Wednesday, October 10, 2007

Privatized Murder and No-Bid Contracts

What means to what ends
As the country defends
Her borders
On orders
Using soldiers for rent
With sovereign consent
From a puppet on strings
And a cowboy on wings
Raising hell and disorder
In the name of Blackwater
Forgive me for repeating my wails on the outsourcing of the military effort to contractors. To review the facts, KBR, Cheney’s Halliburton subsidiary, provided logistics services to our troops on a cost plus basis much as other services by other contractors. In the case of KBR, they provided contaminated water from 63 of 65 water purification stations. One might feel that KBR should not be paid and you would be correct. They were paid, despite protests of the GAO. The count goes on for Parsons that was paid for constructing Iraqi police barracks that were not only unusable, but were a health hazard and had to be destroyed. Both those jobs were well suited to combat engineers or Seabees who do not work on a cost plus basis.
I highlight KBR because that company became the model for privatizing logistics in a war, declared or not. As an old military logistician, I am awestruck by the KBR rules for where they would or would not provide services. They did not provide hot meals for outposts with fewer than 1800 soldiers. In worst case thinking, they got the big bucks no-bid contracts without real risk and were not subject to the Uniform Code of Military Justice. Our troops got MREs when they were lucky and, if we are to believe the media, supplements from families back home. If we had a matter of non-performance, we had contract discussions (probably not in theater). Contractors like KBR do not take orders. To date, despite several findings of overcharging, dangerously contaminated water and general under-performing, their car on the gravy train remains firmly on track
But KBR is not the only contractor in Iraq. In fact, a recent estimate places the contractor share of “military” expenses in Iraq at 40%. They outnumber the military by about 50,000 in aggregate although many are low scale workers from the Philippines, Bangladesh, etc. With cost plus contracts in their pockets and no requirement to perform to a standard, no oversight and immunity from both Iraqi and U.S. law, what’s not to like about this deal? The immunity is a legacy of the Proconsul Bremer who unilaterally eliminated the entire Iraqi Army by fiat thus creating opportunity for outsourcing jobs to American firms and simultaneously creating a motivated, armed and trained insurgency. Records show that Triple Canopy, DynCorp, Blackwater, Aegis (UK) and Armor (UK) all hold huge contracts as security companies directly competing for military roles against our uniformed services that have a less capable lobby. Of course, it did not hurt that Erik Prince (Blackwater CEO) contributed $160,000 (reported) to the GW Bush election campaign.
The nature of cost plus contracts is to minimize financial risk for contractors, and physical risk is a kissing cousin. In the TV documentary “Iraq for Sale,” contract employees stated that they were instructed to destroy trucks with flat tires on logistics runs rather than replace the tires. This meant that the cost plus was applied to an $80,000 truck instead of a $400 tire. Why conserve or take a risk if you are going to be paid more for destroying the truck? In life, some things are mysteries. A cost plus no-bid contract isn’t one of them. The KBR rationale was risk reduction. Not incidentally, the military was called upon to destroy the abandoned trucks.
My verse invoked Blackwater hired by the State Department to provide security for U.S. officials. Unfortunately for hundreds of innocent bystanders, records show that Blackwater fired first 84% of the time when violence erupted. While other companies hovered around the 50% mark, no company came close to Blackwater. Some of the encounters are difficult to explain such as when a Blackwater employee was drunk from a Christmas party and he shot and killed an Iraqi presidential security guard. That employee was flown out of Iraq the next day on State Dept. instructions and fired by Blackwater. The State Department also suggested that Blackwater pay $15,000 to the family of the guard in order to make the situation go away.
I have a simple set of questions that cry out for answers. In addition to paying Blackwater $1 B for the contract, are we reimbursing them for hush money? Do they get a percentage for that unexpected cost? If it is a cost plus 10% contract, did we as taxpayers pay $1500 in bonus money for a drunk to kill an Iraqi security guard?
Well we may never know. Similar records have been classified SECRET because corruption in Iraq is now a security threat if we disclose or discuss it. Shh. I hope that includes the Texan, Ray Hunt that was just with Kurds for an oil contract without the Iraqi Central Government. Hunt is not only a Bush friend and major contributor, but he sits on the National Petroleum Council and the Foreign Intelligence Advisory Board. Please don’t see this as a conflict of interest by either Hunt or Bush. Primary interest? If you feel that this is counter to the president’s purpose of supporting a strong Central government, you are paranoid. Shh. They will take you away.

George Giacoppe
03 October 2007

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