Wednesday, February 18, 2009

Halliburton's Army: How Cheney's Former Firm Revolutionized Warmaking and Screwed Us in the Process

A new book on Halliburton looks at how a symbol of epic fraud in Iraq achieved so little with so much money.
chatterjee

In 2004, antiwar activists pushed bright red booklets titled "Houston We Have a Problem" under the doors of hotel rooms where Halliburton shareholders rested before the company's annual meeting. The booklets were alternative annual reports that detailed how Halliburton and its then subsidiary, KBR, overcharged taxpayers for services in Iraq, was under investigation for corruption and had used political connections to win no-bid and cost-plus contracts. Those contracts now total more than $30 billion.

The report's author, Pratap Chatterjee of Corpwatch, a corporate watch-dog group, compiles years of reporting on Halliburton/KBR's corporate malfeasance in Halliburton's Army: How a Well- Connected Texas Oil Company Revolutionized the Way America Makes War. More than a laundry list of wrongdoings, the book shows how the symbol of a failed Iraq reconstruction effort achieved so little with so much money. As we move on from the Bush administration, this book helps to understand what really happened.

Halliburton subsidiary KBR won the bulk of contracts in Iraq before it was spun off in 2007. The Texas-based company began building military bases during the Vietnam War, when President Lyndon B. Johnson favored it in exchange for hefty campaign donations. KBR co-founder George Brown claimed LBJ described the deals as a "joint venture," in which, "I'm going to take care of the politics and you're going to take care of the business side of it."

By 2003, Halliburton/KBR had a seat at the table when Pentagon officials planned the invasion of Iraq. When Congress approved the invasion in October 2002, the company's managers were already hard at work building military bases. Chatterjee recounts how Halliburton/ KBR's proposal to fix the Iraqi oil fields damaged by Saddam Hussein was never put up for bid.

Many of these contracts were costplus, which meant the government covered all expenses and guaranteed profits of two to seven percent. This was in addition to contracts to construct military bases, as well as basic services such as purchasing and serving food. These latter contracts fell under the military doctrine called Logistics Civilian Augmentation Program (LOGCAP), which allows civilian contractors to replace soldiers for kitchen duty and work done off the battlefield.


All of the contracts were won with minimal lobbying since Halliburton's ex-CEO, Dick Cheney, was Vice President. Even when accusations of overcharging surfaced in 2004, Chatterjee notes the company's annual lobbying budget was just $300,000.

http://www.alternet.org/story/126227/

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