The UN, US and Iraq IV

nimh, I pointed out the Werewolves came to naught. The comparison is not similarity of effect between the Iraqi and German Post-War resistance, but of intent. Hitler's plan was unrealized. Saddam's plan has seen some successes. The nature of the occupation of the two nations is quite different, as well; there is no brutal Soviet Occupation Force on hand to make the US troops seem a better yoke to bear all around.

I often state my point of view here. Sometimes I mention my kid. Some might be interested in something from his point of view.

Out the office window


The Americans have landed

How do the war supporters reconcile their desire for a war of revenge
(remember 9/11!), to turn Iraq, all of it, into a parking lot, with their
later claim of philanthropic war of "liberation?"

These are diametrical objectives, aren't they?

When I said Bush was begging for help, Timber pointed out that no one was begging.

Well ok, pleading. This from BBC this morning:

"About 15,000 US soldiers and reservists have been told to prepare for service in Iraq , as other countries hold back from pledging troops.
The announcement follows earlier statements by senior US officers this week, that National Guard and Reserve troops would be needed.

Other countries failed to respond to President George W Bush's plea for help for help in stabilising the country."

Yes, I can buy into the premise... I also get the gut feeling that Bush knew before he pulled off the y2k coup that he would have no chance of winning the 2004 election ... didn't want to for that matter. IMHO this war is a money grab that makes pappy Bush, Jeb, Raygun and their merry band seem like small freakin potatoes with the S&L crisis. A hundred and sixty billion in the fist six monhs. I was wrong, i's not about oil .... it's nothing but cold hard cash and it's going to be a long time before these dots are connected.

Folks are welcome to make their own assumptions and to draw their own conclusions. Folks who ascribe mercenary venality and petty revenge to the US motivation for and conduct of the current Iraq intervention do themselves, the People of Iraq, and the overall campaign against Global Terrorism grave disservice, IMO. That's my assumption, based on conclusions drawn from information I have garnered ... information based on facts, figures, documetary evidence, and diligent following of Hard News as opposed to Agenda-driven Opinion.

A couple of observations: Halliburton's role in Iraq resulted from the provisions of the LOGCAP program, a system whereby firms regularly bid to be incuded among a list of contractors "On Call" to provide, on contigency basis, near, mid, and long-term logistical services in support of US operations throughout the world as such services become necessary. The program provides a ready pool of resources and capabilities available for immediate deployment, thus avoiding the time-consuming, wastefully redundant process of soliciting bids for such services in piecemeal fashion as individual circumstances arise. Halliburton, under LOGCAP, was selected as the prime contractor for logistic support in The Balkans, for instance. No specific bid for Iraqi Reconstruction was necessary, as Halliburton was already a sucessful bidder to LOGCAP ... ready and able to go to work immediately. A specific-bid approach would still be in the developmental phase, mired in studies, projections, disclosures, analyses, and evaluations. Halliburton and subsidiaries are, however, at work rebuilding Iraq, not jockeying among a pack of prospective contractors while Iraq waits. It should be noted too that profits under LOGCAP are limited to a range between 2% to around 7%, largely contingent upon time-and-performance bonuses and awards. Greater return-on-investment is readily and regularly achieved in the private sector, and, incidentally, that Halliburton's direct costs so far have been far greater than had been anticipated, something which will negatively impact long-term return-on-investment.

Cheney stands to make no gain, nor, to be fair, to suffer no loss, from Halliburton's participation in Iraq's reconstruction. The benefit acruing to his sizeable stock options has been assigned to several charities, while Cheney has further eschewed any personal tax benefit from the resultant charitable contributions. Additionally, at his own expense, Cheney provided private insurance to guarantee the continuation of his deferred compensation (the delayed payment of monies already earned - in Cheney's case, earnings dating to 1999 and earlier) regardless of Halliburton's performance ... he has no stake whatsoever in the fortunes of the firm, win or lose.


Now, when it comes to macro-economics and global geopolitics, there are no easy answers. IMO, an awful lot of folks overlook that, and sieze on the first postulate which appears to reinforce their own prejudices, regardless of the facts.

I don't think anyone who heard or read Bush's speech to the UN could characterize it as begging or pleading.

I find interesting, if predictable, the machinations of Russia, France, and Germany, among others, to "Get past previous disagreements" and attempt to secure themselves a space at the feeding trough.

I thought, Bush and the US administration is seeking a compromise?!

No, Walter, "compromise" is not in the John Wayne wannabee lexicon. "With us or against us" is. More's the pity.

I think they are, to a degree, Walter.
France (possibly Germany) started by 'demanding' we get out of Iraq in a month.
They know now this is foolhardy and not in Iraq's best interests.
Bush hadn't budged on that.
They are coming around to Bush's ideas on the post-war--not the other way around.

But, I do think Bush places a higher value on relationships with these countries than it may appear. Bush is cozy with Putin today. I think we will see Bush make concessions on other issues to reaffirm ties with the world.

Gotta have the utmost respect for a man who referred to him as "Pooty-toot" on his first metting with him in 2001!

Please tell me you made that up.
If I hear Bush's adage about 'looking into putin's eyes' again, I'll hurl.

Sleep inducing?

Sleep inducing? No. Inconvenient to those committed to denigrating the US? Certainly.

Ah shucks, ruffling feathers Either your with us or you're a terrorist

I'm scavenging carrion, BTW :wink:

Timber, where did you get your info on Cheney? This discussion contradicts your statement


.



_____Related Links_____

• U.S. Corps of Engineers Iraq Operations
• U.S. House Committee on Government Reform Minority Office on Iraq Contracts
• Oil in Iraq: The Morning After
• Oil in Iraq: A Trillion Dollar Prize
• War in Iraq Special Report
• War in Iraq Transcripts
• Talk: Message Boards

Oil in Iraq: Role of Halliburton
Michael Dobbs
Post Staff Writer
Thursday, August 28, 2003; Noon ET

Halliburton, the energy services company that was headed by Vice President Dick Cheney, has received more than a billion dollars in government contracts in Iraq and stands to make hundreds of millions more in a controversial no-bid process. Halliburton has been somewhat of a political lightening rod given its close ties to the Bush administration. An analysis of data and documents by The Washington Post shows the company's Kellogg, Brown and Root subsidiary stands to make far more off Operations Iraqi Freedom than was previously disclosed.

The Washington Post's Michael Dobbs was online Thursday, August 28, at Noon ET to discuss Halliburton's role in Iraq, how the company won such lucrative projects and the increasing reliance on for-profit civilian contractors in managing the occupation.

A transcript follows.

Editor's Note: washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.


Michael Dobbs: Welcome to the on-line chat. I am happy to answer your questions about U.S. defense contractors in Iraq.

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Carpinteria, Ca: Mr. Dobbs- Thank you for your excellent report. Several questions: Why has the press basically ignored this story which reeks of conflict of interest? If this had occurred during the Clinton administration, there would be hearings, scandal, etc. Secondly, can you contrast Halliburton/Bush/Iraq with Brown & Root/LBJ/Viet Nam? I understand that the Brown brothers were instrumental in LBJ's early career and later profited enormously from contracts during the Viet Nam war. Thank you

Michael Dobbs: There has been quite a lot of reporting on this subject in the press, although nobody else to my knowledge has added all the figures up together recently. You are right that Brown and Root has a colorful history: before the company was taken over by Halliburton, it funneled money to LBJ, and was a major factor in his early rise to power, as documented by Robert Caro. Like other big defense contractors, Halliburton is a major campaign contributor, mainly to the Republican party.

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Arlington, Va.: Regrettably, the Iraqi commitment is and will be expensive.

Troops will remain in this region for years to come with some form of US presence permanently in place. Recently attention has been given to work provided by private contractors and the amount they have been receiving for these services without the scope and seriousness of this work being considered.

Why shouldn't the best companies and professionals who CAN complete this work effectively be awarded the contracts? And when will the news of dollars spent also carry the success stories and positive work that these SAME COMPANIES complete EVERY DAY under the harshest circumstances.

Thank You.

Michael Dobbs: I agree with you that it would be interesting to look at the work of Brown and Root on the ground in Iraq. That's difficult to do in Washington. Nobody disputes that they are providing a lot of real services to the troops, which the army can no longer provide, because of manpower shortages.

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Wash DC: I think the fact that Haliburton is getting all of these contracts in Iraq is just plain unfair. Are the soldiers that are being maimed going to be given any of the money? I think all of the soldiers in Walter Reed Hospital and elsewhere should be given a piece of the pie. In fact, I think the contracts should have been given to some of the Iraqi contractors.

Michael Dobbs: From the army's point of view, it is easier and more efficient to grant a whole series of contracts to one big company rather than bid each piece of work out separately. That was the point of the LOGCAP program that I write about in my article. The drawback to the system is that it is difficult for other companies to break into the business, and the bulk of the work tends to go to a small group of companies experienced in the ways of Washington.

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Cleveland, Ohio: Is there another company in the USA who could do the work that Halliburton is slated to carry out? I was under the impression that the oil & infrastructure work that they do is pretty exclusive & that they are the elite.

Michael Dobbs: It is true that there are not many companies with the global reach and expertise of Halliburton and Bechtel. If you are the 500-pound guerrilla in the field, you obviously have a built-in advantage.

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New York, N.Y.: Please explain the military procurement process and why these contract were awarded without competitive bidding.

Michael Dobbs: I explain this a bit in my article. To summarize, the Defense Department decided back in 1992 that it did not have the time to bid out every single contract for work arising from operations like Haiti or Bosnia. So it decided to negotiate a super-contract, known as LOGCAP, with a big company that could encompass a whole range of contingency works. In other words, the company agreed to be on call for the army. That system is essentially still in place, and Halliburton is the beneficiary of the super-contract.

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Baldwin, N.Y.: Do you think that this huge Halliburton deal in Iraq is just the latest in a string of shady dealings between Republicans and powerful corporations... I'm referring to Shulz on the board of Bechtel and Cheney's secret energy policy meetings.

Michael Dobbs: It is very difficult to prove "shady dealings," as you refer to them. Nevertheless, it is true that virtually all the big contractors have some kind of political connection, or make big campaign contributions.

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Torrance, CA: Military families have said that their sons and husbands are lacking adequate supplies, such as water (less than 3 liters a day), they are still eating MRE's, and the medical facilities in Germany for the wounded are very understaffed. How much of this is to Haliburton putting profit before the welfare of our troops.

Michael Dobbs: There have been complaints about the quality of the services provided to the troops. One big problem is that contractors are not bound by military discipline. If a soldier refuses to report for duty in a danger zone, he can be court-martialed. If a contractor backs out, the most that happens is that he doesn't get paid.

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Laurel: Does Vice-President Cheney have any ongoing relationship with Halliburton? Does he still own stock or options, or get a pension for life, or anything like that?

Michael Dobbs: I believe that Cheney sold his stock in Halliburton after he resigned from the company in 2000. However, he still receives deferred compensation from the company of around $160,000 as part of his retirement package.

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Takoma Park, Md.: I read that Cheney is still receiving money from Halliburton, upwards of $1 Million. Do you know if this is true?

Michael Dobbs: See my last response.

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Newark, Delaware: I find it increasingly worrisome how private sector for-profit corporations (PSFPC's) are taking over US military areas of national security infrastructure responsibilities. Iraq is not the 1st time!

This began some years ago in former Yugoslavia during the Clinton years, especially in Operation Allied Force in Kosovo. How much were those contracts and to whom were they issued, the same or similar entities?

Michael Dobbs: The practice of contracting out logistics operations in a major way dates to the end of the Cold War, and the downsizing of themilitary. The Balkans was a huge opportunity for contractors, but it looks as if Iraq will be even bigger.

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Washington, D.C.: It seems to me that one of the oddest things about the big post-war cleanup contracts in Iraq is how much focus is put on experience in putting out oil well fires. Both Halliburton and Bechtel have boasted of their expertise/experience in this area, and pointed to it as one of the reasons for sole-sourcing the work. But as I understand it, ALL of this specialized work is actually done by the same few subcontractors (Red Adair, Boots and Coots, Wild Well Control, Safety Boss), regardless of which corporate behemoth is the prime contractor. Am I missing something here?

Michael Dobbs: There are obviously other companies that could have been hired to put out oil well fires. According to the Army Corps of Engineers, Halliburton\Brown and Root got the contract because time was of the essence and they had already been commissioned to draft a plan on how to do the work. The Corps also says that some details of the plan to put out oil fires were originally classified, meaning that it was impossible to share it outside the government. Critics like Henry Waxman (D-CA) say this is all just an excuse to give the work to the Pentagon's favorite contractor.

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Cleveland Ohio: Income Taxes--Both Corporation and Individual Taxes. Will Hallibuton/Brown and Root have to pay income tax on profits made in Iraq? Will their personnel working in Iraq have to Pay Federal Income Tax on their earnings. Also, how about payroll taxes? In other words, are they helping to pay for the expense of having our military in Iraq and rebuilding Iraq? They do benefit from the war. Are they helping to pay for it?

Michael Dobbs: I assume that Halliburton shareholders will have to pay taxes on their dividends. Americans working abroad do not pay tax on the first $75,000 or so of their income, so much of their income is tax-free.

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Bowie, Md.: When I was studying the possibility of my mom & pop company getting governemnt contracts, one strategy mentioned (though not necessarily recommended) by a "how to get contracts" book was to low-ball a particular function described in the contract but that the contractor might not actually be called to fulfill.

Are there any LOGCAP functions that haven't been ordered, and might any of these not be money-makers for Halliburton?

Michael Dobbs: Low-balling is a fairly comman practice in bidding for contracts. On your second question, LOGCAP is expanding all the time. For example, according to the spreadsheet provided by the army, on August 9, Brown and Root won a work order for $14.9 million for helping to train a new Iraqi army. There is no upper limit to the amounts that can be awarded under LOGCAP.
On the negative side, I have been told by contractors that it often takes a long time to get paid by the Pentagon. In other words, they have to pay their employees\contract personnel from their own pockets, and then get reimbursed.

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Gambrills, Md:
"Services performed by Halliburton, through its Brown and Root subsidiary, include building and managing military bases, logistical support for the 1,200 intelligence officers hunting Iraqi weapons of mass destruction, delivering mail and producing millions of hot meals."

The issue isn't whether Halliburton can perform these services. The issue is whether it is appropriate or legal to expend federal tax dollars under a no-bid contract.

I find it difficult to believe that there aren't other companies out there that can't deliver the mail and reheat and distribute MRE's. The no-bid aspect of this is what stinks.

Michael Dobbs: The individual work orders, e.g. delivering mail, building an army base, training the IRaqi army, are not bid under LOGCAP. But the LOGCAP program was bid back in 2001: Halliburton was one of three companies that submitted proposals to the Pentagon. At that time, of course, nobody could foresee that the U.S. would be fighting a war in Iraq in 2003, and there would be a huge demand for contracting services.

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San Antonio. Tex.: George Shultz of Bechtel, along with Warren Buffet of Omaha, is now advising Arnold Schwarzenegger's campaign in California's recall election. What do you make of that? What does it say about the state of Republican politics? What does it say about business as usual?

Michael Dobbs: Not sure what to make of that. Warren Buffett was also an adviser to the late Kay Graham, and on the board of the Washington Post Co. She played tennis with George Shultz. So what?

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Oxford, U.K.: Mr. Dobbs, I'm interested in the nuts-and-bolts of your fascinating article. How did it originate? Did Waxman's office give you a copy of their Brown and Root contract spreadsheet, and then you got the most recent version? Or was this entirely an enterprise project on your part?

Michael Dobbs: I had been interested in the trend toward farming out U.S. Army logistic operations to private contractors. I called Waxman's office, which has been pursuing this story. They gave me some information, and the army gave me some more information.

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Washington, DC: Is there evidence that Brown and Root is less qualified than other potential bidders on these contracts, or that because of the lack of accountability they are overcharging for the work they are doing?

Michael Dobbs: The General ACcounting Office made some criticisms of Brown and Root, and the general contracting process, in the Balkans. I don't think there is much evidence that they are "less qualified" than other potential bidders. Indeed, they are probably more qualified in some ways, in the sense that they have a lot of experience in this business.

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Swampscott, Mass.: Do you believe anything illegal has taken place here?

Michael Dobbs: There is no evidence of any illegality.

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New York, NY: Did Congress approve of LOGCAP and isn't there any Congressional oversight of the program?

Michael Dobbs: I don't think that Congress signed off on individual LOGCAP contracts. They have debated the general issue, and the GAO, Congress's investigative arm, periodically looks into the question of how contracts are being awarded and implemented.

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Nairobi, Kenya: Excellent article and graphics package, but let me play the devil's advocate: Why not Brown & Root? How many other companies have the depth of experience and the capacity to do what Brown & Root does? And since the U.S. government bid process makes room for other companies to protest contract awards, have any of them ever protested the Brown & Root awards?

Michael Dobbs: It is true that only a few companies have the ability to mobilize quickly on the scale of a Brown and Root or a Bechtel, and build an army base from scratch in a few weeks. There have been periodic protests about contract awards but, as far as I know, nobody protested the 2001 LOGCAP award to Brown and Root. There has been more criticism of the Army Corps of Engineers award of the oil field rehabilitation contract to Brown and Root.

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Washington, DC: Are you aware of anyone who is keeping a running tab on the costs of the war and the rebuilding of Iraq? It seems the costs are pretty much skyrocketing out of control due to the mob rule that set in following the Sept. 11 attacks. But eventually that anger will cool down and people will want to see what all the damage comes to.

Michael Dobbs: Various think tanks are trying to keep tabs on this, but I am not sure there is a comprehensive running tab maintained by anyone.

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Portland, OR: You said:
However, he still receives deferred compensation from the company of around $160,000 as part of his retirement package.

Is that per year?

Michael Dobbs: Yes

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washingtonpost.com: Halliburton's Deals Greater Than Thought (Post, Aug. 28)

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Demarest, NJ: Mr. Dobbs:

You said in one of your answers that, when LOGCAP was negotiated, "of course, nobody could foresee that the U.S. would be fighting a war in Iraq in 2003, and there would be a huge demand for contracting services." But that's not true. Dick Cheney of Haliburton, and various others now in the Bush administration, could not only foresee it but helped bring it about.

Doesn't this no-bid contract idea set up a cycle, a vicious one for democracy, that companies grow rich from huge government contracts; then help finance elections to put their own people in power; who then make sure the companies get the policies (like the Iraq war) that keep them rich? I'm reading Kevin Phillips' "Wealth and Democracy" which traces this same pattern perniciously through our history.

Michael Dobbs: Well the LOGCAP contract was awarded before the Sept. 11 terrorist attacks. While Cheney and others may have been in favor of a showdown with IRaq, I doubt very much that we would have gone to war in the absence of a major incident like Sept. 11. 9/11 changed everything.
On your second point, of course there is a revolving door between business and government. That is plain for every0one to see. Eisenhower spoke about the military-industrial complex back in the 50s. The ties between business and government have only grown since then.

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Bowie: Is there an analogue to Halliburton's LOGCAP contract in Afghanistan?

Michael Dobbs: As I mentioned in the article, Halliburton is also working in Afghanistan under the same LOGCAP contract. Work orders under Operation Enhduring Freedom so far amount to around $183 million: this is all part of the same super-contract.

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Washington, D.C.: Do you think that the bad feelings that many feel over the contracts going to Brown and Root are somewhat based on the fact that this company was VP Dick Cheney's baby at one point? I find it curious that when it comes to defense contracts this particular baby gets the all the love.

Michael Dobbs: This is the question at the back of everybody's minds, and one that is really impossible to answer. It's a chicken and egg question. Obviously, Halliburton (and other companies like Bechtel) hires people like Dick Cheney in part because of their government expertise, and connections. But that is the way Washington works.

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New York, N.Y.: Has anyone studied the true cost savings or otherwise to the military from these outsourcing contracts? If so, what are the conclusions?

Chee Ooi, New York.

Michael Dobbs: As far as I am aware, there has not been a detailed study of this point. There has been a lot of debate about it. Some argue that outsourcing helps the military focus on its core tasks, and cuts costs. Others maintain that the costs of hiring a contractor are much higher than doing the work yourself. I would be interested to see a serious study on this, but I have not yet seen one.

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Michael Dobbs: I have enjoyed answering your questions. We had a good discusson. I can see there is a lot of interest in this topic.

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© 2003 The Washington Post Company

Is that the same as committed to the truth?

A model of propriety

Gel, nothing in that transcript rebutts a thing I said.
LOGCAP has been "The way its done" for over a decade, and participation in LOGCAP is pedicated both on competitive bid and demonstrated capabilities ... even if the pool of qualified bidders is, of obvious necessity, small. Cheney's only tie to Halliburton is that Halliburton continues, under perfectly legal, above-board contractual obligation, to disburse to Cheney monies earned prior his assuming any role in The Current Administration. There is no impropriety that I can determine. Should there be evidence of impropriety developed, I am confident legal proceedings as would be appropriate will be pursued. One's position within or association with an Administration does not immunize one from the diligence of one's foes in the presence of actionable wrongdoing. Just ask Dick Nixon, Bill Clinton, Billy Sol Estes, BeBe Rebozo, Spiro Agnew, or Ivan Boesky, among others.