the tremendous CON JOB by the Kleptocrats should have been THE issue for midterm elections

Six Questions for Gordon Adams on the Real Cost of the "War on Terror"
by Ken Silverstein
Posted on Thursday, August 3, 2006
Harper's Magazine
http://harpers.org/sb-six-questions-for-gordon-adams-1154646051.html

Gordon Adams was the senior White House budget official for national security and international affairs from 1993 to 1997. He is a Fellow of the Woodrow Wilson International Center for Scholars and is writing a book on national security budget planning. He responded to a series of questions about the enormous sums of money being spent on the war on terror, and the Enron-style budgetary trickery being used by the Bush Administration to obscure the war's true cost.

1. How much money has the United States spent fighting the wars in Iraq, Afghanistan, and the broader war on terrorism, and how much more can we expect will be allocated over the foreseeable future?

Including all the funds Congress has voted this year, we will have spent $437 billion on Iraq, Afghanistan, and other parts of the war on terror since 2001, about $1,500 for every American. All this despite Paul Wolfowitz's promise that the war would be over quickly, the troops home soon, and that the reconstruction would be self-funding, thanks to the sale of Iraqi oil supplies. Back in 2003 the President's economic advisor, Larry Lindsay, predicted that the Iraq adventure would cost more than $100 billion. He was fired, in part, for saying it, yet he greatly underestimated the cost. Spending on Iraq alone makes up over 70 percent of the $437 billion, with Afghanistan costing another 20 percent and the rest for counter-terror operations elsewhere in the world. Another way of looking at it is that funding for Iraq, Afghanistan, and the war on terror accounts for 20 percent of all the funds the Defense Department has spent over the past five years. The Congressional Research Service estimates conservatively that we might spend another $371 billion on these operations through 2016.

2. How closely do the Administration and the Congress scrutinize budget requests for all that money?

Virtually all of this money has been authorized by Congress as "emergency supplemental" funding. That is supposed to mean "we didn't expect it and we need it right away, so don't waste time with the normal budget process." And that is how it has been done. The funding request is prepared at the top of the Defense Department, but does not go through the regular internal budget planning process; it is waved through the White House, and lands - with minimal justification - on congressional desks. Normally, the defense budget is reviewed three times - by the Budget Committee, the Armed Services Committee, and the Appropriations Committee. Emergency supplementals skip the first two committees and go straight to the money guys - the appropriators. Over the past five years, the appropriators have held virtually no public hearings on the Iraq money; they just mark it up and push it through for a vote. So nobody is minding the store the way they should.

3. Is there any way of knowing exactly how that money has been spent?

Not really. The Defense Department, which has received over 90 percent of the $437 billion, has stiffed Congress for two years on a requirement that Congress voted into law to demand regular reporting on how they are spending the money. So, aside from anecdotal evidence, we don't really know what happened with the money. The State Department reports every quarter on how it plans to spend the relatively small share of funds it has received for reconstruction in Iraq (about $27 billion). But it doesn't tell Congress or the public how it was actually spent, and we rely on the small office of the Special Inspector General for Iraq Reconstruction to tell us how all that money is being spent.

4. Is the Pentagon and/or the Bush administration taking advantage of this process to fund pet projects that it might have a hard time winning support for through the normal appropriations process?

The Administration has shoved into the emergency supplemental request things they should be able to plan for on a regular basis and request through the normal budget process: repair and replacement of equipment being used in Iraq, buying new helicopters and Marine aircraft, restructuring the Army into brigades, rather than divisions, and buying new equipment for future Army needs. Some of these items have been in the works for years; all can be planned; all of them should be in the regular budget. As for the Congress, they play "three card Monte" with the emergency supplementals - they cut the regular defense budget so they can fit it into their own overall budget limits and control the deficit; then they add the money they cut back into the supplemental, which doesn't count against the limits, but adds to the deficit.

5. Have previous administrations relied on such sleight of hand to fund wars?

The Congressional Research Service looked at that question and found that in every previous war, since World War II, after one or at the most two years, the [President] planned and requested war funding from the Congress through the regular budget process. This time we are doing something new and dangerous.

6. What are the implications of all this for budget planning and public awareness of how tax dollars are being spent?

Putting 20 percent of our defense dollars beyond standard scrutiny has broken the budget planning process. The defense budget that is published is incomplete and meaningless and the emergency supplementals are based on a "trust me" system. As a result, our defense spending is dishonest and out of control.
***

Cheney's Halliburton Loses Its Iraq Cash Cow
By Charlie Cray
posted on TomPaine.com
Posted on July 31, 2006

Recently, the Army announced with much fanfare that it was canceling the monopoly logistics contract that Halliburton/KBR has used to bilk U.S. taxpayers since the occupation of Iraq began. The contract will be broken up and divided among at least three different companies, but it’s not clear that this will make much difference to taxpayers, or even that Halliburton will stop making a killing.

The new policy is, in effect, tacit recognition of the epidemic of waste, fraud and poor contract oversight that have plagued the Iraq occupation from the start.

It vindicates key congressional critics, such as Sen. Byron Dorgan, D-N.D., and Rep. Henry Waxman, D-Calif., whose dogged persistence has exposed a cornucopia of corruption associated with contracts like Halliburton's. Yet, if the history of the Iraq contracts so far is any indication, that’s about as much as can be read into the policy.

The history of Halliburton's other major contract in Iraq - the oil contract - indicates the need for skepticism. It is well known that Halliburton received its first oil contract (RIO I) as the result of a dubious no-bid contract ordered by top Pentagon officials (including Paul Wolfowitz) - a decision that was "coordinated with the vice president's office," according to a Pentagon e-mail uncovered by Judicial Watch.The rest, as they say, is history.

After getting a leg up on all potential competitors, KBR also used its incestuous relationship with the Army Corps of Engineers to extract a second no-bid oil contract (RIO II).
The fix was in, according to the Corps' top civilian contracting expert, Bunnatine Greenhouse: "I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career."

Greenhouse exposed the collusive relationship at an unofficial congressional hearing held by the Democrats last June (no official committee has yet chosen to invite her to testify), before she was demoted for speaking out.
As was the case with the oil contracts, Halliburton remains eligible to bid for the new logistics contracts in Iraq, despite a horrendous record of dubious cost overruns, waste, employees who took kickbacks, the torching of $85,000 trucks that required only minor repairs, $45 cases of soda, $100 per bag of laundry, and evidence that Halliburton served contaminated water to the troops. All of this and so much more have been uncovered by the Pentagon’s auditors, the Inspector General for Iraq Reconstruction, numerous whistleblowers, Waxman and Dorgan, and plenty of outside investigators, including my colleagues at Halliburton Watch.

The point is that in Halliburton's case, there is more than enough basis for suspension or debarment from future contracts.
Yet the fact remains that with weak oversight, it's impossible to imagine anything will change. In fact, it could get worse, especially if the responsibility for oversight itself is outsourced.
With the network of contract cronyism and subcontracting ties in Iraq and elsewhere, it will be hard to find any contractor to conduct such oversight that does not have a significant conflict of interest. Waxman, Dorgan and other members have already identified this conflict of interest in other Iraq-related contracts.

Meanwhile, the powerful Republicans who control key committees in Congress have staunchly resisted all calls for in-depth investigations, while rebuffing numerous attempts by Sen. Dorgan to establish a special Senate investigative committee on war profiteering, modeled after a similar committee established by Harry Truman in World War II. The last time Dorgan raised his proposal was in May, when it was shot down in a strict partisan vote.

Leading Senate Democrats, including Dorgan, Durbin, D-Ill., Harry Reid and Pat Leahy have also introduced a comprehensive contracting reform proposal - The Honest Leadership and Accountability in Contracting Act of 2006 (S. 2361). The bill would establish criminal penalties for war profiteering, require that lawbreaking companies be excluded from any new contracts and protect whistleblowers from retaliation, among other provisions. It was brought up for a vote during the Senate's consideration of the 2007 Defense bill, and similarly shot down by the Republican Congress’ highly partisan Halliburton protection racket.

The only contract reform bill that continues to survive with bipartisan support is the Federal Funding Accountability and Transparency Act (S. 2590) - a proposal introduced by Sens. Barack Obama, D-Ill., and Tom Coburn, R-Okla., with support from other Republicans including John McCain. This bill would require the White House Office of Management and Budget (OMB) to create a publicly available database that tracks federal spending as well as the entities that receive federal funds. A useful proposal, but quite modest when measured against the epidemic of contracting abuses.

“We have not done the oversight,” Dorgan suggests. "I think part of it is because we have one-party rule in this town - the White House and the House and Senate. Nobody wants to embarrass anybody. But the fact is there is such massive amount of money that is going out the door in support of these contracts - sole-source, no-bid contracts that have promoted waste. And nobody wants to take a second look at it. Nobody wants to see what is going on."

Because Halliburton remains eligible to bid on any of the new Iraq logistics work, there is every reason to watch for new scams invented to circumvent the Potemkin-like oversight asserted by the Pentagon. For example, when the buzz about breaking up the monopoly contract began last year, Halliburton's CEO David Lesar, a former partner at Arthur Andersen suggested: "If we do choose to rebid, we're going to jack the margins up significantly."

Another problem with outsourcing oversight is that all kinds of fraud can be hidden under layer after layer of subcontracts, especially when the subcontractors are incorporated in different countries all over the world.

It may be difficult for anyone but the best forensic accountant to determine if the other contractors and their subcontractors have no connection to Halliburton. After all, we're talking about a company experienced at using offshore subsidiaries and tax haven accounts to avoid restrictions on doing business in Iran and who hid a $180 million bribery scheme in Nigeria. Halliburtion is a company that knows how to hide its dirty linen from inattentive eyes. Lesar and his colleagues are plenty confident they can continue business as usual despite the stepped up attention.

U.S. taxpayers, at least, deserve better. If the congressional protection racket that surrounds Halliburton is willing to play hardball, then Democrats should up the ante. Rather than conceding defeat, they should push for tougher reforms to demonstrate what a difference a midterm election can make. As leverage they should continue to expose the culture of corruption that has gutted all kinds of enforcement standards and procurement policies that are merely sweetheart deals and just plain giveaways to former government workers turned kleptocratic contractors.

Charlie Cray is the director of The Center for Corporate Policy in Washington, D.C.
© 2006 Independent Media Institute. All rights reserved.View this story online at: http://www.alternet.org/story/39567/