McCaskill Takes On Military Industrial Complex

A Governmental Accountability Office report has found that Defense Contract Audit Agency officials and major defense contractors successfully pressured Pentagon auditors to hide damaging facts about the performance and costs of weapons systems. Photo by Joseph Kaczmarek / AP.
Freshman senator files scathing report
By Matt Renner / July 25, 2008

A scathing report accusing government auditors of corruption, issued by the government's top investigative body, prompted a freshman senator to call for firings "by nightfall" on Thursday.

In her first term, Senator Claire McCaskill (D-Missouri), a former prosecutor and Missouri state auditor, has taken the lead in figuring out whether the US military gets what it pays for from contractors

In an impassioned speech on the floor of the Senate, McCaskill outlined the findings of a Government Accountability Office (GAO) report, which found that Defense Contract Audit Agency (DCAA) officials and major defense contractors successfully pressured Pentagon auditors to hide damaging facts about the performance and costs of weapons systems.

The DCAA has "gotten caught in what could be the biggest auditing scandal in the history of this town, and I'm not exaggerating here. I will guarantee you, as auditors around the country learn about this, they're going to have disbelief and raw anger that this agency has impugned the integrity of government auditors everywhere by these kinds of irresponsible actions," McCaskill said.

McCaskill fired off letters to Secretary of Defense Robert Gates and DCAA Director April G. Stephenson, demanding accountability and a full explanation of the issues the GAO report raised. In a July 11 letter, Stephenson said that DCAA did not agree with the "totality" of the report but was addressing some of the issues raised.

The GAO, the top nonpartisan governmental investigative body in Washington, DC, looked at 14 audits performed by the 4,000-member DCAA, the internal government audit team that is supposed to oversee contracting for the Department of Defense (DoD) and other government agencies. Zero of the 14 audits met government standards.

The report, titled "DCAA Audits: Allegations That Certain Audits at Three Locations Did Not Meet Professional Standards Were Substantiated," was based on over 100 interviews with current and former auditors and a review of the 13 sets of "working papers" - the documentation auditors use to backup their conclusions.

The report found, in every case, the working papers did not support the conclusions of the auditors - a clear violation of auditing principles. In addition, the investigation revealed that supervisors at the DCAA "dropped findings and changed audit opinions," and that the DCAA did not allow auditors sufficient time to do thorough work.

According to GAO investigators, "[W]e also found that contractor officials and the DoD contracting community improperly influenced the audit scope, conclusions, and opinions of some audits - a serious independence issue." In GAO speak, this means private companies and people in the Pentagon conspired to conceal wasteful and fraudulent activity by contractors at the cost of the US taxpayer.

Among the findings of the report:

* The DCAA resident auditor made an agreement with an unnamed aerospace contractor (determined to be Boeing based on the facts contained in the report), one of the five largest government defense contractors, that "limited the scope" of the audit and would allow the contractor to correct problems that were found before the final audit opinion was issued. [Bullet]The resident auditor replaced uncooperative auditors and intimidated others into making unsubstantiated assessments that benefited contractors at the expense of the government. [bullet]Supervisors assigned complex auditing tasks to underqualified subordinates, resulting in incomplete audits.

* DCAA officials threatened staff members with retaliation for speaking with GAO investigators.

* The director of a cost-estimating system for a major defense contractor threatened the DCAA he would "escalate" the issue "to the highest level possible" in the government and within the company in question if the DCAA would not green-light the billing system it identified as problematic.

* The DCAA failed to revisit contracts that were negotiated by a corrupt (and later convicted) Air Force official.

* Mistakes, incompetence or intentional deception by the DCAA has essentially built in defective price-estimating systems that may artificially inflate contract estimates for years to come.

The GAO investigation itself was interfered with. In a letter to top members of Congress, the GAO stated: "we noted a pattern of frequent management actions that served to intimidate the auditors and create an abusive environment ... As a result, some auditors were hesitant to speak to us." Nick Schwellenbach, National Security investigator for the nonpartisan government spending watchdog group, Project on Government Oversight (POGO), said that the GAO report "demonstrates that the government's system of contractor oversight is rotten because the independent government agencies that are supposed to look out for the taxpayers are corrupted," adding "we have senior members inside the DCAA who are retaliating against their own members in favor of the private contractors."

Schwellenbach pointed out that DCAA auditors oversee contracting at a number of different government agencies including NASA, and that NASA's inspector general has previously criticized the DCAA's work. "This looks like it could go even deeper," Schwellenbach added.

"You know, the Department of Defense has been on the high risk list of this government for more than a decade. Scandal after scandal has rolled out of the Department of Defense on contracting ... I took a trip to Iraq just on contract oversight with an auditor's eye, meeting with the people that oversee the contracts in Iraq ... I think we burned up more than $150 billion in just pure contracting abuse," McCaskill said during her speech, adding, "and all this time that we have been wasting hundreds and billions of dollars, the fox was in the chicken coop."

Source / truthout

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The Pork Barrel Thrives in This Administration

CEO of Firm That Signed Controversial Iraq Oil Deal Longtime Bush, Cheney Adviser
By Jason Leopold / July 6, 2008

Ray Hunt, the Texas oil man who landed a controversial oil production deal with Iraq’s Kurdistan regional government, has enjoyed close political and business ties with Vice President Dick Cheney dating back a decade – and to the Bush family since the 1970s.

Despite those longstanding connections – and Hunt’s work for George W. Bush as a member of the President’s Foreign Intelligence Advisory Board – the Bush administration expressed surprise when Hunt Oil signed the agreement last September.

At that time, administration officials said Hunt Oil’s deal with the Kurds jeopardized delicate negotiations among competing Iraqi sects and regions for sharing oil revenues, talks seen as vital for achieving national reconciliation.

“I know nothing about the deal,” President Bush said. “To the extent that it does undermine the ability for the government to come up with an oil revenue sharing plan that unifies the country, obviously if it undermines it I’m concerned.”

However, on July 2, the House Oversight and Government Reform Committee released documents showing that senior administration officials were aware that Hunt was negotiating with the Kurdistan government and even offered him encouragement.

Hunt also personally alerted Bush’s PFIAB about his oil company’s confidential contacts with Kurdish representatives.

In a letter to Secretary of State Condoleezza Rice, Rep. Henry Waxman, D-California, committee chairman, complained that the administration’s comments last year were “misleading.”

“Documents obtained by the Committee indicate that contrary to the denials of Administration officials, advisors to the President and officials in the State and Commerce Departments knew about Hunt Oil’s interest in the Kurdish region months before the contract was executed,” Waxman wrote.

Waxman said the Hunt-Kurdish case also raised questions about the veracity of similar administration denials about its role in arranging more recent contracts between Iraq and major U.S. and multinational oil companies, including Exxon Mobil, Shell, BP and Chevron.

Plus, there’s the longstanding suspicion that oil was a principal, though unstated, motive behind the Bush administration’s invasion of Iraq, which sits on the world’s second-largest oil reserves.

Administration officials – and much of the mainstream U.S. media – have ridiculed the oil motive charge as a conspiracy theory.

Oil Deals

But many of the oil companies now stepping forward to benefit from Iraqi oil were instrumental in both supporting Bush’s political career and giving advice to Cheney’s secretive energy task force in 2001.

For instance, Ray Hunt’s personal relationship with the Bush family dates back to the 1970s as Hunt, the chief of Dallas-based Hunt Oil, helped build the Texas Republican Party as it served as a power base for the Bushes rise to national prominence.

The Hunt family donated more than $500,000 to Republican campaigns in Texas, while Hunt Oil employees and their spouses gave more than $1 million to Republican causes since 1995, according to the Center for Responsive Politics.

Ray Hunt also had strong ties to Dick Cheney during his years at the helm of Halliburton, the Houston-based oil-services giant. In 1998, Cheney tapped Hunt to serve on Halliburton’s board of directors, where Hunt became a compensation committee member setting Cheney’s salary and stock options.

In 1999, when Texas Gov. George W. Bush was running for the Republican presidential nomination, Bush turned to Hunt to help fund his presidential campaign efforts in Iowa, according to Robert Bryce’s book, Cronies: Oil, The Bushes, And The Rise Of Texas, America's Superstate.

“By the summer of 1999, Bush had already raised $37 million but he wanted to conserve his campaign cash so he turned to a Texas crony, Ray Hunt, to help fund the Iowa effort,” Bryce wrote. “In July of 1999, Hunt was among a handful of Bush supporters who each donated $10,000 to the Iowa Republican party.”

In May 2000, Bush appointed Hunt finance chairman of the Republican National Committee. Hunt also donated $5,000 to the Florida recount battle and spent $100,000 on Bush’s inaugural party.

Bush Presidency

When Bush became President in 2001, Hunt emerged as an advisor to Cheney’s energy task force, according to highly placed executives at Hunt Oil whom I have been in contact with over the past seven years.

Bush also appointed Hunt to the Federal Reserve Bank of Dallas and to the PFIAB, giving him access to highly classified information.

Hunt’s son, Hunter, a vice president at Hunt Oil, became another top energy advisor to the new administration, the company’s Web site said.

One of the topics before Cheney’s task force was the hoped-for opportunity for American oil companies to regain access to Iraq’s underdeveloped oil fields as a way to meet increasing U.S. energy demands.

That opportunity opened up after the U.S.-led invasion and conquest of Iraq in March and April of 2003, although a stubborn insurgency and political disarray slowed efforts to modernize the Iraqi oil industry.

Further bolstering Hunt Oil’s influence in the region in November 2003, Bush named James Oberwetter, a Hunt Oil vice president, to be U.S. Ambassador to Saudi Arabia.

Hunt Oil finally nailed down a major oil agreement with the semi-autonomous Kurdish region on Sept. 7, 2007. But the deal outraged many Iraqi officials because it was enacted before a national law could be adopted on the distribution of oil revenues. Bush administration officials also criticized the deal.

At the time, Rep. Dennis Kucinich, D-Ohio, questioned whether Ray Hunt benefited from inside information from Bush, Cheney and/or other White House officials about Iraq’s stalled national oil law.

"As I have said for five years, this war is about oil,” Kucinich said. “The Bush administration desires private control of Iraqi oil, but we have no right to force Iraq to give up their oil. … The constitution of Iraq designates that the oil of Iraq is the property of all Iraqi people."

Amazon Pipeline

The production-sharing agreement Hunt Oil signed with the Kurds is not the company’s first controversial energy project. Nor is it the first time the company has received help from the Bush administration for its work overseas, as documents obtained by Waxman’s investigators show.

In August 2003, the Bush administration threw its support behind the Camisea gas-pipeline project in the Amazon jungle in Peru that drew international criticism because it threatened to destroy a pristine stretch of rainforest and jeopardized the lives of indigenous people.

The London Independent reported that the beneficiaries of the project “would be two Texas energy companies with close ties to the White House, Hunt Oil and Kellogg Brown & Root, a subsidiary of Vice President Dick Cheney's old company, Halliburton.” [Independent, Aug. 4, 2003]

When the pipeline deal went through, Hunt hired Halliburton to conduct the engineering work on the project as well as to build a $1 billion export terminal on the coast.

“Bush Pioneer Jose Fourquet played a pivotal role in the financing of a massive Peruvian natural gas project that benefited Hunt Oil Co., whose chairman, Ray L. Hunt, signed up to be a Pioneer and is a longtime ally of the president,” the Washington Post reported on May 17, 2004.

“Fourquet, the Treasury Department's U.S. representative to the Inter-American Development Bank, rebuffed the official written and oral recommendation from other U.S. officials to vote ‘no’ on the project.

“Instead, he abstained on $135 million in financing for the project, allowing it to proceed. Opposition from the United States, a primary funder of the IDB bank, would have jeopardized the deal,” the Washington Post reported.

Wink and Nod

Now, the new evidence suggests that Hunt Oil at least benefited from the administration’s wink and nod in striking the Kurdish oil deal.

In a July 12, 2007, letter to PFIAB, Hunt disclosed that Hunt Oil was “approached a month or so ago by representatives of a private group in Kurdistan as to the possibility of our becoming interested in that region.”

Hunt described a visit of a Hunt Oil survey team and stated, “we were encouraged by what we saw. We have a larger team going back to Kurdistan this week.”

In a second letter to PFIAB, dated Aug. 30, 2007, Hunt revealed that he would travel to Kurdistan in early September for meetings with the Kurdistan regional government, including its president, prime minister and oil minister.

Those meetings led to the oil agreement between Hunt Oil and the Kurdish leaders -- and now have raised questions about Bush’s denial that he had any advanced knowledge about the deal.

“State Department officials similarly disavowed involvement in the contract,” Waxman said in the letter to Rice. “Department officials claimed that to the extent they were aware of any negotiations, they actively warned Hunt Oil not to enter into a contract because it was contrary to U.S. national security interests.

“Documents obtained by the Committee indicate that contrary to the denials of Administration officials, advisors to the President and officials in the State and Commerce Departments knew about Hunt Oil’s interest in the Kurdish region months before the contract was executed.”

Waxman asked Rice to cooperate with the committee’s investigation. Hunt Oil declined to comment on Ray Hunt’s relationship with Bush or his administration.

Source. / The Public Record

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Film : John Cusack's War, Inc

John Cusack stars as a hit-man Brand Hauser in war-torn Turagistan in War, Inc.
Cusack's Savage Satire Strikes a Chord
with Soldiers and Their Families
By Arianna Huffington / June 12, 2008

"Whose top advisers are linked to war profiteers?" asks John Cusack in a new TV ad linking John McCain and George Bush ("Both...Bet you can't tell them apart"). The ad, produced by MoveOn.org, starts airing today and is already being passed around the Internet.

Cusack's righteous rage over the billions being pocketed in Iraq by companies like Blackwater, Halliburton, and Bechtel is the beating heart of his brilliant War Inc. The film, a corrosive, audaciously funny takedown of the Right's push toward privatized war, has become a surprise, grassroots-driven hit -- despite having almost no ad money behind it.

I saw the film before it was finished, and even before the final edit, the music, etc., I was overwhelmed by how it captured the insanity going on in Iraq. War Inc. has pulled off the near-impossible: it has a found a savage, reality-altering humor amidst the tragedy of Iraq.

It masterfully wields my favorite creative weapon: satire. It punches you in the gut, making you laugh, wince, and become outraged all at the same time. Naomi Klein rightly calls War, Inc. "one of those rare satires with the danger left in."

Political satire designed to confront the powers-that-be with painful truths and to produce not just laughs but change is rarely seen in today's multiplexes. And that's not surprising; it's a high-wire act few even dare to attempt. But when someone does and succeeds at it -- think Stanley Kubrick, Paddy Chayefsky, Joseph Heller, Billy Wilder -- the effect is indelible.

Lewis Lapham identified the satirist's project as "the crime of arson, meaning to set a torch of words to the hospitality tents of pompous and self-righteous cant." And that great satirical arsonist Mark Twain wrote that exposure to good satire made citizens less likely to be "shriveled into sheep."

The great satirists have always been passionate reformers challenging the status quo. "Sometimes," says Paul Krassner, whose satiric and radical journalism inspired Cusack and his co-creators, "humor is just a way of calling attention to the contradictions or the hypocrisy that's going on officially. ... That's the function of humor -- it can alter your reality." Which is exactly what War, Inc. does.

When in 1729, Jonathan Swift wrote the most famous work of political satire of all time, "A Modest Proposal," he was seeking to light a fire under the indifference toward the twin Irish crises of hunger and over-population. His proposal was to feed young children to hungry men. "I have been assured," he wrote, "that a young healthy child, well-nursed, is at a year old a most delicious, nourishing and wholesome food, whether stewed, roasted, baked or boiled; and I make no doubt that it will equally serve in a fricassee or a ragout."

You can imagine the blowback from those who failed to grasp the satiric point Swift was trying to make. Similarly, the satire-challenged Right has tried to attack Cusack and War, Inc. as (all together now) unpatriotic and a slam on American troops. They've also gotten their knickers in a twist, outraged that someone would try to find humor in the death and suffering of U.S. soldiers.

But Cusack's targets are not our troops but private military contractors, war profiteers, and flag-waving politicians who, as Cusack puts it, support "keeping our troops in harm's way in Iraq but not the bipartisan G.I. bill of rights to support them when they return home." (And, yes, he's talking about you, Messrs Bush and McCain).

Indeed, since the film's release Cusack has received many moving emails and postings on his MySpace page from soldiers and military family members supporting the film and its message. Their missives run from disappointment to disillusionment and fury over being asked to serve and sacrifice while mercenaries are better paid -- and often better treated.

Among the emails:

Sgt. Brent Sammann, US Army.
From Sgt. Brent Sammann, an active-duty soldier in the US Army:

I'm a first-hand witness to the exploitation by KBR and other companies lending their services to the war effort -- services us soldiers are fully capable of doing ourselves.... The military is being overcharged by these companies on a regular basis. Also, the poor service and treatment we get from some of their employees who make three times as much as those of us serving our country that are not in it for the money but are trying to make the world a better place for everyone.

From SPC (P) Johnny Rhodes in 3/2 SCR Infantry based in Diyala, Iraq:

After being awake for 3 days I may be a little bit out of it, so excuse any rambling or incoherence on my part. Off the top of my head, I can easily say that KBR in particular is of no help here in my area of Iraq. They do, jobs soldiers could do, get paid way better for it, but the work is almost always substandard.... at any given time there are hordes of these guys tying up the phones and internet, cramming the chow hall, etc. Which makes the soldiers have to wait. And wait. And wait. They also paid way more than me, for a job, I could do with my eyes closed.

From Brenda Clampitt, of Baton Rouge, LA, the wife of a soldier stationed at Camp Adder in Tallil, Iraq:

[My husband] drives the trucks and Humvees and escorts the KBR around where they need to go. He doesn't understand why they get paid way more then he does when [he and his fellow soldiers] are the ones doing the protecting, and are the ones getting shot at and blown up. He has seen soldiers die in front of him; he has seen lives destroyed and the country torn apart. My husband would serve his country whether he got paid or not, that is just how he is. He loves his country and wants to protect it but he sees first hand what is going on over there and he doesn't like it.... I myself am sick and tired of this war. It is dragging on and on and it is all about the money. I am not anti war. But I am FOR everything your movie is about.

Today's lead editorial in the New York Times, titled "Interrogation for Profit," decries "one of the Bush administration's most blatant evasions of accountability in Iraq -- the outsourcing of war detainees' interrogation to mercenary private contractors" and calls on Congress to approve "measures to make war-zone contractors liable for criminal behavior." The editorial concludes: "The way out of the Iraq fiasco must include an end to the outsourced shadow armies."

This indictment has the same urgency of War Inc. Especially with John McCain reminding us that it's "not that important" to him when our troops come home.

Source. / The Huffington Post

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