Waste, Fraud & Abuse hearings; the results

The Senate Democratic Policy Committee met today in Washington for the 13th time to examine contracting abuse in Iraq and to hear the testimony of former contractors in Iraq, KBR, WWNS & CAPE Environmental.

Senator Dorgan called the current behavior of contractors in Iraq the "the greatest waste, fraud and abuse in the history of this country" and insisted that we have got to stop the fleecing of the American taxpayer.

In his opening statement the Senator from North Dakota again suggested that an oversight committee based on the Truman Committee that performed oversight during WWII. He reminded us that that Committee held 60 hearings a year and saved the US taxpayers $15 billion at a cost of $15,000. He closed by reminding us that he had:

"proposed the creation of such a Committee three times in the 108th and 109th Congresses, and regrettably the vote each time was almost exactly along party lines.
But I still believe that we need to establish a bipartisan Truman Committee, with subpoena power, to exercise the oversight that these abuses demand, and I will continue to push until we create one."

The statements of each of the witnesses, as well as video of the testimony are posted here. Take a few minutes, if you dare, to see just exactly how your tax dollars are being spent. Here are a few highlights (or would that be lowlights?) from the day.

The contractor who worked for WWN & CAPE Environmental, Barry Halley said:

While I was working with this same defense contractor, the site manager was
involved in bringing prostitutes into hotels operated by the contractor. A co-worker unrelated to the ring was killed when he was traveling in an unsecure car and shot performing a high-risk mission. I believe that my co-worker could have survived if he had been riding in an armored car. At the time, the armored car that he would otherwise have been riding in was being used by a manager to transport prostitutes from Kuwait to Baghdad. There were other employees involved in the prostitution ring as well.
Although the activities had been going on for some time, nothing was done to stop it until the contractor’s home office was informed about the prostitutes. Instead of firing the ring leader, however, the contractor merely transferred him to another project in Haiti.

Linda Warren, a former employee of Halliburton/KBR gave her testimony:

From the first day I was in Baghdad, I noticed something happening which I felt to be very wrong. KBR employees who were contracted to perform construction duties inside the palaces and municipal buildings were looting. Not only were they looting, but they had a system in place to get the contraband out of the country so it could be sold on eBay. They stole art work, rugs, crystal and even melted down gold to make spurs for cowboy boots. At first, I just watched as these KBR employees pilfered, but when I was asked if I wanted some of the items, I became very outspoken about what was happening, and informed the looters that what they were doing was stealing, and that those items belonged to the Iraqi people. I was ostracized because I started objecting to the actions of my co-workers, and was very vocal in my belief that they were looting, trafficking, and stealing antiquities.

Former KBR employee, Frank Cassaday told a compelling story of Marines being denied ice-

During my time as an ice plant operator at Camp Webster, I witnessed numerous
illegal activities and rules violations by KBR managers and employees. Ice was a very valuable commodity in Iraq that was regularly stolen and bartered for other goods. One day a convoy of U.S. Marines was going out of the area for several days and they wanted 28 bags of ice. The ice was used to keep their food and drinks cool. I watched as the ice plant foreman refused to give the troops the ice they requested and offered them only 3 bags of ice. The foreman told the troops that he was only allowed to give them 2 pounds of ice per person per day, but in fact it was the foreman who made that rule. KBR had plenty of ice that could have been provided to these troops who were going off the base into the desert.

One Marine asked me, “Why won’t this man give us ice, you do?” I told the Marine that he should tell his superior officer because the ice foreman was cheating the
troops out of ice at the same time that he was trading the ice for DVDs, CDs, food and other items at the Iraqi shops across the street.

I could go on, but I have provided the links to the full testimony and video of the hearing held today, so the ball's in your court. April 15th was less than 2 weeks ago, a day where our taxes re-filled the governments coffers, and these examples of waste, fraud & abuse is how your tax dollars are being spent. It's not okay with me. What are you doing to raise your voice to say, STOP IT AND STOP IT NOW?

Where do you start? How about your member of Congress or one of members of the Senate Democratic Policy Committee Hearing?

• Senator Byron L. Dorgan, Chairman, Senate Democratic Policy Committee
• Senator Richard Durbin, Assistant Majority Leader
• Senator Jeff Bingaman
• Senator Maria Cantwell
• Senator Robert Casey
• Senator Amy Klobuchar
• Senator Claire McCaskill
• Senator Bernie Sanders
• Senator Sheldon Whitehouse

It's your tax money, is this okay with you?

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?