while the contractors and their officers live the good life at the big bases;

-- Halliburton is reaping a large profit from the sale of KBR, the division that has the largest contract in Iraq;

-- Despite the DOD’s promises to crackdown on labor abuses by US paid contractors, many abuses still exist;

-- New Pentagon plans project U.S. presence in Iraq until at least 2009.

Perhaps because the problem has grown so monstrous and the risk to the soldier so great, this commission can be a serious step toward real reform. In the past, the various commissions have looked at the wasteful and fraudulent actions of the Military Industrial Complex (MIC), which is deeply entrenched in our political system and very hard to reform. This commission will be looking at a new industry that I have dubbed the War Service Industry. This industry was born out of a need to service this war and future wars with the largest amount of private contractors in history.

Unlike the MIC, this industry has strong but new political connections and still may be able to be regulated and controlled. It will be hard, however, because the War Service Industry has spent its first four years with virtually no serious oversight. According to McCaskill’s press release, a list of companies supporting this war does not exist and figures “on how much the government is paying contractors does not exist.”

These two bring new and different backgrounds to this effort. Senator Webb is a highly decorated combat Vietnam veteran with a history of warriors in his family. With a son who has served in Iraq and his on-the-ground experience with war in Vietnam, he brings a sense of urgency and reality to examining how this new War Service Industry has failed the troops. He also, as Secretary of the Navy, done hand-to-hand combat with the military bureaucracy and knows their dodges and tricks.

Senator McCaskill is a former prosecutor, but more importantly, was the State Auditor for Missouri, so she knows about accountability and systems for accountability. She also has the “show me state” skepticism that will be vital to take on the bureaucracy and the contractors as they try to soothe these freshman senators into believing that all is well within the system.

This attempt to establish this commission is the first joint effort of the freshman senators. Perhaps they are the ones that can try to do this because they have not yet been compromised or worn out trying to get control of the voracious DOD budget. We can only hope that they can get this through the congressional system and past the President to be able to finally make our defense dollars work for the troops out in the field. They will need all our help to pull this off against poor historical odds.

7:26 pm pdt




Contractor, then Soldier: A Response from Someone Who Was There


We have received all types of letters and reviews of our new book but none so powerful as from Dana Beausoleil, a man who first worked as a contractor and then a soldier in Iraq. The following is the full text of his review of the book and the problems he sees with our military's heavy reliance on contractors in this war.

Dina Rasor

Read this book. It’s that simple. Then read Fiasco. Then go to the VA hospital and talk to the soldiers sitting in the waiting areas. The truth is there for those who care to seek it out. One way or another, you’ll pay for this book. You’ll either read it and have your eyes opened, or not read it and have the wasted tax dollars efficiently extracted from your weekly paycheck. It’s your choice. You can ignore it, not read it and say it’s just ‘left wing lies’ but I’m writing this review to tell you that if you do that, you’re only lying to yourself. I know. I was there with the contributors to this book. I served under them. I went hungry when the contractors failed to supply meals and I drank contaminated water with the rest of the US military while they horded bottled water in their supply depots and their 5 star hotels in Kuwait.

Lies come from our elected officials both to get elected and to keep their positions of power. Lies come faster from them and make it to TV to decry books like this as ‘just lies’. But like all lies, eventually the truth comes out. This book sheds light on the real truth that is our military funding system gone amok. Lies now come (sadly) from far too many of our military leaders seeking to protect their careers and their command mistakes and to cover up ever-increasing mission failures because contractors don’t have to follow orders, they have to be paid or they leave. Mostly, they leave anyway. I know. I was one of them. I not only quit when the going got tough, I got a bonus for my service! Lies come from criminals seeking to ‘beat the system’. We all know that. Lies also come from well-connected corporations seeking ‘any & every means’ to increase their business revenue streams for the all-mighty profit. That’s what this book is about. It’s about the lies that our military lives with now, accepts now, is served by now and is harnessed to by more than 126,000 civilians who live comfortably in combat, not in fox holes with lice crawling on them like the soldiers do, but in air conditioned trailers with TV and internet while they argue with our commanders that they need more (& Bigger!) contracts. They’re arguments would get a soldier thrown in the brig. In wartime, it could get a summary execution. In this war, threatening a contractor leads them to quit when the mission gets too dangerous or causes them to ‘slow down’ to make us learn a lesson. We, the soldiers now know the golden rule: Don’t bite the hand that feeds you or they’ll stop bringing your food. They did it. We went hungry and convoys stopped coming. Not once, but year after year. They stopped in 2003 while I was in Baghdad and again in 2004 when I was in Tikrit.

Lies don't come from the testimonies of the brave souls willing to put their careers on the line for this book. That’s not an opinion, that’s a fact. I’ve spoken to one contributor whose career is effectively ended for what he reported. Our first duty is no longer to serve our nation and protect freedom; it’s to not make the military look bad by reporting the missions aren’t getting through because the civilians won’t take the missions.

When I entered Baghdad in April 2003 and initially occupied Saddam's bombed out Ramadan palace to setup the new government, I was their as a civilian contractor. I was thrilled! I made more pay in 4 months as a contractor than in 4 years as a soldier. Months later, when I was called to service by my unit, I didn’t respond to serve my country as a soldier because I was already in Baghdad. The army can’t admit that’s a problem, so they transferred me into the inactive reserves so I could stay in the war and make oodles of money. Again, I was thrilled! I stayed in Iraq and made so much money doing a job ½ as good as a soldier with incompatible equipment impossible to interact with the army needs for 40x the military pay, that I bought a new house in Florida every other month. We didn’t accomplish a damn thing as contractors. In fact, we broke more stuff than we brought and lost the rest but who cares? I wasn’t responsible for it? The corporation was. Hell, I still have a bullet proof vest my corporation bought for me while soldiers were going into battle w/o body armor. I had the best!

Nevertheless, there’s a flipside to living in the emerald city and rubbing elbows with the most powerful people on the planet: During the initial invasion, I saw and read the accounts and could care less because I was getting rich. But when I returned six months later (for another year as a soldier) I was on the receiving end of KBR (and other) contractors. I managed KBR day-to-day operations requests from my soldiers at FOB Speicher and had them routinely denied or agreed to for more money, more contracts. This book documents that well, but not even close to how incredibly dependent we are now on civilians, many now who don’t even speak English…

Sure, just for writing this review I'll probably lose my DoD job, my security clearances and my military career as a military police officer. Nevertheless, I’ll be in the company of heroes. The fact is that America is about courageous common folk who only seek freedom, truth and justice. Ask any hero and his first response is “I’m not, I just did my duty”. Sadly, our leaders, both military and civilian, have no longer any right to remain in the presence of America’s true heroes. Their decisions are our nightmares leading to our dead brothers and sisters, our ruined lives, our broken military and our nation’s dishonor. They’ve led us down a path such that we’re no better than drug addicts, addicted to civilian contractors. Once we were the fiercest fighting force the world has ever known. Now, we are beggars for goods no less so than those we pass in the streets of Baghdad. Please, Mr. civilian contractor, may we have some more water? What more can I pay you to bring food to my troops in the field? What (drug) deal can I strike with you so that you gain more business and I get fuel for my attack copters?

This book is about how our national security used to be served by civilian contractors and how our leaders now have chosen to sell us out not only to the lowest bidder, but to the highest profiteer knowing they'll be rewarded with yet another six-figure salary as a lobbyist after they’re not re-elected. No loss (for them) there! A retired congressman gets $65,000/yr be he a convicted felon or not. I’ll get $800 and (maybe) a claim from the VA. The corporations have won. The traitors to America have won. The soldier, the sailor, and you have lost.

Reading this book, and others by true investigators, true American heroes; willing to tell the truth no matter what their own personal consequences, should be mandatory for everyone to become a US citizen or even to receive a driver’s license or a movie ticket to the next big blockbuster summer hit. Sadly, most of us vote our politicians into their arrogant, powerful positions by being artfully deceived by their catchy sound bites, their Cheshire cat smiles and their well funded corporate campaigns. We get what we got sold: Tragic civilian leadership.

But after reading this book, life for you will be different. You’ll be informed, and you’ll have to make a choice. You’ll still sit down to your dinner tables, and speak of how well we all support our troops. But now you’ll know you’re lying with the leaders or fighting for the truth. Sadly, if you choose the former, the more you speak, the more you’ll believe you’re telling the truth and that’s not something you should teach your children. Sure, you’ll make yourself feel better by putting a yellow ribbon on your bumper, as we all do who are either unaffected by the war or actually are affected because our son, daughter, husband or wife is ‘over there’ putting their lives on the line for our freedom and shaking their heads in wonderment of their supply contractor’s wage comparisons and lack of accountability.

In the end, one fact remains. It’s inescapable. We are all individually responsible for this woefully wrong new path our nation has set forth upon. We’re responsible because we are free. –Free to either not vote and stand idly by as the ideal that is “America” fades into history or free to vote uninformed buying into the self-interests and deceits of the people we’ve voted into power who talk much, promise more, but haven’t supported our troops a damn bit w/o the first wave of rage coming from us, the people.

This book is about accountability. Yours. Mine. Everyone’s. It starts when you read it. It accelerates when we actually begin to hold both our civilian leadership & our military leadership fully accountable for what they’ve done to our men and women in uniform. It shows progress when we re-learn and remember to return to the pursuit of our nation’s ideals rather than fall victim to its leaders political spin and profit. Our greatest nation world status will follow again, if we choose wisely. Maybe, even peace will follow. But if it’s world peace you truly seek, tell the civilian leadership to tell the civilian contractors to get the hell out of our war zones. Ask the soldier, the airmen, the sailors to sacrifice their lives for your freedom and we will. Not because we have some motive of profit, but because our true agenda, proven over the test of time, is defending America’s freedom for everyone here now, who has come before us, and who shall surely follow in the generations to come.

Becoming a true patriot means remembering America’s past with honor, and honoring that past by sending our military needs to our defense contractors who have so aptly supplied us in uniform for two hundred years with what we need to go to war with. Tell our leaders to have them do that again. Then, when the contractors have produced what our military needs, tell them to stand on the tarmac at our nation’s airfields and wave American flags as we soldiers & sailors go off to fight for their freedom and win again their right to make oodles of money safely back here in the good old USA.

BTW, while you’re thanking the contractors who truly are helping build the war materials we desperately need, you could mention they should support the USO. That USO sends some damn fine musicians, actors and models to us in battle that boost our morale and make our missions a little easier to fight for. Fighting for contractors to make six figure incomes for the same work we’re trained to do, will never equal the morale boost a good USO tour delivers. If you’ve read this whole review, God Bless you! -As God has blessed America and how, even in death, he blesses our troops.

Dana Beausoleil
7:38 pm pdt








Wednesday, July 18, 2007
Iraq Contracting: Overpay Now and Overpay Later



USA TODAY wrote two articles earlier this week about how the Army is paying a higher amount of questioned costs on KBR’s contract to support the troops, the largest contract in Iraq. The contract is now well over $20 billion with more and more bills coming in every day. The Defense Contract Audit Agency (DCAA, which has its ranks deeply cut in the 1990s) has been trying to scrub the numbers find the waste and overcharging. The Army has been overruling DCAA and allowing more of the questioned payments to go to KBR than the average DOD contract (Believe me, the average DOD contract is not a bastion of efficiency.)

According to the USA TODAY report, “almost two thirds of costs challenged by Pentagon auditors as inflated, erroneous or otherwise improper – more than $1 billion—were eventually approved by project managers. That compares with 44% for all defense contracts in 2005.” The Army is answering this with the usual blather that more of these costs were justified because we are at war. While researching my book, I had dozens of soldiers and contractor employees tell me of outrageous padding of costs and purposeful waste by contractors, especially KBR. I have been investigating these padding of costs for over 25 years in defense contracts but this war has taken this scheme to breathtaking heights.

Padding of costs is an old game that the contractors play with the DOD. Everyone knows their role. The contractor pads his costs to the government, as much as twice the real costs, the DCAA scrubs the numbers and pushes the costs down by 44% (often they know it is much more but also know that the politics in the Army will not let them scrub harder), the government contract manager claims a victory for the government and the contractor gets paid far more than his work was worth.

It is obvious that this hurts the US Treasury and the available resources for the soldiers but most people, including most members of Congress, don’t realize that we are also going to pay later for this kabuki dance between the Army and the contractor. Most DOD contracts are based on historical costs, i.e. new contracts are determined by how much the past contracts have cost. That is one of the reasons that the price for each generation of fighter planes for the Air Force increases exponentially -- all the waste, fraud and fat that is not scrubbed out by the auditors becomes the new baseline of the follow-on aircraft.

Since we now have about as many contractors in Iraq as troops, contractors have become a dangerous and expensive part of the logistics. Short of troops, the Army has allowed contractors to infiltrate into the Army in a way not done by any other war. Because of this, the Army’s ability to do its own logistics has atrophied and they now will be heavily reliant on the contractors in the future. This also means that all the unscrubbed fraud, waste and fat in these wartime contracts will become the new baseline for all the contracts in the future. Because of the lack of cost controls now, we will be paying way too much in the future. The inevitable result will be what is happening in this war now, the contractor billings have sucked up the supplemental war money and the soldiers are still not getting what they need to fight, no matter how much money the Congress shoves to the Army. Over pay now and hurt the troops, overpay later and hurt the troops. This math should not be too complicated for the Congress to grasp and do something about it.

Dina Rasor
7:21 am pdt






Thursday, July 12, 2007

Iraq Fraud and Waste Nightmare, Redux





In the Byzantine world that is defense procurement, nothing is ever what it seems. This can be said of the newly announced LOGCAP IV, the newest contract to support our troops in Iraq and around the world. The notorious old contract, LOGCAP III was the contract where KBR, formerly owned by Halliburton, over-billed the government while not supplying the troops with what they need. The Army just announced a new “strategy” for the LOGCAP IV contract by splitting the work among three contractors – KBR, Fluor, and DynCorp, with each company expecting work valued at $5 billion per year for ten years, a total of $150 billion. The Army says this new “strategy” will reduce the risk to the government and result in a more competitive environment “meant to control costs and enhance quality” (Didn’t the Army say the same thing to justify privatizing their logistics?). On top of this, the Army awarded a LOGCAP IV “support” contract to a fourth contractor – SERCO, to provide planning and management support on the contract.



It can be said that splitting this huge contract is a positive step toward competition and cost controls. But I don’t see it that way. Yes, there are three contractors on this massive contract. But, in reality, where is the competition? If each contractor is guaranteed the same value of the work, despite their bids, performance and costs, competition is only an illusion. If the government really wanted to control costs, they would award the majority of the contract at set intervals to the contractor who keeps their costs lowest while doing the best job for the troops. That is real competition and would put in the right incentives. This new contract promises to have four contractors, secure in their portion of the contract, continuing KBR’s tradition of inflated billings while not adequately supplying the troops, especially those outside the bases.



LOGCAP IV services troops throughout the world, not just Iraq. Given that KBR is completely entrenched in Iraq and to change contractors there would be disruptive and costly, KBR, most likely, will continue its work in Iraq on the major support task orders and the other two contractors will divide up work on smaller task orders or in other countries. That would not do much to change the status quo for KBR in Iraq. This arrangement also sets an environment for a possible scenario in which an alliance or collusion among the contractors could occur in order to keep costs at an artificially high level, manipulate who is going to get what task order and to protect the status quo. There are few incentives in this new contract to control costs.



And what role will SERCO have in the determination of which contractors get the work? Under the support contract, SERCO will provide “acquisition and life cycle management support for the program.” There is a fundamental problem of having a contractor involved in the acquisition, planning, and management support over LOGCAP IV, especially since a contractor’s first priority is to make money for itself. After all, this support contract is a cost reimbursable type, known for the ease in which you can overcharge the government. The incentive here is not to save money for the Army and this climate creates many questions about that contractor’s relationships with the other three contractors. Will this new management company provide the Army its analysis and assessments of who wins task orders and at what cost for itself and the other contractors being awarded the task orders? In other words, it appears that the contractors will run the show and DOD’s already strapped acquisition and oversight personnel will be forced to take a back seat in the process. This could be another recipe for overcharging and fraud. We can’t afford this during a war.



The cost of $5 billion per year per contractor is also an illusion given the cost history of the over-inflated LOGCAP III and the unknown future of contingencies the services are to be used for. LOGCAP III was sailing along at about an expected $60 million per year before the Iraq war started in March 2003 and then exploded to an estimated 8.5 billion per year from March 2003 to 2006. Within LOGCAP III, Task Order 59 was the first major task order to establish bases in Iraq and support the troops. It was valued at $3.9 billion in July 2003 and ended up costing $9.7 billion by April 2005. The value of a contract is only good until the contract is signed. After that, it will be bombarded with modifications adding significant costs to that initial value. Also, task orders, especially the major support task orders, most likely will be based on historical costs. These historical costs are highly inflated from previous work in Iraq. From recent government audits, such as the Special Inspector General for Iraq Reconstruction audit report, we are just now getting a good idea of how costs on task orders have been inflated. That audit reflected overcharging on just one task order for services by KBR within the Green Zone. What about costs of all the other task orders for services throughout Iraq? When, and if, such costs are ever audited, the overcharges promise to be staggering. It is these costs that form the basis for estimating future work for new task orders under LOGCAP IV. Not a pretty sight when contemplating the future costs of the contract especially when the contractor SERCO, not the government, will be doing the pricing analysis on contractor submitted estimates.



The only way that the Army will get control of costs under LOGCAP IV will be to significantly raise the level of government oversight. First, the government needs to scrub the numbers from the fat LOGAP III contract and bring the billings and historical costs back to earth. In order for oversight to work for the new contract, it has to include technical experts in cost analysis who can properly determine whether the contractor’s internal costs are reasonable including evaluation of whether requested contract modifications are necessary and reasonable. This is a type of oversight that has not existed to date and has led to inflated costs. But, with the new “support contract,” the Army apparently has outsourced their oversight responsibilities. Pentagon oversight staffing levels have decreased an estimated 40 percent since the 1990s and have not been replenished while defense service contracts have increased 78 percent creating a serious shortage of qualified technical contract experts to conduct the necessary oversight over LOGCAP IV. This, apparently, has forced the Army to outsource in order to provide resources for acquisition management and oversight. By doing this, the Army is only masking its inability to manage and oversee the contract itself. But, who is going to provide oversight over SERCO? Who is going to watch the watchers? Certainly not the Army. They don’t have the personnel to do that in a meaningful way.



Let’s summarize: no realistic competition; costs that will surely increase well beyond initial expectations; no cost control incentives, no meaningful government oversight over contractor cost controls. LOGCAP IV is not what it seems. As I outlined in my book, LOG CAP III was a disaster in supplying our troops what they needed and massively picked the taxpayers pocket. Congress, you appropriate the money for this, are you listening?



Robert Bauman

Wednesday, September 12, 2007
Dr. Gansler, We Need Some Tough Love

In my last blog post, I talked about how the Army planned to have Lt. General Ross Thompson investigate contracts for the Iraq war that were issued in Kuwait, which is small part of the large contractor problem. They also plan to have Dr. Jacques Gansler lead a 45 day commission to look at Iraq contracting as a whole to make sure that the procurement system is working (its not).

Everyone involved in Iraq contracting knows that this is desperately needed. As I outlined in my book, Betraying Our Troops: The Destructive Results of Privatizing War, the contractors have run wild in Iraq with very little oversight and the huge bills are coming in. That might be all right if the troops were getting what they needed but they aren't. If you don't believe me, go to our website, www.followthemoneyproject.org and read some of our blogs and the numerous government reports.

In my last blog entry here, I was concerned that Dr. Gansler was not going to be tough enough on the contractors because his University of Maryland's new Center for Public Policy and Private Enterprise, according to the university, "fosters collaboration among the public, private and nonprofit sectors to promote mutually beneficial public and private interests." His most recent comments on the commission's goals worry me even more

In an interview with Government Executive, Gansler seems to want to only look to the future without getting to the bottom of the systemic fraud from the large contractors for the past four years. The article states: "The leader of a recently announced commission on in-theater Army contracting said Tuesday that the investigation will be forward-looking, not a 'witch hunt' for existing problems. ... Jacques Gansler said his Special Commission on Army Contracting will focus on recommending changes to better prepare the Army to do business during expeditionary engagements."

No, no, no, Dr. Gansler, we need some tough love on these major contractors. The Army has let them run away with the supplemental budget and shortchange the troops. Some contractors have even threatened work stoppages in the battlefield. This has left the troops to do without and made their job even more difficult. The existing problems have become entrenched and will require some very tough reforms within the Army. Even if you suggest drastic and tough measures, you will need the help of the Congress to force the errant Army into doing the right thing with the contractors. Dr. Gansler has been around long enough to know these problems and they have festered during this war.

I am hoping that maybe, just maybe, Dr. Gansler will realize that his commission cannot be another exercise in Washington naval gazing because we have an ongoing war and the troops are counting on the Army. If his commission forces tough reforms, including penalizing contractors for past performance, his commission report due on October 31, will be a treat, not a trick on the troops. If he does nothing, the public and the media will have to force the Congress to take the drastic steps needed to right this horrible wrong done to our troops in a time of war.

Dina Rasor
6:20 pm pdt



Thursday, August 30, 2007
From a Mind Numbing $2 Billion a Week to a Mind Blowing $3 Billion a Week:

On June 12, I wrote a Huffington Post blog called the “Iraq ‘Splurge” and the Never Ending Military Costs,” about how the cost of the surge in Iraq was going to rocket upwards because the costs of the military contractors were out of control. To my horror, my predictions were right. According to a story in yesterday’s Washington Post, the Bush Administration is planning to ask the Congress for another $50 billion on top of the $147 billion still pending in Congress in supplemental money for the war. They feel confident that they will get it. We are going from a mind numbing $2 billion a week to a mind blowing $3 billion a week for the war. And the troops are still not getting what they need while the military contractors in this new war service industry are reaping the benefits of this money.

During the research of my new book, Betraying Our Troops: The Destructive Results of Privatizing War, I was able to follow the experiences of troops and contractor employees and show that the private military contractors were stealing and wasting billions of dollars while not supplying the troops what they needed to fight. Congress has just started to look into what they can do to investigate and get control of the contractor costs. Many reports from government agencies have shown lack of oversight and out of control costs. Senators McCaskill and Webb have introduced legislation to resurrect another Truman Commission to investigate the contractors before the war is over. But something more has to be done now, before committing almost $200 billion with little oversight.

Right now everyone is concentrating on how to exit or wind down the war. That debate needs to go on. In the meantime, even the most optimistic people think that it will take us at least a year to get out of Iraq. At $3 billion a week, that is real money. The Congress needs to scrub these supplemental requests and force the DOD to tighten up the cost controls and oversight on the contractors who are tasked with supporting all these troops. This war is rife with stories of stolen money, unsubstantiated costs being paid by a compliant Army and contractors charging labor costs of 12 hours a day, 7 days a week, regardless of the work being done.

Congress has the ability to stop this through the appropriations process. They can put restrictions on the money and force the DOD to look at the contractor costs in a sane manner. The military will counter that they need unlimited funds to have “the best for our boys.” Their track record on this war will show that they have not done the best for the soldiers but, instead, have been influenced, threatened and bullied to do the best for contractors. Corruption, cronyism, and waste only hurt the soldiers and these contractors have taken advantage of this war in a way that has never been seen before. Their role, which is larger in this war than any before, was supposed to help the soldier and cost the taxpayer less.

At $3 billion a week with troops still complaining that they can’t get what they need, this sick experiment by the military must finally be brought under control. Let the Congress know, whatever your politics are on the war, that they have to do something drastic before giving over another $200 billion over to this underreported scandal.

Dina Rasor
10:42 am pdt

Sunday, August 5, 2007
Out of Control Costs of the Iraq War: The Bridge to Nowhere

Professor Seymour Melman of Columbia was right. He was calling me in the fall of 2004 because he was finishing a new book and I was working on the problem that the DOD had lost track of billions of dollars. He told me that one of the main points in his new book was that America’s infrastructure was falling apart while we were allowing out of control defense budget costs to consume ever larger parts of our national treasury. He told me that he was going to take the American Society of Civil Engineer’s estimates of what it would take to fix our infrastructure for a new report that they planned to publish and contrast it to the billions of dollars that the DOD could not account for. He was known for his work on what he called a permanent war economy and he feared that this new war would further erode our economy with perpetual wasteful and ineffective defense spending.

At the time we spoke, the DOD had been forced by a new law to audit its past transactions and could not account for over a trillion dollars. Melman was intrigued and incensed by these new numbers because it was very close the ASCE’s estimate of what it would take to fix all our infrastructure problems, aviation, bridges, roads & transit, brownfields, dams and levees, drinking water & wastewater and inland waterways.

Unfortunately, Professor Melman died in December 2004 at the age of 89 and his book was not published.

Now, in 2007, we awake to several headlines this week. Earlier in the week, the Deputy Secretary of Defense Gordon England tells the House Budget Committee that they won’t have enough money for the war after October 1 and the Congress needs to be ready to put up more. But he told the committee that he did not have a detailed budget because of the fluid situation. DOD Comptroller Tina Jonas told the committee that if there is a shortfall, they will start taking money out of depo maintenance (the budget that fixes all the broken war equipment) and soldiers’ pay. Not a word about maybe withholding money from the contractors who have run up huge unscrubbed bills while demanding to be paid. The DOD knows that if there are pictures of unfixed Humvees in depos and complaints from soldiers for not getting paid, the Congress will look mighty bad if they don’t pony up whatever the DOD asks for.

The DOD had asked for $147 billion for the war effort but Rep. Jack Murtha thinks the DOD will come back and ask for $30-40 billion more. He is talking about giving them money short term, in two to three month intervals until it is clearer what they really need for the war. He is also skeptical that they really need the money now. “’Their spending is out of control’, he said of senior administration and defense officials.” During this same week, U.S Adm. Michael Mullen, in his confirmation hearings to be the next chairman of the Joint Chiefs of Staff, told Democratic Freshman Senator Claire McCaskill, “You know more than I do,” when she asked him about waste and abuse by military contractors in Iraq. No wonder she and Senator Webb have introduced legislation to form a new Truman Committee to look exclusively at the contractor fraud and waste in this war.

Then we hear about the nightmare bridge collapse in Minnesota. Reporters are racing to go to the ASCE webpage to see what it would take to fix our infrastructure, especially our bridges. Here is what the reporters are finding on the website:

Between 2000 and 2003, the percentage of the nation's 590,750 bridges rated structurally deficient or functionally obsolete decreased slightly from 28.5% to 27.1%. However, it will cost $9.4 billion a year for 20 years to eliminate all bridge deficiencies. Long-term underinvestment is compounded by the lack of a Federal transportation program.

We are spending approximately $10 billion a month in Iraq. Whatever your politics on the war, all of us should agree that we must get control of this spending now. We need to start by reining back the out of control contractor billings so that the predictions that this war will cost $1 trillion will not come true and we can begin to rebuild our country. Professor Melman spent his career warning us about our fraudulent and wasteful war spending. Will we begin to listen now?

DINA RASOR
9:58 am pdt




Friday, July 27, 2007
The Warrior and the Auditor: Can They Buck History and Make This Work?


Senator James Webb (D-VA) and Senator Claire McCaskill (D-MO) have introduced legislation to make a new congressional Truman commission to look at the waste and fraud that has wreaked havoc on the soldier and the taxpayer in our current war. The historical odds are against them. There have been dozens of Executive and Legislative branch commissions, committees and study groups all in the name of getting control of military procurement over the past sixty years. Most of them are either staffed by people who have reasons to keep the lucrative military procurement system in place or by people who are too naïve about the system and soon get rolled by the military bureaucracy and the powerful industry. Traditionally these commissions have produced reports that are still gathering dust in various archives. The last truly successful commission, dubbed the Truman Committee, was run by Harry Truman in the 1940s. These Senators want to pattern there efforts after that commission that actually jailed a general and got taxpayer money back from the companies who defrauded the government.

Something has to be done. A quick look at press stories and accounts this week show us that:

-- soldiers who are not near bases where the contractors work are still struggling just to get the basic needs while the contractors and their officers live the good life at the big bases;

-- Halliburton is reaping a large profit from the sale of KBR, the division that has the largest contract in Iraq;

-- Despite the DOD’s promises to crackdown on labor abuses by US paid contractors, many abuses still exist;

-- New Pentagon plans project U.S. presence in Iraq until at least 2009.

Perhaps because the problem has grown so monstrous and the risk to the soldier so great, this commission can be a serious step toward real reform. In the past, the various commissions have looked at the wasteful and fraudulent actions of the Military Industrial Complex (MIC), which is deeply entrenched in our political system and very hard to reform. This commission will be looking at a new industry that I have dubbed the War Service Industry. This industry was born out of a need to service this war and future wars with the largest amount of private contractors in history.

Unlike the MIC, this industry has strong but new political connections and still may be able to be regulated and controlled. It will be hard, however, because the War Service Industry has spent its first four years with virtually no serious oversight. According to McCaskill’s press release, a list of companies supporting this war does not exist and figures “on how much the government is paying contractors does not exist.”

These two bring new and different backgrounds to this effort. Senator Webb is a highly decorated combat Vietnam veteran with a history of warriors in his family. With a son who has served in Iraq and his on-the-ground experience with war in Vietnam, he brings a sense of urgency and reality to examining how this new War Service Industry has failed the troops. He also, as Secretary of the Navy, done hand-to-hand combat with the military bureaucracy and knows their dodges and tricks.

Senator McCaskill is a former prosecutor, but more importantly, was the State Auditor for Missouri, so she knows about accountability and systems for accountability. She also has the “show me state” skepticism that will be vital to take on the bureaucracy and the contractors as they try to soothe these freshman senators into believing that all is well within the system.

This attempt to establish this commission is the first joint effort of the freshman senators. Perhaps they are the ones that can try to do this because they have not yet been compromised or worn out trying to get control of the voracious DOD budget. We can only hope that they can get this through the congressional system and past the President to be able to finally make our defense dollars work for the troops out in the field. They will need all our help to pull this off against poor historical odds.

7:26 pm pdt




Contractor, then Soldier: A Response from Someone Who Was There


We have received all types of letters and reviews of our new book but none so powerful as from Dana Beausoleil, a man who first worked as a contractor and then a soldier in Iraq. The following is the full text of his review of the book and the problems he sees with our military's heavy reliance on contractors in this war.

Dina Rasor

Read this book. It’s that simple. Then read Fiasco. Then go to the VA hospital and talk to the soldiers sitting in the waiting areas. The truth is there for those who care to seek it out. One way or another, you’ll pay for this book. You’ll either read it and have your eyes opened, or not read it and have the wasted tax dollars efficiently extracted from your weekly paycheck. It’s your choice. You can ignore it, not read it and say it’s just ‘left wing lies’ but I’m writing this review to tell you that if you do that, you’re only lying to yourself. I know. I was there with the contributors to this book. I served under them. I went hungry when the contractors failed to supply meals and I drank contaminated water with the rest of the US military while they horded bottled water in their supply depots and their 5 star hotels in Kuwait.

Lies come from our elected officials both to get elected and to keep their positions of power. Lies come faster from them and make it to TV to decry books like this as ‘just lies’. But like all lies, eventually the truth comes out. This book sheds light on the real truth that is our military funding system gone amok. Lies now come (sadly) from far too many of our military leaders seeking to protect their careers and their command mistakes and to cover up ever-increasing mission failures because contractors don’t have to follow orders, they have to be paid or they leave. Mostly, they leave anyway. I know. I was one of them. I not only quit when the going got tough, I got a bonus for my service! Lies come from criminals seeking to ‘beat the system’. We all know that. Lies also come from well-connected corporations seeking ‘any & every means’ to increase their business revenue streams for the all-mighty profit. That’s what this book is about. It’s about the lies that our military lives with now, accepts now, is served by now and is harnessed to by more than 126,000 civilians who live comfortably in combat, not in fox holes with lice crawling on them like the soldiers do, but in air conditioned trailers with TV and internet while they argue with our commanders that they need more (& Bigger!) contracts. They’re arguments would get a soldier thrown in the brig. In wartime, it could get a summary execution. In this war, threatening a contractor leads them to quit when the mission gets too dangerous or causes them to ‘slow down’ to make us learn a lesson. We, the soldiers now know the golden rule: Don’t bite the hand that feeds you or they’ll stop bringing your food. They did it. We went hungry and convoys stopped coming. Not once, but year after year. They stopped in 2003 while I was in Baghdad and again in 2004 when I was in Tikrit.

Lies don't come from the testimonies of the brave souls willing to put their careers on the line for this book. That’s not an opinion, that’s a fact. I’ve spoken to one contributor whose career is effectively ended for what he reported. Our first duty is no longer to serve our nation and protect freedom; it’s to not make the military look bad by reporting the missions aren’t getting through because the civilians won’t take the missions.

When I entered Baghdad in April 2003 and initially occupied Saddam's bombed out Ramadan palace to setup the new government, I was their as a civilian contractor. I was thrilled! I made more pay in 4 months as a contractor than in 4 years as a soldier. Months later, when I was called to service by my unit, I didn’t respond to serve my country as a soldier because I was already in Baghdad. The army can’t admit that’s a problem, so they transferred me into the inactive reserves so I could stay in the war and make oodles of money. Again, I was thrilled! I stayed in Iraq and made so much money doing a job ½ as good as a soldier with incompatible equipment impossible to interact with the army needs for 40x the military pay, that I bought a new house in Florida every other month. We didn’t accomplish a damn thing as contractors. In fact, we broke more stuff than we brought and lost the rest but who cares? I wasn’t responsible for it? The corporation was. Hell, I still have a bullet proof vest my corporation bought for me while soldiers were going into battle w/o body armor. I had the best!

Nevertheless, there’s a flipside to living in the emerald city and rubbing elbows with the most powerful people on the planet: During the initial invasion, I saw and read the accounts and could care less because I was getting rich. But when I returned six months later (for another year as a soldier) I was on the receiving end of KBR (and other) contractors. I managed KBR day-to-day operations requests from my soldiers at FOB Speicher and had them routinely denied or agreed to for more money, more contracts. This book documents that well, but not even close to how incredibly dependent we are now on civilians, many now who don’t even speak English…

Sure, just for writing this review I'll probably lose my DoD job, my security clearances and my military career as a military police officer. Nevertheless, I’ll be in the company of heroes. The fact is that America is about courageous common folk who only seek freedom, truth and justice. Ask any hero and his first response is “I’m not, I just did my duty”. Sadly, our leaders, both military and civilian, have no longer any right to remain in the presence of America’s true heroes. Their decisions are our nightmares leading to our dead brothers and sisters, our ruined lives, our broken military and our nation’s dishonor. They’ve led us down a path such that we’re no better than drug addicts, addicted to civilian contractors. Once we were the fiercest fighting force the world has ever known. Now, we are beggars for goods no less so than those we pass in the streets of Baghdad. Please, Mr. civilian contractor, may we have some more water? What more can I pay you to bring food to my troops in the field? What (drug) deal can I strike with you so that you gain more business and I get fuel for my attack copters?

This book is about how our national security used to be served by civilian contractors and how our leaders now have chosen to sell us out not only to the lowest bidder, but to the highest profiteer knowing they'll be rewarded with yet another six-figure salary as a lobbyist after they’re not re-elected. No loss (for them) there! A retired congressman gets $65,000/yr be he a convicted felon or not. I’ll get $800 and (maybe) a claim from the VA. The corporations have won. The traitors to America have won. The soldier, the sailor, and you have lost.

Reading this book, and others by true investigators, true American heroes; willing to tell the truth no matter what their own personal consequences, should be mandatory for everyone to become a US citizen or even to receive a driver’s license or a movie ticket to the next big blockbuster summer hit. Sadly, most of us vote our politicians into their arrogant, powerful positions by being artfully deceived by their catchy sound bites, their Cheshire cat smiles and their well funded corporate campaigns. We get what we got sold: Tragic civilian leadership.

But after reading this book, life for you will be different. You’ll be informed, and you’ll have to make a choice. You’ll still sit down to your dinner tables, and speak of how well we all support our troops. But now you’ll know you’re lying with the leaders or fighting for the truth. Sadly, if you choose the former, the more you speak, the more you’ll believe you’re telling the truth and that’s not something you should teach your children. Sure, you’ll make yourself feel better by putting a yellow ribbon on your bumper, as we all do who are either unaffected by the war or actually are affected because our son, daughter, husband or wife is ‘over there’ putting their lives on the line for our freedom and shaking their heads in wonderment of their supply contractor’s wage comparisons and lack of accountability.

In the end, one fact remains. It’s inescapable. We are all individually responsible for this woefully wrong new path our nation has set forth upon. We’re responsible because we are free. –Free to either not vote and stand idly by as the ideal that is “America” fades into history or free to vote uninformed buying into the self-interests and deceits of the people we’ve voted into power who talk much, promise more, but haven’t supported our troops a damn bit w/o the first wave of rage coming from us, the people.

This book is about accountability. Yours. Mine. Everyone’s. It starts when you read it. It accelerates when we actually begin to hold both our civilian leadership & our military leadership fully accountable for what they’ve done to our men and women in uniform. It shows progress when we re-learn and remember to return to the pursuit of our nation’s ideals rather than fall victim to its leaders political spin and profit. Our greatest nation world status will follow again, if we choose wisely. Maybe, even peace will follow. But if it’s world peace you truly seek, tell the civilian leadership to tell the civilian contractors to get the hell out of our war zones. Ask the soldier, the airmen, the sailors to sacrifice their lives for your freedom and we will. Not because we have some motive of profit, but because our true agenda, proven over the test of time, is defending America’s freedom for everyone here now, who has come before us, and who shall surely follow in the generations to come.

Becoming a true patriot means remembering America’s past with honor, and honoring that past by sending our military needs to our defense contractors who have so aptly supplied us in uniform for two hundred years with what we need to go to war with. Tell our leaders to have them do that again. Then, when the contractors have produced what our military needs, tell them to stand on the tarmac at our nation’s airfields and wave American flags as we soldiers & sailors go off to fight for their freedom and win again their right to make oodles of money safely back here in the good old USA.

BTW, while you’re thanking the contractors who truly are helping build the war materials we desperately need, you could mention they should support the USO. That USO sends some damn fine musicians, actors and models to us in battle that boost our morale and make our missions a little easier to fight for. Fighting for contractors to make six figure incomes for the same work we’re trained to do, will never equal the morale boost a good USO tour delivers. If you’ve read this whole review, God Bless you! -As God has blessed America and how, even in death, he blesses our troops.

Dana Beausoleil
7:38 pm pdt








Wednesday, July 18, 2007
Iraq Contracting: Overpay Now and Overpay Later



USA TODAY wrote two articles earlier this week about how the Army is paying a higher amount of questioned costs on KBR’s contract to support the troops, the largest contract in Iraq. The contract is now well over $20 billion with more and more bills coming in every day. The Defense Contract Audit Agency (DCAA, which has its ranks deeply cut in the 1990s) has been trying to scrub the numbers find the waste and overcharging. The Army has been overruling DCAA and allowing more of the questioned payments to go to KBR than the average DOD contract (Believe me, the average DOD contract is not a bastion of efficiency.)

According to the USA TODAY report, “almost two thirds of costs challenged by Pentagon auditors as inflated, erroneous or otherwise improper – more than $1 billion—were eventually approved by project managers. That compares with 44% for all defense contracts in 2005.” The Army is answering this with the usual blather that more of these costs were justified because we are at war. While researching my book, I had dozens of soldiers and contractor employees tell me of outrageous padding of costs and purposeful waste by contractors, especially KBR. I have been investigating these padding of costs for over 25 years in defense contracts but this war has taken this scheme to breathtaking heights.

Padding of costs is an old game that the contractors play with the DOD. Everyone knows their role. The contractor pads his costs to the government, as much as twice the real costs, the DCAA scrubs the numbers and pushes the costs down by 44% (often they know it is much more but also know that the politics in the Army will not let them scrub harder), the government contract manager claims a victory for the government and the contractor gets paid far more than his work was worth.

It is obvious that this hurts the US Treasury and the available resources for the soldiers but most people, including most members of Congress, don’t realize that we are also going to pay later for this kabuki dance between the Army and the contractor. Most DOD contracts are based on historical costs, i.e. new contracts are determined by how much the past contracts have cost. That is one of the reasons that the price for each generation of fighter planes for the Air Force increases exponentially -- all the waste, fraud and fat that is not scrubbed out by the auditors becomes the new baseline of the follow-on aircraft.

Since we now have about as many contractors in Iraq as troops, contractors have become a dangerous and expensive part of the logistics. Short of troops, the Army has allowed contractors to infiltrate into the Army in a way not done by any other war. Because of this, the Army’s ability to do its own logistics has atrophied and they now will be heavily reliant on the contractors in the future. This also means that all the unscrubbed fraud, waste and fat in these wartime contracts will become the new baseline for all the contracts in the future. Because of the lack of cost controls now, we will be paying way too much in the future. The inevitable result will be what is happening in this war now, the contractor billings have sucked up the supplemental war money and the soldiers are still not getting what they need to fight, no matter how much money the Congress shoves to the Army. Over pay now and hurt the troops, overpay later and hurt the troops. This math should not be too complicated for the Congress to grasp and do something about it.

Dina Rasor
7:21 am pdt






Thursday, July 12, 2007

Iraq Fraud and Waste Nightmare, Redux





In the Byzantine world that is defense procurement, nothing is ever what it seems. This can be said of the newly announced LOGCAP IV, the newest contract to support our troops in Iraq and around the world. The notorious old contract, LOGCAP III was the contract where KBR, formerly owned by Halliburton, over-billed the government while not supplying the troops with what they need. The Army just announced a new “strategy” for the LOGCAP IV contract by splitting the work among three contractors – KBR, Fluor, and DynCorp, with each company expecting work valued at $5 billion per year for ten years, a total of $150 billion. The Army says this new “strategy” will reduce the risk to the government and result in a more competitive environment “meant to control costs and enhance quality” (Didn’t the Army say the same thing to justify privatizing their logistics?). On top of this, the Army awarded a LOGCAP IV “support” contract to a fourth contractor – SERCO, to provide planning and management support on the contract.



It can be said that splitting this huge contract is a positive step toward competition and cost controls. But I don’t see it that way. Yes, there are three contractors on this massive contract. But, in reality, where is the competition? If each contractor is guaranteed the same value of the work, despite their bids, performance and costs, competition is only an illusion. If the government really wanted to control costs, they would award the majority of the contract at set intervals to the contractor who keeps their costs lowest while doing the best job for the troops. That is real competition and would put in the right incentives. This new contract promises to have four contractors, secure in their portion of the contract, continuing KBR’s tradition of inflated billings while not adequately supplying the troops, especially those outside the bases.



LOGCAP IV services troops throughout the world, not just Iraq. Given that KBR is completely entrenched in Iraq and to change contractors there would be disruptive and costly, KBR, most likely, will continue its work in Iraq on the major support task orders and the other two contractors will divide up work on smaller task orders or in other countries. That would not do much to change the status quo for KBR in Iraq. This arrangement also sets an environment for a possible scenario in which an alliance or collusion among the contractors could occur in order to keep costs at an artificially high level, manipulate who is going to get what task order and to protect the status quo. There are few incentives in this new contract to control costs.



And what role will SERCO have in the determination of which contractors get the work? Under the support contract, SERCO will provide “acquisition and life cycle management support for the program.” There is a fundamental problem of having a contractor involved in the acquisition, planning, and management support over LOGCAP IV, especially since a contractor’s first priority is to make money for itself. After all, this support contract is a cost reimbursable type, known for the ease in which you can overcharge the government. The incentive here is not to save money for the Army and this climate creates many questions about that contractor’s relationships with the other three contractors. Will this new management company provide the Army its analysis and assessments of who wins task orders and at what cost for itself and the other contractors being awarded the task orders? In other words, it appears that the contractors will run the show and DOD’s already strapped acquisition and oversight personnel will be forced to take a back seat in the process. This could be another recipe for overcharging and fraud. We can’t afford this during a war.



The cost of $5 billion per year per contractor is also an illusion given the cost history of the over-inflated LOGCAP III and the unknown future of contingencies the services are to be used for. LOGCAP III was sailing along at about an expected $60 million per year before the Iraq war started in March 2003 and then exploded to an estimated 8.5 billion per year from March 2003 to 2006. Within LOGCAP III, Task Order 59 was the first major task order to establish bases in Iraq and support the troops. It was valued at $3.9 billion in July 2003 and ended up costing $9.7 billion by April 2005. The value of a contract is only good until the contract is signed. After that, it will be bombarded with modifications adding significant costs to that initial value. Also, task orders, especially the major support task orders, most likely will be based on historical costs. These historical costs are highly inflated from previous work in Iraq. From recent government audits, such as the Special Inspector General for Iraq Reconstruction audit report, we are just now getting a good idea of how costs on task orders have been inflated. That audit reflected overcharging on just one task order for services by KBR within the Green Zone. What about costs of all the other task orders for services throughout Iraq? When, and if, such costs are ever audited, the overcharges promise to be staggering. It is these costs that form the basis for estimating future work for new task orders under LOGCAP IV. Not a pretty sight when contemplating the future costs of the contract especially when the contractor SERCO, not the government, will be doing the pricing analysis on contractor submitted estimates.



The only way that the Army will get control of costs under LOGCAP IV will be to significantly raise the level of government oversight. First, the government needs to scrub the numbers from the fat LOGAP III contract and bring the billings and historical costs back to earth. In order for oversight to work for the new contract, it has to include technical experts in cost analysis who can properly determine whether the contractor’s internal costs are reasonable including evaluation of whether requested contract modifications are necessary and reasonable. This is a type of oversight that has not existed to date and has led to inflated costs. But, with the new “support contract,” the Army apparently has outsourced their oversight responsibilities. Pentagon oversight staffing levels have decreased an estimated 40 percent since the 1990s and have not been replenished while defense service contracts have increased 78 percent creating a serious shortage of qualified technical contract experts to conduct the necessary oversight over LOGCAP IV. This, apparently, has forced the Army to outsource in order to provide resources for acquisition management and oversight. By doing this, the Army is only masking its inability to manage and oversee the contract itself. But, who is going to provide oversight over SERCO? Who is going to watch the watchers? Certainly not the Army. They don’t have the personnel to do that in a meaningful way.



Let’s summarize: no realistic competition; costs that will surely increase well beyond initial expectations; no cost control incentives, no meaningful government oversight over contractor cost controls. LOGCAP IV is not what it seems. As I outlined in my book, LOG CAP III was a disaster in supplying our troops what they needed and massively picked the taxpayers pocket. Congress, you appropriate the money for this, are you listening?



Robert Bauman

Thursday, July 12, 2007 Iraq Fraud and Waste Nightmare, Redux In the Byzantine world that is defense procurement, nothing is ever what it seems. This can be said of the newly announced LOGCAP IV, the newest contract to support our troops in Iraq and around the world. The notorious old contract, LOGCAP III was the contract where KBR, formerly owned by Halliburton, over-billed the government while not supplying the troops with what they need. The Army just announced a new “strategy” for the LOGCAP IV contract by splitting the work among three contractors – KBR, Fluor, and DynCorp, with each company expecting work valued at $5 billion per year for ten years, a total of $150 billion. The Army says this new “strategy” will reduce the risk to the government and result in a more competitive environment “meant to control costs and enhance quality” (Didn’t the Army say the same thing to justify privatizing their logistics?). On top of this, the Army awarded a LOGCAP IV “support” contract to a fourth contractor – SERCO, to provide planning and management support on the contract. It can be said that splitting this huge contract is a positive step toward competition and cost controls. But I don’t see it that way. Yes, there are three contractors on this massive contract. But, in reality, where is the competition? If each contractor is guaranteed the same value of the work, despite their bids, performance and costs, competition is only an illusion. If the government really wanted to control costs, they would award the majority of the contract at set intervals to the contractor who keeps their costs lowest while doing the best job for the troops. That is real competition and would put in the right incentives. This new contract promises to have four contractors, secure in their portion of the contract, continuing KBR’s tradition of inflated billings while not adequately supplying the troops, especially those outside the bases. LOGCAP IV services troops throughout the world, not just Iraq. Given that KBR is completely entrenched in Iraq and to change contractors there would be disruptive and costly, KBR, most likely, will continue its work in Iraq on the major support task orders and the other two contractors will divide up work on smaller task orders or in other countries. That would not do much to change the status quo for KBR in Iraq. This arrangement also sets an environment for a possible scenario in which an alliance or collusion among the contractors could occur in order to keep costs at an artificially high level, manipulate who is going to get what task order and to protect the status quo. There are few incentives in this new contract to control costs. And what role will SERCO have in the determination of which contractors get the work? Under the support contract, SERCO will provide “acquisition and life cycle management support for the program.” There is a fundamental problem of having a contractor involved in the acquisition, planning, and management support over LOGCAP IV, especially since a contractor’s first priority is to make money for itself. After all, this support contract is a cost reimbursable type, known for the ease in which you can overcharge the government. The incentive here is not to save money for the Army and this climate creates many questions about that contractor’s relationships with the other three contractors. Will this new management company provide the Army its analysis and assessments of who wins task orders and at what cost for itself and the other contractors being awarded the task orders? In other words, it appears that the contractors will run the show and DOD’s already strapped acquisition and oversight personnel will be forced to take a back seat in the process. This could be another recipe for overcharging and fraud. We can’t afford this during a war. The cost of $5 billion per year per contractor is also an illusion given the cost history of the over-inflated LOGCAP III and the unknown future of contingencies the services are to be used for. LOGCAP III was sailing along at about an expected $60 million per year before the Iraq war started in March 2003 and then exploded to an estimated 8.5 billion per year from March 2003 to 2006. Within LOGCAP III, Task Order 59 was the first major task order to establish bases in Iraq and support the troops. It was valued at $3.9 billion in July 2003 and ended up costing $9.7 billion by April 2005. The value of a contract is only good until the contract is signed. After that, it will be bombarded with modifications adding significant costs to that initial value. Also, task orders, especially the major support task orders, most likely will be based on historical costs. These historical costs are highly inflated from previous work in Iraq. From recent government audits, such as the Special Inspector General for Iraq Reconstruction audit report, we are just now getting a good idea of how costs on task orders have been inflated. That audit reflected overcharging on just one task order for services by KBR within the Green Zone. What about costs of all the other task orders for services throughout Iraq? When, and if, such costs are ever audited, the overcharges promise to be staggering. It is these costs that form the basis for estimating future work for new task orders under LOGCAP IV. Not a pretty sight when contemplating the future costs of the contract especially when the contractor SERCO, not the government, will be doing the pricing analysis on contractor submitted estimates. The only way that the Army will get control of costs under LOGCAP IV will be to significantly raise the level of government oversight. First, the government needs to scrub the numbers from the fat LOGAP III contract and bring the billings and historical costs back to earth. In order for oversight to work for the new contract, it has to include technical experts in cost analysis who can properly determine whether the contractor’s internal costs are reasonable including evaluation of whether requested contract modifications are necessary and reasonable. This is a type of oversight that has not existed to date and has led to inflated costs. But, with the new “support contract,” the Army apparently has outsourced their oversight responsibilities. Pentagon oversight staffing levels have decreased an estimated 40 percent since the 1990s and have not been replenished while defense service contracts have increased 78 percent creating a serious shortage of qualified technical contract experts to conduct the necessary oversight over LOGCAP IV. This, apparently, has forced the Army to outsource in order to provide resources for acquisition management and oversight. By doing this, the Army is only masking its inability to manage and oversee the contract itself. But, who is going to provide oversight over SERCO? Who is going to watch the watchers? Certainly not the Army. They don’t have the personnel to do that in a meaningful way. Let’s summarize: no realistic competition; costs that will surely increase well beyond initial expectations; no cost control incentives, no meaningful government oversight over contractor cost controls. LOGCAP IV is not what it seems. As I outlined in my book, LOG CAP III was a disaster in supplying our troops what they needed and massively picked the taxpayers pocket. Congress, you appropriate the money for this, are you listening? Robert Bauman