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Miles to Go Before the PMC Industry Rests

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When reading about private military contractors there are two pieces of supposed conventional wisdom to keep in mind. The first, which is especially touted by PMC advocates, is that media coverage of their sector is frequently shallow, inaccurate, incomplete, out of context or wildly sensationalistic. The second is that while there may be problems things are a lot better than they used to be and are getting better yet.

Those assertions are, at least partly, true. For example, the tired old canard that private security contractors are just mercenaries in drag is scurrilous and should have been laid to rest many years ago. And yes, thanks to the efforts of legislators, non-governmental organizations, reporters, academicians, lawyers, groups like the Special Inspector General for Iraq Reconstruction and the Commission on Wartime Contracting and even some executive branch officials the overall environment, from an oversight and accountability perspective, is somewhat better.

But that is not the entire truth. To paraphrase Robert Frost's famous poem, "Stopping by Woods on a Snowy Evening," the PMC industry has promises to keep and miles to go before it rests.

As a case in point, consider the remarks made last week by Sen. Byron Dorgan (D-ND), He is Chairman of the Senate Democratic Policy Committee (DPC). He is retiring after 30 years in Congress. On December 2 he addressed the Senate and reviewed the 21 hearings the DPC has conducted on contracting waste, fraud and corruption in Iraq and Afghanistan since 2003. You can see a listing of past DPC hearings here.

Sadly, none of the media seems to have covered Dorgan's remarks. Here is a case where PMC advocates are right; media coverage is lacking. As far as I know I am the first to write on this. But his remarks merit careful reading as they illustrate how far the government has to go before it reaches a level of reasonably effective oversight of PMC. Note that I wrote reasonably effective, not perfect.

You can find Dorgan's remarks in the Congressional Record for December 2, 2010 (Senate)] [Page S8377-S8380]. I recommend you read the whole thing as it is not very long. Here are a few excerpts.

I believe I have held 21 hearings as chairman of the Democratic Policy Committee over recent years--21 separate hearings on the subject of waste, fraud, and abuse in contracting in the wars in Iraq and Afghanistan. Much of it still goes on in terms of the work with the Pentagon on this contracting issue.

I have just received a letter from the inspector general at the Pentagon, who is looking into one of the issues of the last hearings-- the issue of soldiers and contractors who were exposed to sodium dichromate, a chemical that was the subject of the movie ``Erin Brockovich,'' soldiers who were exposed and not told they were exposed to that deadly carcinogen and some of whom have already died. They were both National Guard and Regular Army soldiers.
In the context of doing a lot of these hearings, I have discovered and I believe that throughout the last decade, we have seen the greatest waste and fraud and abuse in the history of this country. It has contributed immeasurably to this overspending and deficits and debt. I wanted to talk about that work we did, myself and my colleagues, over 21 separate hearings.
At one of the hearings we held, we had testimony from a man who, in Iraq, was responsible for rooting out corruption in the Iraqi Government. His name was Judge al-Radhi. I have a photograph of Judge al-Radhi. He testified in this country. He testified that in his work as head of the anticorruption unit in Iraq, he found that $18 billion was missing, most of it American money, most of it coming from the American taxpayer.
Just missing. Now, why was he here in the country testifying at a hearing I held? Because he got booted out of Iraq, and he got no support from the U.S. Government as he was booted out of Iraq, and he ended up in this country. But he is the person who was supposed to be rooting out and investigating and prosecuting waste and fraud and abuse.
His investigations and the investigations of his staff--some of whom were assassinated, some of whose families were killed--show there was $18 billion--$18 billion--missing, and most of it was American money.
Well, that is the story about Judge al-Radhi.
We had a hearing early on in this process and talked about the issue of contractors and contracting. As you know, in the early part of the war in Iraq and in Afghanistan, money was just shoved out the back door of the Pentagon, hiring contractors, very large contracts, in most cases no-bid, sole-source contracts.
A very courageous woman came to testify before our committee. Her name was Bunnatine Greenhouse. She was the highest civilian official at the Army Corps of Engineers, the highest civilian official in the Pentagon in charge of contracting. Here is what she said. She objected to the way the Pentagon was doing these contracts, massive contracts, sole-source, a massive amount of money, and she watched as the normal processes were avoided and ignored. She testified in public:

I can unequivocally state that the abuse related to contracts awarded to Kellogg, Brown & Root represents the most blatant and improper contract abuse I have witnessed during the course of my professional career.

This is an extraordinary woman, the highest civilian person in the Army Corps of Engineers. She was in charge of contracting. Two master's degrees, came from a family in Louisiana. All three kids have advanced degrees. Her brother, by the way, was one of the 50 top professional basketball players in the last century, Elvin Hayes. Bunnatine Greenhouse. Remember that name. A very courageous woman, she saw abuses, spoke about it publicly, and for that she lost her career. She gave up her career. She was told: Resign or be fired.
Let me talk about what she meant when she said the most unbelievable abuses she had seen in contracting. I want to do it starting small because then I am going to talk about billions of dollars.
But at one of our hearings, we had a man who kind of looked like a bookkeeper at a John Deere dealership in a small town. He was kind of a good old guy with glasses, and he had been in charge of purchasing for Kellogg, Brown & Root or Halliburton over in Kuwait, purchasing the things our troops needed in Iraq. He came and testified, and he said: You know, as I was purchasing things, I was told by my employer, Halliburton: Don't worry what the cost is, the taxpayer pays for this. This is cost-plus.
So he told us a number of examples, big examples, but he brought a small one that I thought reflected the entire attitude.
This is a towel. I ask unanimous consent to show the towel on the floor of the Senate.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. This is a towel. Halliburton was to purchase towels for the troops, hand towels. You know, they were purchasing hand towels to be awarded to the troops. So he ordered some white hand towels for the troops, and his boss said: Well, you can't order those white hand towels. You have to order the hand towels that have the logo of our company, ``Kellogg, Brown & Root,'' on the hand towel.
Mr. Bunting said: Yes, but that would quadruple the cost.
His boss said: That doesn't matter. This is a cost-plus contract.
Order the towels. Put our company name on them.
I mean, this is such a small but important symbol of the behavior that went on for most of the decade that fleeced the American taxpayers.
...
We heard from witnesses about the Parsons Corporation, which got a $243 million contract to build or repair 150 health clinics in Iraq.
Two years later, the money was all gone, and there weren't 150 health clinics, there were 20.
I had a doctor, a very brave, courageous physician, come to this country to testify to what he saw of the ones that were completed.
Unbelievable. So what happened to the money? The American taxpayers lost the money. Did this improve the health of the Iraqis?
The physician who came to testify said he went to the Minister of Health in Iraq and said to the Minister of Health: Where are those clinics, because I am told the Americans have spent $243 million to build health clinics. Where are the clinics?
The Iraqi Health Minister said: Well, most of them are imaginary clinics.
Yes, but the money was not imaginary. The American taxpayers' money is gone.
We had several hearings on the issue of Kellogg, Brown & Root. And I mention them because they got the biggest contract, sole-source contract. That is why they are the ones that are mentioned the most.
They were providing water treatment to the military facilities in Iraq.
So our solders are in military camps in Iraq, and KBR gets the water treatment contract. It turns out that the nonpotable water they were providing to soldiers in the camps that we had a hearing on was more contaminated than raw water from the Euphrates River.
We actually had, from a whistleblower, the internal memorandum from Kellogg, Brown & Root, by the guy who was in charge of the water contract in Iraq, and in his memorandum, he said this was a near miss.
It could have caused mass sickness or death. But publicly, they said it didn't happen. The Defense Department said it did not happen. But it did happen, and I asked the inspector general to investigate it. He did. He did a report and said that both the Defense Department and Kellogg, Brown & Root were wrong. It did happen, in fact. That kind of contaminated water was being served to the troops because the contract was a contract that was not provided for appropriately by the company.
The company was taking the money and not doing what it was supposed to do with the water.
By the way, in the middle of these hearings, while the Department of Defense, Department of the Army, as well as Kellogg, Brown & Root were denying it all, I got an e-mail here in the Senate from an Army doctor, a captain, and she wrote to me and said: I am a physician in the camp.
I had my lieutenant follow the water line to find out what was happening because I had patients here who showed that they were suffering diseases and suffering problems as a result of contaminated water.
So that came from the physician who was in Iraq on the ground.
So despite all of the denials, the inspector general finally issued a report saying: No, no, the Defense Department was wrong, as was Kellogg, Brown & Root. A contract to provide water to these soldiers across Iraq at the Army camps was not being appropriately handled, and very contaminated water was going to those camps.
The list is almost endless. I know there is a photograph I have shown on the floor previously because it is another contract to provide electrical capabilities to the Army camps. When you put up an Army camp, you have the need to provide electricity. And I held two hearings on this subject.
This is a photograph of SGT Ryan Maseth--quite a remarkable young man, a Green Beret from Pennsylvania. He is shown there with his mother, who is a very courageous woman as well. He was killed in Iraq, but Sergeant Maseth wasn't killed by a bullet from an enemy gun; Sergeant Maseth was killed taking a shower. He was electrocuted in a shower. And it wasn't just Sergeant Maseth; others lost their lives as well--electrocuted in a shower, power-washing a Jeep.
The fact is, what we discovered when we held the hearings was that the work that was done to provide electricity and to wire these camps was done in some cases by people who didn't have the foggiest idea what they were doing. Third-country nationals who couldn't speak English and didn't know the first thing about electricity were working on these issues.
The Army originally told Mrs. Maseth that her son died, they thought, because he took an electrical appliance into the shower. No, he didn't.
He was killed because shoddy electrical work was done that ended up killing this soldier.
Now, Kellogg, Brown & Root denied that, as did the Defense Department. The inspector general did the report and said: Oh, yeah.
Yeah, that sure did happen.
In fact, let me show you what the inspector general has said.
This is from Jim Childs, master electrician hired by the Army Corps of Engineers, to inspect this electrical work for which the American taxpayer paid a bundle. Jim Childs, master electrician, went in after I held the hearings. He said:

[T]he electrical work performed by KBR in Iraq was some of the most hazardous, worst quality work I have ever inspected.

Let me show what Kellogg, Brown & Root said:

The assertion that KBR has a track record of shoddy electrical work is simply unfounded.

The inspector general did the inspection. We had to redo much of the work in Iraq and Afghanistan, inspect it all and redo much of it. In the meantime, people died. We have demonstrated that there is evidence of shoddy work in a range of areas. Yet the contractors continue to be given additional contracts. For the shoddy electrical work for which some soldiers gave their lives, this contractor was not only given the money from the contract but bonus awards for excellent work. I have tried very hard to get the Pentagon to take back those bonuses, unsuccessfully. But the reason I am going through this is to point out that we have for a decade now been shoveling money out the door at a time when we are deep in debt, spending a great deal of money on the defense of this country, on the Defense Department, on the war effort, and so on. A substantial portion of that which goes out the back of the Pentagon in the form of contracts has represented the most egregious waste in the history of the country.
...
I started by talking about the issue of sodium dichromate. We think about 1,000 soldiers were at risk at a place in Iraq that is called Qarmat Ali. Some have died. Those soldiers who were at Qarmat Ali told of seeing something like sand blowing all over the place. It was red, however. That was the sodium diechromate, a deadly carcinogen. It is the subject over which a movie was made called ``Erin Brockovich.''
We have tried for a long time to get the Pentagon to be as active and involved as they should be with respect to the health and safety of those 1,000 soldiers who were potentially exposed. Like most of these issues, they have been very slow to respond.
My point is twofold. One is about supporting America's fighting men and women, doing what is right for them. There have been a number of people in the Pentagon--one of whom testified before the Armed Services Committee in the Senate and who I strongly believe knew he was not telling the truth. He was a general, as a matter of fact. There have been a number who have denied virtually all of these circumstances. Yet inspectors general have investigated and said they are wrong.
Obviously, the contractor denies these things. The contractors have gotten wealthy doing this. We have had whistleblowers come in. A woman came in and told us she was working at a recreational facility in the war theater, and that is at the base. There is a facility where you can play pool and ping-pong and do various things. It was a facility with many different rooms. She worked for Kellogg, Brown & Root and she was to keep track of how many people came in because they got paid based on how many people came in.
She said: What they told me to do was to keep track of how many people came in to each room, and that is what we billed the government for. If somebody came in and went through three rooms, the government was billed for three visits. I went to the people in charge and said:
This is fraud. We can't do this. We are defrauding the government. They immediately put me in detention in a room under guard and sent me out of the country the next day.
It is the story of virtually all the hearings we have held.
...
This has been an abysmal record. In this decade, the amount of money spent on contractors--in many cases with no-bid, sole-source contracts that were negotiated under the most abusive conditions and in violation, in many cases, of rules, according to the highest civilian official in charge of contracting--has been a disgrace. This country needs to do much better.
The work I and a number of my colleagues did holding these hearings has in many ways held up a spotlight and tried to shine it on the same spot. We have cajoled, embarrassed, and pushed, and I think we have made some progress. But so much more needs to be done and can be done.