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Cheney's Halliburton Loses Its Iraq Cash Cow

By Charlie Cray, 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/

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Death at the Supermarket

By Mark Ames, Comment Is Free
Posted on July 31, 2006

This article first appeared on Comment is Free, a news and analysis group blog run by the British newspaper The Guardian.

The blazing hot summer has produced yet another American workplace rage massacre by a disgruntled employee. On June 25, a 22-year-old worker at a Safeway grocery chain warehouse in Denver, Colorado, fired a handgun at his co-workers, killing one and wounding five, and set several fires in an attempt to burn down the massive 1.3 million square foot structure where he worked, before he was finally gunned down by police.

"I can't imagine this happening out here. It could happen anywhere." This was how one employee, Raymond Rivas, reacted to the shooting - words that are a repeat of a repeat. This disbelief can be found in practically every article about a workplace massacre, word for word, going back to the first ones some 20 years ago.

These workplace rampages, in which an employee blasts his coworkers, are now a regular feature of American life, yet they are still grossly misunderstood and oddly ignored. One would think that after 20 years of this new species of crime, with hundreds of dead and wounded, there should be a massive body of literature devoted to studying and explaining it. And yet they are one of the last true Made In America products.

The rage murder crime first appeared in the mid-late 1980s, when a rash of post office massacres by postal employees gave American slang a new term: "Going Postal." Within a few years, post office massacres jumped like a virus to the private workplace, beginning with a disgruntled employee at a printing press in Louisville, Kentucky, who killed or wounded 20 coworkers in 1989... and from there, the crime metastasized to the middle-class American schoolyards.

Until the late 1980s, no one had even conceived of the workplace as a potential killing zone where any coworker is a potential rage murderer. Today, gossiping over who is most likely to "go postal" in your office is one of the favorite water cooler conversation topics - and also a sly way to make sure you're on the witchhunting end of the workplace clique, rather than on the suspected-weirdo end. You have to be careful though when gossiping - offices today are increasingly like high security camps complete with surveillance video cameras, security badges, armed guards and undercover informants.

In the case of the June 25 massacre, the media and the culture reacted as they always do: answering the "why" by focusing on the rampager. And as always, this trail led to a dead end, so to speak.

Yet very little attention was given to the one possible motive which the media has barely focused on: Michael Ford, the killer, was apparently “teased” and "harassed" by coworkers for being Muslim.

This may strike Normal People as a pretty weak reason to try to murder your coworkers, as proof that Ford was sick and weak. Yet it is interesting that so many schoolyard shootings in middle-class America are also triggered by bullying. Indeed a lot of workplaces massacres, such as the first big one in Louisville, featured a murderer who had been brutally hazed or teased by coworkers.

The hazing, the coworker-on-coworker cruelty, is real, but it's a symptom of something larger: a corporate culture gone bad.

And this is where the media sleuths always avert their eyes - because then it means looking at what really changed in the 1980s which might bring about rage in the workplace at this point in time.

What changed in the US workplace isn't a sudden influx of guns on the market, or an influx of psychos in the workplace, but rather the most obvious and powerful cultural force of all: Reaganomics.

But you can't bring that up. Reaganomics is accepted as a kind of law of physics, the ultimate example of America's cultural and moral superiority, at least according to our cultural propaganda.

Yet if you consider the possibility that these crimes have a socio-economic cause, just like inner-city violence does, then you find that much more is revealed by profiling the company where the massacre took place than by profiling the murderer.

Profile Safeway. Its current CEO, Steve Burd, is a classic post-Reagan corporate vampire whose every working hour has been dedicated to enriching a tiny layer of shareholders and executives - including himself - at the expense of tens of thousands of Safeway employees. Burd's policies of constantly slashing workers' pay, pensions, health care benefits and so on earned him hefty bonuses during Safeway's best years in the 90s.

Instead of distributing the earnings windfall back to workers, he went on a reckless (and some say corrupt) acquisition spree, which came under fire from some some shareholders for obvious conflicts of interest in many of the companies acquired (which had ties to some Safeway directors).

When these acquisitions turned out to be bad buys, Burd did what all post-Reagan CEOs do: he made his employees pay it. So in 2003, he tried further freezing wages, raiding the employee pension funds and forcing workers and retirees to pay for health care benefit payments for the first time in Safeway's history. This led to a five-month workers' strike by some 70,000 California employees in 2003-4, the longest grocery worker strike in American history.

Burd's real-world villainy, and the utter futility of resisting it, was summed up in early 2004 by Rev. Jim Conn, a Methodist who led a several-hundred-mile pilgrimage up to Burd's home to plea for him to look into his heart: "We are praying for this man, Burd, who has been so recalcitrant, so cold to his workers. He needs to know about the lives he is affecting."

Prayer didn't melt the ogre's heart: eventually workers agreed to a new contract requiring them to pay for health care benefits, and they got no salary increase as they'd fought for. But perhaps God was listening to Burd's prayers, because last year he earned 42% more than in 2004: $3.25 million in salary and bonus, and 1.03 million share options.

In 2002, Burd boasted that he planned to raise Safeway's share price in part by "financing price reductions by lowering costs, including restructuring labor contracts..."

Like other post-Reagan corporate heroes such as "Neutron" Jack Welch - who fired 120,000 GE employees while making billions for the super-wealthy - and Al "Chainsaw" Dunlap, who took over Scott Paper in 1994, fired a third of the employees, and walked away with over $100 million in stock options 19 months later - Burd gets away with this plunder, his only threat being a salvo of Methodist poison-prayers, and he gets to be the hero too. Ask most Americans today, and they'll tell you - even the ones who stand to lose from it - that a company's highest priority is not its responsibility to its employees, but its responsibility to its tiny clique of obscenely rich major shareholders. And these people are considered sane!

Some rampage murderers were very explicit about tying Reaganomics to the destruction of their lives, such as Robert Mack who shot his supervisor at General Dynamics in 1991.

The 65-year-old who shot up his American HomePatient office last month told police that he acted after fearing that he was going to be fired. Then he killed himself.

American HomePatient recently got creamed by Bush's Medicare reform bill, which is shifting money towards funding prescription drugs (thus handsomely paying back Bush's drug industry donors) and away from covering necessities like home oxygen for seniors, since companies like American HomePatient which provide that equipment don't have a hundredth of the lobby power that the drug companies do. The result? A 65-year-old worker who gave the last 17 years of his life to the company has to be let go. And for many people today, getting fired means death.

A new survey showed that Americans are becoming increasingly lonely and isolated. In 1985, most Americans reported having three close friends; by 2004, a quarter of Americans said they had "no one" close to them, and another 50% said that they had at best 2 close friends.

One of the survey's authors, Duke University Professor Lynn Smith-Lovin, noted, "This is a big social change, and it indicates something that's not good for our society."

Indeed.

Michael Ford's rampage massacre was typical of the post-Reagan era in some details, such as how he fired 16 shots, and was killed in a hail of police bullets, taking seven hits. Yet it stood out in its destructive ferocity. Ford, considered a quiet young man who was engaged to be married and had no history of crime or problems at work, was at least as intent on burning the huge building down as he was in shooting his coworkers, suggesting that he was out to kill not just a few coworkers who'd teased him, but The Company itself. As police chief Gerry Whitman said, "He spent more time setting fires than shooting." Burn, Safeway, burn.

Interestingly, some of the fires Ford had set the day before were reported to have rekindled. As a fireman on the scene noted, the rekindled fires "added to the employees' unease."

Mark Ames is editor of the Moscow English alt weekly, The eXile and author of the book Going Postal: Rage, Murder, and Rebellion - From Reagan's Workplaces to Clinton's Columbine and Beyond" (Soft Skull, 2005).

© 2006 Independent Media Institute. All rights reserved.
View this story online at:
http://www.alternet.org/story/39681/

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The Real Tragedy of Student Debt

By Myshele Goldberg, WireTap
Posted on July 24, 2006

There's been a lot of talk lately about increasing levels of student debt. With all of the fuss, you'd expect that lucky high school seniors receive a sobering invoice with their college acceptance letters. But for many students, the plunge into debt is much more insidious. Like drug dealers, the lenders start small and cheap, lulling students into a false sense of security. By the time the full effects of debt creep in, it's too late.

I hope that my experience will shed light on similar stories unfolding across America, illuminating the impossible choices that meet working-class students. It's also a cautionary tale for countries seduced by the false promises of private college education financed by student loans and credit cards.

At my working-class high school in Connecticut, I was always a top student. The overwhelming message for high achievers was that brains, determination, and charisma would lead to success in any career, and I dutifully pursued volunteer work, leadership training, part-time jobs, and anything else that would 'look good on the resume.'

My hard work paid off when I was accepted for a prestigious early-entrance program at the University of Southern California. The Resident Honors Program (RHP) selects 'exceptional and highly motivated' students to begin college a year before graduating high school, recruiting from the top 4 percent of sophomores nationally. From a pool of 25,000, between 30 and 60 join the program each year.

I got a $6,000 scholarship, along with $19,500 in grants and work study. In order to make the required fees and expenses of $28,000, I took out a $2,500 student loan my first year - a manageable amount, I thought.

Once I got to USC, I worked for a month at a grocery store, then got a work-study job for 20 hours a week, $6 an hour. An irregular schedule caused me to miss RHP activities, and I had to skip some classes. But keeping my debts under control seemed worth it. My first summer home, I worked on a farm and earned $1,000 - enough to buy my plane tickets.

My second year, USC's tuition fees increased by $2,000, and my mother's income increased by $1,000. Ironically, this pushed our family out of the 'low-income' category, and I lost half of my grant money. I considered transferring to a less expensive school, but USC's general education classes were so obscure that I'd have to repeat my freshman year anywhere else. So I held my nose and took out a $9,500 loan, hoping to apply for scholarships later on.

I got another work-study job - on top of running two student organizations, taking honors-level classes, and dealing with a roommate from hell. Getting to the library was becoming impossible, so I took out a $1,500 loan to buy a laptop. It was my first experience of a private student loan, and I was told it wasn't much different from a federal loan. The interest was slightly higher, and there were slightly different rules, but overall it all seemed the same.

After Christmas, the overload became too much, and I had to prioritize. I decided that leadership and education were more important than meaningless employment, so I quit my job and took out another $2,000 private loan. I navely hoped that my education would someday allow me to earn more than $6 an hour.

My third year, I attended Edinburgh University in Scotland, where tuition fees were half of USC's. That year, I needed only a $4,000 loan, and didn't have to worry about a job. But the next year brought hardly any grant money, and rather than give up in the 'home stretch,' I took out more loans than I ever expected I'd need.

When I graduated in the summer of 2002, I was $36,000 in debt. My only consolation was that my debts were equivalent to one year's cost of attendance - a bargain, really.

A shift from grants to loans hurts working class students

I moved back to my mother's house and began looking for a job. But in the recession following 9-11, employers wanted practical, predictable degrees, not esoteric subjects like anthropology. From seeking meaningful employment, I slid into looking for any job. I had a few days of temporary office work, a few months in retail. I went to Scotland in search of a better job market, but couldn't even get an interview before my money evaporated.

Since my degree wasn't helping me find work, I decided I needed a skill. I started a multimedia course at a community college, paid for with wages from a salon. But I soon discovered that my little laptop couldn't handle graphics work, so I bought a new computer with a private loan for $2,000.

Six months later, I finally got what I really wanted - a meaningful job. I put multimedia on hold and began working as a union organizer. In exchange for 'unlimited hours' - sometimes 70 hours a week - the salary was excellent: $2,000 a month. I paid off my credit cards and started on the loans. By this point, with capitalized interest, my total debt was $43,000.

Six months later, I was burnt out. I could deal with the impossible hours, but it was an upward battle just to maintain the status quo for the workers I was helping. An overwhelming sense of futility made me wonder if anything was ever going to change, and I retreated to school to reconsider my goals and tactics. My loans were in deferment, giving me a little breathing room.

Eventually I came to the conclusion that multimedia could earn me a living, but I still wanted a career that would help disadvantaged communities. I applied to an 'alternative' master's program in Edinburgh that was ideal - studying social change. I couldn't get any scholarships for an obscure foreign school, but I could finish in half the time of an American master's degree. I took out a private student loan for $18,000 and worked as a 'Santa's Elf' at a shopping mall (among other jobs).

As of finishing my master's degree, my debt hovers around $70,000 - it will grow to over $100,000 by the time I pay it off. My repayment schedule reaches into my late forties, at $650 a month. If I do the kind of low-paid, meaningful work I want to pursue - teaching, writing, grassroots organizing - I will likely struggle to make each payment.

To be fair, I made the choices that put me in this situation. I attended an expensive university 3,000 miles from home. I stayed at that school, even though I could get a cheaper education elsewhere. I studied an impractical subject that I loved, then continued my studies at an obscure foreign university. I wasn't always aware of financial consequences.

Yet I made my choices based on the values I had been taught - that helping others is more important than making money for yourself, meaningful career is more important than net worth, and brains, determination, and charisma are the key ingredients of success. I realize now that I subscribed to the fantasy of an equal society, when in fact everyone's options arise from class, race, gender, and a thousand other subtle differences in our experiences, assumptions, and privileges.

There are alternative models

My experience with higher education exemplifies the conundrum of the working class. Universities guarantee financial aid to low-income students, but often shift from grants to loans after a year or two. Students are expected to make higher contributions each year, even though upper-level classes are more demanding than introductory ones. Students are encouraged to take leadership roles in extracurricular activities, but working-class students have to fill their summers with meaningless low-paid jobs instead of volunteer work or internships, and are put behind their upper class peers.

Adding insult to injury, education gives a tantalizing glimpse of the wider world. For many, college is where they realize that their experience of injustice is not isolated, and many gain a desire to work for social justice. But to pay back their debt, graduates must forget their ideals and go to work for the highest bidder.

To put it in perspective, the average debt at graduation in America is $19,300. In the United Kingdom, it's $16,000; in New Zealand, $9,600; in Germany, $7,000. Most countries require repayment only when a graduate earns a certain salary - in the United Kingdom, it's $28,000. In Germany, it's $14,500 - but students enjoy a five-year grace period, subsidies for good grades, and forgiveness on all loans above $12,500. Sweden's grace period is three years, Holland's is two, and most countries in Europe forgive student loans after 15-25 years.

These different arrangements allow students to 'get on their feet' after graduating. New graduates have the time and space to find a niche, rather than getting trapped in the first job that comes along. They are allowed to engage in useful work without worrying about excessive loan payments, making contributions that aren't measured by the GDP.

Grants rather than loans also limit the flow of educated, desperate young people into the semiskilled labor market, leaving service jobs open to those who have not pursued higher education. While this contributes to social stratification, it also makes jobs available to people who need them.

In America, with its tangled webs of overpriced private colleges, usurious credit cards and bankruptcy-proof student loans, it's unlikely that socialized education would be embraced. Still, it's heartening to know that our system is an excessive anomaly - most other countries make much better investments in their young people regardless of their class and race.

In many ways, this pattern is one manifestation of a larger trend in America: sacrificing the opportunities and livelihoods of lower- and middle-class people for the profit of banks, corporations and the wealthy elites. But there's only so much sacrifice people can handle before they're bled dry, and only so long a country can prosper on credit cards and loans that can't be reasonably repaid.

What is writ large in corporate bankruptcies, withering federal programs and industrial outsourcing is writ small in stories of impossible choices and shattered educational dreams. The real tragedy is not that America's young people can't afford their college education - the tragedy is that they are told their entire lives that education is their birthright and a chance to social mobility, and then are forced to watch that birthright crumble under the weight of unbearable debt.

Myshele Goldberg is an aspiring Ph.D. in Edinburgh, Scotland.

© 2006 Independent Media Institute. All rights reserved.
View this story online at:
http://www.alternet.org/story/39278/