No Bid And No Problem
by Charlie Cray
July 07, 2004


There may have been a transfer of sovereignty in Iraq last week, but on the ground things look much the same: most Iraqis without reliable utility service and no-bid contractors scooping up billions of Iraq's oil money without producing any measurable improvements. Here, Center for Corporate Policy Director Charlie Cray traces the connections between the Bush administration and corporate interests and explains how no-bid contracts are undermining democracy in Iraq—and at home.

Charlie Cray is the director of the Center for Corporate Policy and a collaborator on Halliburton Watch. His book, The People’s Business: Controlling Corporations and Restoring Democracy, (co-authored with Lee Drutman) will be published by Berrett-Koehler in November.

The U.S. occupation of Iraq may be entering a new phase with the nominal transference of sovereignty, but reports issued from and about Iraq in recent days suggest that the promised reconstruction is far from done. And while many well-connected cronies rush home to reinforce their friends’ re-election efforts, it’s not clear that those left behind will ever finish the job—a circumstance that is bound to aggravate existing tensions in the country.

According to the Government Accounting Office (GAO) and The New York Times , more than a year after the first infamous no-bid contracts were given out Halliburton and Bechtel, only a fraction of the projected construction projects have been carried out. Supplies of electricity and water are no better for most Iraqis, and in some cases utilities are much worse than they were before the invasion in the spring of 2003.

A report put out by Christian Aid last week suggests that the mess left behind by the CPA may be much worse than the well-known abuses associated with the reconstruction money allocated by Congress. The UK-based group—which has closely monitored the CPA’s handling of Iraq’s oil-related revenues—reports that CPA officials left the country after spending nearly $20 billion out of the Development Fund of Iraq (derived from oil revenues) with virtually no accountability or transparency.

“For the entire year that the CPA has been in power in Iraq, it has been impossible to tell with any accuracy what the CPA has been doing with Iraq’s money,” said Helen Collinson, a policy analyst with Christian Aid.

The CPA’s hasty exit strategy will remind some observers of the stampede of greedy executives who cashed out their options a few years ago before leaving others to deal with the mess they left behind. In the run up to the handover, Christian Aid reports, CPA officials spent nearly $2 billion of the “Iraqi people’s” money. The transitional government will be in place just two weeks before an initial KPMG audit of the CPA’s handling of the development fund is due.

Meanwhile, although U.S.-funded reconstruction work will continue, festering resentments over unfulfilled promises of a Marshall Plan-scale reconstruction and refurbishment of the country’s infrastructure will likely continue to fuel support for the resistance. The resistance itself all but guarantees that a significant portion of the money earmarked for reconstruction will have to be spent on private security protection for reconstruction personnel (GAO estimates the current fraction is 18 percent), while the projects themselves will be prime targets for sabotage.

It’s also unclear if the private military firms providing the security could be held accountable in the event of human-rights violations or whether the contractors themselves can be held to account for shoddy work. A new contract to coordinate contractor security was awarded in May to the British firm Aegis, whose founder Tom Spicer’s resumé includes a history of arms smuggling in countries like Sierra Leone. As the result of a parting gift to the contractors, CPA chief Paul Bremer signed a final order on June 28 which guarantees that U.S. contractors will be exempted from prosecution by the country's new interim government for anything that happens while they are performing official duties.

Despite the transference of sovereignty, the CPA’s other various orders (including those that open up certain state-owned businesses to foreign investors, which critics say violate international norms restricting an occupying power’s right to restructure the occupied country’s economy) will also remain in effect during the coming transition.

Meanwhile, more than 100,000 U.S. troops will be forced to stay and occupy the country through the hot summer and for the foreseeable future, while many of the Bush administration’s war-profiteering cronies will be coming home—as reinforcements for the Bush/Cheney re-election campaign. In fact, a few are Bush/Cheney “Pioneers” and “Rangers.” (They could just as well have called them “rocketeers” for taking fundraising to new levels, but someone must have noticed how close to “racketeer” that sounded).

To name a few of the war profiteers wired into the Bush/Cheney patronage system:

In 2003, a few of Bush’s closest political allies created New Bridge Strategies to help corporations “evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war.” New Bridge shares its Washington, DC offices with Barbour, Griffith & Rogers—the high-powered Republican lobbying firm founded by Haley Barbour, former head of the Republican National Committee and current governor of Mississippi. The firm’s CEO is Joe Allbaugh, the Bush/Cheney 2000 national campaign manager (and subsequent head of FEMA), and others involved include Ed Rogers (a top aide to Bush Sr.) and Lanny Griffith (who held several top advisory positions under Bush Sr., and is a 2004 Pioneer). Allbaugh recently registered as a lobbyist with Lockheed Martin. Looks like he finally figured out where the big money is.
Top GOP strategist Charlie Black’s clients have included Fluor, which received a big public works contract in Iraq to reconstruct the country’s water and electricity. Black is chairman of BKSH, an affiliate of global public relations giant Burson-Marsteller, and a big backer of Ahmed Chalabi before the war. In June, the London-based Telegraph reported that an arrest warrant was issued by the Iraqi police for Francis Brooke, a BKSH consultant who attempted to block a recent raid on Chalabi’s Iraqi headquarters, after Chalabi was accused of passing American secrets to Iran.
In the administration’s drive to create a beacon for democracy for the entire Middle East, another outstanding example of “do as we say and not as we do” has been the way the contract to develop a “competitive private sector” in Iraq has been handled. In this instance, the U.S. Agency for International Development allowed BearingPoint to help write the specifications for the $240 million contract, which in effect knocked its competitors out of the running, according to AID’s own inspector general. BearingPoint (formerly KPMG Consulting) and its employees have given more than $117,000 to the 2000 and 2004 Bush election campaigns. In 2003, an $80 million BearingPoint contract in Florida was withdrawn after critics complained about the company’s close ties to Gov. Jeb Bush.
Former Rep. Bob Livingston, R-La., runs a lobbying firm that has represented well-placed Iraqi families seeking to form business alliances with U.S. and foreign companies wishing to do business in Iraq. Livingston has also gained some notoriety in Washington for lobbying against provisions that would ban tax-dodging companies that have incorporated offshore from being eligible for federal contracts. Recently he was part of an effort that succeeded in convincing Congress to drop an attempt to block the Department of Homeland Security’s from giving Bermuda-based Accenture a $10 billion contract for, of all things, “border control.” (U.S. taxpayers who don’t have any offshore accounts might not be happy to learn that Accenture also has a contract to help the IRS upgrade its website.)
In 2003 Coalition Provisional Authority chief Paul Bremer issued a decree that Iraq’s 200 state-owned companies would be privatized and that foreign owners would be allowed to expatriate 100 percent of the profits. This looting of Iraq’s state-owned businesses—disguised as “private-sector development” was stalled by worker protests and skepticism among wary investors concerned about the strength of the insurgency. Thomas Foley—a former Citigroup banker assigned by the CPA to oversee the privatization process, returned to Greenwich, Conn. in early 2004, where he is the state co-chair for the Bush/Cheney re-election campaign.
Three weeks after construction and engineering firm Washington Group was awarded a contract to rebuild water projects in Iraq, 31 company employees gave $27,750 to Bush. By the end of April 2004, CEO Stephen Hanks had become a Bush campaign “Pioneer” (by raising more than $100,000). Washington Group spokesman Jack Hermann was unconcerned about any appearance of impropriety. "You either participate in the system or you don't," Hermann told a Bloomberg reporter. "People can draw ulterior motives. We understand the baggage that comes with that."
The kingpin of corporate cronies, of course, is Vice President Cheney’s old firm, Halliburton. Recent revelations that a political appointee working under Douglas Feith made the decision to override objections from career Pentagon contract experts to award Halliburton a key oil-related contract which provided the company an inside track for no-bid billion-dollar contracts has given partisan critics plenty of ammunition to criticize the administration’s bending of contract rules to benefit their friends. The fact that Cheney’s chief of staff was notified of the decision contradicts the vice president’s claim that he has had no involvement in the decision and, along with his televised assertion that he has no “ongoing financial interest” in the company (while continuing to receive more than $150,000 in deferred compensation payments) has made his connection to the king of corporate cronies a significant potential liability for the administration’s credibility and the upcoming election.

“The entire Halliburton affair represents the worst in government contracts with private companies: influence peddling, kickbacks, overcharging and no-bid deals," charged Sen. Frank Lautenberg, D-N.J. in a March 2004 Associated Press article. But the vice president’s old firm is by no means the only war profiteer that has close ties to top administration officials. In fact, just as the U.S. media failed to objectively cover the war after being em-bedded with the troops, they have mostly failed to map out how thoroughly inbedded this network of contractors is with the Bush family, friends and campaign cronies.

For example, last year, the Financial Times reported that Neil Bush has been involved in the Iraq contract gravy train through his association with John Howland and Jamal Daniel of New Bridge Strategies. The president's brother wrote letters to push businesses established by Howland and Daniel, including Crest Investment Corporation, which in turn employs Bush as co-chairman. The FinancialTimes reported that Bush receives the equivalent of $60,000 a year from Crest for working an average of three or four hours a week. The failure of the U.S. media to report this story is amazing. Imagine if the story involved Roger Clinton.

The blame also falls on Congress for not passing many proposed amendments to the Iraq appropriations that would have brought a higher standard of oversight and accountability to the contracts. As Sen. Dorgan and other members have suggested, the outsourcing of the oversight process itself is another way that the Bush administration has insulated the contractors from any real level of accountability.

In January 2004, Rep. Jim Leach, R-Iowa, introduced a resolution calling for the creation of a bipartisan committee to “investigate the awarding and carrying out of contracts” in Iraq, Afghanistan and elsewhere. Leach’s proposal is modeled after Harry Truman’s World War II committee—which saved taxpayers billions by rooting out corruption. It’s worth noting that Truman’s commission was created by a Congress controlled by the same party as the president.

Just as it was then, oversight should not be considered partisan,” Leach asserted. “It should be viewed solely in the context of protecting and preserving public resources and bolstering people’s confidence in their government.”
Of course, Leach’s bill was quietly quashed by Republican leaders who clearly understood that any investigation of Halliburton would be political suicide during an election year.

Federal No-Bid Contracts On Rise
By Robert O'Harrow Jr.
The Washington Post
Wednesday 22 August 2007

Use of favored firms a common shortcut.
Under pressure from the White House and Congress to deliver a long-delayed plan last year, officials at the Department of Homeland Security's counter-narcotics office took a shortcut that has become common at federal agencies: They hired help through a no-bid contract. And the firm they hired showed them how to do it.


Scott Chronister, a senior official in the Office of Counternarcotics Enforcement, reached out to a former colleague at a private consulting firm for advice. The consultant suggested that Chronister's office could avoid competition and get the work done quickly under an arrangement in which the firm "approached the government with a 'unique and innovative concept,' " documents and interviews show.

A contract worth up to $579,000 was awarded to the consultant's firm in September.

Though small by government standards, the counter-narcotics contract illustrates the government's steady move away from relying on competition to secure the best deals for products and services.


A recent congressional report estimated that federal spending on contracts awarded without "full and open" competition has tripled, to $207 billion, since 2000, with a $60 billion increase last year alone. The category includes deals in which officials take advantage of provisions allowing them to sidestep competition for speed and convenience and cases in which the government sharply limits the number of bidders or expands work under open-ended contracts.

Government auditors say the result is often higher prices for taxpayers and an undue reliance on a limited number of contractors.
"The rapid growth in no-bid and limited-competition contracts has made full and open competition the exception, not the rule," according to the report, by the House Oversight and Government Reform Committee.


Keith Ashdown, chief investigator at Taxpayers for Common Sense, a nonpartisan watchdog group, said that in many cases, officials are simply choosing favored contractors as part of a "club mentality."
"Contracting officials are throwing out decades of work to develop fair and sensible rules to promote competition," Ashdown said. "Government officials are skirting the rules in favor of expediency or their favored contractors."


In the case of the counter-narcotics office, a spokesman for the Homeland Security Department said it was not unusual for a contractor to tell agency officials how to arrange no-bid contracts because contractors sometimes know federal procurement regulations better than federal program managers.


Chronister and the former colleague, consultant Ron Simeone, declined to be interviewed for this article. The director of the counter-narcotics office, Uttam Dhillon, defended his office's decision to use the consultants, saying ethics officials at the Department of Homeland Security had been informed of the arrangements and approved them, as long as Chronister did not supervise his former colleagues.


Contracting officials at the department also determined that the no-bid arrangement was okay because Simeone and his subcontractor were uniquely qualified to do the work, in part because they intended to replicate some work they had done for the White House drug office, he said.


"Every step of the way, we followed the advice and guidance of our ethics officer," Dhillon said. "We did everything we're required to do by law and then some."

Dhillon said he was comfortable hiring Simeone after Chronister and another office official described the consultant as a counter-narcotics expert. He said the firm performed well.


"My goal was to get this done as quickly and efficiently as possible," he said. "He obviously had experience with this and was knowledgeable about this."


Homeland Security's counter-narcotics office was formed in 2004 to develop policies that unify various drug-enforcement programs. With fewer than a dozen employees, the office has struggled with deadlines for its budget, annual reports and the development of a system for measuring the effectiveness of drug-control efforts, Dhillon said.


After Dhillon was confirmed as the office's director in May 2006, he made the development of the measure system "one of my highest priorities," he said. He said Congress and the White House had made multiple requests for information that the office could not provide.


A senior manager at the counter-narcotics office had been assigned to the task. But Dhillon said he "came to the conclusion the office was not really in a position" to finish the work.

In July, Chronister asked Simeone for help in developing a system to measure the impact of government interdiction efforts. Simeone in turn decided to hire another consultant, John Carnevale, for help.


Chronister, Simeone and Carnevale had worked together over the years, including at the White House's Office of National Drug Control Policy. Chronister later worked as a senior policy analyst at Carnevale Associates, a policy consulting firm owned by Carnevale, before joining the counter-narcotics office.


Simeone, too, worked at Carnevale Associates. He is listed as chief scientist, on the firm's Web site. At the same time, Simeone ran his own company, Simeone Associates. Carnevale is listed on that company's Web site as a senior associate.


Carnevale said Chronister sought the meeting with Simeone last July "to explain the problems they were having related to pulling together a performance-measurement system and asked him for advice."
"Simeone suggested an approach, which he turned into a sole-source proposal," Carnevale said in an e-mail.

On Sept. 20, about a week before the contract was awarded, Chronister was given responsibility for overseeing the work, according to an e-mail obtained by The Washington Post. That changed five days later, when Chronister first told Dhillon about his ties to the consultants, Dhillon said in an interview. On advice from ethics officials at the department, Dhillon told Chronister not to work with Carnevale.


"Chronister was walled off from dealing with the contractor and subcontractor before the contract was signed," Dhillon said. "We made the decision with an abundance of caution."

But contact didn't cease between Chronister and the contractors.
Dhillon eased the prohibition on Chronister's contact with Simeone when the office expanded the demands of the contract, and Dhillon asked the contractor to also help prepare the office's annual report to Congress, which was months overdue. He said an ethics official approved the arrangement.


An Oct. 18 e-mail shows that Chronister was also included in communication involving the original project and a planned conference that included Simeone and Carnevale.

In November, the office organized a meeting with other drug enforcement agencies to present an outline of its plan, called "Performance Measures for United States Counternarcotics Enforcement Efforts." Both Simeone Associates and Carnevale Associates are listed on the documents.


Carnevale said he did not answer to Chronister for his work, which focused on budget matters. "Technically and legally speaking, Simeone was my supervisor," Carnevale said.

Chronister and Carnevale also maintained a close professional tie outside the office: They are listed as the authors of a March 2007 paper, "An Assessment of the U.S. Drug Control Budget." Chronister is listed on the paper as working at Carnevale Associates, and it includes an e-mail address for him at the firm.

Carnevale said the paper was actually written in 2004. He said Chronister was listed as a Carnevale employee because that was his job at the time. Carnevale said Chronister is no longer a paid employee.

Federal Times.com

House panel votes to strengthen protections for whistleblowers
Bill doesn’t go far enough, advocates say
By TIM KAUFFMAN
October 05, 2005
The House Government Reform Committee approved a bill Sept. 29 to strengthen whistleblower protections for federal employees and expand coverage to airport screeners and federal contract employees.
Lawmakers didn’t go as far as some advocates wanted, however. The Republican-led committee struck down an amendment by two Democrats that would have extended whistleblower protections to employees at intelligence agencies and the FBI, who are not covered under current law.
“If a whistleblower has information on our national security, we need to do everything we can to have them come forward,” said Rep. Carolyn Maloney, D-N.Y., who offered the amendment with Rep. Diane Watson, D-Calif. “The way it is now . . . we’re basically telling them to shut up, go away and be quiet.”

Committee Chairman Tom Davis, R-Va., said he didn’t know enough about the issue to vote on extending coverage to national security employees and felt that doing so could prompt objections by the White House that would make it harder to pass the larger bill.
That drew an irate response from the National Security Whistleblowers Coalition, whose members include dozens of current and former civil service and contract employees who lost their jobs or were otherwise retaliated against for making whistleblower allegations.
Coalition president Sibel Edmonds, who was fired from her job as an FBI language specialist in March 2002 after reporting security breaches and other violations to her bosses, said Davis rejected the coalition’s repeated requests for a hearing to explain why national security employees need full whistleblower protections.
“The message they are sending to these national security whistleblowers is, ‘We don’t want to hear from you,’” Edmonds said in an interview.
Despite the failure to expand protection to national security employees, good government groups praised the committee’s action to expand coverage to contract employees and airport screeners and to strengthen existing whistleblower protections.
TSA, contractor protections
The committee agreed in principle to two Democratic amendments that would expand coverage to the 45,000 passenger and baggage screeners at the Transportation Security Administration and the more than 1 million private-sector employees under contract to civilian agencies.
Questions over the exact wording of the amendments kept them from being included in the final bill approved by the committee, although Davis said the provisions would be added when the bill goes before the full House. It was unclear at press time when the House would consider the bill.
Providing full whistleblower protections to TSA screeners would give them the same rights afforded to all other employees at the Homeland Security Department, which was established after TSA was created, said Del. Eleanor Holmes Norton, D-D.C., who introduced the amendment. TSA whistleblowers currently can have their retaliation claims reviewed by Office of Special Counsel under a memorandum of understanding between the two agencies but can’t appeal those claims to the Merit Systems Protection Board, which is empowered to issue rulings that are legally binding on the agency.
Providing whistleblower protections to contract employees would close a significant loophole in the current law, said Henry Waxman, D-Calif., who introduced the measure. Waxman said the large amount of work being funneled to contractors in the aftermath of hurricanes Katrina and Rita heightens the importance of providing those employees protection for blowing the whistle on corrupt or incompetent management.
“As literally billions of federal dollars flood into Louisiana and Mississippi, the potential for waste, fraud and abuse is enormous,” Waxman said. “Federal contractors will be doing most of this work, and we need to encourage their employees to report wasteful spending.”
The Waxman amendment would allow contract employees who have submitted whistleblower complaints to agency inspectors general to file complaints in the U.S. District Court where they live if agency leaders fail to act on the complaint within 180 days.
The bill passed by the House Government Reform Committee contains provisions also found in a Senate bill that cleared the Homeland Security and Governmental Affairs Committee in April.
Stronger protections for all
Both bills are intended to strengthen whistleblower protections that advocates say have been weakened through a series of judicial rulings. The bills would clarify that employees are protected for any disclosures — no matter who they are made to or whether the employee was on the job at the time. This would reverse a narrow interpretation of the law by the courts, which says only disclosures made outside an employee’s normal job or to people outside the employee’s chain of command are covered.
Both bills also would:
• Ensure coverage for disclosures that the whistleblower reasonably believes are valid. This would erase a much harsher test imposed by the courts that requires proof of waste, fraud or abuse that cannot be contested or denied.
• Codify the so-called anti-gag provision, which makes it illegal for agencies to use nondisclosure policies or agreements to block employees from making whistleblower disclosures. Congress has added this provision to an unrelated bill each year since 1988.
• Prohibit managers from investigating an employee or job applicant in retaliation for a whistleblower disclosure.
The House bill, introduced in March by Rep. Todd Platts, R-Pa., also would allow federal whistleblowers who believe they have been retaliated against to have their case heard by a jury before the U.S. District Court where they live. That provision isn’t included in the Senate bill.
Whistleblowers would be able to file lawsuits in federal court only if OSC fails to act on their complaints within 180 days and in lieu of having their cases heard by the Merit Systems Protection Board. As with MSPB decisions, employees could appeal court rulings to the U.S. Court of Appeals for the Federal Circuit.
Although the Senate bill doesn’t expand coverage to contract employees or airport screeners, many of its provisions go further than the House bill in expanding the types of disclosures that are protected under the law and giving employees new appeals rights.
Specifically, the Senate bill would:
• Prohibit managers from revoking an employee’s security clearance or investigating an employee or job applicant in retaliation for a whistleblower disclosure.
• Protect employees who disclose classified information to lawmakers or other congressional employees who are authorized to receive such information.
• Allow whistleblowers, under a five-year pilot project, to appeal final decisions or orders by MSPB to the U.S. Court of Appeals in the circuit where they live or to the U.S. Court of Appeals for the Federal Circuit. Currently, employees can appeal only to the federal circuit.
• Allow OSC to litigate cases on behalf of federal employees in court. OSC currently can appeal cases only to MSPB.

Here is an interesting site regarding the DOJ and FBI and some degree of conspiracy allegations. I cannot attest to it’s accuracy, but found it interesting reading. Pretty disturbing if it is true.

www.defraudingamerica.com/FBI_murderous_culture.html

Flyover_27

To Whom It May Concern:

The failure of attorneys in OSC and MSPB to comply with their
positive legal and professional duties - as attorneys and federal
employees - to implement the laws they were hired to implement to
protect federal employees from PPP's, or blow whistles about it, has
significant explanatory power for 9/11, failure of levees in New
Orleans, loss of Space Shuttle Columbia and countless other instances
of federal incompetence or malfeasance since 1989.

After 15 years of sacrifice, risk, suffering, and loss, I have "teed
up" OSC and MSPB to allow the US Court of Appeals for the Federal
Circuit to "out" and stop this OSC and MSPB lawbreaking, and,
hopefully, set events in motion to allow some measure of justice and
compensation for OSC and MSPB direct victims.

I suspect the Department of Justice (DOJ), which normally represents
agencies at the Federal Circuit (in this particular case, MSPB is
representing itself), finally realizes this and realizes the
government could become liable for hundreds of millions, if not a
billion dollars or more, in well-founded claims by the 10,000 or more
victims of this lawbreaking since 1989 - federal employees who were
so foolhardy to put their duty to the common good and public health
and safety before their economic self-interest, and whom OSC and MSPB
failed to protect as required. In particular, this includes the 3000
or so federal employees who sought whistleblower protection from MSPB
after OSC failed to protect them.

I suspect supervisory attorneys at DOJ intimidated a junior DOJ
attorney, who possibly has significant educational loans to pay off,
into making a perjurious declaration to obstruct justice in this case.

The attached is my motion for the Court to appropriately investigate
my claims against this attorney, with its exhibits.

Respectfully,

Joe Carson, PE