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Monday, October 02, 2006

House Stages Sham Hearings on Iraq Contracts as Heat Rises on War Profiteers - by Charlie Cray

After being AWOL for over two years, the House Committee on Government Reform finally held a hearing about the botched Iraq reconstruction contracts on Thursday.

Although the hearing put some light on a few serious issues, given the context, the hearing was basically a sham, a last-ditch effort to muffle the growing outrage over war profiteering stirred up by Senator Dorgan's series of ten hearings, the recent debut of Iraq for Sale, the mainstream media's growing interest in the Halliburton convoy attacks and daily war profiteering outrages like the recent report that the Lincoln Group received another contract after getting caught paying Iraqi newspapers to plant propaganda. (So much for Bushco's respect for freedom of the press in their ongoing effort to democratize Iraq.)

So why was the hearing a sham? Because it came too late in the session to result in any significant legislative reforms.

Also, ask yourself why Bechtel and Blackwater were happy to come testify without having to be subpoenae'd, unless they knew they'd be treated with velvet gloves.

Continued on "Print Article and/or Read More" below >>>

This was the first hearing the committee has held since July of 2004! In the last two years the news has been saturated with story after story about botched reconstruction projects, incompetence, cronyism and corruption at the CPA, a court decision that threatens to gut the nation's principal anti-fraud law (the judge's decision in the Custer Battles case), and an endless whistle-blower driven trail of waste, bribery, fraud and human rights abuses.

So while all this has been going on, where have these guys been?

Apparently committee chair Tom Davis (R-VA) believes it is more important to hold hearings about other topics, including the use of steroids in professional sports (4 hearings since mid-2004) and the country's inventory of flu shots (3 hearings).

Thus, it was pretty hard not to laugh when Davis claimed in his opening remarks that "since 2004, the Committee has been engaged in continuous and vigorous oversight of contracting activities in Iraq." Perhaps Davis could have spent a little less time meeting with clients of the consulting firm that employs his wife and more time digging into all the waste and fraud, rather than ,merely claiming to do so with a token hearing before the committee closes down for the pre-election break.

And just what did Davis and the committee decide to focus on when they finally held their hearing?

Mostly, it was old news, including the fact that the construction of a children's hospital in Basra is almost a full year behind schedule and more than $50 million over budget. Although it was nice to see Bechtel try to explain what happened, the company has already been dropped from that contract.

Davis was also kind enough to remind U.S. taxpayers that "the construction of 150 primary healthcare centers across Iraq has consumed over $180 million but has resulted in the completion of only six centers and at best that Iraqis will end up with only 20 of the health facilities planned under this contract." He forgot to mention that one reason the health sector has suffered from mismanagement is because Laura Bush pushed AID to construct a monumental high-tech children's hospital in Basra instead of a network of clinics that Iraqi medical professionals said was their most important priority.

As Richard Garfield, a public health professor at Columbia University and one of the world's leading experts on Iraq's health care system, told my fellow HuffPo blogger T. Christian Miller, "It was clear that this new hospital, a symbol of American support, would not provide services for at least eight years. It was cynical." (See page 48 of Miller's superb new book, Blood Money)

Other troubled projects discussed on Thursday included a $218 million emergency communications network that does not allow citizens to call for emergency services and multiple water projects that are chronically over budget and behind schedule. (Somehow Davis didn't catch the fact that roaming death squads being run out of the Ministry of Interior -- which received that money -- have been seen with sophisticated radio equipment.)

Stuart Bowen, the hardworking Special Inspector General for the Reconstruction of Iraq, released an audit during his testimony that revealed that Parsons had botched the refurbishment of a police academy so badly that raw sewage is running down the walls.

Bowen also reminded listeners that Iraq has lost $16 billion in oil sales not just because of insurgent attacks, but because contractors botched the job of repairing the country's oil production infrastructure.

Bowen has generally done a tremendous job overseeing the reconstruction contracts. But for some unknown reason, he has been reluctant to directly finger Halliburton for the al-Fatah pipeline disaster.

Bowen has gone aggressively after many contractors, including KBR, but for some reason when it comes to naming names in his reports to Congress and hearings, he pulls punches. It makes one wonder if that might be explained by Bowen's partisan background -- he worked for the Bush/Cheney 2000 campaign, and for Bush back in Texas before that. Whatever his reason, Bowen chose to abide by Davis' unstated rule on Thursday: Don't use the H word.

As Davis said, "Some on the other side ... play "hit and run" oversight with inflammatory press releases and one-sided presentations from self-appointed watchdogs and whistleblowers," Davis said in his opening remarks. "They oversimplify, distort and prejudge the outcome of complex contracting processes to fit the pre-ordained conclusion that everything goes wrong in Iraq. And, it will never go without saying that it's all Halliburton's fault."

Of course not everything is Halliburton's fault. But neither is it true that Halliburton can do no wrong.

At least Davis was honest enough to point out that the "challenging security environment cannot excuse otherwise avoidable problems and preventable waste. Original plans proved wildly optimistic. Only about 55% of the planned water projects and about 70% of the planned projects in the electricity sector have been completed. According to the Special Inspector General for Iraq Reconstruction, we keep spending more and building less because cost estimates are still inaccurate, reconstruction priorities and funding allocations keep shifting, and contractor performance is not being closely monitored."

"So we need to learn how contracting systems designed to work here are being adapted to function under very different, hostile circumstances over there. We have to ask whether contractors have over promised and underperformed or whether the companies were stuck in an environment where success was virtually impossible."

The problem is that today, September 30, is the final day that any new contracts can be signed. Thus, unless Davis urges his colleagues to appropriate more money, his point is moot.

No, instead Davis decided it was important to counter critics of the administration's failure to complete its Middle East Marshall Plan (in the words of AID head Natsios) by pointing out that "things have been built, and some of our witnesses today will testify that, despite many challenges, we are progressing - slowly but surely."

Other members of the committee managed to raise some new and interesting points, including the fact that because of the layer-upon-layer structure of subcontracting, both the Army and KBR are technically able to deny that they have any relationship to Blackwater, the security contractor whose employees were ambushed in Fallujah.

Although Blackwater was not authorized to guard convoys or carry weapons, Rep. Chris Van Hollen (D-MD) "held up a copy of Blackwater's contract, which said Blackwater was ultimately working for the Army's main contractor in Iraq, Kellogg Brown & Root, with two companies in between."

Why has it taken this long to get to this information out about the Fallujah attacks? Why hasn't Davis used the committee's subpoena authority to demand answers. Rep. Henry Waxman has been asking the Army for documents and answers to questions related to the contract since November 2004? Why hasn't the committee backed him up? Isn't that what taxpayers expect?

No, instead faling for this last-minute showcase hearing, it's getting to be time we asked ourselves, if those with the power refuse to do their job, we should make them turn that power over to someone who can and will seek higher standards of accountability.

Charlie Cray is the director of the Center for Corporate Policy in Washington, DC. He helped establish Halliburton Watch, and is co-author of The People's Business: Controlling Corporations and Restoring Democracy (Berrett-Koehler), and is a former associate editor of Multinational Monitor magazine.

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House Stages Sham Hearings on Iraq Contracts as Heat Rises on War Profiteers


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