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Congressional Inquiry Necessary for War Profiteering

Campaign to Stop the War Profiteerers
February 25th, 2004

The Pentagon and State Department criminal fraud investigations of Halliburton concerning their handling of a fuel contract in Iraq are an important first step - but point to the need for bold action on the part of the President and Congress to ensure accountability of military contractors, according to the Campaign to Stop the War Profiteers.

"The Pentagon's decision to investigate criminal wrong-doing by Halliburton is commendable and an important first step," said Chris Kromm, co-director of the Campaign. "However, the scope of the scandals surrounding Halliburton and other military contractors demands a full Congressional inquiry into the politics surrounding contract decisions, and the performance of corporations that have been given billions of taxpayer dollars."

"Halliburton has overcharged by at least $61 million for gasoline brought in from Kuwait to Iraq; Halliburton employees took at least $6.3 million in kickbacks for steering a subcontract for Iraq rebuilding to a Kuwaiti firm; and Halliburton was charging the government for three times as many meals as it was actually serving to U.S. soldiers in Kuwait over a nine month period," said William Hartung, senior fellow at the World Policy Institute at the New School and author of a forthcoming book on war profiteering.

"In short, Halliburton is a desperate firm with a history of shaky ethical practices that is being allowed to take U.S. taxpayers for a ride in large part because of its cozy relationship with the Army and its powerful friend in the White House, Vice President Cheney," Hartung concluded.

Kromm noted that government agencies have yet to investigate San Francisco-based Bechtel which, despite being given over a billion for various reconstruction projects in Iraq, has been dogged by charges of waste, fraud and abuse. Kromm and the Campaign also expressed concern that the Pentagon official in charge of the investigation, L. Jean Lewis, is known as a highly partisan Republican activist, who was roundly condemned for her zealous leadership of the Whitewater legal case against President Clinton in the 1990s.

Keith Ashdown, Vice-President of Policy at Taxpayers for Common Sense, further stated, "Recent revelations about questionable billing and procurement practices have raised important questions about the quality of government oversight in Iraq and whether the Bush Administration is adequately protecting the interests of American taxpayers. Hundreds of millions of dollars are being wasted as a result of unscrupulous conduct by contractors and lax government controls and oversight. A bipartisan, independent commission is needed to review the performance of contractors under existing contracts and monitor the letting of subcontracts."

Campaign organizers say the ongoing revelations of war profiteering and the Pentagon criminal investigation add urgency to the need for reform measures, including:

Establish A Bipartisan War Profiteering Commission: Congress should establish a bipartisan commission based on the Truman Committee model with the goal of rooting out waste and malfeasance. The committee would have the power to subpoena the appropriate parties and conduct far-ranging investigations into the nature of the contracting process, and thus will perform an important public service to U.S. taxpayers in this time of huge government outlays and to the Iraqi people who are in desperate straits.

End "Cost-Plus" Contracts: As whistleblower and former Halliburton purchasing officer Henry Bunting stated in recent testimony to the Senate Democratic Policy Committee, Halliburton's unofficial motto in Iraq is "don't worry about it, it's cost-plus." Cost-Plus contracts remove any incentive for corporations to reduce costs; the greater the cost incurred in the project, the greater the profit for the company.

Organizations around the country held demonstrations yesterday against corporate war profiteering, with events in 20 cities including San Francisco, C.A.; Houston, T.X.; Raleigh-Durham, N.C.; and Washington, D.C. Activists called on Congress to take immediate action to hold military contractors accountable and for legislation penalizing companies that engage in war profiteering. They also demanded full respect for democracy and human rights in Iraq.

The Campaign to Stop the War Profiteers is a national initiative of the Institute for Southern Studies, a non-profit research, education and action center based in Durham, N.C. The Campaign has been endorsed by over 50 organizations and thousands of activists nation-wide. For more information about the Institute and the Campaign, visit www.southernstudies.org

For more information, contact:
Rania Masri, Campaign to Stop the War Profiteers: 919.419.8311 x27
William Hartung, World Policy Institute: 212.229.5808 x106
Keith Ashdown, Taxpayers for Common Sense: 202.546.8500 x 110