Scandals, Military, Iraq War, Graft and Fraud

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Military, Iraq War, Graft and Fraud

Treatment of Veterans

Leadership blamed for shabby Army hospital building

February 20, 2007 WASHINGTON (CNN) -- Army Secretary Francis Harvey blamed a failure of leadership for substandard conditions in a building that is part of Walter Reed Army Medical Center and vowed Tuesday to move quickly to fix the problem.

"We failed here, we failed in having a facility like this," Harvey told CNN. "Unfortunately, it's a leadership problem."

Inside Building 18, used for outpatients who suffered wounds in Iraq and Afghanistan, workers were repairing plumbing, covering holes in ceilings and repainting mold-covered walls. (Watch a tour of the run-down facility )

Harvey said he learned about the conditions in the building, a former hotel where some soldiers have been recuperating for more than a year and a half, on Sunday, when the Washington Post broke the story.

"If we would have known about this, we would have fixed it," he said. "Unfortunately, we didn't know about it."

The article, titled "The Other Walter Reed," said some outpatients at the facility include veterans who suffer from depression and were involved in overdoses and suicide attempts.

Walter Reed is the Army's top medical facility. It opened in 1901 in a single small building and now is a complex of structures with 28 acres of floor space.

The hospital can accommodate 250 patients and admits more than 14,000 a year. Thousands use its outpatient facilities daily.

President Bush has been seen visiting wounded troops at the hospital several times, and presidents often receive medical care there.

The Base Realignment and Closure Commission in 2005 recommended closing Walter Reed in 2010.

Harvey said an "action plan" was being put together "to ensure across the board that our soldiers are being taken care of with the highest quality medicine possible in the kind of facilities that provide a quality of life for the soldier that is equal to the quality of their service."

He added, "To have it in this condition is disappointing to me, unacceptable to me as the secretary of the Army, and we have a plan in place."

Christo Fascism

Religious Group's Ties to Pentagon Questioned

All Things Considered, December 11, 2006 · A military watchdog group is asking the Pentagon whether senior uniformed officers had permission to appear in a video endorsing an evangelical Christian group.

The Christian Embassy is an evangelical missionary group focused on government workers in Washington, DC. The group's recent promotional video features endorsements from several prominent military officers.

In response, another group, the Military Religious Freedom Foundation, is preparing a possible class-action lawsuit against the Pentagon for what lawyer Michael Weinstein calls "the creation of a theocracy, of a particular fundamentalist perspective within our own military branches."

The foundation says a core of evangelicals are gaining influence at the Pentagon, and violating military policies. It cites Wednesday-morning prayer sessions in the Pentagon's executive dining room, which features speakers from the Christian Embassy.

The Pentagon released a statement Monday insisting it does not endorse any religious viewpoint or organization. But the Defense Department also promised to review the promotional video. In it, Brig. Gen. Vince Brooks and seven other uniformed officers endorse the Christian Embassy.

Rebuilding Iraq


Graft in U.S. Army Contracts Spread From Kuwait Base

Lawmakers appalled by scale of contract fraud in Iraq

House panel probes charges of human trafficking in Iraq embassy project

July 26, 2007 A pair of whistleblowers alleged Thursday that the contractor selected to build the U.S. embassy in Iraq "kidnapped" foreign nationals to work on the $592 million construction project, luring low-wage laborers into a war zone under false promises that they would be working at hotels in Dubai.

John Owens and Rory Mayberry, both former employees of First Kuwaiti Trading & Contracting Co., told members of the House Oversight and Government Reform Committee that workers from the Philippines, India, Pakistan and Sierra Leone were tricked into boarding planes to Baghdad and then forced to work and live in squalid -- and often dangerous -- conditions.

The allegations have been vigorously disputed by both First Kuwaiti and the State Department inspector general, who investigated the claims.

"Let me spell it out clearly. I believe these men were kidnapped by First Kuwaiti to work on the U.S. Embassy," said Mayberry, who worked for the contractor for less than a week providing emergency medical services to construction workers. "They had no passports because they were confiscated at the Kuwait Airport. When the airplane touched down at Baghdad Airport, they were loaded into buses and taken away. Later, I found out they were smuggled into the Green Zone. They had no IDs, no passports, nothing."

Owens said he witnessed workers at the job site being physically and verbally abused by First Kuwaiti managers who threatened to dock their salary if they were five minutes late or found sitting down at work. And although they were contractually obligated to work 12-hour days, seven days a week, if workers wanted a new pair of shoes or gloves, they were told to "do with what you have," Owens claimed.

Mayberry, meanwhile, said he found men working on 30-foot-high scaffolds, with no safety harnesses and under the influence of pain killers.

"Conditions were deplorable, beyond what even a working man should tolerate," said Owens, who served as a general foreman for eight months -- from November 2005 through June 2006. "Foreign workers were packed in trailers tight. There was insufficient equipment and basic needs -- stuff like shoes and gloves."

Wadih El Absi, managing director of First Kuwaiti, was invited to testify before the committee, but the company instead submitted a written statement, claiming the human trafficking allegations were unsubstantiated and made "by a few disgruntled former workers." The company claimed that the majority of its employees are hired through recruiting agencies and that contracts with laborers have "State of Iraq" clearly written on them. The Justice Department now is investigating some of the recruiting firms reportedly used by First Kuwaiti.

"The implication that First Kuwaiti laborers are brought into Iraq against their will and are kept there against their will is absolutely ludicrous," the statement read.

Howard Krongard, the State Department's inspector general, visited the embassy site last December. His assessment supported First Kuwaiti's claims. The IG found that no workers had been mistreated, living quarters were above average and medical facilities were clean and well organized. Half of the workers interviewed by the IG staff carried their passports, while the other half said they had asked First Kuwaiti to maintain the documents for security and convenience.

The IG's report concluded that the new embassy compound "rated in the top third with above average quality of life conditions" and that the trafficking violations were unfounded.

Democrats on the committee noted that the IG did not interview either Owens or Mayberry and that First Kuwaiti was allowed to select the employees that were interviewed. Rep. John Tierney, D-Mass., said the State Department may have reason to whitewash the allegations.

"We have learned during the course of our investigation that a number of officials in our own State Department may have looked the other way when confronted with these disturbing and 'inconvenient' allegations," Tierney said.

Republicans, however, turned the focus on the whistleblowers. Rep. Darrell Issa of California said Owens filed a lawsuit against First Kuwaiti and that Mayberry is a "professional whistleblower," alleging previous wrongdoing by another former employer, KBR of Houston. At the direction of his attorney, Owens declined to confirm the existence of any lawsuit against First Kuwaiti.

Committee members also sparred over conditions at a temporary guard camp located adjacent to the embassy. According to State Department cables, first reported on July 5 in The Washington Post, when employees turned kitchen equipment on for the first time in May, they received electrical shocks and discovered wires had melted. Embassy officials shut down the site, citing "life safety issues" and "potential fire hazards."

In a follow-up cable, State Department officials in Washington dismissed the concerns as without merit and blamed the problems on the equipment that had been installed by KBR, which was responsible for providing meals to embassy workers. "KBR created the problems, and [is] now trying to put this matter on the construction of the camp," the cable said.

Karl Demming, who oversees KBR's engineering and construction work in Iraq, told the committee that the problem may have been counterfeit wiring -- when the wire size printed on the insulation actually has smaller, low-capacity conductors -- installed by First Kuwaiti.

State Department officials said the wiring problems were routine "punch list" items common to virtually every building project and had no impact on the separate embassy compound. But under questioning by Tierney, Demming conceded that the electrical problems with the guard base "may be reason for concern" at the embassy.

The 24-building compound will be the largest embassy in the world, occupying more acreage than the Vatican and amounting to roughly two thirds the size of the National Mall in Washington. The facility, the details of which have been a closely guarded secret, will reportedly mirror a self-sustaining city, featuring six apartment buildings, fast food restaurants, a swimming pool and beauty salon. Despite the controversies, the project is scheduled to be completed in September on time and under budget -- a rarity with Iraq reconstruction projects.

Officials Indict 5 in Iraq Contract Scam

February 07, 2007 WASHINGTON - Three U.S. Army Reserve officers were indicted Wednesday, accused of taking part in a bid-rigging scam that steered millions of dollars for Iraq reconstruction projects to a contractor in exchange for cash, luxury cars and jewelry.

An American businessman in Romania was charged as the go-between for the military officers and the contractor. The husband of one of the reservists was accused of helping smuggle tens of thousands of dollars into the United States that the couple used to pay for a deck and a hot tub at their New Jersey house.

Together, the five used the $26 billion Iraqi rebuilding fund "as their own personal ATM machines," Deputy Attorney General Paul McNulty said in announcing the charges.

"These defendants actually took bricks of stolen cash ... and smuggled them out of Iraq and back to the United States for their own personal use," McNulty said.

The 25-count indictment, filed in U.S. District Court in New Jersey, marks the latest development in an investigation of $8.6 million in Iraq contracts awarded to construction mogul Philip H. Bloom.

Bloom, an American citizen who ran construction and services companies under Global Business Group, has admitted to laundering at least $2 million that was stolen from reconstruction funds managed by the U.S.-led Coalition Provisional Authority in Iraq. He awaits sentencing.

McNulty said the five people indicted Wednesday stole or otherwise misused $3.6 million from the CPA fund.

The three reservists _ Col. Curtis G. Whiteford of Utah, Lt. Col. Debra M. Harrison of New Jersey and Lt. Col. Michael B. Wheeler of Wisconsin _ were responsible for helping supervise the funding and progress of the CPA contracts in al-Hillah, Iraq, southwest of Baghdad.

In return for steering contracts to Bloom between 2003 and 2005, prosecutors said, the military reservists and their accomplices shared an estimated $1 million in cash, and were showered with Porsche and Nissan sports cars, a Cadillac SUV, real estate, a Breitling watch, business-class plane tickets, computers and other items.

Harrison's husband, William Driver, was charged with helping smuggle over $300,000 into the U.S., part of which was used for home improvements, prosecutors said.

One of Bloom's friends, businessman Seymour Morris Jr., allegedly acted as a go-between for the military officers and the construction company by illegally wiring money and securing the goods. Morris is a U.S. citizen who lives in Romania, and owns a Cyprus-based financial services business.

Charges against the five include bribery, conspiracy, wire fraud, money laundering and transporting stolen property.

The indictment was unsealed the day after authorities arrested Morris in Romania. It also followed tough questioning Tuesday by House Democrats of the former U.S. occupation chief in Iraq over how he doled out up to $12 billion in Iraqi money without accounting for it.

At that hearing, in front of the a House Committee on Oversight and Government Reform, L. Paul Bremer III repeatedly said he had spent Iraqi _ not U.S. _ money. Bremer ran the country for 14 months.

U.S. Immigration and Customs Enforcement agents helped unravel the scheme by examining money trails and other data gleaned from computers, cell phones, global positioning systems and other devices, said Kumar Kibble, the agency's deputy assistant director for national security.

Stuart Bowen, the government's special inspector general in Iraq, said his team of 10 investigators are pursuing 80 cases of waste, fraud and abuse of taxpayer dollars in reconstruction contracts.

Last week, former CPA comptroller and funding officer Robert Stein, 52, of Fayetteville, N.C., was sentenced to nine years in prison for receiving kickbacks from Bloom in exchange for contracts.

Bribery and fraud "has not been a significant component of the American reconstruction experience over there, but where we found it, it has been egregious," Bowen said. "And this is an egregious example of it."

Congress Tells Auditor in Iraq to Close Office

November 02, 2006 Investigations led by a Republican lawyer named Stuart W. Bowen Jr. in Iraq have sent American occupation officials to jail on bribery and conspiracy charges, exposed disastrously poor construction work by well-connected companies like Halliburton and Parsons, and discovered that the military did not properly track hundreds of thousands of weapons it shipped to Iraqi security forces.


Stuart W. Bowen Jr., left, has received orders to shut down his office, the Special Inspector General for Iraq Reconstruction, by October 2007. (Christoph Bangert/Polaris, for The New York Times)

And tucked away in a huge military authorization bill that President Bush signed two weeks ago is what some of Mr. Bowen’s supporters believe is his reward for repeatedly embarrassing the administration: a pink slip.

The order comes in the form of an obscure provision that terminates his federal oversight agency, the Office of the Special Inspector General for Iraq Reconstruction, on Oct. 1, 2007. The clause was inserted by the Republican side of the House Armed Services Committee over the objections of Democratic counterparts during a closed-door conference, and it has generated surprise and some outrage among lawmakers who say they had no idea it was in the final legislation.

Mr. Bowen’s office, which began operation in January 2004 to examine reconstruction money spent in Iraq, was always envisioned as a temporary organization, permitted to continue its work only as long as Congress saw fit. Some advocates for the office, in fact, have regarded its lack of a permanent bureaucracy as the key to its aggressiveness and independence.

But as the implications of the provision in the new bill have become clear, opposition has been building on both sides of the political aisle. One point of contention is exactly when the office would have naturally run its course without a hard end date.

The bipartisan opposition may not be unexpected given Mr. Bowen’s Republican credentials — he served under George W. Bush both in Texas and in the White House — and deep public skepticism on the Bush administration’s conduct of the war.

Susan Collins, a Maine Republican who followed the bill closely as chairwoman of the Senate Committee on Homeland Security and Government Affairs, says that she still does not know how the provision made its way into what is called the conference report, which reconciles differences between House and Senate versions of a bill.

Neither the House nor the Senate version contained such a termination clause before the conference, all involved agree.

“It’s truly a mystery to me,” Ms. Collins said. “I looked at what I thought was the final version of the conference report and that provision was not in at that time.”

“The one thing I can confirm is that this was a last-minute insertion,” she said.

A Republican spokesman for the committee, Josh Holly, said lawmakers should not have been surprised by the provision closing the inspector general’s office because it “was discussed very early in the conference process.”

But like several other members of the House and Senate who were contacted on the bill, Ms. Collins said that she feared the loss of oversight that could occur if the inspector general’s office went out of business, adding that she was already working on legislation with several Democratic and Republican senators to reverse the termination.

One of those, John W. Warner, the Virginia Republican who is chairman of the powerful Senate Armed Services Committee, said in a statement that Mr. Bowen was “making a valuable contribution to the Congressional and public understanding of this very complex and ever-changing situation in Iraq.”

“Given that his office has performed important work and that much remains to be done,” Mr. Warner added, “I intend to join Senator Collins in consulting with our colleagues to extend his charter.”

While Senators Collins and Warner said they had nothing more than hunches on where the impetus for setting a termination date had originated, Congressional Democrats were less reserved.

“It appears to me that the administration wants to silence the messenger that is giving us information about waste and fraud in Iraq,” said Representative Henry A. Waxman, a California Democrat who is the ranking minority member of the House Committee on Government Reform.

“I just can’t see how one can look at this change without believing it’s political,” he said.

The termination language was inserted into the bill by Congressional staff members working for Duncan DUKE Hunter, the California Republican who is the chairman of the House Armed Services Committee and who declared on Monday that he plans to run for president in 2008.

Mr. Holly, who is the House Armed Services spokesman as well as a member of Mr. Hunter’s staff, said that politics played no role and that there had been no direction from the administration or lobbying from the companies whose work in Iraq Mr. Bowen’s office has severely critiqued. Three of the companies that have been a particular focus of Mr. Bowen’s investigations, Halliburton, Parsons and Bechtel, said that they had made no effort to lobby against his office.

The idea, Mr. Holly said, was simply to return to a non-wartime footing in which inspectors general in the State Department, the Pentagon and elsewhere would investigate American programs overseas. The definite termination date was also seen as helpful for planning future oversight efforts from Bush administration agencies, he said.

But in Congress, particularly on the Democratic side of the aisle, there have long been accusations that agencies controlled by the Bush administration are not inclined to unearth their own shortcomings in the first place.

The criticism came to a head in a hearing a year ago, when Representative Dennis J. Kucinich, an Ohio Democrat, induced the Pentagon’s acting inspector general, Thomas Gimble, to concede that he had no agents deployed in Iraq, more than two years after the invasion.

A spokesman for the Pentagon inspector general said Thursday that Mr. Gimble had worked to improve that situation, and currently had seven auditors in Baghdad and others working on Iraq-related issues in the United States and elsewhere. Mr. Gimble was in Iraq on Thursday, the spokesman said.

Mr. Bowen’s office has 55 auditors and inspectors in Iraq and about 300 reports and investigations already to its credit, far outstripping any other oversight agency in the country.

But Howard Krongard, the State Department inspector general, said that the comparison was misleading, because many of those resources would probably flow to State and the Pentagon if Congress shuts Mr. Bowen’s office down.

“I think we are competitive to do what they ask us to do,” Mr. Krongard said, referring to Congress.

Mr. Kucinich and other lawmakers said that Iraq oversight could also be hurt by the loss of Mr. Bowen’s mandate, which allows him to cross institutional boundaries, while the other inspectors general have jurisdictions only within their own agencies. Mr. Krongard said that issue could be handled by cooperation among the inspectors general.

Officials at the State Department and the Pentagon made it clear that in general terms they supported Mr. Bowen’s work and would abide by the wishes of Congress.

While the quality of Mr. Bowen’s work is seldom questioned, he is sometimes accused of being a grandstander who is too friendly with the news media. Mr. Bowen has responded that it is standard procedure to publicize successful investigations as a way of discouraging other potential wrongdoers.

Among the disagreements on the termination language in the defense authorization bill was exactly how much it would have shortened Mr. Bowen’s tenure. An amendment in the Senate version of the bill actually expanded the pot of reconstruction money his agents could examine.

Because the tenure of his office is calculated through a formula involving the amount of reconstruction money in that pot, the crafters of that amendment figured that it would have extended Mr. Bowen’s work until well into 2008 — or longer if Congress granted further extensions.

Mr. Holly agrees that the Senate language would have expanded that pot of money, but he says that in the Republican staff’s interpretation of the formula, Mr. Bowen’s tenure would have run out sometime in 2007 whether the money was added or not.

In any case, as the bill came out of conference, the termination date of Oct. 1, 2007, was inserted, effectively meaning that Mr. Bowen would have to start working on passing his responsibilities to other agencies by early next year.

Capitol Hill staff members said that after House Democratic objections were overridden, Senate conferees agreed to the provision in a bit of horse-trading: the amount of money Mr. Bowen could look at would be expanded, but only with the hard termination date.

Mr. Bowen himself declined to comment on the controversy surrounding his office, saying only that he was already working with the other inspectors general to develop a transition plan in accordance with the defense authorization act. “We will do what the Congress desires,” Mr. Bowen said.

Idle Contractors Add Millions to Iraq Rebuilding


A prison built in Nasiriya, Iraq, by the Parsons group. Overhead costs eat up large shares of such contracts.

October 25, 2006 Overhead costs have consumed more than half the budget of some reconstruction projects in Iraq, according to a government estimate released yesterday, leaving far less money than expected to provide the oil, water and electricity needed to improve the lives of Iraqis.

Those overhead costs have ranged from under 20 percent to as much as 55 percent of the budgets, according to the report, by the Special Inspector General for Iraq Reconstruction. On similar projects in the United States, those costs generally run to a few percent.

The highest proportion of overhead was incurred in oil-facility contracts won by KBR Inc., the Halliburton subsidiary formerly known as Kellogg Brown & Root, which has frequently been challenged by critics in Congress and elsewhere.

The actual costs for many projects could be even higher than the estimates, the report said, because the United States has not properly tracked how much such expenses have taken from the $18.4 billion of taxpayer-financed reconstruction approved by Congress two years ago.

The report said the prime reason was not the need to provide security, though those costs have clearly risen in the perilous environment, and are a burden that both contractors and American officials routinely blame for such increases.

Instead, the inspector general pointed to a simple bureaucratic flaw: the United States ordered the contractors and their equipment to Iraq and then let them sit idle for months at a time.

The delay between “mobilization,” or assembling the teams in Iraq, and the start of actual construction was as long as nine months.

“The government blew the whistle for these guys to go to Iraq and the meter ran,” said Jim Mitchell, a spokesman for the inspector general’s office. “The government was billed for sometimes nine months before work began.”

The findings are similar to those of a growing list of inspections, audits and investigations that have concluded that the program to rebuild Iraq has often fallen short for the most mundane of reasons: poorly written contracts, ineffective or nonexistent oversight, needless project delays and egregiously poor construction practices.

“This report is the latest chapter in a long, sad and expensive tale about how contracting in Iraq was more about shoveling money out the door than actually getting real results on the ground,” said Stephen Ellis, a vice president at Taxpayers for Common Sense in Washington.

“These contracts were to design and build important items for oil infrastructure, hospitals and education, but in some cases more than half of the money padded corporate coffers instead,” he said.

Although the federal report places much of the burden for the charges squarely on the shoulders of United States officials in Baghdad, the findings varied widely over a sampling of contracts examined by auditors, from a low of under 20 percent for some companies to a high of over 55 percent.


One oil contract awarded to a joint venture between Parsons, an American company, and Worley, from Australia, had overhead costs of at least 43 percent, the report found. One contract held by Parsons alone to build hospitals and prisons had overhead of at least 35 percent; in another, it was 17 percent.

The lowest figure was found for certain contracts won by Lucent, at 11 percent, but the report indicates that substantial portions of the overhead in those cases could not be determined.

The report did not explain why KBR’s overhead costs on those contracts — the contracts totaled about $296 million — were more than 10 percent higher than those at the other companies audited. Despite past criticism of KBR, the Army, which administers those contracts, has generally agreed to pay most of the costs claimed by the company.

Melissa Norcross, a spokeswoman for KBR, said in a written reply to questions, “It is important to note that the special inspector general is not challenging any of KBR’s costs referenced in this report.”

“All of these costs were incurred at the client’s direction and for the client’s benefit,” she said, referring to the Army Corps of Engineers, which is in charge of the oil contract.

But a frequent Halliburton critic, Representative Henry A. Waxman, a California Democrat who is the ranking minority member of the House Committee on Government Reform, disputed those assurances. “It’s incomprehensible that over $160 million — more than half the value of the contract — was squandered on overhead,” Mr. Waxman said in a written statement.

A spokeswoman for Parsons, Erin Kuhlman, said the United States categorized overhead and construction costs differently from contract to contract in Iraq, making it difficult to make direct comparisons. “Parsons incurred, billed and reported actual costs as directed by the government,” she said.

In Iraq, where construction materials are scarce and contractors must provide security for work sites and housing for Western employees, officials have said they expect the overhead to be at least 10 percent, but the contractors and American officials have grudgingly conceded that the true costs have turned out to be higher.

But even the high of 55 percent could be an underestimate, Mr. Mitchell said, because the government often did not begin tracking overhead costs for months after the companies mobilized. He added that because of the haphazard way in which the government tracked the costs, it was not possible to say how well the figures reflected overhead charges in the entire program.

The report’s conclusions were drawn from $1.3 billion in contracts for which United States government overseers actually made an effort to track overhead costs, of the total of $18.4 billion set aside for reconstruction in specific supplemental funding bills for the 2006 fiscal year.

When all American and Iraqi contributions are added up, various estimates for the cost of the rebuilding program range from $30 billion to $45 billion. Language included in the Defense Authorization Act, signed by President Bush last week, states that the inspector general’s office will halt its examination of those expenditures by October of next year.

Maj. Gen. William H. McCoy, who until recently commanded the Persian Gulf region division of the Corps of Engineers, disputed some of the inspector general’s findings in a letter appended to the report. Things like “waiting for concrete to cure” could still be taking place during what seem to be periods of inactivity, General McCoy wrote, so a quiet period “does not mean that the project is not moving forward.”

But many of the delays came during 2004 and took place in response to political developments in Iraq, the inspector general’s report says. The American occupation government, the Coalition Provisional Authority, mobilized many of the companies early that year.

After the authority went out of existence in June 2004, handing sovereignty to the Iraqi government, top American officials then kept the companies idle for months as the officials rewrote the rebuilding plan, and ran up costs as little work was done.

Iraq reconstruction failures tied to contracting breakdowns

October 13, 2006 Contracting problems have hamstrung reconstruction efforts in Iraq, raising questions about how the government can adapt its procurement system to effectively address unforeseen circumstances, according to a panel that examined the role procurement has played in the Iraq reconstruction effort.

T. Christian Miller, author of Blood Money: Wasted Billions, Lost Lives, and Corporate Greed in Iraq, Special Inspector General for Iraq Reconstruction Stuart Bowen and Katherine Schinasi, Government Accountability Office managing director for acquisition and sourcing management, spoke at a Friday event on the reconstruction effort. The panel was organized by the George Washington University Government Procurement Law Program.

Miller said he started his work in Iraq with an expectation for the story he would encounter there: the government procurement system meets the Wild West in Iraq, and the government procurement system wins. But he said he quickly realized that the reconstruction was not working.

The first U.S. government project Miller saw was a water treatment plant that, on the day of his visit, was out of chlorine and short on generator power because the machines had seized up for lack of antifreeze in the cold climate. Worse, when the plant eventually began to pump out clean water, what flowed from the taps of Iraqi homes was tainted with sewage and other contaminants because the old, leaky pipes between the facility and the homes had not been replaced.

Neither the engineers nor the project managers, Miller said, had considered the delivery aspect of the infrastructure project they had signed on to complete.

Miller described contracting staff shortages as central to the problems he encountered. He said David Nash, the first director of the Coalition Provisional Authority's Project Management Office, framed the issue as one of bodies and budgets: the Army Corps of Engineers had about 30,000 employees in the United States with a $13 billion budget for construction projects and contracts like the ones in Iraq, Nash told Miller. In Iraq, the Corps had 50 employees for the $18 billion budget it was allocated in late 2003.

"People were blowing cash around Iraq like they had leaf-blowers," Miller said.

Helping to manage that money and the projects it funded were layers and layers of contractors, Miller said. There sometimes were as many as nine tiers of contractors between the person ordering work done and a worker laying the bricks.

The CPA started out with only three contracting officers, Miller said. While the staff eventually grew, the office remained short-handed, sometimes having just one or two days to analyze and award large, complex contracts.

With government contracting officers working three-month tours of duty, contractors became the experts who had the knowledge needed to manage projects, Miller said, creating a situation vulnerable to manipulation.

"I really can't blame [the contractors] -- it's a business, that's how it's set up. They're supposed to make money. The person that's supposed to be the ... regulation on that is the U.S. government, and it was just never, never there."

GAO's Schinasi and IG Bowen echoed several of Miller's concerns with staffing and oversight levels, though in less certain tones, drawing on a recent GAO forum on procurement and an IG report on Iraq contracting.

Procurement policy tries to strike a balance between the flexibility to allow agencies to respond quickly to circumstances, and the application of complex rules intended to minimize fraud, waste and abuse. But, Schinasi said, "The lesson so far is, what we have isn't good enough."

Ties to GOP Trumped Know-How Among Staff Sent to Rebuild Iraq

After the fall of Saddam Hussein's government in April 2003, the opportunity to participate in the U.S.-led effort to reconstruct Iraq attracted all manner of Americans -- restless professionals, Arabic-speaking academics, development specialists and war-zone adventurers. But before they could go to Baghdad, they had to get past Jim O'Beirne's office in the Pentagon.

To pass muster with O'Beirne, a political appointee who screens prospective political appointees for Defense Department posts, applicants didn't need to be experts in the Middle East or in post-conflict reconstruction. What seemed most important was loyalty to the Bush administration.

O'Beirne's staff posed blunt questions to some candidates about domestic politics: Did you vote for George W. Bush in 2000? Do you support the way the president is fighting the war on terror? Two people who sought jobs with the U.S. occupation authority said they were even asked their views on Roe v. Wade .

Many of those chosen by O'Beirne's office to work for the Coalition Provisional Authority, which ran Iraq's government from April 2003 to June 2004, lacked vital skills and experience. A 24-year-old who had never worked in finance -- but had applied for a White House job -- was sent to reopen Baghdad's stock exchange. The daughter of a prominent neoconservative commentator and a recent graduate from an evangelical university for home-schooled children were tapped to manage Iraq's $13 billion budget, even though they didn't have a background in accounting.

The decision to send the loyal and the willing instead of the best and the brightest is now regarded by many people involved in the 3 1/2 -year effort to stabilize and rebuild Iraq as one of the Bush administration's gravest errors. Many of those selected because of their political fidelity spent their time trying to impose a conservative agenda on the postwar occupation, which sidetracked more important reconstruction efforts and squandered goodwill among the Iraqi people, according to many people who participated in the reconstruction effort.


Bribe Inquiry Looks at Sale of Field Gear to Military

In a widening scandal at the United States Special Operations Command, federal investigators are looking into a bribery scheme as well as accusations of improper influence involving millions of dollars in battlefield equipment used by Navy Seals and Army Green Berets and Rangers.

Whistle-blower slams Iraq contractor

Halliburton subsidiary Kellogg, Brown & Root charged millions to the government for recreational services never provided to U.S. troops in Iraq, including giant tubs of chicken wings and tacos, a widescreen TV, and cheese sticks meant for a military Super Bowl party, according to a federal whistle-blower suit unsealed Friday.

Instead, the suit alleges, KBR used the military's supplies for its own football party.

Filed last year in U.S. District Court in Washington, D.C., by former KBR employee Julie McBride, the lawsuit claims the giant defense contractor billed the government for thousands of meals it never served, inflated the number of soldiers using its fitness and Internet centers, and regularly siphoned off great quantities of supplies destined for American soldiers.

This ties in to the SOCom Rec-Center scandal and Hunter's Santa Rosa Island hunting perserve. Hunter contends it would not be difficult for the government to run free hunts at no cost to taxpayers, something his opponents dispute. The 'free' part would be kickbacks from other contracts.

SOCom sentence: 15 months

As Tom Spellissy walked into U.S. District Court Monday, he had no idea what his punishment might be.

The federal judge about to impose his sentence had already overturned a jury's verdict and dismissed the bulk of the case against him. His lawyer was arguing for probation, citing the dubious evidence against his client and his exemplary 29-year military career.

But prosecutors said Spellissy caused irreparable harm at Special Operations Command in Tampa by seeking special treatment for his clients in the defense industry. They recommended he spend up to two years in prison on the single conspiracy charge he still faced.

U.S. District Judge James Whittemore weighed the case for more than two hours. He noted Spellissy's sterling reputation and his unfortunate family circumstances: a wife with ovarian cancer and two young children.

In the end, Whittemore said he had no choice but to sentence Spellissy to 15 months in prison.

"Probation is not an appropriate sentence for this offense," Whittemore said.

Spellissy was also ordered to pay a $4,000 fine. His company, Strategic Defense International Inc. of Clearwater, was fined $125,000.

Spellissy, a retired Army colonel who worked as a private defense contractor, looked shocked as he left the courtroom.

"To tell you the truth, I don't know what to think," Spellissy said before his lawyer, Pat Doherty, ushered him away from reporters.

Military recruiting

Army Signs More Dropouts

Army Uses New Tool to Recruit 5900 ‘Quality’ Dropouts

November 22, 2006 A wartime Army struggling to attract enough “quality” volunteers is enlisting additional thousands of high school dropouts using an experimental screening tool to identify those most likely to complete their enlistments.

The Two Tier Attrition Screen (TTAS) is an added “quality indicator” that officials hope will allow the Army take in many more high school dropouts with greater confidence they won’t drive up attrition rates.

Years of research have shown that high school dropouts are more prone to be discipline problems in service and to be discharged early. The first-term attrition rate for non-graduates typically is 50 percent, almost double that of high school diploma graduates.

In fiscal 2006, which ended Sept. 30, the Army brought in 5900 non-high school graduates as TTAS (pronounced T-TAS) recruits. Not only do such recruits help the Army reach its numerical recruiting goals but the Army can exclude these recruits when calculating the percentage of high school diploma graduates recruited, which is an important quality measure.

For example, the Army announced last month that 81 percent of its non-prior service recruits for 2006 were high school graduates. That was disturbingly below the 90 percent Department of Defense standard for every service. But the proportion of high school graduates would have been reported as 74.3 percent if the Army had to count the 5900 TTAS enlistees high school dropouts. The number instead is ignored.

In June, Defense officials gave the Army permission to sign up 8000 TTAS recruits a year to ease increasingly difficult recruiting challenges.

The Army began to recruit up to 4000 specially screened non-graduates, and to exclude them from quality calculations, in fiscal 2000. The recruits needed to pass a high school equivalency exam, called the GED. They also were screened using a special test to assess motivation, developed by the U.S. Army Research Institute for the Behavioral and Social Sciences.

The “GED-Plus” recruits, as they were called, had attrition rates not much lower than that of high school dropouts. So in April 2005, the Army fielded TTAS, an improved screening tool. It combines a better motivation test with minimum score requirements on the math and word-knowledge portions of the military entrance exam. Finally, TTAS screens non-diploma recruits using weight-to-height proportions also called a body mass index.

Only time will tell how effective TTAS is for screening high school dropouts to control first-term attrition. But it looks promising, according to preliminary findings presented in report for the Army Research Institute by researchers Mark C. Young and Leonard A. White.

Recruits who comply with the TTAS standard have a six-month attrition rate of 6.2 percent which is near to 5.6 percent reported for high school graduates. It’s much better than 10.3 percent attrition after six months for non-high school graduates who failed the TTAS standard.

Non-high school graduates, the authors point out, are “relatively inexpensive to recruit and some…do make very good soldiers.” They project that TTAS could save the Army $100 million a year by lowering recruiting costs an average of $10,000 per recruit for up to 10,000 recruits a year.

TWO GENERALS, TWO VIEWS – Two Army generals addressed a symposium Nov. 16 on sustaining the volunteer force through the long wars of Iraq and Afghanistan. They disagreed on current recruit quality.

Lt. Gen. Michael Rochelle, the Army’s deputy chief of staff for personnel, put on a happy face.

“I hope everyone is as pleased as I am with the U.S. Army’s recruiting success for 2006. A very, very successful year,” he said.

He noted that the active Army exceeded its goal on numbers of recrurits. He gave numbers too for the Reserve and National Guard but failed to mention that they fell 1000 and 1600 recruits short of goal, respectively.

Rochelle referred to a “very challenging recruiting environment” but he did not blame, say, a divisive war in Iraq. Instead, he said, youth are “being influenced by what they see in the liberal media, both about the nature and the quality of the force…But I’m here to tell you it’s a magnificent force…by every measure of quality [including] the economic strata from which they come, certainly patriotism, and even education and aptitude, morals.”

Retired Gen. Barry McCaffrey also showered praise on current forces, particularly the caliber of non-commissioned officers. But he said it’s long past time for the Bush administration to level with Americans about both the impact of Iraq and Afghanistan on the Army and about the urgent need to expand U.S. ground forces to fight the global war on terrorism.

“This is a problem of resources and political will,” McCaffrey said to vigorous applause from 300 attendees at the professional symposium sponsored by the Military Officers Association of America.

“Generally speaking,” he said, “we’ve quadrupled the number of lowest mental category [recruits]…we’ve quadrupled the number of non-high school graduates…we’re putting six, seven, eight thousand moral criminal waivers into the armed forces.” As recruit quality falls, he said, battalion and squadron leaders are facing more readiness challenges.

“Cocaine use is reappearing. Lots of pregnancy among young women emerging from” advanced individual training reporting to units, he said.

The armed forces are too small, recruiters lack sufficient incentives and politicians, from the president down, aren’t asking Americans to sacrifice or to encourage sons and daughters to join the fight, he said.

As to why his views differ so from Rochelle’s, McCaffrey joked, “Look, if you take an [active] Army officer…and drop him down a well, start throwing dung on his head for about an hour and a half and come back, he’ll say ‘This is the best well I ever got dropped in.’ ”

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The Pentagon's 12-Step Program to Create a Misfit Military

Military recruiting in 2006 has been marked by upbeat pronouncements from Defense Secretary Donald Rumsfeld, claims of success by the White House, propaganda releases by the Pentagon, and a spate of recent press reports touting the way the military has made its wo/manpower goals.

But the armed forces have only met with success through a fundamental "transformation," and not the transformation of the military -- that "co-evolution of concepts, processes, organizations and technology" -- Rumsfeld is always talking about either.

While the Secretary of Defense's longstanding goal of transforming the planet's most powerful military into its highest tech, most agile, most futuristic fighting force has, in the words of the Washington Post's David Von Drehle, "melted away," the very makeup of the Armed Forces has been mutating before our collective eyes under the pressure of the war in Iraq. This actual transformation has been reported, but only in scattered articles on the new recruitment landscape in America.

Last year, despite NASCAR, professional bull-riding, and Arena Football sponsorships; popular video games that doubled as recruiting tools; TV commercials dripping with seductive scenes of military glory; a "joint marketing communications and market research and studies" program actively engaged in measures to target for military service Hispanics, drop outs, and those with criminal records; and at least $16,000 in promotional costs for each soldier it managed to sign up, the U.S. military failed to meet its recruiting goals. This year those methods have been pumped up and taken over the top in twelve critical areas of recruitment that make the old Army ad-line, "Be All That You Can Be," into material for late night TV punch lines of the future.

Concern over US army recruitment

23 August, 2006 As the "war on terror" drags on, the US military is finding it difficult to fill its ranks and there are growing concerns some recruiters are breaking the rules.

Nearly five years into the war, with conflicts in Afghanistan and Iraq, the death toll is approaching 3,000 servicemen and women.

The pressure to sign up new recruits against this background has challenged the US military.

The problem is especially acute for the army.

It had a goal of bringing in 80,000 new soldiers in the financial year that ended on 30 September 2005.

It finished that year with just 73,000 recruits.

This year the army appears to be on target to reach the 80,000 goal but to do so it has had to double the top enlistment bonuses for recruits from $20,000 to $40,000.

It has also had to loosen medical standards, forgive more minor criminal offences, raise the age limit for new recruits from 35 to 42 and accept more people who did not finish high school.

Military recruiters cited for misconduct

20 August, 2006 More than 100 young women who expressed interest in joining the military in the past year were preyed upon sexually by their recruiters. Women were raped on recruiting office couches, assaulted in government cars and groped en route to entrance exams.

A six-month Associated Press investigation found that more than 80 military recruiters were disciplined last year for sexual misconduct with potential enlistees. The cases occurred across all branches of the military and in all regions of the country.

"This should never be allowed to happen," said one 18-year-old victim. "The recruiter had all the power. He had the uniform. He had my future. I trusted him."

At least 35 Army recruiters, 18 Marine Corps recruiters, 18 Navy recruiters and 12 Air Force recruiters were disciplined for sexual misconduct or other inappropriate behavior with potential enlistees in 2005, according to records obtained by the AP under dozens of Freedom of Information Act requests. That's significantly more than the handful of cases disclosed in the past decade.

The AP also found:

-The Army, which accounts for almost half of the military, has had 722 recruiters accused of rape and sexual misconduct since 1996.

-Across all services, one out of 200 frontline recruiters - the ones who deal directly with young people - was disciplined for sexual misconduct last year.

-Some cases of improper behavior involved romantic relationships, and sometimes those relationships were initiated by the women.

-Most recruiters found guilty of sexual misconduct are disciplined administratively, facing a reduction in rank or forfeiture of pay; military and civilian prosecutions are rare. -The increase in sexual misconduct incidents is consistent with overall recruiter wrongdoing, which has increased from just over 400 cases in 2004 to 630 cases in 2005, according to a General Accounting Office report released this week.

Gen. Hal M. Hornburg: Air Force's Thunderbirds

The FBI is investigating the award of a $50 million publicity contract for the Air Force's Thunderbirds aerial stunt team to a company with ties to a recently retired general, military and law enforcement officials said Friday.

The Air Force canceled the contract with Strategic Message Solutions in February, after two losing bidders complained that the company had an unfair advantage, including its decision to make retired Gen. Hal M. Hornburg a partner, according to a federal lawsuit over the contract.

Air Force Secretary Michael Wynne directed the Pentagon's inspector general to review the contract award. The inspector general referred the matter to the FBI to look into possible violations of federal contracting laws, a law enforcement official said.

A senior defense official said the Inspector General's Defense Criminal Investigative Service opened a criminal investigation into the matter around the end of February. A short time later DCIS brought in the FBI.

Strategic Message Solutions, based in Plymouth Meeting, Pa., and its president, Edward Shipley, sued the government in February, demanding that the contract be reinstated. The suit says Hornburg had no involvement in obtaining the contract.

James E. Beasley, the company's lawyer, did not immediately return messages left Friday by The Associated Press. While lauding the company's services and Shipley's role in developing the publicity package, the lawsuit describes an unusual chain of events that includes a purported decision by Gen. T. Michael Moseley, the Air Force chief of staff, to provide Shipley an immediate $8.5 million in federal funds in April 2005, without any request for bids for the work.

At the time, Moseley was the Air Force's No. 2 officer.

Ex-Navy officials accused of fraud

Two former Pentagon officials, including an acting secretary of the Navy, have been accused of scheming with a banned American contractor to get lucrative rebuilding contracts in Iraq, The Associated Press has learned.

The contracting firm, Custer Battles LLC, was suspended two years ago by the military for submitting millions of dollars in fake invoices.

The charges come in a sealed federal lawsuit, a copy of which was obtained by the AP. It was filed by two whistle-blowers -- one of whom won a $10 million judgment in another suit when a federal jury agreed that Custer Battles had swindled the government.

The current suit names former acting Navy Secretary Hansford Johnson, former acting Navy Undersecretary Douglas Combs and Custer Battles LLC officials including founders Scott Custer and Mike Battles, who were barred in 2004 after billing the government for work that was never done and for padding invoices by much as 100 percent.

Also named were six companies connected to the contracting firm, including Windmill International Ltd., a worldwide contractor run by Combs and Johnson, and a Romanian company, Danubia Global, which bought Custer Battles in 2005.

The new lawsuit contends Custer and Battles, both Army veterans with Washington political connections, tried to get around the suspension order by plotting with Johnson and Combs "to set up sham companies (thereby) concealing their ownership and control of those entities."

According to the suit filed in Virginia, the shell companies committed other illegal acts, including selling weapons on the Iraqi black market, creating a dangerous possibility that "insurgents could buy them and use them to attack U.S. soldiers."

Army Corps of Engineers employee indicted on fraud charges

A U.S. Army Corps of Engineers employee signed off on inflated apartment rental leases for military personnel in Kuwait in exchange for $47,000 in bribes from a real estate agent, according to a federal indictment made public Friday.

Gheevarghese Pappen, 62, was charged with three counts of honest services wire fraud in an indictment returned by a federal grand jury in Savannah, Ga. He faces up to 60 years in prison and $750,000 in fines, the Justice Department said.

Lincoln Groups

I Was A PR Intern in Iraq

In this astonishing confessional by an Oxford graduate who worked in the green zone of Baghdad, we see the perversity of the American version of a 'free press' in Iraq.

I arrived at the Baghdad airport on July 7, after waiting for my luggage in Amman for nearly a week. People at the baggage claim shouted like tour guides for KBR employees to gather in one spot, while others, holding aloft signs with the names of various security firms, urged bulky, tattooed men to congregate in groups. But I saw no one there to greet me. As the hall emptied, I noticed a man and woman loitering indifferently near the exit. I eventually made my way over and asked if they were here to meet Willem Marx. They were. Each shook my hand, and then they led me in silence out of the airport and to the back seat of a battered sedan.

To get to the villa where I would be living for the summer, I was awakened before dawn and loaded onto what was essentially a Greyhound bus with armored plating and shatterproof windows. The road to Baghdad's Green Zone, where the Lincoln Group villa was located, is known as the Highway of Death, for the number of convoys that have been attacked along its route. And so we trundled along the dangerous road in complete darkness, flanked by a quartet of Humvees and watched over by helicopters with nightscopes.

There were four bedrooms on the villa's ground floor, and I was to share one of these with an Iraqi named Ahmed. Ahmed, who had attended American University in Washington, always wore immaculately pressed shirts and remained clean-shaven. Because he often shared his bed with one of several Baghdadi girlfriends, I moved down the hall after only a few nights. My new roommate, Steve, a recent Brown graduate, had signed on with Lincoln Group for a full year and seemed to be pacing himself accordingly. Most nights he would drink beers bought from a nearby market, and the next day he would sleep well into the afternoon.

I was soon contacted by a Lincoln Group employee named Jon, who formerly had run political campaigns in Chicago and now worked on the company's I.O., or Information Operations. Over lunch at the recently bombed and rebuilt Green Zone Café -- an air-conditioned tent with plastic chairs and a TV airing Lebanese music videos -- Jon explained that he was returning home for several weeks of

R & R and that Jim Sutton had chosen me to be his replacement. Jon quickly sketched out my new I.O. responsibilities. An Army team inside the Al Faw palace, another of Saddam's former residences, would send me news articles they had cobbled together from wire stories and their own reports from the field. It was my job to select the ones that seemed most like Iraqis had written them. I was then to pass these articles along to our Iraqi employees, who would translate the pieces into Arabic and place them in local newspapers. Jon told me that the U.S. Army could hardly carry out this work in their military uniforms, so they hired Lincoln Group, which could operate with far fewer restrictions. It was a bread-and-butter contract, he said, that paid the company about $5 million annually. I asked if the newspapers knew that Lincoln Group or the U.S. military were behind these articles. They did and they didn't, Jon said. The Iraqis working for us posed as freelance journalists, but they also paid editors at the papers to publish the stories -- part of the cost Lincoln Group billed back to the military. "Look," Jon assured me, "it's very straightforward. You just have to keep the military happy."

The day had been extremely long, and I was exhausted and more than a little shaken. The blocks of cash that we had locked up in my room had been picked up and moved to a bank in central Baghdad. In my email inbox, there were messages from both my parents, asking me when I would leave Iraq and saying they hoped that it would be very soon. Lincoln Group had also sent me a newly drawn contract; they were offering me up to $70,000 to postpone journalism school and to work another ten months in Baghdad. But I couldn't fathom doing the work any longer. I had become what I had to admit was the antithesis of a journalist. And if I continued to suborn Iraqi reporters with U.S. military money, this would surely mean I would never be able to work as one.

That night I rang Christian Bailey and Paige Craig at the company's D.C. headquarters and told them I wanted to go home. On August 20, I boarded a plane out of Baghdad, and my summer internship was over.

Business Booms for U.S. Firm That Planted Stories

Just two years ago, the Lincoln Group was a small start-up communications firm with an idealistic vision and a handful of employees, many of them former service members.

Today, the company boasts 300 employees worldwide, is drawing $100 million contracts from the military, and is at the center of a recent Washington miniscandal as the firm that planted pro-American news articles in Iraqi newspapers on behalf of the Coalition Provisional Authority.

Even though the placed stories apparently were factually correct, critics worried the contract amounted to a U.S. propaganda campaign that ran roughshod over the fledgling independence of the Iraqi media.

Those officials declined to talk in much detail about the nature of their work or with whom they are contracted. But [Paige Craig], a former enlisted Marine who co-founded the company, said it is active in Iraq, Afghanistan, Lebanon, Pakistan and the United Arab Emirates and is hoping to make inroads in Africa and Asia.

He said the firm’s goal is to promote commerce in hostile environments by “bridging the cultural divide” between those nations and Western governments and businesses.

Lincoln employs a mix of former military personnel — a former Special Forces medical sergeant works alongside a former New York University professor — as well as public relations specialists, television producers, business development consultants and research analysts.

The private sector definitely has a role to play in efforts to gather and dispense information, said Eric Larson, a senior policy analyst at the RAND Corp., Santa Monica, Calif. And private marketing and advertising firms tend to attract the kind of “creative types” who can think of ways to get an effective message through to native populations.

“The government and the military are limited,” both in manpower and other resources, to do this kind of thing, he said. “These are complementary skills that are out there in the private sector [and] could be helpful.”

The Lincoln Group was one of three firms hired last summer by the Defense Department to work in Iraq to improve public opinion of the United States and its military.

The arrangement became controversial in December when the Los Angeles Times and other news outlets reported that Lincoln received a contract worth up to $100 million to do work on behalf of Multi-National Forces-Iraq, to include planting favorable stories produced by the U.S. military in Iraqi newspapers and on Iraqi radio.

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