Outrageous! That is what many are calling the war profiteering by U.S. corporations who have flocked into Iraq. In particular, Halliburton Corp., which Vice President Dick Cheney used to head, has come under scrutiny over its $10 billion Pentagon contracts, many obtained without competitive bidding, as well as fuel-price gouging and other improper or illegal actions. Meanwhile, U.S. cities and states are starved for cash.

In a new scandal, a top government inspector has reported that Halliburton lost millions of dollars worth of government property that it is being paid more millions to manage for the U.S. occupation in Iraq. The missing property includes generators, trucks, laptops, armored vests and helmets.

The Coalition Provisional Authority inspector general found that Halliburton subsidiary Kellogg Brown and Root (KBR) “did not effectively manage government property,” and that “its property records were not sufficiently accurate or available.”

KBR was unable to account for one-third of the equipment it was supposed to manage, with a value of about $20 million.

Associated Press reported on the audit the day after Thanksgiving, a “slow-news day,” and few media picked up the story, evidently preferring to focus on holiday shoppers lining up at 4 a.m. at discount stores.

Pratap Chatterjee, director of CorpWatch, says the missing equipment is only part of a larger, “more damning” picture of mismanagement, incompetence, corruption and in some cases fraud on the part of U.S. corporations reaping profits from Iraq. “This is not what we want people to be doing with our tax dollars,” he noted drily.

Halliburton chairman, president and CEO David Lesar received in $7,751,018 in total compensation in 2002. Vice President Dick Cheney was CEO of Halliburton for five years before running for the White House. Since taking office as vice president, Cheney has continued to receive payments from Halliburton totaling about $2 million in bonuses and deferred salary, and also holds Halliburton stock options.

Despite numerous charges of mismanagement, overcharging, kickbacks and other questionable practices, Halliburton continues to be paid in full by the Pentagon.

In November, Rep. Henry Waxman (Calif.), ranking Democrat on the House Government Reform Committee, released internal U.S. embassy documents indicating that KBR officers in Kuwait solicited bribes from those seeking subcontract work from the firm. Kuwait is the main supply and staging area for U.S. operations in Iraq. Senior administration officials, including the U.S. ambassador to Kuwait, steered a lucrative fuel contract to a favored Kuwaiti subcontractor, documents showed. Waxman is seeking new Congressional hearings on Halliburton’s Iraq contracts.

FBI and Army criminal investigators are now pursuing charges by Army Corps of Engineers contract officer Bunnatine Greenhouse that the Pentagon improperly favored Halliburton in awarding no-bid contracts for Iraq.

As the Pentagon continues to pour millions into the Halliburton trough, a new report by the Center for American Progress and the National Priorities Project shows that American states and cities are being shortchanged. The report, “Americans Pay High Price for War,” shows how much tax money each state pays for the Iraq war and occupation, and how little it gets back for homeland security and “No Child Left Behind.”

Ohio, for example, spent $5.7 billion on Iraq in fiscal year 2003. In the same period it received only $200 million for homeland security, and $659 million for “No Child Left Behind.” Cleveland, which sent $153 million to Washington for Iraq in FY 2003, now faces a $60 million city budget deficit, and another $100 million deficit in its school budget. More than 1,000 teaching staff have been laid off. Seven percent of the city’s firefighters have been laid off this year, along with 250 police officers. Among the police units eliminated are those for harbor, street crimes, auto thefts, narcotics, youth gangs and community policing.

In a recent issue of Online Investors News, Bill Ridley crows that “the big dogs of the corporate world stand to clean up” by “carving up the spoils” from the Bush administration’s Iraq occupation. The “big prize,” he writes, is “the Iraqi oil fields and putting these prized assets into the hands of friendly U.S. oil corporations.”

The author can be reached at suewebb@pww.org


Susan Webb
Susan Webb

Susan Webb is a retired co-editor of People's World. She has written on a range of topics both international - the Iraq war, World Social Forums in Brazil and India, the Israel-Palestinian conflict and controversy over the U.S. role in Okinawa - and domestic - including the meaning of socialism for Americans, attacks on Planned Parenthood, the U.S. as top weapons merchant, and more.