Halliburton and Defense Acquisition -- Kerry Rants

[Timber Loftis]

September 17, 2004
Kerry Criticizes Bush and Cheney on Halliburton's Iraq Contracts
By THE ASSOCIATED PRESS

ALBUQUERQUE, N.M. (AP) -- Democratic presidential candidate John Kerry on Friday accused the Bush administration of turning a blind eye to waste and overcharging by Halliburton, the company Vice President Dick Cheney once ran, and proposed reforming the contracting system to ensure fair competition.

The Kerry campaign said a new ad, "Cheney Halliburton," will air next week in Oregon and other battleground states to criticize the administration and its no-bid contracts with the company. The ad suggests a conflict of interest for Cheney because he collects deferred benefits from the time he was chief executive of Halliburton, a multinational company that provides reconstruction and other services in Iraq.

"As president, I will stop companies like Halliburton from profiting at the expense of our troops and taxpayers," Kerry said in a statement released by his campaign. "I will stop companies from receiving no-bid contracts from the government when the president or vice president is still receiving compensation from that company."

The new ad also contends the administration's decision to award contracts to Halliburton without competitive bidding wasted taxpayer money that could have been used to create jobs and provide health care. Several investigations into Halliburton's work in Iraq have shown evidence of overcharging or raised questions about the corporation's performance.

The campaign sought to link Cheney and Halliburton to President Bush's management of military and security operations in Iraq. Kerry frequently charges that the Bush administration works hardest for special interests.

"We need a commander in chief and a vice president who puts the interests of our troops and our taxpayers ahead of their big-money friends," Kerry said. "I will make sure that all government funds are properly accounted for. And as commander in chief, I will have two words for companies that cheat the U.S. military: 'You're fired."'

The Bush-Cheney campaign said the links aren't there.

"John Kerry's latest personal attack has as much accuracy as a Kitty Kelly novel," said spokesman Steve Schmidt, referring to the expose author who recently released a book on the Bush family. "It's a breathtakingly dishonest attack by John Kerry."

Schmidt said deferred compensation packages have been accepted by other business leaders who move to the private sector, including some in President Clinton's administration, and added that Cheney has been very charitable with that income.

Cheney left the company before the Iraq war, and the Bush campaign said that Halliburton and its subsidiaries had been a government contractor before Cheney became vice president.

Kerry said he wants to clean up and open up the government contracting system by streamlining the paperwork, making it easier for smaller companies to compete, restructuring the accounting system and expanding audits. Kerry also wants to withdraw contracts from companies that violate the law and punish businesses that overcharge the government.

The Massachusetts senator unveiled the ad while he campaigned in New Mexico, one of a number of states barraged by campaign commercials and teetering between the two presidential candidates. A recent poll, taken just as the Republican convention got rolling, showed Bush with a slight edge.

The state has seen higher than average unemployment and underemployment during the Bush administration, a factor that could work to Kerry's advantage.

F. Chris Garcia, a political science professor at the University of New Mexico, said the poll indicates that New Mexican voters might be more inclined to vote for security than a better economy, favoring Bush.

"People are generally sticking, even with some ambivalence, with the leadership that we have in these times of tension," Garcia said.


__________________________________________________ _-

This is one of my biggests problems with Bush/Cheney. However, Mr. Kerry, there are already rules in place to do everything you suggest -- except make a specific provision regarding former company execs. (which isn't needed under existing rules, when they are followed).

So, please don't act like you are reinventing the wheel. Here are links to the DFARS Rules and Here's the government's main link to their policy.

Yes, Kerry is right in that Halliburton skirted the rules, got in on a contract under emergency needs, and has never gone through the required open bidding (which has been deferred for 6 months at a time since the war began). Yes, it is cronyism. No, we don't need new rules -- just a little enforcement. Halliburton should be debarred from defense contracts for a number of years, just like anyone else would be.

[Jonas Strider]

I'm not privy on the policy or details, just wondering if Kerry just wants to add in new stuff to help enforce the rules AND maybe make it easier for smaller companies to compete instead of being easily push put by larger companies such as Haliburton. Whatever Kerry's ideas are, I'm for it because the current rules aren't working or beig enforced under Cheney's iron hands.

[Felix The Assassin]

I'm not sure about big business, and gov't contracts. I'm not ready to learn just yet.

Halliburton is the big name, we in the Army know them as 'Brown&Root'. They have quite a few contracts doing what NOBODY else will. Yes there are checks and balances, they are in place and should be followed. What he did not mention or point out is, THESE guys are the only ONE's that will do THESE contracts for the minimal amount of peanuts the Gov't shells out.
B&R can be found in Kosovo, Iraq, Kuwait, Saudi, Afghanistan, and just about anywhere else that the military is. These 'contractors' do what the military as a force doesn't do. They haul cargo, food, water, fuel etc from point A to destination. They build structures that combat engineers are not trained to build. These guys run supplies, while being shot at, and they are unarmed. They do all for all, the dirty work. B&R has no competitor, nobody else wants these contracts, they don't want the sky rocketed insurance, nor the risk of human life for contract signature.

Some of the things he was attempting to create an illusion about deals with direct cost. When a contractor is involved within a flucuating market, the increase is passed back through the channel, as in when the price of liquid x = a on day 1, but becomes d on day 29, that increase is passed to the Gov't, and it's so written. Again if the price becomes less a, then the savings are passed along as well. Not many contractors get involved with a fixed price within a volatile market, as one would like you to believe. So, if they do agree to a set price to volume, then rest assured it is advantages to the contractor. AFAIK. B&R did not commit to set price.

[ 09-18-2004, 12:38 AM: Message edited by: Felix The Assassin ]

[Khazadman Risen]

Thank you Felix. But I doubt that facts will do anything to sway the real Koolaid drinkers out there.

[John D Harris]

Anybody want to take a gander at which Presidental campaign has a Haliburton Lobbist(sp?) working for them? This Lobbist's firm gets paid approx $500,000 a year.

The point is SO THE "HALE" WHAT!!! if it is wrong for any interest to have contacts with the U.S. Government it is wrong for all interests to have contact, i.e. all the enviromental groups, veterans groups, one eyed redheaded bastards groups. Don't try and tell me that one side is wrong/bad/cheating because the humans that make up that side might have interests in other areas, when there is the same kind of things are going on with the other side. I read people complaining about "Big Company" this, "Big Business" that. Where the "Hale" do you think you folks get your paychecks from? If "Big Business didn't exsist the economy would calapse and we would be eating our pet dogs to survive. We would be running around killing each other in numbers that would make the Great Khan proud.

Don't even try this "Well that's the problem, it's all about Money, we need to be like the Federation(as in Star Trek)", and get rid of the money, crap. Here comes the reality check, Star Trek is fake/fantasy/as in NOT REAL, Capt Kirk, & Capt. Picard are not famous for their kind gentle ways, they're are famous for kicking Klingon and Borg BUTT! The Enterprise (all versions) is a Warship, that's right the "peace/love/can't we all just get along crowd's" greatest fantasy of utopian(sp?) society is backed and suported by WAR/Military and the interests that keep it going! Even in the fantasy of no more money they can't solve the problem of war!

[Timber Loftis]

It's all about the money -- there should have been a fair bidding process.

Felix is incorrect -- Brown and Root is not the ONLY one who can do the scale of job we're talking about here. There are, in fact, 3 to 4 competitors who may be able to do it. If the bidding rules were followed, B&R may have been the only entry -- but we don't know that.

I'm not trying to do any namby liberal trick here -- I'm just trying to point out that the contract bidding rules are there to ensure our government seeks the lowest price bidder (with a conforming bid) and thus *best* spends our tax dollars. This isn't rocket science -- it's a process that's followed by everyone who wants to put roofing on barracks or build roads on a base.

So, the "horrible liberal blah blah" cry baby mantra has NO meaning here at all. This is all about money and business, and ensuring fair competition. It is a fair complaint and concern any businessman can understand. No liberal plot here.

And, as a side note, Khazadman are you even brave enough to say what you meant with the Koolaid comment?

[Felix The Assassin]

TL, I very well may be incorrect, that's why I started my post with the 'I'm not sure'. I would like to understand more, and really learn about this field, however, it's not possible at the moment.
I would like to hear about the other companies, and contractors that put in bids for these 'hot' contracts. I'm not pro B&R or Haliburton, but I do respect what they do.

[ 09-19-2004, 06:22 PM: Message edited by: Felix The Assassin ]

[Djinn Raffo]

How much is a Haliburton truck driver making in Iraq right now?

How much is a US soldier who drives a truck making in Iraq right now?

Who signs each of their paycheques?

[Timber Loftis]

Very Good Questions, Djinn. This is a long -- and I think informative if a bit off-point -- topic about wages in Iraq. You will note waaay down that US truck drivers (included the unemployed folks hired and trained specifically for this job) make $7000-8000 a month over there. I think that's a LOT more than many enlisted men with years of professional soldier training who drive trucks. That's a six-figure income. Holy shit -- I've been searching the wrong job market.

http://corpwatch.radicaldesigns.org/article.php?id=9928
___________________________________

Baghdad - Behind miles of coiled barbed wire, a maze of concrete barricades designed to stop the most determined suicide bomber and checkpoints run by heavily armed soldiers from the Florida National Guard, lies the Al Rasheed hotel, Baghdad's most exclusive, which modestly advertises itself as "more than a hotel." Today it serves as part of the temporary headquarters for the occupation forces in Iraq.

I was on my way to meet with a U.S. Army spokesperson, glad I had finally been granted an interview. It is difficult to get inside the hotel in the best of times -- the only way is via a personal invitation. It took three hours and multiple satellite phone calls routed through Virginia for us to connect that day because of an emergency shutdown. My army contact got confused as to where we were meeting, partly because he had only been in country for three weeks. Perhaps more importantly, because the occupation forces rarely leave the Green Zone, they have no idea how complicated it is for civilians to get in.

As I entered the Al Zaheer restaurant inside the hotel, I encountered three employees representing an unusual collection of South Asian nations whose governments have at times been bitter enemies: Muzaffar, a cook from a small village some 40 miles from Dhaka, Bangladesh, Shahnawaz, a waiter from Delhi, India and Ali from the lawless North-West Frontier Province in Pakistan, who works behind the salad bar.

These men work quietly together serving meals in the dining room that seats some 300 people. Sprawled out at the tables are uniformed soldiers and Secret Service men with earpieces -- guns never more than an arm's length from their reach -- smartly dressed secretaries from military contracting firms and men in dark business suits, chatting loudly about the business of running a country.

The restaurant workers were brought together by a company named Kellogg, Brown and Root (KBR), a subsidiary of Halliburton of Houston, Texas.

Halliburton has contracts in Iraq worth more than $8 billion that range from cooking meals, delivering mail, building bases to repairing Iraq's oil industry.

The company can't hire workers fast enough to fulfill their commitments, but the pay scales fluctuate wildly depending on the country of citizenship of the employee. Americans, who work at dead-end, low-wage jobs at home, get paid handsomely even by US standards. Iraqi salaries start at $100 a month and imported South Asian workers get three times that. Meanwhile Halliburton is being investigated by the US military for overcharging US taxpayers to the tune of at least $16 million.

Halliburton's Dirty Dishes

I was invited to lunch at the Al Zaheer restaurant by Richard Dowling, the spokesperson for the United States Army Corps of Engineers. Dressed in full tan military camouflage uniform, he is a cheerful, middle- aged white bearded civilian who has worked for the Army for 23 years. His appearance has earned him the name Baba Noel, the Arabic translation for Santa Claus.

I ate uneasily remembering an NBC news report that the Pentagon repeatedly warned Halliburton that the food it served to US troops in Iraq was "dirty," as were the kitchens it was served in. The Pentagon reported finding "blood all over the floor," "dirty pans," "dirty grills," "dirty salad bars" and "rotting meats ... and vegetables" in four of the military messes the company operates in Iraq.

Indeed even the mess hall where Bush served troops their Thanksgiving dinner was dirty in August, September and October, according to NBC. Halliburton promises to improve "have not been followed through," according to the Pentagon report that warned "serious repercussions may result" if the contractor did not clean up.

The meals at the Al Rasheed are mediocre -- certainly nothing to write home about. They are definitely a step up from the Meals-Ready-To-Eat issued to soldiers in the battlefield but the average hotel or restaurant in Baghdad could turn out equally mediocre or better food for a quarter of the price. For the kind of cash that the government is spending ($28 a day per soldier) the soldiers could be eating at the White Palace, one of the best restaurants in Baghdad, fancied by Paul Bremer, the United States ambassador who oversees the occupation authority in Iraq.

After our meal, I stop to chat with the workers who tell me they earn $300 a month including overtime and hazard pay. Asked what they think of their jobs, they are non-committal. "Chalta he," says one. (We manage somehow.) Muzaffar explains that it's a lot more than he makes at home. He's paid for his eldest daughter to get married to another Bangladeshi who lives in Saudi Arabia. But both he and his son-in-law rarely get to see their wives. His other daughter and his young son barely know him as he has lived abroad for 13 years.

While some of the men working for Halliburton in Iraq are recruited to these jobs directly from India by the Saudi-based Tamimi Corporation, most are brought over from Kuwait or Saudi Arabia, where they were offered bonus pay to work in Iraq. One worker says that the company really didn't offer him a choice: it was Iraq or get laid off. These men never get to leave the grounds of the hotel or the Republican Palace because it is considered far too dangerous to venture out of the high-security Green Zone.

Our conversation is cut short by Tony, a Filipino American ex-Marine from Burlingame, California and the man in charge of the 60 South Asian staff, who strides over to the kitchen workers taking a break to say goodbye.

"Back to work," he snarls. "All of you in the kitchen now." As he speaks neither Urdu nor Bengali, the conversation is incomprehensible to him and maybe that makes him nervous.

"Tony's such a hard-ass," says Mike, one of the military contractors and witness to the exchange. "Give them a break," he calls out as I rise to leave. The three kitchen workers are apologetic. "Come back to meet us at the palace," they say. "Sometimes we cook Indian food here."

As we leave the hotel I ask Army Corp of Engineers spokesperson Dowling about the allegations that Halliburton in profiting out of the war in Iraq.

"Some may see it as war profiteering but for the young soldiers, it is hot food and a dry place to sleep," he explains. "Yes, it is a profit motive that brings companies into a dangerous location, but that is what capitalism is all about. Halliburton employees are under fire and several have died but they are still here. With all due respect to nonprofit organizations, like the United Nations and the Red Cross, they have pulled out. If it takes profit to motivate an organization to take a tough job, then that's the only way to do it," Dowling went on.

Cooking the Numbers

In December Halliburton estimated that it had served 21 million meals so far to the 110,000 troops at 45 sites in Iraq, according to numbers provided to an NBC reporter. But in recent weeks military auditors have started to suspect that the company may be cooking the numbers and over-charging the government by millions of dollars.

After I returned to the States, the Wall Street Journal reported in early February that Halliburton may have overcharged taxpayers by more than $16 million for meals to U.S. troops serving in Operation Iraqi Freedom for the first seven months of 2003. In July 2003 alone Halliburton billed for 42,042 meals a day but served only 14,053 meals daily.

I emailed Melissa Norcross, a spokesperson for Halliburton's Middle East region, about the phantom meals. She wrote back to CorpWatch with the following explanation from Randy Harl, chief executive officer of KBR:

"For example, commanders do not want troops "signing in" for meals due to the concern for safety of the soldiers; nor do they want troops waiting in lines to get fed."

Norcross also explained, however, that the "dirty kitchen" problems have been taken care of, and the facilities have since passed subsequent inspections.

"Keep in mind that serving food to more than 130,000 patrons daily in a hostile war zone is not easy. And it's worth noting that although there are many challenges involved in supplying food to more than 130,000 patrons every day, there are also accounts of wonderful things our employees do," according to the Halliburton spokesperson.

She quoted a note from a Halliburton client in Tall Afar, Iraq: "The commander gave kudos to staff for the Thanksgiving Meal served. He said it was the best he had ever seen and I told him that it was the best that I have seen anywhere in 23 years of government service."

Local Labor

Across the street from the Al Rasheed hotel stands the Baghdad convention center with a vast empty theater but lots of life in the offices from the basement to the third floor. Earnest Iraqis, the military and their private guards and the odd camera crew mostly populate the rooms.

Eventually a group of convention workers, wearing Halliburton badges, stop by to chat on their tea break. One of them tries several times to pronounce the word Congratulations but fails. Unable to wish his boss well, he exasperatedly turns to me to ask if there is a better word. I suggest slapping the boss on the back and saying: Good job! Well done! But he shakes his head violently. "No, I cannot say that - Mr. Lewis is an American, my boss. I must say something more polite."

The convention hall employees are friends and live in the same neighborhood. Every morning Halliburton sends a car to pick them up and bring them to work at 8:00 a.m. and take them back at 4:00 pm. The three are professionals who are better paid by Halliburton than [are] laborers. Khaled Ali is an engineer in charge of construction at the convention center, Saba Adel Mostafa is an interpreter, and Daoud Farrod is a supervisor. Farrod is older but the first two are in their late 20s. They are excited to work for Halliburton.

"It's my first job, I was not able to practice my English before. And the government pay before was just $10 a month," Saba says.

Khaled explains that it is his first job too. "And you are in charge of all the construction here?" I ask. He nods proudly, beaming when I exclaim, "Congratulations!" The three of them say that Halliburton workers earn a range from $100 to $300 a month - Saba earns $200.

Temps From Texas

Half a world away, another group of unemployed workers can be found at recruiting sessions in Houston. The company has been posting flyers at truck stops and posting advertisements on the internet. Four out of five of the recruits who are invited to training sessions who worked at a now defunct JC Penny store will be sent to Iraq. Halliburton sends an average of 500 recruits a week.

These men are not skilled. "They are unemployed and underemployed workers with few jobs in a U.S. economy that isn't producing many jobs," writes Russell Gold, a Wall Street Journal reporter. Gold interviewed men lining up for the training sessions, citing the example of one typical applicant whose previous job was transporting chickens for $12 an hour.

But when they arrive in Iraq, their navy blue American passports earn them a tidy sum of money: between $7,000 and $8,000 a month, generous sums, even by American standards. CorpWatch asked company spokesperson Norcross why there is such a huge disparity based on nationality in the wages Halliburton pays in Iraq.

"We will not discuss our specific wage structures. Our compensation packages and the compensation packages provided by our subcontractors are based on a wage scale that was recommended by the Coalition Provisional Authority in Iraq, and are competitive in terms of the local market," she wrote back.

When I posed the same question to Army spokesperson Dowling, we got a more revealing answer.

"These workers consider themselves fortunate to have jobs even if it means them traveling somewhere else. There is an army of companies that move from conflict to conflict with experience in setting up chow halls from an empty field to a 1,000 army camp in a matter of days. It's not an easy job and these guys are good at it. They bring their own people with them - people with experience in other military locations," Dowling explained.

"The (salary) decision is not based on the value of his life but on the cost of training and equipping the workforce. Nor would it be right for the US Army to enforce US based salaries where no one else could match it. Life sometimes isn't fair," he concluded.

I'm sure Al Rasheed waiters Muzaffar, Shahnawaz and Ali would agree.

Pratap Chatterjee is Program Director/ Managing Editor of CorpWatch.

[ 09-20-2004, 10:07 AM: Message edited by: Timber Loftis ]

[Timber Loftis]

Here's an interesting take on it, from a blog inside Iraq. It's a very interesting blog, and here's the excerpt regarding our wasted Halliburton dollars:

_____________________________________________

Listen to this little anecdote. One of my cousins works in a prominent engineering company in Baghdad- we’ll call the company H. This company is well-known for designing and building bridges all over Iraq. My cousin, a structural engineer, is a bridge freak. He spends hours talking about pillars and trusses and steel structures to anyone who’ll listen.

As May was drawing to a close, his manager told him that someone from the CPA wanted the company to estimate the building costs of replacing the New Diyala Bridge on the South East end of Baghdad. He got his team together, they went out and assessed the damage, decided it wasn’t too extensive, but it would be costly. They did the necessary tests and analyses (mumblings about soil composition and water depth, expansion joints and girders) and came up with a number they tentatively put forward- $300,000. This included new plans and designs, raw materials (quite cheap in Iraq), labor, contractors, travel expenses, etc.

Let’s pretend my cousin is a dolt. Let’s pretend he hasn’t been working with bridges for over 17 years. Let’s pretend he didn’t work on replacing at least 20 of the 133 bridges damaged during the first Gulf War. Let’s pretend he’s wrong and the cost of rebuilding this bridge is four times the number they estimated- let’s pretend it will actually cost $1,200,000. Let’s just use our imagination.

A week later, the New Diyala Bridge contract was given to an American company. This particular company estimated the cost of rebuilding the bridge would be around- brace yourselves- $50,000,000 !!

Something you should know about Iraq: we have over 130,000 engineers. More than half of these engineers are structural engineers and architects. Thousands of them were trained outside of Iraq in Germany, Japan, America, Britain and other countries. Thousands of others worked with some of the foreign companies that built various bridges, buildings and highways in Iraq. The majority of them are more than proficient- some of them are brilliant.

Iraqi engineers had to rebuild Iraq after the first Gulf War in 1991 when the ‘Coalition of the Willing’ was composed of over 30 countries actively participating in bombing Baghdad beyond recognition. They had to cope with rebuilding bridges and buildings that were originally built by foreign companies, they had to get around a lack of raw materials that we used to import from abroad, they had to work around a vicious blockade designed to damage whatever infrastructure was left after the war… they truly had to rebuild Iraq. And everything had to be made sturdy, because, well, we were always under the threat of war.

Over a hundred of the 133 bridges were rebuilt, hundreds of buildings and factories were replaced, communications towers were rebuilt, new bridges were added, electrical power grids were replaced… things were functioning. Everything wasn’t perfect- but we were working on it.


http://riverbendblog.blogspot.com/20...g_archive.html