The 10 Most Brazen War Profiteers

By Charlie Cray, AlterNet. Posted September 5, 2006.

The history of American war profiteering is rife with egregious examples of incompetence, fraud, tax evasion, embezzlement, bribery and misconduct. As war historian Stuart Brandes has suggested, each new war is infected with new forms of war profiteering. Iraq is no exception. From criminal mismanagement of Iraq's oil revenues to armed private security contractors operating with virtual impunity, this war has created opportunities for an appalling amount of corruption. What follows is a list of some of the worst Iraq war profiteers who have bilked American taxpayers and undermined the military's mission.

No. 1 and No. 2: CACI and Titan

In early 2005 CIA officials told the Washington Post that at least 50 percent of its estimated $40 billion budget for that year would go to private contractors, an astonishing figure that suggests that concerns raised about outsourcing intelligence have barely registered at the policymaking levels.

In 2004 the Orlando Sentinel reported on a case that illustrates what can go wrong: Titan employee Ahmed Fathy Mehalba, an Egyptian translator, was arrested for possessing classified information from the Guantanamo Bay prison camp.

Critics say that the abuses at Abu Ghraib are another example of how the lines can get blurred when contractors are involved in intelligence work. CACI provided a total of 36 interrogators in Iraq, including up to 10 at Abu Ghraib at any one time, according to the company. Although neither CACI, Titan or their employees have yet been charged with a crime, a leaked Army investigation implicated CACI employee Stephen Stefanowicz in the abuse of prisoners.

CACI and Titan's role at Abu Ghraib led the Center for Constitutional Rights to pursue companies and their employees in U.S. courts.

"We believe that CACI and Titan engaged in a conspiracy to torture and abuse detainees, and did so to make more money," says Susan Burke, an attorney hired by the Center for Constitutional Rights (CCR), whose lawsuit against the companies is proceeding into discovery before the Federal Court for the District of Columbia.

The private suits seem to have already had some effect: In September 2005 CACI announced that it would no longer do interrogation work in Iraq.

Titan, on the other hand, has so far escaped any serious consequences for its problems (in early 2005, it pleaded guilty to three felony international bribery charges and agreed to pay a record $28.5 million Foreign Corrupt Practices Act penalty). The company's contract with the Army has been extended numerous times and is currently worth over $1 billion. Last year L-3 Communications bought Titan as part of its emergence as the largest corporate intelligence conglomerate in the world.

No. 3: Bechtel: precast profits

The San Francisco-based construction and engineering giant received one of the largest no-bid contracts -- worth $2.4 billion -- to help coordinate and rebuild a large part of Iraq's infrastructure. But the company's reconstruction failures range from shoddy school repairs to failing to finish a large hospital in Basra on time and within budget.

Recall that USAID chief Andrew Natsios originally touted the reconstruction as a Middle Eastern "Marshall Plan." Natsios should have known that all would not go smoothly with Bechtel in the lead: Prior to joining the Bush administration, he was chief executive of the Massachusetts Turnpike Authority, where he oversaw the Big Dig -- whose costs exploded from $2.6 billion to $14.6 billion under Bechtel's lead.

In July, the company's reputation for getting things done unexpectedly plummeted like a 12-ton slab of concrete when Stuart Bowen, the special inspector general for Iraq Reconstruction (SIGIR), released an audit of the Basra Children's Hospital Project, which was $70 million to $90 million over budget, and a year and half behind schedule. Bechtel's contract to coordinate the project was immediately cancelled.

Now that the money is running out, American officials are beginning to blame Iraqis for mismanaging their own infrastructure. But as Bowen warns, contractors like Bechtel, the CPA and other contracting agencies will only have themselves to blame for failing to train Iraqi engineers to operate these facilities (esp. water, sewage and electricity) when they leave.

No. 4: Aegis Defense Services

The General Accounting Office (GAO) estimates 48,000 private security and military contractors (PMCs) are stationed in Iraq. The Pentagon's insistence on keeping a lid on military force requirements (thereby avoiding the need for a draft) is one reason for that astronomical growth, which has boosted the fortunes of the "corporate warriors" so much that observers project the industry will be a $200 billion per year business by 2010.

Charlie Cray is director of the Center for Corporate Policy in Washington, D.C.

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