Soldiers of fortune Civilian
employees of Dick Cheney's former company are carrying out military missions
around the world - for profit. IN EARLY JANUARY, Jon France,
transportation officer at the Sierra Army Depot in Herlong, Calif., was asked to
help support the war in Afghanistan by sending prefabricated military bases that
could be run by private corporations.
With just two days to complete the
job, France scrambled to get 100 containers of a package code-named Force
Provider (see "Force Provider: The Base-in-a-Box,") to Reno, Nev. where the
Nevada Air National Guard was standing by to load them onto three Air Force C-5s
and four 747s headed to Ramstein, Germany, Larry Rogers, a spokesperson for the
army depot, told us. A day later the 21st Theater Support Command arrived in
Ramstein to airlift the Force Provider package to Central Asia.
Employees of Kellogg Brown and Root, a subsidiary of the Dallas-based
Halliburton Corp. (once run by Vice President Dick Cheney), are scheduled to
arrive at the Bagram air base in southern Afghanistan to take over the
day-to-day support services at the Force Provider camp starting in late April or
early May (the exact date is classified). They are also set to arrive at the
Khanabad air base in Uzbekistan, one of the main military support stations for
the war in Afghanistan, to run three Air Force Harvest Eagle camps (an older
version of Force Provider) for the 1,500 U.S. troops based there since October,
according to Daniel McGinty, a spokesperson at the Defense Contract Management
Agency, which will be overseeing the contracts.
"They [Brown and Root]
will be maintaining these packages, [doing] base camp maintenance, facilities
maintenance, laundry services, food services, airfield services, property
accountability, and supply operations," says Gale L. Smith, a spokesperson for
the U.S. Army Operations Support Command in Alexandria, Va. (Brown and Root is
now named Kellogg Brown and Root, following a corporate merger, but is often
referred to by its previous name.) She refused to confirm or deny whether Brown
and Root would be working on similar bases in Manas, Kyrgyzstan, or other sites
in Afghanistan and Pakistan to support Operation Enduring Freedom.
The
new job is one of the first examples of a private company being awarded a
lucrative contract from the Pentagon to run the day-to-day support operations on
the battlefield. In December 2001, Brown and Root secured a 10-year deal called
Logistics Civil Augmentation Program (LOGCAP), according to a Pentagon press
release. The contract is a "cost-plus-award-fee,
indefinite-delivery/indefinite-quantity service," which basically means that the
federal government has an open-ended mandate and budget to send Brown and Root
anywhere in the world to run humanitarian or military operations for a profit.
And critics are alarmed. The military has a long-celebrated, cozy
relationship with private industry, but Brown and Root's goes much further. For
private industry will now essentially run a war operation. And the potential
problems are legion, military critics warn. Not only will civilians be running
around overseas with guns, but they'll also be answering to nobody.
"The
Bush-Cheney team have turned the United States into a family business," says
Harvey Wasserman, author of The Last Energy War (Seven Stories Press, 2000).
"That's why we haven't seen Cheney - he's cutting deals with his old buddies who
gave him a multimillion-dollar golden handshake. Have they no grace, no shame,
no common sense? Why don't they just have Enron run America? Or have Zapata
Petroleum [George W. Bush's failed oil-exploration venture] build a pipeline
across Afghanistan?"
Deep roots Halliburton, Brown and Root's parent
company, is a Fortune 500 construction corporation working primarily for the oil
industry. In the early 1990s the company was awarded the job to study and then
implement the privatization of routine army functions under then-secretary of
defense Dick Cheney.
When Cheney quit his Pentagon job, he landed as
chief executive of Halliburton, bringing with him his trusted deputy David
Gribbin. The two substantially increased Halliburton's government business until
they quit in 2000, once Cheney was elected vice president. Since then another
confidante of Cheney, Adm. Joe Lopez, former commander in chief for U.S. forces
in southern Europe, took over Gribbin's old job of go-between for the government
and the company, according to Brown and Root's own press releases (see "Dick
Cheney: Soldier of Fortune," page 23). Other close friends include Richard
Armitage, the assistant secretary of state, who worked as a consultant to
Halliburton before taking up his present job.
Last year the company took
in $13 billion in revenues, according to its latest annual report. Currently,
Brown and Root estimates it has $740 million in existing U.S. government
contracts (approximately 37 percent of its global business), most of which are
in addition to the LOGCAP deal.
For example, in mid November 2001, Brown
and Root was paid $2 million to reinforce the U.S. embassy in Tashkent,
Uzbekistan, under contract with the State Department, according to the New York
Times. More recently Brown and Root was paid $16 million by the federal
government to go to Guantánamo Bay, Cuba, to build a 408-person prison for
captured Taliban fighters, according to Pentagon press releases.
That's
by no means all: Brown and Root employees can be found back home running support
operations from Fort Knox, Ky., to a naval base in El Centro, Calif., according
to information provided by the company.
And it is also snapping up
contracts with American allies, according to company press releases: In
September 2001 the company signed on to a $283 million project for Russia's
Defense Threat Reduction Agency to eliminate liquid-fueled intercontinental
ballistic missiles and their silos. In November 2001 the Philippines awarded the
company a $100 million order to convert the U.S. Navy's former ship-repair
facilities in Subic Bay into a modern commercial port facility. And in December
it won a $420 million contract from the British Army to support a fleet of new
mammoth tank transporters.
Critics charge that this is a classic example
of the revolving door between government and big business. "Cheney gives new
meaning to the term 'revolving door.' " says Bill Hartung, senior research
fellow at the World Policy Institute in New York. "If he does not get elected
president next, I have no doubt he will return to Halliburton when he leaves the
White House."
Jennifer Millerwise, a spokesperson for Cheney's office,
denies that there was any contact help from the White House: "The vice president
did not discuss this with anybody from Halliburton or any subsidiary of
Halliburton. Nor does he comment on Halliburton's policies, since he doesn't
work there any more."
The business of war But Brown and Root is no
stranger to the war business. From 1962 to 1972 the Pentagon paid the company
tens of millions of dollars to work in South Vietnam, where they built roads,
landing strips, harbors, and military bases from the demilitarized zone to the
Mekong Delta. The company was one of the main contractors hired to construct the
Diego Garcia air base in the Indian Ocean, according to Pentagon military
histories.
The privatization of services at military camps is a
relatively new concept that was introduced in 1992, when the Pentagon, then
under Cheney's direction, paid Brown and Root $3.9 million to produce a
classified report detailing how private companies (like itself) could help
provide logistics for U.S. operations abroad (see "Dick Cheney: Soldier of
Fortune," page 23). Several months later the Pentagon gave the company an
additional $5 million to update its report.
That same year Brown and
Root won its first five-year LOGCAP contract from the U.S. Army Corps of
Engineers, which would send them to work alongside G.I.s in places such as
Somalia, Haiti, the Balkans, Bosnia, and Saudi Arabia. Brown and Root's work in
the Balkans has been the most profitable for the company - the General
Accounting Office (GAO) estimates the company made $2.2 billion in revenue
during the military operations there, building sewage systems, kitchens, and
showers and even washing underwear for the 20,000 soldiers stationed there.
A student research report written by Maj. Maria Dowling and published by
the Air University at Maxwell Air Force Base in Alabama shows that Brown and
Root employees can be required to live with soldiers, wear battle dress
uniforms, and be issued guns (ostensibly for personal protection). They are
substituting for conventional military support units - with acronyms that would
make a vegetarian cringe - such as Prime Base Engineer Emergency Force (Prime
BEEF), Rapid Engineer Deployable Heavy Operational Repair Squadron Engineer (RED
HORSE), and Prime Readiness in Base Service (Prime RIBS).
The ratio of
such contractors to military personnel is rapidly rising from 1 in 50 during
Operation Desert Storm in the Gulf War to 1 in 10 in Operation Just Endeavor in
the Balkans, according to other Air University research papers.
Praise
from the army, criticism from outside Col. Tom Palmer, maintenance chief for
Task Force Eagle in Bosnia, admiringly describes how closely he worked with
private contractors such as Brown and Root in Bosnia at a Sept. 18, 1997,
operation to seize and maintain control of a transmission tower on Mount Zep
that was transmitting continuous, inflammatory anti-NATO Stabilization Force
messages to the public. In a recent issue of Army Logistician, he wrote, "For
soldiers familiar with the Bosnian area of operations, the name 'Brown and Root
Services Corporation' (BRSC) became synonymous with "contractor support."
But other government agencies are more sceptical. "It is convenient to
contract a lot of this work out," says Neil Curtin, director of operations and
readiness issues for the GAO defense capabilities and management team. "The
problem is that the government doesn't do the best job of oversight."
Policy analysts say it's simply a matter of time before something goes
wrong. Thomas Donnelly, deputy executive director of the Project for the New
American Century in Washington, D.C., says, "We've been pretty lucky so far that
nothing has gone wrong. The Balkans were one thing, but Central Asia is a much
tougher neighborhood. Suppose a local Afghani contractor gets kidnapped or used
for mischief? This has not been thought through at the policy level or opened up
for public debate. There's a lot of opportunity for things to fall through the
cracks and a huge security risk."
Christopher Helmand, research analyst
at the Center for Defense Information, a think tank on military affairs,
believes that privatization can help reduce waste and inefficiency in the
military but points out that security is a big concern. "What do we do when
somebody infiltrates a U.S. military base and blows it up? If we have civilians
walking in and out of our bases because they are 'our allies' in the Northern
Alliance or private contractors, we increase our risk considerably," he says.
"We simply don't have all the bugs worked out because this is such a new area."
Sometimes the risks have come from inside. In 1994, United Nations
troops armed with batons and tear gas had to be brought in to quell protests by
workers Brown and Root dismissed at the end of its engagement in Somalia. In
Saudi Arabia the army was alarmed when it discovered locally contracted drivers
were firing up portable propane tanks to cook meals in the desert while
transporting high-explosive ordnance weapons, according to the Dowling report.
Certain contractors, including Brown and Root, have also complained that
the army treats them as second-class citizens. On at least one occasion,
food-service contractors walked off the job in Saudi Arabia when they were not
provided with proper protection against chemical attacks; another time,
contractors moved out of army tents and checked into a hotel in defiance of army
orders, according to a research report by Major Lisa Turner of the U.S. Air
Force.
Independent agencies are still sceptical about claimed financial
savings from the privatization of military support operations, and the GAO has
conducted several investigations. A February 1997 study showed that an operation
estimated at $191.6 million when presented to Congress in 1996 had ballooned to
$461.5 million a year later.
Examples of overspending by contractors
have included flying plywood from the United States to the Balkans at $85.98 a
sheet and billing the army to pay its employees' income taxes in Hungary.
A subsequent GAO report, issued September 2000, showed that Brown and
Root was still taking advantage of the contract in the Balkans, noting that army
commanders were unable to keep track of the contract, as they were typically
rotated out of camps after a six-month duration, erasing institutional memory.
The GAO painted a picture of Brown and Root contract employees sitting
idly most of the time. The report also noted that a lot of staff time was spent
doing unnecessary tasks, such as cleaning offices four times a day.
Allegations of fraud In February 2002, Brown and Root paid out $2
million to settle a suit with the Justice Department that alleged the company
defrauded the government during the mid-1990s closure of Fort Ord in Monterey,
Calif.
The allegations in the case surfaced several years ago when
Dammen Gant Campbell, a former contracts manager for Brown and Root turned
whistle-blower, charged that between 1994 and 1998 the company fraudulently
inflated project costs by misrepresenting the quantities, quality, and types of
materials required for 224 projects. Campbell said the company submitted a
detailed "contractors pricing proposal" from an army manual containing fixed
prices for some 30,000 line items.
Once the proposal was approved, the
company submitted a more general "statement of work," which did not contain a
breakdown of items to be purchased. Campbell maintained the company
intentionally did not deliver many items listed in the original proposal. The
company defended this practice by claiming the statement of work was the legally
binding document, not the original contractors pricing proposal.
"Whether you characterize it as fraud or sharp business practices, the
bottom line is the same: the government was not getting what it paid for," says
Michael Hirst, of the United States Attorney's Office in Sacramento, who
litigated the suit on behalf of the government. "We alleged that they exploited
the contracting process and increased their profits at the governments expense."
Campbell's attorney Dan Schrader has a guess as to why the company was
so eager to compromise. "If the company was indicted, I suspect that it might
have been far more difficult for them to get new government contracts," he says.
Indeed, the company's 2001 annual report says just that in its notes on
the settlement of the lawsuit: "Brown and Root's ability to perform further work
for the U.S. government has not been impaired." Hirst adds, "Brown and Root was
very cooperative and eager to settle. They said they wanted to maintain a good
relationship with the government."
The company will have a harder time
milking the contract in Afghanistan, because the government is now dispatching
auditors from the Defense Contract Management Agency to monitor all purchases,
but it still stands to at least make a profit on whatever it can bill. The
contract allows for the company to charge a fee of up to 9 percent over cost.
The exact amount depends on performance in the field.
And if the war on
terrorism expands to the size of the Balkan operations, profits could add up to
a few hundred million dollars. In addition to the bases in Uzbekistan and
Afghanistan, the army started dispatching Force Provider units to Kyrgyzstan's
Manas air base as recently as January 2002 to support up to 3,500 soldiers.
Whether or not Brown and Root will follow them there, the army has yet to tell
the public.
"Brown and Root has not deployed nor been tasked to provide
support in either country," company spokesperson Zelma Branch said, refusing to
give any more details about the current LOGCAP contract. When provided with
evidence that the company was indeed going to both countries, she e-mailed us,
"We can not elaborate at this time. Recommend you contact the Army."
The
Pentagon, on the other hand, is considering expanding the role of the private
sector to do a variety of services, from refueling fighter jets and bombers in
midair to running missile-tracking systems.
Inside military circles,
talk has it that the Defense Security Cooperation Agency (DSCA) is considering
hiring private contractors to train the new Afghan police and army, which it has
done in the past in places such as Croatia, where it hired Military
Professionals Resources Inc.
MPRI, founded in 1988 by former army chief
of staff Carl Vuono and seven other retired generals, was harshly criticized
after the Croatian military, in a highly effective offensive called Operation
Storm, captured the Serb-held Krajina enclave later that year, uprooting more
than 150,000 Serbs from their homes.
David Des Roches, a DSCA spokesman,
denied that the Pentagon had a proposal on the table at the moment but did not
rule out the future possibility: "A lot of people have said, 'Ding, ding, ding,
gravy train.' But in point of fact, it makes sense. They're probably better at
doing these sorts of missions than anyone else I could think of."
The
World Policy Institute's Hartung disagrees. "This is a company that has more
experience with insider dealing and corruption than with efficiency," he says.
"During the Second World War, there was a Senate committee on war profiteering.
Personally I think we should set it up again and investigate Brown and Root," he
says.
Pratap Chatterjee is an investigative environmental writer and
producer. This article was produced with support from the CorpWatch fund for
investigative journalism. www.corpwatch.org). He is also
coproducer and host of the weekly Terra Verde radio show on KPFA, 94.1-FM, Fri.,
1-2 p.m.
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