Sunday, January 28, 2007

Finally! Contractor Abuse Investigation

The Associated Press is reporting that the Army has set in motion as many as fifty criminal probes into contractor abuses in Iraq, Afghanistan, and Kuwait.

Senior contracting officials, government employees, residents of other countries and, in some cases, U.S. military personnel have been implicated in millions of dollars of fraud allegations ...

Battlefield contractors have been implicated in allegations of fraud and abuse since the war in Iraq began in spring 2003. A special inspector general office that focused solely on reconstruction spending in Iraq developed cases that led to four criminal convictions.

Imagine that! After four years of contractor fraud stories, anecdotal because the Republican-dominated Congress refused to hold hearings or establish a Truman-like Commission to detect and deter such abuses, the IG's office got four whole convictions. Wow, war profiteering criminals must be on the run now.

The Pentagon has viewed outsourcing a wide variety of military tasks as much more efficient, leaving troops trained in combat to the business of war.

But the Government Accountability Office reported in December that the military has been losing millions of dollars because it cannot monitor industry workers in far-flung locations.

The Defense Department's inability to manage contractors effectively has hurt military operations and unit morale and cost the Pentagon money, the GAO said.

Some 60,000 contractors have been supporting the Army in Southwest Asia, which includes Iraq. That compares with 9,200 contractors in the 1991 Persian
Gulf War.

Commanders are often unsure how many contractors use their bases and require food, housing and protection, according to the report. One Army official said the service estimates losing about $43 million each year on free meals provided to contractors who also get a food allowance.Bold added.

There's a WTF moment for you. Free meals to the tune of $43 million a year to people who are being paid a food allowance? Commanders don't know how many of these folks to plan for? And of course the number of contractors in this article is substantially smaller than has been reported in other sources.

In fact, the most recent figure is that some 100,000 contractors, enough to compete in number with the our military, are in place in Iraq.
This article deals with the great cost of covering the insurance required for every single contractor in Iraq.
U.S. taxpayers pay the premiums to insurance companies for these contractors. When the contractors are killed or injured in war, taxpayers pay the benefits, too ...

Bunny Greenhouse, a top contracting officer for the Army Corps of Engineers, said that insurance companies have charged exorbitant premiums, considering that it is taxpayers who are taking the risks.

"The insurance companies are getting over on us," Greenhouse said. "This has been accepted because no one looked into it."Bold added.

The cost of insurance for contractors on the battlefield is at record levels; 100,000 contractors are in Iraq now, far more than in the Persian Gulf war in 1991, when 9,200 private contractors were used. This unprecedented use of private contractors -- driven in part by the relatively small number of troops deployed to Iraq -- is a mounting, open-ended tab for taxpayers.

It is impossible to say how much the insurance costs. No agency regulates the premiums, and no one tracks the overall costs ...

The number of contractors covered by the insurance has grown more than sevenfold in the past five years and will continue to grow ...

In the first gulf war, seven contractors were killed. As of October, 646 U.S.-financed private contractors had been killed in Iraq. Most deaths stem from acts of war ... This allows the insurance companies to ask the U.S. Department of Labor to pay all future benefits and reimburse the insurers for all payments, plus 15 percent for processing the claims.

Sounds like there's room for more investigation. I keep waiting for Congress to start looking into these issues. It is apparent that the mere threat of Congressional oversight has suddenly jump-started the fraud investigations, but there is room for hundreds of probes into this mess.


RoseCovered Glasses said...

Your post has some excellent points. Here's some additional data:

The Department of Defense, headquartered in the Pentagon, is one of the most massive organizations on the planet, with net annual operating costs of $635 billion, assets worth $1.3 trillion, liabilities of $1.9 trillion and more that 2.9 million military and civilian personnel as of fiscal year 2005.

I am a 2 tour Vietnam Veteran who recently retired after 36 years of working in the Defense Industrial Complex on many of the weapons systems being used by our forces as we speak.

It is difficult to convey the complexity of the way DOD works to someone who has not experienced it. This is a massive machine with so many departments and so much beaurocracy that no president, including Bush totally understands it.

Presidents, Congressmen, Cabinet Members and Appointees project a knowledgeable demeanor but they are spouting what they are told by career people who never go away and who train their replacements carefully. These are military and civil servants with enormous collective power, armed with the Federal Acquisition Regulation, Defense Industrial Security Manuals, compartmentalized classification structures and "Rice Bowls" which are never mixed.

Our society has slowly given this power structure its momentum which is constant and extraordinarily tough to bend. The cost to the average American is exhorbitant in terms of real dollars and bad decisions. Every major power structure member in the Pentagon's many Washington Offices and Field locations in the US and Overseas has a counterpart in Defense Industry Corporate America. That collective body has undergone major consolidation in the last 10 years.

What used to be a broad base of competitive firms is now a few huge monoliths, such as Lockheed Martin, General Dynamics, Northrop Grumman, Raytheon and Boeing.

Government oversight committees are carefully stroked. Sam Nunn and others who were around for years in military and policy oversight roles have been cajoled, given into on occasion but kept in the dark about the real status of things until it is too late to do anything but what the establishment wants. This still continues - with increasing high technology and potential for abuse.

Please examine the following link to testimony given by Franklin C. Spinney before Congress in 2002. It provides very specific information from a whistle blower who is still blowing his whistle (Look him up in your browser and you get lots of feedback) Frank spent the same amount of time as I did in the Military Industrial Complex (MIC) but in government quarters. His job in government was a similar role to mine in defense companies. Frank's emphasis in this testimony is on the money the machine costs us. It is compelling and it is noteworthy that he was still a staff analyst at the Pentagon when he gave this speech. I still can't figure out how he got his superior's permission to say such blunt things. He was extremely highly respected and is now retired.

The brick wall I often refer to is the Pentagon's own arrogance. It will implode by it's own volition, go broke, or so drastically let down the American people that it will fall in shambles. Rest assured the day of the implosion is coming. The machine is out of control.

If you are interested in a view of the inside of the Pentagon procurement process from Vietnam to Iraq please check the posting on this blog entitled, "Odyssey of Armaments"

On the same subject, you may also be interested in the following sites from the "Project On Government Oversight", observing it's 25th Anniversary and "Defense In the National Interest", insired by Franklin Spinney and contributed to by active/reserve, former, or retired military personnel.

Catzmaw said...

Wow, your information is fantastic. I hope you caught Senator Webb on Face the Nation today saying he's going to push for a full accounting of the contracting process and its excesses.

Lindsey said...

Thanks for posting about Bunny Greenhouse. I thought you might be interested in this new letter Bunny wrote after she was retaliated against for testifying to Congress last week. Bunny is calling on all Americans to support whistleblower protection for federal employees. To read her letter go to

Catzmaw said...

Thanks for the support, Lindsey. Imagine, it's only two years since I posted this diary and we're actually talking about protecting people like Bunny. Progress? I hope so.

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