Gulf Stream Coach -- the politically connected company handed a $500 million federal contract to manufacture trailers for Hurricane Katrina victims -- knew its product was contaminated with dangerous levels of cancer-causing formaldehyde in early 2006.

But it failed to notify residents or take any action to protect them.

That was one of the revelations that emerged from yesterday's hearing on Katrina trailer manufacturers held by the House Committee on Oversight and Government Reform. Led by Rep. Henry Waxman of California, the committee has been investigating health problems related to toxic trailers that the Federal Emergency Management Agency provided to storm survivors at a total cost to taxpayers of more than $2 billion. The hearing came a week after the Centers for Disease Control and Prevention released a report assessing in detail trailers' formaldehyde levels.

"FEMA failed by ignoring the dangers of formaldehyde and resisted testing. Gulf Stream's problem is different," Waxman said in his opening statement. "The company did test trailers after hearing the first reports of high formaldehyde levels. It found pervasive formaldehyde contamination in its trailers. And it did not tell anyone."

The Department of Homeland Security gave the first piece of the limited-competition contract for 50,000 travel trailers to Gulf Stream of Nappanee, Ind. four days after Katrina came ashore in August 2005 -- even before New Orleans' Superdome shelter was evacuated. The second half of the deal, the largest DHS awarded to a private company in 2005, was in place by Sept. 9. In the decade leading up to the disaster, Gulf Stream's founding family and employees contributed at least $81,650 to political candidates and groups, with all but $5,250 of that going to Republicans.

In March 2006, the first media reports appeared documenting FEMA trailer dwellers' health complaints, including headaches, nosebleeds and respiratory problems. After communicating with FEMA officials, the company agreed to send someone to a Louisiana trailer staging area to test the units' air quality. Between March 26 and May 15, Gulf Stream employees tested about 50 trailers, finding dangerously elevated levels in many of them. Some of the units registered formaldehyde at levels above 500 parts per billion -- a level that triggers mandatory medical monitoring under federal workplace safety rules.

However, when the company summarized its findings with FEMA in a May 2006 letter, it downplayed their seriousness, according to a staff analysis prepared for the committee:

Gulf Stream did not inform FEMA that all of the 11 occupied units it tested had levels about 100 ppb. It did not inform FEMA that four of the 11 occupied units had levels about 500 ppb, which is the OSHA action level for mandatory medical monitoring. And it did not inform FEMA that over 20 of the approximately 40 unoccupied trailers it tested had formaldehyde levels about the 750 ppb OSHA standard.

Though Gulf Stream offered to make its test results available to FEMA, the agency apparently did not pursue that offer, the analysis found. Meanwhile, Gulf Stream Chairman Jim Shea blamed FEMA for the company's inaction in his prepared testimony:

On May 17, 2006, FEMA specifically advised us NOT to directly contact occupants. The agency told us it had the means to address occupant concerns and that it would let us know if it wanted our assistance.

Other manufacturers addressed in yesterday's hearing were Forest River of Elkhart, Ind.; Keystone RV of Goshen, Ind.; and Pilgrim International of Middlebury, Ind. The trailers made by those companies and used to house Katrina's displaced were all found by the Centers for Disease Control and Prevention to have significantly higher levels of formaldehyde than other brands. However, the other companies apparently did not have as much detailed knowledge of the potential health risks as Gulf Stream.

Last year, Gulf Stream voluntarily converted to wood products that meet the formaldehyde emission levels proposed by the California Air Resources Board. The Recreational Vehicle Industry Association has also set that standard for all its members. However, there are still no federal formaldehyde standards for travel trailers.

While problems with trailers' air quality have long been known, the federal government has been slow to come up with a disaster housing plan that avoids their use. Last month FEMA unveiled a plan that calls for trailers to be deployed only as a last resort, with the approval of the affected state's governor, and for use only on private property where the owners can repair damaged homes within six months. The agency said it would instead promote permanent construction of new housing units, use of vacant rental units, and alternative housing such as the prefab "Katrina cottages."

But U.S. Sen. Mary Landrieu of Louisiana said FEMA's plan represented a case of too little, too late. As she told the New Orleans Times-Picayune:

"Nearly three years after Katrina and Rita, FEMA submitted to Congress a six-page document that regurgitates FEMA's typical housing strategy. ... The only new strategy in FEMA's 2008 plan is to call upon governors of impacted states to sign off on the use of trailers, which would allow FEMA to give them to disaster survivors responsibility-free."

(In this FEMA photo by Mark Wolfe, Bobby Keyes of Mississippi moves his belongings into a new FEMA travel trailer on Thanksgiving Day 2005)

Labels: contracting, FEMA, formaldehyde, Gulf Coast Reconstruction Watch, Gulf Stream Coach, Hurricane Katrina, toxic trailers

The New York-based Center for Constitutional Rights was part of a legal team that last year filed suit against North Carolina-based private security contractor Blackwater for its role in the mass shooting of Iraqi civilians.

Now the nonprofit law firm is targeting three other contractors based in the South -- this time over torture inside Iraq's notorious Abu Ghraib prison.

Yesterday CCR announced that it was suing CACI International and CACI Premier Technology Inc. of Arlington, Va., along with an Alexandria-based division of L-3 Communications Corp. It's also suing three individual contractors: Adel Nakhla of Maryland, a translator with L-3, then known as the Titan Corp.; Timothy Dugan of Ohio, a CACI screener and interrogator; and Daniel E. Johnson of Seattle, also a CACI interrogator.

"Private military contractors and the individuals they employ cannot act with impunity," said CCR attorney Katherine Gallagher in a statement. "Contractors must act within the bounds of law and must be held accountable for their participation in the atrocities at Abu Ghraib and the other facilities in Iraq. We believe their actions and the acts of torture of their employees clearly violated the Geneva Conventions, the Army Field Manual, and the laws of the United States."

The lawsuits were filed in federal court on behalf of the following Iraqi civilians:

* Mohammed Abdwaihed Towfek Al-Taee, a 39-year-old taxi driver who alleges abuse during a nine-month detention and who later learned that he was probably turned in by a customer seeking U.S. payment for intelligence tips.

* Wissam Abdullateef Sa’eed Al-Quraishi, a 37-year-old who was allegedly hung on a pole for seven days and subjected to beatings, forced nudity, electrical shocks, humiliating treatment, mock executions and other forms of torture.

* Sa’adoon Ali Hameed Al-Ogaidi, a 36-year-old Arabic teacher and shopkeeper who was allegedly held for a year during which he was caged, abused, stripped and kept naked, and who for a time was hidden from the International Committee of the Red Cross.

* Suhail Najim Abdullah Al-Shimari, a farmer who was held for more than four years and allegedly caged, menaced with dogs, subjected to beatings and electrical shocks, and threatened with death and being sent to a "far away" place.

CCR was founded in 1966 by attorneys who represented civil rights movements in the South. Other firms involved in the lawsuit over contractor torture are Burke O'Neil of Philadelphia and Akeel & Valentine of Troy, Mich. For more details on the allegations, click here.

Labels: blackwater, CACI, center for constitutional rights, contracting, iraq, L-3, military, torture, virginia

Blackwater Worldwide CEO Erik Prince, President Gary Jackson, and spokesperson Anne Tyrrell traveled from the company's compound in Moyock, N.C. yesterday to the state capital, where they met with editorial board members, editors and reporters at the Raleigh News & Observer to challenge what they consider to be unfair media treatment, the paper reports.

The visit was part of a public-relations campaign the private security contractor launched last fall after Blackwater employees guarding a State Department convoy in Baghdad were involved in the shooting deaths of 17 civilians. That incident remains under federal investigation and is also the target of a lawsuit.

Also on the agenda was Blackwater's recent request that a U.S. federal court apply Islamic Shari'a law to a lawsuit brought by the widows of three U.S. soldiers who died in a crash of one of the company's planes in Afghanistan four years ago. Blackwater subsidiary Presidential Airways of Florida initially argued that the lawsuit should be dismissed since the company was acting as a government agent and soldiers can't sue the government, but the courts rejected that argument. Now it argues the suit should be dismissed because Shari'a law -- not U.S. law -- applies.

Here's my transcript of N&O Executive Editor John Drescher questioning Prince and Tyrrell about the Shari'a request. You can follow along with the audio recording online here, where there are also other audio recordings from yesterday's discussion:

JD: I've read your motion to dismiss in the McMahon v. Presidential Airways case. My question for you is why do you want Shari'a law to apply in this case?

EP: Ah, I couldn't comment as to the details of, ah, of that motion to dismiss. I mean, it was a choice of law venue. It was actually a question raised by, uh, by the judge in one of the original hearings, so this is responding to an inquiry from the judge -- from the, uh, from the federal judge himself.

JD: OK. But, but why -- OK. So you respond to the question, but your answer is not we want this heard in an American courtroom, you want it heard in Afghanistan under Shari'a law. Why would you want that?

AT: That may well be a question for our lawyers.

EP: Yeah, I'm not able to render judgments on that one. It's way over my head.

JD: Really?

EP: That's big-time lawyers going on.

JD: Well, I'm not a big-time lawyer.

EP: I'm not -- we're not, either.

JD: I'm a citizen who read the case, and North Carolinians are very patriotic. We're going to write on a motion you all have filed, so you need to know where my line of questioning is. Very patriotic people. It's hard to read -- to be honest with you, it's hard to read that brief as American citizens and not be insulted by it. Here you have an American company operating a plane with six Americans on it that crashed in Afghanistan. As far as I know, there's no Afghanistan citizen involved in this in any way, shape or form.

EP: Where did the crash occur? In Afghanistan.

JD: Correct. But remember all the parties here are flying under FAA regulations.

EP: Right.

JD: And so, so what you're saying is you no longer want to have this case heard by an American judge and an American jury under American law. You want it heard under Shari'a law? Under Islamic law?

EP: Here's, but here's the glitch. That contract was flown in Afghanistan supporting, under operation and control of the U.S. military. Um, and uh, you know, the trial lawyers try to characterize it as a, uh, air taxi, air charter for hire. It's impossible to fly an FAA Part 135 mission there, because there's no nav[igation] aids, there's no flight service station, there's no published approach procedures, there's no radar control. There's none of those things, none of those elements that you would expect to have in a FAA-sanctioned organization. That was a battlefield support mission, flown on a battlefield, in a foreign country.

JD: That's not what the Air Force says. The McMahon case is purely private litigation, which the United States has no interest in.

EP: I think there are some other statements from a number of general authors that would beg to differ with that.

Who is the architect of this curious legal strategy? The company's chief counsel is Joseph Schmitz, who served as Defense Department Inspector General from 2002 until he left to join Blackwater in 2005. He's the son of John Schmitz, a former member of the U.S. House of Representatives from California who was expelled from the far-right John Birch Society for "extremism," and the brother of Mary Kay Letourneau, a former schoolteacher who served several years in prison for statutory rape involving a teenage student to whom she's now married.

Joseph Schmitz is also a member of the Knights of Malta -- a Catholic military order that was involved in fighting Islamic rule of the Holy Land during the Crusades.

(Photo of "I Support Blackwater" T-shirt from the company's online store, which also offers a Christmas-themed onesie for infants.)

Labels: blackwater, contracting, iraq, news and observer

We've reported extensively here on allegations of cronyism and other problems with the Department of Housing and Urban Development's work in post-Katrina New Orleans -- problems that culminated in the resignation earlier this year of former HUD Secretary Alphonso Jackson, who remains under criminal investigation for his role in questionable contracts in New Orleans, Philadelphia and the Virgin Islands.

This weekend, the Washington Post disclosed new problems with HUD's operations. They appear to be related to the agency's efforts to boost contracts awarded to minority-owned companies while disregarding concerns about qualifications raised by longtime HUD contracting staff:

The contract awards that staff members questioned took place within programs, heavily promoted by Jackson, to help small, minority-owned businesses get a bigger share of the roughly $1 billion in public contracts HUD awards each year. During Jackson's tenure, the proportion of contracts awarded to small black- and Hispanic-owned businesses, including under the Section 8(a) program, rose from 6 percent to nearly 35 percent. The proportion of contracts open to full competition decreased from 71 percent to 33 percent, federal records show.

The paper's examination of HUD contracts found three firms that won hundreds of millions of dollars in contracts under Jackson while career contracting staff repeatedly raised concerns about their qualifications. The firms, all based in the South, are:

* Harrington, Moran and Barksdale Inc. (HMBI), an Arlington, Texas-based company that's led by two former Reagan administration officials and has close relations with senior Republican appointees at HUD. In 2004, the company -- which had previously managed only a handful of apartment buildings and development projects -- landed $71 million in HUD contracts overseeing the upkeep and sale of defaulted homes.

* National Housing Group, a Miami-based property management firm that's contributed generously to GOP campaigns, won $50 million in contracts from 2003 to 2007. Its second-highest executive has been indicted for allegedly falsifying reimbursement requests to HUD.

* Drayton, Drayton & Lamar of Georgia had received about $1 million in HUD business through 2002. But since 2003, it landed $35 million in data-technology and information-management contracts at HUD despite concerns about its performance. "Its president has socialized with a HUD official," the Post noted.

It also appears that HUD brass retaliated against lower-level employees who voiced objections to the deals. For example, when veteran agency contracting specialist Gloria Freeman repeatedly raised concerns about HMBI, she was transferred to a policy job and later retired. And when Ed Girovasi -- a 33-year HUD employee -- was asked to review an NHG claim for $8 million, he concluded the firm had exaggerated and actually owed HUD $250,000. He too was transferred to a policy position and later retired.

Labels: Alphonso Jackson, contracting, housing, HUD

The Senate Foreign Relations Committee will hold a hearing tomorrow titled "Closing Legal Loopholes: Prosecuting Sexual Assaults and Other Violent Crimes Committed Overseas by American Civilians in a Combat Environment."

Representatives of the departments of Justice, State and Defense are scheduled to testify. So is Mary Beth Kineston, a former employee of Houston-based contractor and Halliburton spinoff KBR, who alleges she was sexually assaulted in Iraq by one KBR coworker, groped by another -- and then fired after complaining about the company's treatment of women. Kineston won a small arbitration award from the company for her ordeal.

But others have had a difficult time finding any justice. Among them is "Lisa Smith," the pseudonym for a woman who worked for KBR as a medic and alleges she was drugged and raped by a KBR coworker and a soldier; her harrowing story was recently detailed by reporter Karen Houppert for The Nation. The radio show Democracy Now! interviewed Smith and Houppert today as well as Jamie Leigh Jones, another KBR worker who alleges she was sexually assaulted by fellow employees; Smith says she will also testify as part of tomorrow's hearing, at which she will reveal her true identity.

Labels: contracting, criminal justice, iraq, Jamie Leigh Jones, KBR, rape

The U.S. State Department has renewed its Iraq security contract with Blackwater Worldwide despite the FBI's still-unfinished investigation into last year's massacre of civilians in Baghdad's Nisour Square by employees of the North Carolina-based mercenary firm. The deal, which was up for renewal on May 7, has been extended for another year.

The announcement came Friday during a press briefing with acting Assistant Secretary of State for Diplomatic Security Gregory B. Starr, who said:

One of the principal recommendations of the Secretary of State’s panel review of the September 16th Nisour Square incident in Baghdad was that upon completion of the FBI’s investigation, the Embassy would submit its recommendation on whether the continued services of Blackwater are consistent with the overall U.S. mission in Iraq. Until that time and after careful consideration of the operational requirements necessary to support the U.S. Government’s foreign policy objectives in Iraq, the Bureau of Diplomatic Security requested the exercise of option year three of task order 6 beyond May 7th, 2008.

In essence, I have requested and received approval to have task order 6, which Blackwater has to provide personal protective services in Baghdad, renewed. And it is that simple.

Asked what would happen should the FBI find Blackwater criminally liable for the mass shooting, Starr replied:

We always -- we can terminate contracts with the convenience of the government if we have to. And if that was the decision, that we had to terminate the contract, we could terminate the contract.

Many Iraqis reacted to the news with anger, among them a traffic policeman assigned to Nisour Square who said the FBI questioned him in Turkey about the incident. The policeman, whose name was withheld for security reasons, told Reuters:

"I went to Turkey and testified about what I saw, but all my efforts were in vain when I heard the news..."

During the press briefing, when asked whether the Blackwater contract extension had the approval of the Iraqi government, Starr answered that the company is "operating with the concurrence of the Iraqi government." But Iraqi Prime Minister Nuri al-Maliki reacted with anger to the contract extension and said his government was not consulted. Reports CNN:

"No judicial action has been taken and no compensation has been made," al-Maliki said Sunday. "Therefore, this extension requires the approval of the Iraqi government, and the government would want to resolve the outstanding issues with this company."

(P.S. For more on this topic, check out today's Democracy Now! interview with journalist Jeremy Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army.)

Labels: blackwater, contracting, iraq

This week brought the news that Housing and Urban Development Secretary Alphonso Jackson would resign effective April 18 to "attend more diligently to personal and family matters." Those personal matters probably include staying out of jail, since Jackson is currently under investigation for political favoritism and corruption in the awarding of contracts as well as for lying to Congress.

President Bush, a longtime friend and former neighbor of Jackson, accepted the resignation with regret. "I have known Alphonso Jackson for many years, and I have known him to be a strong leader and a good man," he said.

Jackson's legal troubles started two years ago with a remark made at a minority real estate forum in Dallas. He told the story of an African-American man who finally won a HUD contract after years of trying -- but when the man thanked Jackson, he also mentioned he didn't like President Bush. The secretary nixed the deal. "Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president?," he said. "Logic says they don't get the contract. That's the way I believe."

Apparently, Jackson was unaware (or unconcerned) that awarding contracts based on partisan politics is a violation of federal law. His remarks led to an investigation by HUD's Inspector General, which found that Secretary Jackson personally intervened against prospective contractors with Democratic affiliations. The IG also examined the political contributions of 29 companies that got HUD contracts and found that officers and key staff members at the winning firms gave more than twice as much to Republican candidates as Democrats.

When hauled before a Senate panel, Jackson testified, "I don't touch contracts." From there the investigation broadened, with the IG's investigators joining forces with the FBI, Justice Department, and a federal grand jury to examine improprieties in a number of HUD contracting decisions -- including several involving the controversial redevelopment of public housing in New Orleans.

Long itching to tear down New Orleans' traditional public housing complexes and replace them with mixed-income developments with less space for the poor [PDF], HUD and the HUD-controlled Housing Authority of New Orleans used Hurricane Katrina to fast-track those plans. This was no quiet conspiracy, however: Soon after the storm, Jackson announced publicly that New Orleans was "not going to be as black as it was for a long time, if ever again." His agency then championed a plan to reduce the number of public housing units in four complexes across the city from more than 5,000 before Katrina -- most of them occupied by African-American families -- to only 2,000.

Residents filed a class-action lawsuit to stop HUD's demolition plans, but a federal court denied all legal challenges. The lawyers have appealed to the U.S. Fifth Circuit, but a decision isn't expected for months. Officials from the United Nations have criticized the teardowns, saying they would force mostly black residents into homelessness. Sen. David Vitter of Louisiana, who has been blocking House-approved legislation to replace demolished public housing units, responded by denouncing the U.N. as a "wasteful international organization" hell-bent on "expanding the dependency of people on government." With Vitter's blessing as well as the New Orleans City Council's, HUD has already begun demolition at three of the complexes, with work at the fourth expected to begin soon.

HUD has also chosen the firms to carry out the redevelopment -- and one of them is now implicated in the scandal surrounding Jackson. As it turns out, the $127 million contract to rebuild the St. Bernard complex in New Orleans was awarded to Atlanta-based Columbia Residential, a company that owes Jackson somewhere between $250,000 and $500,000 for past work. Columbia has been one of the few private developers to land significant HUD contracts in recent years, including a major public housing redevelopment project in Atlanta. Investigators are now looking at Jackson's involvement in the Columbia deal in New Orleans, as well as whether he arranged high-paying contract work for two friends -- one of whom ended up with a $485,000 gig at HANO.

As the various probes of Jackson continue, there's still no word on who might replace him at HUD. The Advancement Project, a civil rights organization that filed a lawsuit against HUD on behalf of New Orleans public housing residents, said the secretary's resignation "should be a call to action for HUD to reverse decisions made in New Orleans and the Gulf Coast. With the change in leadership, HUD now has the opportunity to fulfill its mission and provide affordable housing for families who are still in desperate need."

And the need is clearly desperate: A PolicyLink analysis [PDF] of HUD's progress in restoring subsidized housing in post-Katrina New Orleans found that the agency has approved resources to rebuild just over a third of those homes. Meanwhile, rents in many parts of the city have doubled, with affordable rentals that once were common now almost impossible to find. At the same time, federal recovery programs are projected to restore only 43 percent of the city's total rental losses, which includes everything from public housing for the poor to market-rate rentals. It's no wonder the city's homeless population has doubled since the storm.

But addressing the dire housing situation in New Orleans will take more than just a change in the top leadership at HUD -- it will also require deeper policy changes. For one thing, if HUD and other government agencies are going to continue to rely on private contractors, then they must strengthen oversight of contracting decisions to prevent improprieties and abuses, since the problem is much larger than Jackson. To date, the House Committee on Oversight and Government Reform has identified at least 25 federal contracts related to Hurricane Katrina -- and 187 federal contracts in total, many relating to Iraq -- that involve significant waste, fraud, abuse or mismanagement. And the problem is not limited to the federal government or one political party: Former Louisiana Gov. Kathleen Blanco is currently under investigation for secretly increasing payments to Road Home contractor ICF International shortly before she left office, while New Orleans Mayor Ray Nagin has come under fire because his family business landed a contract installing countertops for a new Home Depot at the same time it was negotiating tax breaks with the city.

Even more fundamentally, though, a solution to the housing crisis in New Orleans and elsewhere across the storm-ravaged Gulf Coast will demand a new approach at all levels of government that treats affordable housing as what it really is: a basic human right that must not be denied, come hell or high water.

(HUD photo of Secretary Alphonso Jackson and New Orleans Mayor Ray Nagin)

Labels: Alphonso Jackson, conflict of interest, contracting, Department of Housing and Urban Development, Gulf Coast Reconstruction Watch, new orleans, public housing

The Nation published a story today about another case involving a woman working for Texas-based defense contractor KBR who alleges she was gang-raped in Iraq. Lisa Smith, the pseudonym of a 42-year-old paramedic from Texas, claims she was drugged and then sexually assaulted by a U.S. soldier and a fellow KBR employee in January, shortly after she arrived in Iraq. As in the case of Jamie Leigh Jones, another KBR employee from Texas who's been outspoken about her alleged gang-rape by coworkers, the company has been less than supportive -- even confiscating Smith's computer as "evidence" shortly after she e-mailed an attorney for help.

Sexual violence against women contract workers in Iraq appears disturbingly widespread. Reporter Karen Houppert notes that one Houston firm has 15 clients with sexual assault, sexual harassment and related retaliation complaints against KBR, its former parent company Halliburton, and KBR shell company Service Employees International Inc. In addition, Jones has been contacted by 40 U.S. contractor employees who say they've been the victims of sexual assault or harassment. And as Houppert points out, justice has proved elusive for these women:

Most of these complaints never see the light of day, thanks to the fine print in employee contracts that compels employees into binding arbitration instead of allowing their complaints to be tried in a public courtroom. Criminal prosecutions are practically nonexistent, as the US Justice Department has turned a blind eye to these cases.

Last October, the House passed a bill that requires the FBI to investigate allegations of wrongdoing by U.S. contractors and allows them to be tried under American jurisdiction. However, the Senate has not yet taken any action on the measure.

Labels: contracting, criminal justice, iraq, Jamie Leigh Jones, KBR, rape

The House Judiciary Committee held a hearing today into the allegations of Jamie Leigh Jones, a young Texas woman who claims she was drugged and gang-raped by her fellow KBR/Halliburton employees in Iraq -- and then imprisoned and threatened with the loss of her job after reporting the incident to her bosses. KBR has denied the allegations.

While Jones courageously testified before the committee, no one from the Justice Department bothered to show up. Principal Deputy Assistant Attorney General Brian Benczkowski sent a letter [PDF] yesterday to Chairman John Conyers (D-Mich.) explaining that the Department was unable to testify because of its "pending investigation" into the incident, which occurred more than two years ago.

But Conyers wasn't buying it. As he said in his prepared statement:

Simply put, it is unacceptable for our own Department of Justice to refuse to testify today. The letter they sent me last night does not begin to respond to the tragedy and injustice that we are looking at now. The department claims to be committed to law enforcement in Iraq, but 1) they will tell us nothing about what is being done in Ms. Jones’ case; 2) they cannot give us even one example of a prosecution where the victim was a civilian contractor employee in Iraq; and 3) they cannot describe any steps they have taken to ensure that such Americans in Iraq can report crimes by contractor employees there to federal law enforcement and that prompt investigation and prosecution will occur. The American people and this committee have the right to demand justice and accountability, and I intend to see that that is exactly what we get.

Also testifying before the committee was U.S. Rep. Ted Poe (R-Texas), who played a key role in Jones' release after she was allegedly locked up by KBR. In his testimony, Poe reported that his office has heard from three other women who say they have suffered similar experiences. They include Tracy Barker, the wife of an Army Airborne sergeant who was recruited at Fort Bragg, N.C., to work for KBR/Halliburton in Iraq. She claims she was sexually assaulted there by a State Department employee who still works at the State Department today; the Justice Department has declined to prosecute that case. Barker also submitted testimony [PDF] to the committee in which she stated:

In short, when I initially arrived in Iraq I was exposed to a sexually hostile, physically threatening and verbally abusive environment. Although I reported the violations properly ... I was retaliated against and lost my job. I was eventually transferred to a dangerous and extremely hostile camp where I endured extreme sexually hostile conditions by my immediate supervisor and was attacked by a State Department employee. Due to the lawlessness that exists in Iraq I have not had a proper opportunity to seek justice in the criminal or civil arena.

Likening Iraq to the Wild West where no one seems to be in charge, Poe called for the law to intervene and restore order.

Labels: contracting, criminal justice, iraq

The House Judiciary Committee will hold a hearing next Wednesday on the disturbing case of Jamie Leigh Jones, the young Houston woman who alleges she was raped by several of her KBR coworkers in Iraq in July 2005 and then locked inside a shipping container by her employer, who warned her that she'd be out of a job if she reported the incident. Two years later, there have still been no charges filed in the case.

Rep. Ted Poe (R-Texas) has announced that the hearing is set for 10:15 a.m. EST on Dec. 19 in a statement on his website. Poe played a key role in freeing Jones after she managed to borrow a cell phone from a sympathetic guard posted outside the container where she was being held without food or water. She called her father, who called the congressman, who contacted the State Department, which dispatched agents from the U.S. Embassy in Baghdad to rescue Jones.

Jones went to Iraq as an employee of former Halliburton subsidiary Kellogg Brown and Root of Houston, now an independent company known as KBR. Within four days of her arrival, Jones alleges she was drugged and raped by several of her coworkers, who were stationed there as KBR firefighters. Army doctors reportedly examined Jones and confirmed she had been raped, but the rape kit containing critical evidence disappeared after it was handed over to KBR security officers.

Jones recently told her story to ABC News as part of an upcoming "20/20" investigation. This week Poe sent letters to officials at the State and Justice departments and joined Judiciary Committee Chair Rep. John Conyers (D-Mich.) in a letter to the Attorney General demanding immediate answers on the status of the investigation. According to Poe's statement:

"Jamie Leigh Jones has bravely decided to waive her rights to privacy and come forward with her story of a brutal sexual assault that she endured while working in Iraq," said Poe. "In 2005, I was contacted by Jamie’s father to facilitate her return from Iraq after she called him for help. Two years later we are still looking for answers as to why this case has not been investigated. Through Jamie’s decision to go public with her story, we now have the ability to demand answers in a public forum."

Legal experts say Jones' alleged rapists will probably never face a criminal trial due to a loophole that's left contractors in Iraq beyond the reach of U.S. law. In October, the House overwhelmingly passed a bill (H.R. 2740) sponsored by Rep. David Price (D-N.C.) that would subject all war zone contractors to U.S. criminal law, but that measure is still pending in the Senate.

In the meantime, Jones has filed a civil suit against KBR and Halliburton. She has also started a nonprofit organization called the Jamie Leigh Foundation, which helps women who were sexually assaulted overseas while working for government contractors or other corporations.

Labels: contracting, criminal justice, violence against women

Good Jobs First, a "national policy resource center for grassroots groups and public officials, promoting corporate and government accountability in economic development and smart growth for working families" has compiled a report entitled The State of State Disclosure which evaluates "online public information about economic development subsidies, procurement contracts and lobbying activities."

Scores from around the South were somewhat disappointing, except North Carolina which placed 9th with a grade of 'C'. Kentucky was ranked as the next best Southern state in 23rd place with a grade of 'D-'. Every other Southern state received a failing grade of 'F'. No state received an 'A' grading.

But is this necessarily a bad thing? In the low-tax, cash-strapped Southern states, which consistently rank at the top in poverty rates and the bottom in education and health care, there are probably better things to spend money on than fancy websites. Besides, it just gives the anti-tax activists and conservative right-wing bloggers something to do in their spare time, looking for wasteful spending on projects such as pre-K programs and winter home heating assistance for the elderly and poor.

On the other hand, government must be accountable to the people. The internet and technology in general have created new opportunities for transparency, not just for journalists and the media but for everyday citizens and taxpayers. Which is likely one reason politicians in most states don't want to fund it. And it shouldn't cost that much. Most if not all of this data is already in one electronic form or another.

As Good Jobs First says in the report's Executive Summary:

Transparency in key aspects of state government is improving, but there are still wide variations in the degree to which states are making full use of the Internet to disseminate information to the public. Only a few states have created high-quality disclosure systems, while many more seem to be resisting the great degree of openness that the Web makes possible.

[..]

More transparency on spending is a positive development, but there is also a need for greater disclosure about other key areas of interaction between government and the private sector -- for example, information about which companies are getting special tax breaks and direct financial assistance from state agencies and which companies are spending money to exert influence over state policymaking.

And even progressives for good government will agree with anti-tax activists that waste and fraud must be weeded out at all levels of government. For Exhibit A, just look to the work by our hosts here at the Institute for Southern Studies and their Gulf Coast Reconstruction Watch project.

The Good Jobs First study focused on online disclosure of subsidies, procurement contracts, and lobbying. State disclosure websites in each of these areas were evaluated according to criteria such as ease of finding the website, searchability, level of detail, thoroughness, and the depth and currency of the data.

The Executive Summary notes that fewer than half the states provide online information about economic development subsidies and that most states do better on procurement contract disclosure with lobbying information not far behind.

Around the South, Alabama, Arkansas, Georgia, Louisiana, Mississippi, South Carolina, Tennessee, Virginia, and West Virginia all received a score of "zero" for disclosure of economic development subsidies. North Carolina did well with a score of 67%, as did Florida with a score of 61%. Kentucky earned a score of 45%.

The South scored better in the procurement contract disclosure category. All had scores of 80% or more except West Virginia with a respectable 71% and Kentucky at 57%.

In the lobbying disclosure category, results were mixed. Florida and Georgia scored well at 89%, as did Mississippi and Kentucky at 83% and Louisiana, North Carolina, Tennessee, and Virginia at 78%. States with room for improvement include Alabama (39%), Arkansas (56%), and West Virginia (39%).

The Executive Summary concludes:

...more than a decade after the Internet gained broad popular use, it is discouraging to find so many states still resisting online disclosure entirely when it comes to subsidies, and numerous others settling for obscure sites with incomplete data when it comes to procurement and lobbying. We commend the disclosure leaders and urge the laggards to emulate them.

For the full findings with state-by-state details and links to all state disclosure websites (where availalbe), visit the Good Jobs First State Disclosure Page.

Labels: contracting, economy, money and politics, regulatory oversight

A U.S. Army Corps of Engineers insider alleges that the 40 pumps protecting New Orleans from catastrophic flooding still suffer from serious flaws that put the city's residents at risk -- and the U.S. Office of Special Counsel (OSC) has found her concerns so compelling that it's ordered the U.S. Department of Defense to respond to the charges.

Maria Garzino, a veteran Corps engineer based in Los Angeles who was the team leader for pump installation in New Orleans, has filed for federal whistleblower status with the OSC, which protects federal employees from reprisals for reporting wrongdoing. In a Sept. 21 letter [PDF] to U.S. Defense Secretary Robert Gates released by the nonprofit Public Employees for Environmental Responsibility, OSC's Scott J. Bloch wrote:

The information provided demonstrates that in an effort to meet time-sensitive deadlines, and to avoid government imposed damages and instead earn financial incentives, the contractor, Moving [Water] Industries (MWI), along with USACE, are likely responsible for installing defective pumping equipment that has been largely untested. Therefore, pursuant to my responsibilities as Special Counsel, I am referring to you a whistleblower disclosure that employees at the Department of the Army, USACE, Mississippi Valley Division, New Orleans District, New Orleans, Louisiana, are responsible for a violation of a law, rule, or regulation, gross mismanagement, a gross waste of funds, and a substantial and specific danger to public safety.

Garzino was the same whistleblower behind earlier disclosures that MWI's pumping equipment was flawed and malfunctioned during tests conducted by the company. She blamed the problems on modifications that were not authorized under the $26.6 million contract and were improperly accepted by USACE. The pumps have been installed at the 17th Street, Orleans Avenue and London Avenue canals.

In her initial disclosure last year, Garzino outlined extensive problems with the pumps that included catastrophic failures of the assemblies and hydraulic fluid lines overheating and bursting. While the Corps acknowledged the problems, it also said they had been fixed. But Garzino disputes that. She says the Corps review team that investigated arrived on a Friday night and provided a report by the following night, failing to take adequate time to address complex technical issues or even interview her about her complaint. The team issued its report in June 2007.

This past summer, the Corps oversaw the installation of new non-hydraulic pumps at the canals by two other contractors, Patterson and Fairbanks Morse. Those pumps were supposed to complement MWI's hydraulic pumps, but Garzino says their installation was based on the incorrect assumption that the MWI pumps were operational. However, a commander of the Corps' hurricane protection office in New Orleans told the Times-Picayune that he is "confident" the pumps "will operate as they were designed to operate."

Under the law, Gates has 60 days to respond to Garzino's charges. Writes OSC's Bloch of the allegations:

If true, given the hardships suffered by the people of New Orleans, and the billions of tax payer dollars spent on post-Katrina recovery, the United States Government can ill afford to take unnecessary risks with public safety due to faulty pumping equipment and lack of proper government oversight of the MWI contract; a situation that indeed raises serious issues of public safety and government oversight.

The Government Accountability Office is also conducting a second investigation into the pumps at the request of U.S. Sen. Mary Landrieu (D-La.). An earlier GAO probe into questions surrounding the awarding of the MWI contract found no wrongdoing.

As we've reported previously, Florida-based MWI has close ties to the Bush family and the Republican Party. During the George H.W. Bush presidency in the late 1980s and early 1990s, MWI owner J. David Eller partnered with presidential scion (and later Florida governor) Jeb Bush in a venture called Bush-El that marketed MWI pumps overseas.

Eller has been under Department of Justice Investigation for shady pump deals in Nigeria for several years now, but that hasn't stopped him from continuing to donate generously to Republican political causes. According to the Center for Responsive Politics' campaign contribution database, he has contributed a total of more than $140,000 to GOP politicians and PACs since 1993 -- including $1,000 to Republican Mitt Romney's presidential campaign in April of this year and another $500 to U.S. Rep. Connie Mack (R-Fla.) in June.

Labels: contracting, Gulf Coast Reconstruction Watch, new orleans

That's what journalist Jeremy Scahill said about North Carolina-based military security contractor Blackwater during an interview last night on MSNBC's "Countdown with Keith Olbermann." Scahill, author of Blackwater: The Rise of the World's Most Powerful Mercenary Army, was commenting on new revelations that the State Department's initial report of last month's incident in which Blackwater guards were accused of gunning down Iraqi civilians was actually written by Darren Hanner -- a Blackwater contractor working in the embassy security detail.

An article that appeared yesterday in the online magazine Salon.com backed up Scahill's charge by detailing the Bush administration's extensive ties to Blackwater. They include Blackwater founder and CEO Erik Prince's generous donations ($300,000 between him and his wives) to Republican candidates and political action committees, Blackwater Chief Operating Officer and General Counsel Joseph Schmitz's former Bush-appointed position as the Defense Department's Inspector General, Blackwater Vice Chair J. Cofer Black's job as director of the CIA's Counterterrorism Center at the time of the 9/11 attacks, Blackwater Vice President for Intelligence Rob Richer's former position as head of the CIA's Near East division and the man who in 2003 briefed President Bush on the growing Iraq insurgency, and Blackwater's former outside counsel Fred Fielding's current role as White House counsel. In addition, the company's current outside counsel is Ken Starr, the independent counsel who investigated Bill Clinton's relationship with White House intern Monica Lewinsky, was on President Bush's short list to replace William Brennan on the Supreme Court and served as U.S. solicitor general under Bush's father.

Which renders rather ironic Republican charges that the congressional investigation into Blackwater's behavior in Iraq is "partisan."

BLOGGING BLACKWATER: If you're interested in following the growing Blackwater scandal in detail, you should add to your reading list "Blackwater Current," a new blog by Raleigh News & Observer investigative reporter Joe Neff. He has covered the company extensively since 2004, when his series "The Bridge" chronicled the death of four of the company's contractors in Fallujah.

Labels: blackwater, contracting, iraq, militarism, politics

It's not only the Iraqi government that wants North Carolina-based security firm Blackwater USA kicked out of Iraq for its involvement in the recent shooting deaths of eight Iraqi civilians. CODEPINK, a national women's peace group, will second the call at a protest that will take place at 3 p.m. today in Washington, D.C.

The action comes in response to an incident that took place on Sunday, Sept. 16 in Baghdad, when an attack on a U.S. State Department motorcade led employees of the security contractor to begin shooting indiscriminately, resulting in the civilian deaths. The Iraqi government has revoked Blackwater's operating license, but the Bush administration is trying to reverse the decision.

The protest will begin at the headquarters of the International Peace Operations Association, which has been defending Blackwater, one of its members. It will make its way to the State Department, where participants will demand it cancel all contracts with the company. According to a CODEPINK statement:

"As a private contractor, Blackwater is subject to virtually no oversight and its employees literally get away with murder," said retired colonel and diplomat Ann Wright, who will lead the march. "The State Department has given Blackwater $678 million in contracts since 2003 to guard U.S. personnel in Iraq, instead of using the State Department's internal Diplomatic Security. We demand that the State Department cancel its contract with Blackwater and instead hire government employees for security who can be held accountable for their actions."

The State Department says it is investigating the incident, but U.S. lawmakers including Congressman David Price (D-N.C.) have raised questions about whether the agency has the authority to take action, the Raleigh, N.C. News and Observer reports:

Price has been trying to figure out for two years which U.S. or international laws might apply to private security contractors working in Iraq. The answer is important, he said, because if the United States has a way to prosecute suspected crimes, that helps its case that the Iraqi government need not bring suspects to court.

"There seems to be a potential conflict brewing about the applicability of Iraqi law," Price said in an interview. "So assuming that there is something here that deserves investigation, and possibly prosecution, then how willing and able the United States is to deal with it is a very important issue and will have a lot to do with the credibility of any case we make against Iraqi prosecution."

Price has sponsored legislation that would clearly place private contractors under the aegis of military law overseas and strengthen congressional oversight of security contractors.

Labels: contracting, iraq, north carolina

This afternoon, a handful of first-year Senators, all Democrats, will introduce a piece of legislation the Institute has long supported: the creation of a new "Truman Commission" to oversee the staggering sums of money spent on war contracts.

Here's the announcement:

Washington, DC – On Tuesday at 2:00 p.m., Senate Democratic freshmen will introduce an amendment to the pending defense authorization bill to establish an independent, bipartisan Commission on Wartime Contracting to investigate U.S. wartime contracting in Iraq and Afghanistan. The Commission will significantly increase transparency and accountability, as well as generate important solutions for longstanding, systematic contracting problems. This legislation would expand the Special Inspector General for Iraq Reconstruction’s responsibilities beyond Iraq reconstruction to all wartime contracting in Iraq and Afghanistan.

The Government Accountability Office reported that between fiscal years 2003 and 2006, the U.S. government has allocated more than $300 billion to support stabilization and reconstruction efforts in Iraq alone. This increasing reliance on contractors exposes extraordinary levels of taxpayer dollars to potential misuse and waste.

The Commission on Wartime Contracting was inspired by the work of the “Truman Committee,” which conducted hundreds of hearings and investigations into government waste, saving American taxpayers more than $15 billion (1943 dollars)

It worked during World War II, why not do it now -- when it's needed even more?

Labels: contracting, peace and security

Federal agencies responding to Hurricanes Katrina and Rita doled out more than $2.4 billion in contracts that guaranteed profits for big companies, according to an investigation by the Center for Public Integrity, a Washington-based investigative journalism nonprofit:

Unlike a fixed-price contract, which generally pays contractors a set amount -- thus pressuring them to keep costs down because they are responsible for any overruns -- cost-plus-fixed-fee contracts allow contractors to bill the government for all of their costs, plus an extra profit based upon a guaranteed amount.

Critics argue that cost-plus contracts often offer companies no incentive to save money or keep costs from ballooning. Industry officials counter that companies often have no idea what the costs will be in a disaster and that sometimes cost-plus is the most sensible choice for the government and taxpayers.

FEMA was responsible for nearly 94 percent of all of the hurricane-related cost-plus contracts, the Center's analysis found. Most of those contracts were for installing and arranging for emergency temporary trailers for evacuees. Those contracts were awarded to four large corporations: Bechtel National Inc., Fluor Enterprises Inc., Shaw Environmental & Infrastructure Inc. and CH2M Hill Inc.

Of the $3.3 billion awarded for those contracts, about $1.97 billion was cost-plus, according to the Center's analysis of figures from the Federal Procurement Data System. The agencies responsible for issuing the bulk of the remainder of the cost-plus contracts were the U.S. Air Force and the Environmental Protection Agency.

The Center found that 27 percent of the $8.4 billion in Katrina and Rita contracts awarded by FEMA through Jan. 31, 2007 were cost-plus, as were almost 21 percent of the EPA's $212 million in contracts and 36 percent of the Air Force's $167 million in contracts.

In March, the House voted 347-73 to pass the Accountability in Contracting Act, which would limit the use of cost-plus and no-bid contracts and require that overcharges of more than $10 million be disclosed to Congress. The bill's sponsor is Rep. Henry Waxman, D-Calif., chairman of the House Oversight and Government Reform Committee and a longtime critic of such contracts.

The measure is currently awaiting action in the Senate Committee on Homeland Security and Government Affairs, which is chaired by Sen. Joe Lieberman, an independent Democrat from Connecticut.

Labels: contracting, Gulf Coast Reconstruction Watch, Hurricane Katrina, investigative reporting

A former accounting executive with Halliburton Inc. says the company engaged in illegal accounting practices, ignored his warnings about them, and then retaliated against him when he took his concerns to federal authorities.

Anthony Menendez -- former director of accounting research and training for Halliburton -- made the allegations in a complaint filed with a U.S. Department of Labor administrative law judge in Covington, La. and recently made public in response to a Freedom of Information Act request. Menendez claims Halliburton was booking product sales before they occurred, distorting its revenue numbers.

The company has denied the allegations.

Menendez also charges that Halliburton improperly accounted for income taxes, off-balance-sheet entities, and foreign-currency adjustments. He first made his allegations to the Securities and Exchange Commission in November 2005, and three months later alerted the company's audit committee, reports Bloomberg News columnist Jonathan Weil:

In a Jan. 3 court filing, Halliburton said the SEC had closed its inquiry into the company's accounting practices.

Menendez told me, though, that he met with SEC investigators at the agency's Fort Worth, Texas, office as recently as March 28. He also shared a March 14 letter from an enforcement-division attorney there, which shows the travel itinerary the SEC arranged for him to attend that meeting. Mann, the Halliburton spokeswoman, declined to comment on whether the company has been notified of further SEC inquiries into Menendez's allegations.

A Houston-based company that recently announced it was moving its corporate headquarters to Dubai, Halliburton holds multimillion federal reconstruction contracts in Iraq as well as the post-Katrina U.S. Gulf Coast.

The company is already under investigation in the U.S. for bribery, bid rigging, defrauding the military and illegal business ties with Iran. It's currently divesting ownership in its KBR subsidiary, which among other things has come under fire for serving contaminated food and water to U.S.troops in Iraq. It was also criticized after one of its subcontractors hired illegal immigrants to perform Katrina-related work.

Before being elected vice president, Dick Cheney was Halliburton's CEO and chairman, a position he took after serving as defense secretary under President George H.W. Bush. Cheney remains a major stockholder in the company, holding 100,000 shares of unexercised stock options worth some $3 million.

Labels: contracting, Gulf Coast Reconstruction Watch, Hurricane Katrina

The deplorable conditions at the Army's Walter Reed Medical Center revealed by the Washington Post's recent investigative reports have resulted in a number of high-profile resignations and firings, including the most recent one reported today:

Lt. Gen. Kevin C. Kiley, the Army's surgeon general, agreed to step down from his position after weeks of intense public criticism stemming from revelations about poor conditions at Walter Reed Army Medical Center, defense officials said yesterday.

Though there had been repeated calls for Kiley to resign as the Army's top doctor during hearings on Capitol Hill, he refused to step aside even as he was grilled about horrid living conditions and a tangled bureaucracy at the Army's flagship hospital. Kiley at first played down reports of problems at Walter Reed-- where he had served as commander from 2002 to 2004 -- but later was far more contrite.

[..]

The Army's initial playing down of reports of rodent infestation, mold and bureaucratic delays at Walter Reed angered senior officials at the Pentagon and drew concern from top administration officials -- including President Bush. Defense Secretary Robert M. Gates was quick to seek accountability at the highest levels, forcing Harvey to resign days after firing the commander of Walter Reed, Maj. Gen. George W. Weightman, two weeks ago.

Ongoing probes could lead to more firings, two defense officials said yesterday.

Questions remain, however, regarding how one key player was hired in the first place.

During a Congressional inquiry into the Walter Reed scandal, it was revealed that services at the medical center had been outsourced to IAP Worldwide Services. Who is IAP Worldwide Services? According to this summary of their involvement:

IAP Run by Former Halliburton Executives. IAP, which is based in Cape Canaveral, Fla., has more than $1 billion a year in revenue and more than 5,000 employees around the world, according to the company's Web site. It is owned by Cerberus Capital Management LP, a private asset management firm. The firm has grown exponentially in recent years in part because of contracts in Afghanistan and Iraq. It recently recruited high-ranking Halliburton Co. official Al Neffgen to be its chief executive. IAP's President is Dave Swindle. Prior to IAP, Swindle was Vice President, Business Acquisition and National Security Programs and an Officer for Kellogg Brown and Root. In this capacity, he was responsible for the Government and Infrastructure Division's Business Development Operations for KBR Americas, Asia-Pacific, Europe-Africa, and the Middle East. [IAP Website, Accessed 3/5/2007; Washington Post, 10/20/2005]

If the name IAP Worldwide Services sounds familiar, it's because it is the same IAP that was awarded a $120 million contract by FEMA to deliver ice to Katrina victims, among several others. You may recall what happened next:

The somewhat befuddled heroes of the tale will be truckers like Mark Kostinec, who was dropping a load of beef in Canton, Ohio, on Sept. 2 when his dispatcher called with an urgent government job: Pick up 20 tons of ice in Greenville, Pa., and take it to Carthage, Mo., a staging area for the Federal Emergency Management Agency.

Kostinec, 40, a driver for Universe Truck Lines of Omaha, Neb., was happy to help. But at Carthage, instead of unloading, he was told to take his 2,000 bags of ice to Montgomery, Ala.

After a day and a half in Montgomery, he was sent to Camp Shelby, Miss. From there, on Sept. 8, he was waved onward to Selma, Ala. And after two days in Selma, he was redirected to Emporia, Va., along with scores of other frustrated drivers who had been following similarly circuitous routes.

At Emporia, Kostinec sat for an entire week, his trailer burning fuel around the clock to keep the ice frozen, as FEMA officials studied whether supplies originally purchased for Hurricane Katrina might be used for Hurricane Ophelia. But in the end, only three of about 150 ice trucks were sent to North Carolina, Kostinec said.

So on Sept. 17, Kostinec headed to Fremont, Neb., where he unloaded his ice into a government-rented storage freezer the next day.

"I dragged that ice around for 4,100 miles, and it never got used," Kostinec said.

To be sure, IAP can't be held entirely responsible for FEMA bungling, but the company is under increasing scrutiny for their role in the Walter Reed scandal. From the Army Times:

The committee wants to learn more about a letter written in September by Garrison Commander Peter Garibaldi to Weightman.

The memorandum “describes how the Army’s decision to privatize support services at Walter Reed Army Medical Center was causing an exodus of ‘highly skilled and experienced personnel,’” the committee’s letter states. “According to multiple sources, the decision to privatize support services at Walter Reed led to a precipitous drop in support personnel at Walter Reed.”

The letter said Walter Reed also awarded a five-year, $120-million contract to IAP Worldwide Services, which is run by Al Neffgen, a former senior Halliburton official.

They also found that more than 300 federal employees providing facilities management services at Walter Reed had drooped to fewer than 60 by Feb. 3, 2007, the day before IAP took over facilities management. IAP replaced the remaining 60 employees with only 50 private workers.

“The conditions that have been described at Walter Reed are disgraceful,” the letter states. “Part of our mission on the Oversight Committee is to investigate what led to the breakdown in services. It would be reprehensible if the deplorable conditions were caused or aggravated by an ideological commitment to privatize government services regardless of the costs to taxpayers and the consequences for wounded soldiers.”

According to the article, the privatization process began in 2000, and accelerated in 2002 "under President Bush’s ‘competitive sourcing’ initiative."

IAP has been the target of criticism on other "competitive sourcing" initiatives, including a $103 million contract with the IRS:

The agency reports that it is planning to reduce a $103 million contract with IAP Worldwide Services, changing the plan to outsource its data collections from seven centers to just two.

The IRS said that the outsourcing was reduced to ensure "to ensure that a sufficient number of employees with the required training and security clearances are in place to manage the files during the upcoming filing season."

[..]

Colleen Kelley, president of the National Treasury Employees' Union (NTEU), chided the agency for contracting with IAP despite the fact that IAP recently admitted it would not have five of the original seven data centers ready by the beginning of tax filing season.

Kelley also criticized the agency for not performing better oversight of the contractors it works with, especially in terms of ensuring the privacy of individuals' Social Security numbers.

"For an agency like the IRS, with such a poor record of contractor oversight, these actions are virtually open invitations to disaster for taxpayers," Kelley said. (Hat tip: unbossed)

In addition to their involvement with Walter Reed, FEMA, and the IRS, the multi-talented IAP has also profited nicely from a number of lucrative contracts related to the War on Terror, according to the Center for Public Integrity:

IAP Worldwide Services began to participate in preparations for the war in Iraq as early as December 16, 2002, when a $7,750 task order was placed on a previously awarded contract with the U.S. Army Corps of Engineers for four-wheel drive vehicles and cell phones, at Camp Doha, Kuwait. The contract with IAP originally was signed in November 2002, as a one-year, indefinite delivery contract worth a maximum of $29.5 million, and with an option for an additional four years of service.

[..]

By September 22, 2003, the total value of task orders on the contract had reached $22 million—$14.3 million going to activities for the war in Iraq and $7.5 million to activities in Afghanistan—nearing the maximum $29 million contract allowance. On September 25, the Army Corps of Engineers announced that based on potential contingency requirements of the U.S. Central Command it was increasing the contract's maximum value by awarding a $494 million task order for the full five year life of the contract to rebuild Iraq's electrical system, including equipment, operations, maintenance, and training Iraqi Ministry of Electricity personnel. The increase brings the total value of International American Products contracts in Iraq to over $508 million. A USACE spokesman told the Center for Public Integrity that the $496 million increase was "a fully competed, best-value negotiated procurement." Reg Pelham, president of IAP, said that all contract information was "considered confidential" and declined to comment on any IAP contracts or media reports.

All of this suggests that having friends in high places is good for business. But the question remains, is it good for taxpayers, and more important, is it good for wounded American troops returning from Iraq? Hopefully, Congress will perform its long-neglected duty of oversight and provide the answers.

Labels: contracting, Hurricane Katrina, iraq, regulatory oversight

For Iraqis, there's probably no better symbol of what's wrong with the U.S. mission in Iraq than the Green Zone -- the fortified and insulated "Little America" that U.S. forces created in the aftermath of the invasion.

While brutal violence, lack of basics like food and electricity, and other crises consumed Iraq -- and still do, 25 more were killed today -- the out-of-touch opulence enjoyed by U.S. forces in Saddam's palace seemed almost designed to outrage the very people the Bush administration claimed they were there to help.

Today's Guardian (London) features an eye-opening excerpt from Imperial Life in the Emerald City, a damning portrait of the Green Zone by The Washington Post's former bureau chief in Iraq, Rajiv Chandrasekaran. The book continues to receive widespread coverage abroad but little in the U.S.; a paperback edition is due out this spring. Here's a taste:

Unlike almost anywhere else in Baghdad, you could dine at the cafeteria in the Republican Palace in the heart of the Green Zone for six months and never eat hummus, flatbread, or a lamb kebab. The palace was the headquarters of the Coalition Provisional Authority (CPA), the American occupation administration in Iraq, and the food was always American, often with a Southern flavour. A buffet featured grits, cornbread and a bottomless barrel of pork: sausage for breakfast, hot dogs for lunch, pork chops for dinner. The cafeteria was all about meeting American needs for high-calorie, high-fat comfort food.

None of the succulent tomatoes or crisp cucumbers grown in Iraq made it into the salad bar. US government regulations dictated that everything, even the water in which hot dogs were boiled, be shipped in from approved suppliers in other nations. Milk and bread were trucked in from Kuwait, as were tinned peas and carrots. The breakfast cereal was flown in from the US.

When the Americans arrived, the engineers assigned to transform Saddam's palace into the seat of the American occupation chose a marble-floored conference room the size of a gymnasium to serve as the mess hall. Halliburton, the defence contractor hired to run the palace, brought in dozens of tables, hundreds of stacking chairs and a score of glass-covered buffets. Seven days a week, the Americans ate under Saddam's crystal chandeliers. [...]

If you had a complaint about the cafeteria, Michael Cole was the man to see. He was Halliburton's "customer-service liaison", and he could explain why the salad bar didn't have Iraqi produce or why pork kept appearing on the menu. Cole was a rail-thin 22-year-old whose forehead was dotted with pimples. He had been out of college for less than a year and was working as a junior aide to a Republican congressman from Virginia when a Halliburton vice-president overheard him talking to friends in an Arlington bar about his dealings with irate constituents. She was so impressed that she introduced herself. If she needed someone to work as a valet in Baghdad, he joked, he'd be happy to volunteer. Three weeks later, Halliburton offered him a job. Then they asked for his CV.

Cole's mission was to keep the air in the bubble, to ensure that the Americans who had left home to work for the occupation administration felt comfortable. Food was part of it. But so were movies, mattresses and laundry service. If he was asked for something, Cole tried to get it, whether he thought it important or not. [...]

Whatever could be outsourced, was. The job of setting up town and city councils was performed by a North Carolina firm for $236m [£121m]. The job of guarding the viceroy was assigned to private guards, each of whom made more than $1,000 [£513] a day. For running the palace - cooking the food, changing the lightbulbs, doing the laundry, watering the plants - Halliburton had been handed hundreds of millions of dollars.

The Green Zone was Baghdad's Little America. Everyone who worked in the palace lived there, either in white metal trailers or in the towering al-Rasheed hotel. Hundreds of private contractors working for firms including Bechtel, General Electric and Halliburton set up trailer parks there, as did legions of private security guards hired to protect the contractors. The only Iraqis allowed inside the Green Zone were those who worked for the Americans or those who could prove that they had resided there before the war. [...]

Americans drove around in new GMC Suburbans, dutifully obeying the 35mph speed limit signs posted by the CPA on the flat, wide streets. When they cruised around, they kept the air-conditioning on high and the radio tuned to 107.7 FM - Freedom Radio, an American-run station that played classic rock and rah-rah messages. Every two weeks, the vehicles were cleaned at a Halliburton car wash.

Shuttle buses looped around the Green Zone at 20-minute intervals, stopping at wooden shelters to transport those who didn't have cars and didn't want to walk. There was daily mail delivery. Generators ensured that the lights were always on. If you didn't like what was being served in the cafeteria - or you were feeling peckish between meals - you could get a takeaway from one of the Green Zone's Chinese restaurants. Halliburton's dry-cleaning service would get the dust and sweat stains out of your khakis in three days. A sign warned patrons to remove ammunition from pockets before submitting clothes.

Iraqi laws and customs didn't apply inside the Green Zone. Women jogged on the pavement in shorts and T-shirts. A liquor store sold imported beer, wine and spirits. One of the Chinese res