Halliburton, a high-powered company formerly led by Vice President Dick Cheney, is under fire. Company employees allegedly overcharged the military for gasoline brought in to Iraq from Kuwait, accepted $6.3 million in kickbacks for steering subcontracts in Iraq to a Kuwaiti firm and stiffed the government for meals not served to soldiers. The company has received billions in Pentagon contracts to handle non-combat tasks, like laundry, meals and base-building in Iraq and Afghanistan, say analysts.
The Defense Department and State Department opened probes of Halliburton in late February.
"The Pentagon's decision to investigate criminal wrongdoing by Halliburton is commendable and an important first step," said Chris Kromm, co-director of the Campaign To Stop the War Profiteers. But, he continued, the scandals around Halliburton and other military contractors warrant a full inquiry into the politics, contract decisions and performance of firms given billions of taxpayer dollars.
"Recent revelations about questionable billing and procurement practices have raised important questions about the quality of government oversight in Iraq and whether the Bush administration is adequately protecting the interests of American taxpayers," said Keith Ashdown, of Taxpayers for Common Sense.
"Hundreds of millions of dollars are being wasted as a result of unscrupulous conduct by contractors, lax government controls and oversight. A bipartisan, independent commission is needed to review the performance of contractors under existing contracts and monitor the letting of subcontracts," Ashdown said.
The first defense contractor jailed for shady dealings was in 1672; George Washington condemned war profiteers in 1778, said Rañia Masri, Ph.D., director of the Southern Peace Research and Education Center. She noted that President Truman commissioned a probe into WWII profiteering and it's time for another.
"No war would offer any authority for a carte blanche. Especially not a war that has been founded on lies and deliberate misleading of the public," Masri added, in an e-mail response to questions.
Profiteers are most concerned with making money and see an opportunity for wartime price gouging, analysts said.
Halliburton: Making Life Easier for Warmongers?
"Anywhere you go where the U.S. Army has to deploy on short notice, Halliburton is there," said Frida Berrigan, co-author of a World Policy Institute analysis of military spending.
World Policy Institute senior research fellow Bill Hartung, who co-wrote the report with Berrigan and whose book, How Much Are You Making On The War Daddy? A Quick and Dirty Guide to War Profiteering in the Bush Administration was published last year, isn't satisfied.
"There probably needs to be a vigorous criminal investigation of Halliburton at this point. There should be congressional hearings with subpoena power to look, not just at Halliburton, but at all the contracting in Iraq," said Hartung. "For that to happen there would have to be a big public outcry," he conceded.
Hartung also believes defense industry executives need to face real penalties. "As it is now, every time Halliburton is caught with its hand in the cookie jar, all they've done is basically given back the money that they were caught with. It's sort of like somebody going and robbing a liquor store, getting caught and they say, 'Oh, sorry. Let me give the money back.' But not ever being penalized, [they] knock off the next liquor store," he said.
Halliburton has wasted money on everything from monogrammed towels to overpriced vehicle leases, Hartung said.
According to Hartung's analysis, Halliburton's prime contracts with the Pentagon jumped almost 700 percent, from $483 million in fiscal year 2002 to $3.9 billion in fiscal year 2003. That does not include a $1.2 billion contract to rebuild oil infrastructure in southern Iraq, approved amid concern about wrongdoing. The Pentagon awarded $209 billion in prime contracts in FY 2003, with the overall defense budget soaring to $400 billion a year and climbing, said Hartung.
Scaling the Ivory Tower
The combination of upcoming presidential elections, powerful Republican chairmen of congressional committees who don't want investigations, lawmakers devoted to pet defense projects, political donations and a revolving door for military industrial complex players, policy planners and foundation leaders who shuffle in and out of government make a formidable enemy.
Richard Perle, a noted hawk, resigned from the Pentagon's Defense Policy Board on Feb. 18. Perle, a longtime associate of Defense Secretary Donald Rumsfeld, was a Reagan-era assistant secretary of defense and tutored 2000 presidential hopeful George W. Bush. He helped craft the Bush "war without end" doctrine, pushed for unilateral invasion of Iraq and painted a rosy picture of success. The invasion has been a bloody mess and Perle's personal business dealings are questionable. In March 2003, Perle stepped down as Defense Policy Board chair, an advisor to the secretary of defense, amid charges he used his clout to solicit business. Last December, questions arose over a $20 billion scheme to have the Air Force lease and retrofit Boeing planes as aerial refueling tankers. Perle backed the deal, but failed to disclose financial ties to Boeing, whose CEO later resigned as news broke of Boeing offering a job to the Air Force procurement official negotiating the tanker deal.
"The policies that are being put together about how to defend our country are being made by much too small a group of people," said Hartung. "They have a tendency to kind of exaggerate the threats to the country in ways that tend to benefit their institutions, their former companies.
"They have repeatedly overestimated and misunderstood what are the real threats to our nation. In the 1990s, when the terrorist threat was growing up, they had not a word to say about terrorism," he said. Their current policy miscues have alienated potential allies against terror, hurt relations with the United Nations and damaged America's world image, with the U.S. now seen as a "global bully," he said.
The Perle resignation may be a PR ploy because of the spotlight put on Halliburton, but what's needed are grassroots action and attacks from Democrats. "If Bush is perceived as basically letting Halliburton get away with this, basically favoring this company at the expense of our troops in the field, he may pay a political price in November," said Hartung.
A Democratic president would still face the military industrial complex, but Bush's crew has gone overboard and reigning in contractors would be a start, he said. Beyond that, the Democrats need an agenda for reforming defense spending and curbing political cronyism, Hartung added.
Increased military spending and "preventive war" mean huge trade and budget deficits, and having money drained from other programs, while countries will need to arm themselves against an ever more aggressive United States, Hartung warned.
"Companies like Halliburton make going to war way too easy," said Frida Berrigan. "When so many of these tasks are privatized, we operate under an illusion. The American people think, 'oh, this war's easy.' The reality is this is a very costly war, but it's much more costly in terms of dollars at this point, than in terms of lives."
But, she added, the lives of Americans are being lost.
Richard Muhammad is the Chicago-based editor of StraightWords E-Zine, and former managing editor for The Final Call newspaper. He can be reached at Straightwords4@yahoo.com.