Contractor Fraud

The Asociated Press reports today about major cases involving alleged contractor fraud in Iraq, Kuwait and Afghanistan. I'm afraid we haven't heard anything yet; I'm sure this is the tip of the iceberg. It's pretty pathetic that military people are involved, although I am not so naive as to believe that wouldn't happen. A jury of their peers, all members of the military, should serve on the jury and let them come to an authentic judgment.

Major Gloria Davis killed herself in Baghdad, Iraq the day after she admitted to an army investigator that she had accepted bribes. She rests in Arlington National Cemetery along side others she swore to protect. Nothing can or will wash the blood off the hands of someone who profits from war regardless of how much forgiveness they plead for or how much religion they find. If any war profiteers ever have a breath of freedom on this earth, it will be too soon.

-- LEE-DAVIS: Maj. Gloria Davis allegedly told Army investigators before her death in December 2006 that she received $225,000 in bribes from Kuwait-based businessman George H. Lee and his son. Army investigator also said she knew of other payments by the Lees to U.S. contracting officers. No charges filed, but military seized Davis' bank accounts and suspended Lee and his company from doing business with government.

-- MAJ. JOHN COCKERHAM: Federal grand jury in Texas last August indicted Cockerham, his wife Melissa and sister Carolyn Blake on bribery, conspiracy and money-laundering charges, accusing them of taking at least $9.6 million in bribes in 2004-05 while Cockerham was contract officer in Kuwait. Largest bribery case to emerge so far in investigation into contractor fraud.

-- LT. COL. BRUCE HOPFENGARDNER: Hopfengardner pleaded guilty in June to conspiracy to commit money laundering and wire fraud. Sentenced to 21 months in prison and fined $144,500 for accepting cash and gifts while serving in Iraq.

-- MOHAMMAD SHABBIR KHAN: Khan, U.S. citizen and former director of Kuwait and Iraq operations for Saudi Arabian subcontractor Tamimi Global Co., sentenced last December to 51 months in prison and fined $10,000 after admitting paying kickbacks to former employee of Kellogg, Brown & Root Services Inc. to win $14.4 million food services contract at Camp Arifjan, Kuwait, and $7.4 million subcontract at palace in Baghdad. Stephen Lowell Seamans, former KBR manager in Kuwait, sentenced to a year and a day after admitting taking kickbacks from Khan.

-- PHILIP BLOOM: Bloom, American living in Romania, sentenced last February to 46 months in prison after pleading guilty to bribery, conspiracy and money laundering. Admitted bribing military personnel with jewelry, computers, cigars and sexual favors to win contracts. Three Army officers awaiting trial for allegedly steering contracts to Bloom.

5 years into the planning of this war, there is still little oversight into war profiteering. The people to lose the most in this high stakes game of avarice and greed on the backs of our military are the military. President Truman is well known for his crusade against war profiteering dating back to his time as a US Senator in 1941.

Back in the spring of 2006, CorpWatch compared the Congressional response from the 40's to these current wars. Truman drove thousands of miles around the country going from one defense plant to another documenting waste and fraud. He then headed the Senate Special Committee to Investigate the National Defense Program -- the Truman committee, for short. The process saved American taxpayers $15 billion (in 1940s dollars). And by uncovering faulty military equipment, he prevented the deaths of hundreds if not thousands of U.S. soldiers.

Contemporary military auditors have discovered corruption no less shocking than that which Truman observed on his muck-raking roadtrip, but the Bush administration has remained virtually silent on the subject. In 2005 alone, defense contracts totaled more than $270 billion, and the White House recently requested an additional $72 billion for the wars in Iraq and Afghanistan. Given these vast sums, greater oversight is needed.

In Congress, bipartisan bills in both the Senate and House to create a Truman-style oversight committee sit in limbo. Since the Iraq War began, there have been only a handful of hearings on military contracts. Between 1941 and 1948, the Truman committee called 1,798 witnesses for 432 hearings and issued 51 reports.

Truman's investigatory team played a critical role in overseeing the military's overseers. In 1943, for example, it began looking into the aerospace firm Curtiss-Wright after getting tips that the company was delivering defective motors to what was then called the Army Air Corps. The military officials responsible for inspecting the plant insisted that all was rosy, but the committee pressed on, conducting a three-city investigation and taking more than 1,000 pages of sworn testimony.

The dirt it uncovered proved that the company had sold leaky motors to the government and covered it up with forged inspection reports. The military had protected the company by removing inspectors who attempted to block the flawed parts from being installed in airplanes. As a result of the investigation, heads rolled at Curtiss-Wright, and one general wound up in prison.

Similar investigative zeal is needed today. A modern-day Truman committee could start by looking into the Army's recent decision to reimburse Halliburton $253 million for delivering fuel and repairing oil equipment in Iraq, even though the Pentagon's own auditors had contested the bills. In a statement that did little to reassure taxpayers, an Army spokesperson explained that "the contractor is not required to perform perfectly to be entitled to reimbursement."

Rumsfeld has not always been silent on war profiteering or Halliburton . As a Republican congressman from Illinois in 1966, Rumsfeld raised questions about the 30-year association between Halliburton 's chairman and then-president Lyndon Johnson. "Why this huge contract has not been and is not now being adequately audited is beyond me," Rumsfeld said. "The potential for waste and profiteering under such a contract is substantial."

At that time, of course, Rumsfeld was lobbing his criticism at a president of the opposing party. But oversight of war-time contracts need not be -- should not be -- a partisan issue. After all, Truman's crusade came with a member of his own party in the White House. In fact, although President Franklin D. Roosevelt expressed some initial anxieties about Truman's efforts, he eventually was so impressed that he chose Truman to be his vice-presidential running mate.

Who in this generation is man or woman enough to stand up for the military and for the taxpayers?