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October 24, 2004
What's a Few Billion Between Friends?
Time magazine has an insider account of how cronyism works in day-to-day practice:
Then several representatives from Halliburton entered. Greenhouse, a top contracting specialist for the Army Corps of Engineers, grew increasingly concerned that they were privy to internal discussions of the contract's terms, so she whispered to the presiding general, insisting that he ask the Halliburton employees to leave the room.Once they had gone, Greenhouse raised other concerns. She argued that the five-year term for the contract, which had not been put out for competitive bid, was not justified, that it should be for one year only and then be opened to competition. But when the contract-approval document arrived the next day for Greenhouse's signature, the term was five years. With war imminent, she had little choice but to sign. But she added a handwritten reservation that extending a no-bid contract beyond one year could send a message that "there is not strong intent for a limited competition."
Greenhouse seems to have got nothing but trouble for questioning the deal. Warned to stop interfering and threatened with a demotion, the career Corps employee decided to act on her conscience ... [and] last week sent a letter—obtained by TIME from congressional sources—on her behalf to the acting Secretary of the Army. In it Kohn recounts Greenhouse's Pentagon meeting and demands an investigation of alleged violations of Army regulations in the contract's awarding. (The Pentagon justified the contract procedures as necessary in a time of war, saying KBR was the only choice because of security clearances that it had received earlier.) Kohn charges that Greenhouse's superiors have tried to silence her; he says she has agreed to be interviewed, pending approval from her employer, but the Army failed to make her available despite repeated requests from TIME.
You know the rest, Halliburton makes big bucks but fails to deliver the services, the deliverables -- or even the receipts at times. But what's a a few billion between friends. We'll forget about it this time, just don't do it so visibly again, okay?
According to the report, Kellogg Brown & Root so far has billed about $12 billion in Iraq, and about $3 billion of that remains disputed by government officials.The U.S. Army is laying the groundwork to let Halliburton Co. keep several billion dollars paid for work in Iraq that Pentagon auditors say is questionable or unsupported by proper documentation, the Wall Street Journal reported on Friday.
...
The Journal also cited Pentagon records showing that $650 million in Halliburton billings are deemed questionable. An additional $2 billion is considered to have insufficient paperwork to justify the billing, the report said.
Also, last week, the L.A. Times had a very good piece about Halliburton in specific but well worth reading as an example of how the myriads of decisions taken by the government each day distribute wealth and power to the few and the chosen. Frankly, I should also say that I think Halliburton is but one highly visible example due to its connection to Dick Cheney, and that it's role in the war is a bit overblown by most antiwar analysts -- although one could argue that this is justifiable since it is the most recognizable face of corporate cronyism in the U.S. today. The Halliburton case is also worth looking at detail because we have more data about it than almost any other such example.
Posted by zeynep at October 24, 2004 02:36 PM
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Comments
I wonder if John McCain is reading this stuff? We're so concerned with the human rights of Iraqis that we're willing to let Halliburton steal billions of dollars of Iraqi funds by not honoring their contractural agreements. Is this anyway to run a military? Apparently it is and apparently there is no end to the thuggery and thievery within the American imperial machine.
Sincerely,
Old & In The Way
Posted by: Phil Cicchi at October 24, 2004 08:01 PM
The Financial Times (FT) reports in its weekend edition (Oct 23/24) on page 2, in a short article "US Army preparing to let Halliburton keep disputed payments." The article quotes Reuters as saying that "the US Army is laying the groundwork to let Halliburton keep several billion dollars paid for work in Iraq that Pentagon auditors say is questionable or unsupported by proper documentation."
Posted by: Ralph at October 26, 2004 01:44 AM