Government officials have admitted that American companies are paying millions of dollars in bribes to military officers to win billions in contracts for work in Iraq, according to numerous press reports last week.
This is only the tip of an iceberg that represents an unprecedented fleecing of the American taxpayer.
“Half the budget of the Department of Defense is going to no-bid contractors,” Ralph Wipfly, a Brookings Institution scholar who writes about military contracting, told the World. “It’s like the military contractors are on steroids — this is unprecedented in the history of our country. They are taking the taxpayers for many billions of dollars.”
He cited some almost incredible figures: “Halliburton, the vice president’s company, got $22.1 billion, security contractors this year got $4 billion, and by 2003 the Defense Department had already awarded $300 billion to these contractors. This does not include contracts awarded by the State Department.”
Wipfli added, “Under President Bush this disturbing process has really been stepped up. The money awarded to Halliburton alone is three times as much as the entire cost of the first Gulf War.”
In many cases bribery has apparently replaced bidding as the method for winning contracts. The New York Times reported Aug. 31 that an American company operating from Kuwait paid hundreds of thousands of dollars in bribes to U.S. military officers to win $11 million in contracts.
The Army says it recently suspended Lee Dynamics, run by a retired officer, from doing business with the government. Defense Secretary Robert Gates sent the Pentagon inspector general to investigate.
Another report says that Earnest O. Robbins, an Air Force engineer who had supervised 70,000 military personnel and contractors with an annual budget of $8 billion, quit the military in 2004 and became a contractor himself. The government awarded him $72 million to build a police station in Baghdad.
Earlier this year he delivered not a police station but a “pile of rubble so badly constructed that the walls literally dripped with human excrement because of subpar plumbing,” Matt Taibi wrote Aug. 23 in Rolling Stone magazine.
Auditors working for the special inspector general for Iraq reconstruction wrote in their official report available from the government: “We witnessed a light fixture so full of diluted urine and feces that it would not operate. During our visit the material dripped from the ceiling onto our assessment team member’s shirt.”
The State and Defense departments released figures July 4 that admit to 180,000 U.S. civilians working in Iraq under U.S. contracts — at least 20,000 more than the number of combat troops. Not included are tens of thousands hired as “subcontractors” or tens of thousands who have been hired as “private security.” Also omitted are 43,000 “foreign” (neither American nor Iraqi) contractors on the U.S. payroll.
With money to be made in this huge contracting business, and not to be outdone by the Air Force, the Army has also dipped into the till.
Army Major Gloria D. Davis shot and killed herself in Baghdad last December, a day after admitting that she had taken $250,000 in bribes.
Corporations use various tactics to avoid getting caught in the growing scandal.
Lee Dynamics, for example, has made many name changes over the past 10 years, often calling itself “American Logistics Services” for a year and then switching back to “Lee Dynamics.”
Various news outlets quoted an “Army spokesman,” Aug. 30, who said the Army has suspended 22 companies from doing business with the government because of fraud investigations in Iraq, Afghanistan and Kuwait. Government records also show at least 100 companies have been formed since 2003 to take advantage of the billions in contracts to clothe, feed and arm U.S. troops.
Assisting military operations, however, is only a small part of what contractors do. They are involved in activity that would shock the average U.S. taxpayer.
Hashmeya Muhsin Hussein, president of the Electrical Workers Union of Iraq, told the World that after the fall of Saddam Hussein, “we started to see the beginning of something new and terrible for us. They started to give away even the simplest jobs to these contractors and we began to have unemployed workers all over the place being locked out of their workplaces.”
In addition to union busting, the contractors are engaging in the theft of Iraq’s entire oil industry.
During a World interview, Faleh Abood Umara, the general secretary of the Iraqi Federation of Oil Unions, said U.S. contractors are “carrying out the scheme to take over our country’s oil industry.”
“They come in, take over our oil fields and do whatever they want,” he said. “Our workers, our unions are shut out. It is impossible for us to go into some of these fields and observe what it is they are doing.”
First Kuwait General Contracting used $600 million from the State Department in 2005 to recruit cheap labor in South Asia. Workers were not told they were going to Iraq. When they got to Baghdad, their passports were confiscated, they were imprisoned in the U.S. embassy compound and forced to work on construction at the complex.
American workers there have complained to the State Department that the Asian “guest workers” receive poor quality food, contaminated drinking water from the Tigris River and no medical care. Although the State Department has dispatched “investigators,” it has yet to take any action.