THE BLOG
06/22/2007 04:40 pm ET Updated May 25, 2011

Truman in a Skirt?: Iraq Contractor Fraud and the New Missouri Senator

Senator Claire McCaskill returned from a trip to Iraq this week. She traveled there with Senator Tom Carper of Delaware and Army Auditor Patrick Fitzgerald specifically to look at fraud in Iraq contracting. McCaskill has pledged to make accountability in war spending a priority in the tradition of Harry Truman, the Senator who occupied her desk in the Senate and was responsible for rooting out war profiteering in World War II. Will she become the new Truman in a skirt? She can if she sticks to her guns and doesn't believe the soothing rhetoric being dished out by the DOD that they are getting control of the costs of this war.

Much of the focus on Iraq contracting fraud has been on Iraq reconstruction contracts. Stuart W. Bowen, the inspector general for Iraq reconstruction, told the House Judiciary committee this week that the fraud in the reconstruction programs in Iraq would be in the tens of millions rather than the "hundreds of millions or billions as is sometimes imagined." Bowen has been surprisingly diligent and I will withhold my judgment on that hoping that he is right.

But that isn't where all the huge fraud, waste and abuse lie. The amount we have spent in Iraq reconstruction is small compared to the huge amounts that we have been spending in support of our troops. A large portion of the supplemental money for this war is going to contractor billings which, on all accounts, is out of control because of the lack of oversight and guts by the DOD.

KBR, the biggest contractor supplying the troops, saw their LOGCAP III contract, the one used for this war, grow from around $60 million before the war to a total contract of around $26 billion. And this number is just a rough estimate because the accounting for this contract ( and others) is so chaotic. With the contractor contracts surging with the most recent troop surge, it is past time to get control of these costs. With this level of spending our troops should have everything that they need. But as I outlined in my book, Betraying Our Troops: The Destructive Results of Privatizing War, the contractors have made life nice for troops at the large bases but the troops who are outside the safe perimeters have trouble getting even the basics of support, including decent food and water. The contractor billings are also threatening the money for basic fighting equipment such as night vision goggles and up armored vehicles.

Senator McCaskill realized early on that KBR and other suppliers were running up their costs with cost reimbursable contracts with little oversight. She was told in this trip to Iraq that there have been improvements because the Army is "centralizing contracting oversight and increasing the number of fixed-price contracts containing incentives not to pad costs." But she shouldn't fall for this soothing talk. The damage may have been done unless the Army is willing to go back and scrub the padding of costs and fraud out of the original contracts. Most contracting in the DOD relies on historical costs, in other words, what you spent before becomes the base of how much your new contract should be. If the Army allows these huge costs to become the norm for all the follow on contracts, we will continue to pay extremely inflated costs in Iraq, whether we are there for months or years. Waste and fraud will become the new normal for using contractors to support our troops. Considering that these same Army managers gave KBR bonuses for their abysmal performance in Iraq so far, it will take outside pressure and legislation from Congress to try to get any type of control over this contractor feeding frenzy of the supplemental money.

It also may be very hard to get enough oversight because of the deteriorating security situation in Iraq. Unless Congress insists that the oversight is down and is willing to withhold other DOD pet project money unless it is done, the DOD won't do it based on their past. This most recent war spending binge makes the scandals of the past look like child's play. It will be tough to wrestle for control over this money.

Will Senator McCaskill step up to the plate? Someone in the Senate has to make this their cause and stick to it. Representative Waxman has been leading the charge in the House of Representatives and has allies on that side of the Hill. Senators have been promising to recreate Harry Truman's work for years but they haven't really been willing to tame the beast. Perhaps the newest Senator from Missouri, a member of the Armed Services Committee, a former prosecutor and state auditor will finally have the tools and moxie to pull it off. If she tries, she will need the support of the public and the press to overcome the power derived from the huge amount of spending involved. The soldiers and taxpayers need a hero here, but it is a tough and often thankless job.