folo

Think again:

WASHINGTON — The Army official who managed the Pentagon’s largest contract in Iraq says he was ousted from his job when he refused to approve paying more than $1 billion in questionable charges to KBR, the Houston-based company that has provided food, housing and other services to American troops.

The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Mr. Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Mr. Smith refused to sign off on the payments to the company. ‘They had a gigantic amount of costs they couldn’t justify,’ he said in an interview. ‘Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that.’

But he was suddenly replaced, he said, and his successors — after taking the unusual step of hiring an outside contractor to consider KBR’s claims — approved most of the payments he had tried to block. …

As you may know, KBR used to be called Kellogg, Brown and Root. It’s a subsidiary of Halliburton (CEO during the Clinton years, Dick Cheney). Here’s a passage from the middle of a long list of investigations noted at HalliburtonWatch.org:

• The Pentagon’s Defense Contract Audit Agency (DCAA) completed a comprehensive review of Halliburton’s system for billing the government for meals served to the troops in the Middle East. The DCAA said Halliburton billed the government for 36 percent more meals than was actually served to the troops while an internal KBR report said it had overcharged by 19 percent. In May 2004, the DCAA recommended that the Pentagon refuse to pay Halliburton for the overcharges.
• An investigation by the inspector general of the now-disbanded U.S. Coalition Provisional Authority (CPA) found that Halliburton lost $18.6 million worth of government property in Iraq because of mismanagement. About a third of the government items under Halliburton management in Iraq, including trucks, computers and office furniture have disappeared.
• The U.S. Justice Department is investigating Halliburton for possible over billing on government services work done in the Balkans from 1996 through 2000. The charges stem from a General Accounting Office report that found in 1997 that Halliburton billed the Army for questionable expenses for work in the Balkans, including charges of $85.98 per sheet of plywood that cost $14.06. A follow-up report by the GAO in 2000 found inflated costs, including charges for cleaning some offices up to four times a day.
• The Army awarded Halliburton a no-bid contract in March 2003 despite a secret Pentagon report which found the company had “significant deficiencies” that could lead to defrauding the government. The Pentagon’s report was given to Hearst News Service under the Freedom of Information Act over Halliburton’s objections.
• The Department of Defense repeatedly warned Halliburton’s subsidiary, KBR, that its food and the kitchens where it is prepared are “dirty,” NBC News reported. A Pentagon report found that KBR’s promises to clean up its food and kitchens “have not been followed through.”

Did any of that bother KBR or its parent? Silly question. In August 2004, when Charles Smith had his assistant Mary Beth Watkins hand-deliver a letter to KBR warning it to provide data justifying its expense claims or risk losing performance bonuses of up to 15%, a KBR official took one look at the letter and said, ‘This is going to get turned around.’

The next morning, Mr. Smith said he got a call from Brig. Gen. Jerome Johnson … ‘He told me, ‘You’ve got to pull back that letter,’ Mr. Smith recalled. General Johnson declined to comment for this article.

A day later, Mr. Smith discovered that he had been replaced when he went to a meeting with KBR officials and found a colleague there in his place. Mr. Smith was moved into a job planning for future contracts with Iraq. Ms. Watkins, who also declined to comment, was reassigned as well.

hilzoy is right, what’s happened here exceeds mere corruption.

In fact, KBR did at one point threaten to stop providing basic supplies — little things like food — to our troops in Iraq. (I’ve put the account of this episode below the fold.) What that means is, to my mind, even more scandalous than simple corruption by a company with good connections. It means that we have outsourced absolutely critical functions to private companies, companies which, unlike military personnel, can threaten to stop doing their jobs without facing courts-martial. In wartime, when a company is doing something as important as providing food to our troops, the military has no choice but to cave to their demands. (That’s one reason I said it was more scandalous than simple corruption: it virtually ensures that that corruption will occur, while simultanously leaving our troops at risk.)

To my mind, we should not allow any company to assume any critical function in wartime without putting in place some guarantee that it will go on performing that function whether it wants to or not. If it’s impossible to do that legally, then that function should not be outsourced. Period. We cannot allow any private company to threaten to stop supplying our troops during wartime. But we have.

. . . Meanwhile, Don Rumsfeld having gone to war “with the Army you have,” our soldiers were scavenging pieces of metal, trying to rig something like up-armoring for their Humvees. Tuff, guys, your Army answers to Halliburton, not vice versa.

I say: even out of office, Rumsfeld, Bush, and Cheney should answer to us for what they’ve done (here’s a challenge: limiting the articles of impeachment to a manageable few. And yes, were it left to me, Pelosi and Reid would join their predecessors Hastert and Frist in the dock as aiders-and-abettors). Gott in Himmel, the stink of these people.