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Reconstruction Corruption Watch

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As we enter Year 4 in Iraq, it's getting tougher to track the extent of waste, fraud and war profiteering perpetrated every day. In a series of entries that appeared on The Notion, I attempted to do just that--by featuring revelations made by the media, whistleblowers, the inspector general, and other activists as they emerge. To read my previous posts on the need for an Independent War Profiteering Commission, click here and here.

Entry 1: Root's Dirty Water

Dick Cheney's favorite Halliburton subsidiary, Kellogg Brown & Root, is back in the news, and its already infamous reputation is sinking to even lower, Enron-like depths. An internal company memo recently obtained by the Associated Press reveals that it provided American soldiers in Iraq with tainted water from the Euphrates.

Larry Margasak of the Associated Press reports that Halliburton water expert, Wil Granger, wrote that KBR's failure to use water purification equipment "...should be considered a 'near miss' as the consequences of these actions could have been very severe resulting in mass sickness or death." Granger further cited that throughout Iraq "there is no formalized training for anyone at any level in concerns to water operations," and inadequate or absent records on water quality audits.

KBR's water expert at the base, Ben Carter, initially discovered the contaminated water at Camp Ar Ramandi. Carter said he resigned when his supervisors told him to stop e-mailing company officials off-base and that he was not to inform the military. It was only through the threat of litigation that the event was reported to senior management and Granger investigated.

But last Thursday--on the same day that the Pentagon announced that its internal watchdog will investigate the matter--Halliburton released a second report attempting to cast doubt on Granger's assertions. The new Halliburton report offered such stellar alternative explanations as larvae found in a commode could have actually been an "optical illusion caused by a leak in the toilet fixture."

Indeed. The same optical illusion that caused Harry Whittington to look like a pheasant.

Good to see that the Pentagon is investigating, but how much faith can the American people have in its ability to reach an independent conclusion? Or even if it does, that Halliburton's patron saint won't intervene on the company's behalf? Another case underlining the need for an independent, bipartisan commission on war profiteering if we are to ever learn the truth about any of this waste, fraud and corruption.

Entry 2: Oil and Water

In the Washington Post Wednesday, Griff Witte writes of overcharges and obfuscation by Halliburton subsidiary--you guessed it--Kellog Brown and Root on a $1.2 billion contract to restore oil services in southern Iraq.

The competitive contract awarded in 2004 followed a $2.4 billion no-bid deal in 2003. Prior to settling on the newer contract, the Defense Contract Audit Agency requested that the Army Corps of Engineers speak with its auditors about "significant deficiencies in KBR's ability to estimate its costs"--the DCAA had challenged $200 million in fuel delivery charges on the first contract--but the Corps failed to do so.

Rep. Henry Waxman released a statement saying, "Halliburton has pulled off the impossible: it has actually done a worse job under its second Iraq oil contract than it did under the original no-bid contract. This new round of overcharges and dismal performance would have been avoided if the Bush Administration had listened to its own auditors."

KBR's profit in the newer contract is determined as a percentage of its costs. In challenging $45 million of the $365 million in reviewed costs, Pentagon auditors cited instances such as KBR's "paying a supplier more than it was due"; cutting cost estimates in half when "pressed on its true expenses"; and billing "for work performed by the Iraqi oil ministry."

As questions about costs and performance were raised, "federal officials in Iraq reported KBR was being 'obstructive' towards officials trying to investigate what had gone wrong." One contracting officer described "...numerous attempts to work with KBR to bring their cost reporting procedures into minimal acceptable standards." And the New York Times reports of an officer writing to the company, "you have universally failed to provide adequate cost information as required."

William Nash, a retired Army General and senior fellow at the Council on Foreign Relations, summarizes, "This a continuing example of the mismanagement of the Iraq reconstruction from the highest levels down to the contractors on the ground."

It is also an example of why only an independent, bipartisan commission will get to the bottom of the waste, mismanagement and corruption related to the Iraqi war effort.

Entry 3: A Few Bad Apples

Last week, an Iraqi-American translator was arrested and charged with offering over $60,000 in bribes to win a $1 million contract for providing flak jackets and other equipment to Iraqi police officers.

According to the New York Times, it is believed that Faheem Mousa Salam of Livonia, Michigan, was acting on behalf of others and that more arrests will be made. Mr. Salam was employed by the Titan Corporation, a division of the L-3 Government Services Group.

The Special Inspector General for Iraq Reconstruction, Stuart W. Bowen Jr., was quoted as saying that this kind of fraud is limited to "... just a few individuals who took advantage of a chaotic situation early on."

This statement further highlights the need for a bipartisan Independent War Profiteering Commission.

To be sure, Mr. Bowen has done important work such as uncovering $9 billion "lost" by the Coalition Provisional Authority. But according to the Washington Post, Bowen is a lawyer from Texas who worked as Deputy General Council for then Governor George Bush; he worked in Florida for 35 days on the election recount in 2000; and he joined the Bush White House as an Associate Counsel.

These investigations need to be free of any hint of partisanship and empowered to follow any lead no matter how high it goes. That is the only way the public will get the answers it deserves.