Accountable Strategies blog

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Archive for October, 2008

Why hasn’t Halliburton come up more in the presidential campaign?

Posted by David Kassel on October 28, 2008

John McCain has repeatedly sought to portray Barack Obama as a proponent of earmark and pork barrel spending, using the famous and inaccurate $3 million overhead projector example in the debates.

It would have been nice had Obama hit back on McCain’s apparently extensive ties to U.S. military contractors in Iraq.   Now, there’s some real pork to talk about.

A 2005 report by the Congressional Committee on Government Reform stated that government auditors had found that “questioned and unsupported” costs by Halliburton alone exceeded $1.4 billion under just two Iraq reconstruction contracts.  As of 2007, there was more than $10 billion in questioned and unsupported costs relating to Iraq reconstruction and troop support contracts, according to a Government Reform Committee hearing transcript. 

The McCainSource blog, by the way, details McCain’s ties to military contractors, noting that the top 10 defense contractors alone funneled $216,259 in political contributions to him.  And McCain’s top advisers and fundraisers have been paid millions of dollars to lobby the Pentagon, the White House and Members of Congress.  As The McCain Source blog noted, McCain opposed several measures to hold contractors accountable, including this vote to create a Senate committee to investigate contractor payments in Iraq and Afghanistan.

Yet, Obama has made little mention on the campaign trail of the lack of oversight of contractors and the resulting drain of U.S. resources in contracts with them. The history in Iraq of Halliburton alone could have been a major campaign issue.

The Government Reform Committee report noted that Halliburton had three multi-billion dollar contracts in Iraq. One of them, a sole-source contract, was awarded in secret in March 2003 to Halliburton’s subsidiary, Kellogg Brown and Root.  The Government Accountability Office reported that the Defense Department paid more than $220 million in “questioned” costs under it.

According to the Committee, all three of Halliburton’s major contracts in Iraq have been “cost plus award fee,” or “cost-plus,” meaning that Halliburton is reimbursed for costs it incurs under the contracts and then receives its profit, or fee, as a percentage of those costs.

The Committee report stated that former Halliburton employees have provided information to Congress that the company charged $45 for cases of soda, billed $100 to clean 15-pound bags of laundry, and housed its executives at a five-star hotel in Kuwait.  Halliburton truck drivers have testified that the company “torched” brand new $85,000 trucks rather than perform relatively minor repairs and regular maintenance on them.  Halliburton procurement officials described the company’s motto in Iraq as “Don’t worry  about price. It’s cost-plus.”

Meanwhile, the Special Inspector General for Iraq Reconstruction reported that under another Iraq reconstruction contract, Halliburton-subsidiary KBR billed the government for $52 million in administrative costs during a nine-month period of inactivity, before it was issued a task order.

There’s clearly a lot of information out there from government sources about these examples of real pork.  It just isn’t getting talked about for some reason.


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