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IRAQ: Halliburton's War Loot

It was Rumsfeld, CEO of the Pentagon, who was complicit in trying to conceal shenanigans by Haliburton subsidiary, KBR, and allowing his people to censor sections of critical audit reports.

by Brian CloughleyCounterpunch
May 3rd, 2005

There is a squalid little wart called Mark Steyn whose blinkered worship for Bush and the Crazy Crusaders is intense. He is the darling of the Murdoch-style, mind-bending, non-information media and of some other formerly respectable US and British publications which have lost their way in the fetid jungle of Bush idolatry. Steyn is the prat who wrote in the UK's Telegraph newspaper a year ago that "I don't think it's possible for anyone who looks at Iraq honestly to see it as anything other than a success story . . . ".

The man has the horizon of a visually-challenged mole on tranquilizers but is held in high regard by loony Bush fundos who are never reluctant to believe the impossible and embrace the incredible.

Steyn detests the UN. In particular he despises Mr Kofi Annan and describes his fellow UN-hater John (Kiss-up, Kick-down) Bolton in the manner of a love-struck ten year-old gushing about a pop icon. Bolton approved of Wolfowitz's insane predictions that everything would be fine in Iraq, just as Steyn looked into his crystal ball in April 2003 and forecast that "In a year's time, Iraq will be, at a bare minimum, the least badly-governed state in the Arab World and, at best, pleasant, civilized and thriving." He and the other clods who made such bird-witted prophecies have been proved entirely wrong.

But marvelous Mark carries on crusading. Selectively.

When the scandal broke about corruption in the oil-for-food program that was supervised by the UN, marvelous Mark rushed to castigate Mr Annan. He wrote "Given that the Oil-for-Fraud program was run directly out of Kofi Annan's office, the Secretary-General ought to have the decency to recognize that he had his chance with Iraq, he blew it, and a period of silence from him would now be welcome." This is in line with such statements as "I'd be in favor of destroying the UN - or, failing that, at least moving its headquarters to Rwanda", and "Oil-for-Fraud is everything the Left said the war was: it was all about oil - for [UN official] Benon Sevan, the UN, France, Russia and the others who had every incentive to maintain Saddam in power. Every Halliburton invoice to the Pentagon is audited to the last penny, but Saddam can use Kofi Annan's office as a front for a multi-billion dollar global kickback scheme . . ."

We can be forgiven for roaring with laughter at his imbecile observation about Halliburton invoices because everyone except marvelous Mark was aware that Cheney's old firm was overcharging on a scale that would excite the admiration of an Enron accountant. Hundreds of millions of dollars went down the drain, but it didn't matter to Washington because it was in the cause of Bush-style freedom and democracy.

Last month Rumsfeld went to Iraq to lecture its citizens about, as he put it, "corruption in government" knowing (one supposes, because we keep being told how smart he is) that just before he went to Baghdad it was discovered there had been "$108 million in overcharges by [Halliburton's] Kellogg Brown and Root [KBR] for delivering gasoline to Iraq. The Pentagon had previously released a redacted version of the audit to conceal the overcharge from the public, at KBR's request."

Use of the word 'redacted' is fascinating. Its correct meaning is "shaping into proper form for publication". But what it now conveys is "censored by the Bush White House", which is exactly the same thing as shaping into proper form for publication if you look at it from the viewpoint of the Washington warriors. It was Rumsfeld, CEO of the Pentagon, who was complicit in trying to conceal KBR's shenanigans by allowing his people to censor sections of critical audit reports, and it might just be possible that poor little Steyn actually believed Halliburton to be white as the driven snow.


* * *

What entity, person or nation did marvelous Mark omit from his list of criminals who indulged in corruption because they "had every incentive to maintain Saddam in power"? At the time when he wrote about Benon Sevan and France and Russia being the guilty parties in the oil scam it was known by everyone else but Steyn that good old Texas was up to its oily armpits in Saddam's swindles. Money, after all, is the root of all power, and where there's money to be made, there are Babbitty Texans getting in there to get more than their share of both. But there was not a peep out of Steyn about that. Did the Texans involved have "every incentive to maintain Saddam in power"? If so, why? If not, then why are they different from those who, Steyn claims, insolently and preposterously, wanted to keep Saddam in power?

It is worth reading UN Security Council resolution 986 of 1995 on the oil-for-food scheme. Among other things it "Authorizes States . . . to permit the import of petroleum and petroleum products originating in Iraq, including financial and other essential transactions directly relating thereto . . . ". Note the key word "States". The Council authorized national governments to make possible the oil flow from Iraq. It was national governments that were responsible for endorsing financial arrangements concerning the transport of oil and payment for it into the UN escrow account.

The Security Council "Oil-for-Fraud" programme, as Steyn described it, involved Texas figures described by the FBI as "Motivated by greed, they flouted the law, made a mockery of the stated aims of the oil-for-food program and willingly conspired with a foreign government with whom our country was on the brink of war". Further, the FBI stated, they used the program as a "cash cow masquerading as a humanitarian venture."

Steyn's next comments on the "global kickback scheme" will be interesting, because he might condemn the Texas cashocracy for being greedy and corrupt, just as he condemned Kofi Annan for being at the head of the UN at a time when some of the scum of Big Oil were scamming the world.

The money criminally obtained through the US-supported oil-for-food program is a tiny portion of what has been stolen by all sorts of corrupt blackguards in the wake of the ridiculously-named Operation 'Iraqi Freedom'. As the Christian Science Monitor's Mark Rice-Oxley noted March 17 "A January report by special [US] inspector Stuart Bowen found that $8.8 billion dollars had been disbursed from Iraqi oil revenue by US [occupation] administrators to Iraqi ministries without proper accounting." Not even Steyn and Rove can blame Kofi Annan for the US handover of eight billion dollars without any sort of follow-through supervision or line item accountability. (But "Every Halliburton invoice to the Pentagon is audited to the last penny," says Steyn . . . .).

It is scandalous that the black holes down which all this cash has gone have not been identified, and verging on the incredible that nobody is being held responsible. The people who authorized movement of the money down the chain to the drain were the so-called "administrators" appointed by Bush and Rumsfeld and headed by the spectacularly inefficient Paul Bremer who was described by Bush as "a can-do type person". After Bremer showed he was a can't-do type person he was awarded the Bush Medal of Freedom, and for that reason there isn't the slightest chance that he or anyone associated with him will be held to account for the missing billions. Anyone to whom Bush hands out a medal cannot be criticized, because that would mean the Great Leader had been wrong. Heads would roll - not the heads of the people to blame for gross incompetence or flagrant corruption, to be sure, but the heads of people who tried to expose incompetence and corruption. This is the trademark of the Bush presidency, and we have to admit that the Rove control apparatus is extremely effective. The great pity is that its expertise has been directed to concealing dishonesty rather than exposing it.

Representative Henry A Waxman of California pointed out to the House Subcommittee on National Security [etc, etc] on March 15 that the successor to the oil-for-food program is the Development Fund for Iraq which was created in May 2003. The Fund came under "the authority of the US-controlled Coalition Provisional Authority" which, as insisted upon by the Bush administration, was to "manage and spend Iraqi funds, which belong to the Iraqi people, for their benefit." The Bush appointees were required to disburse monies "in a transparent manner to meet the humanitarian needs of the Iraqi people . . . and for other purposes benefiting the people of Iraq". That is perfectly clear. It is an honorable and laudable objective of which we should all approve. The phrase "transparent manner" is specially welcome.

The Fund's transparency was to be overseen by a group appointed by the Security Council (thus by definition approved by Bush Washington), drawn from UN members, the World Bank, the International Monetary Fund, and the Arab Fund for Economic Development. It is known as the International Advisory and Monitoring Board, but its advice was treated with contempt and it was prevented from monitoring anything by Washington's usual expedient of ignoring requests for information.

After Washington's decision to spend the cash, Halliburton wangled some no-bid contracts from the US "Coalition Provisional Authority" in which comfortable little family arrangement there was no input whatever from "Coalition" members or anyone else. The main priority of Cheney-Bush was oil supply restoration which involved committing $2.5 billion of which $1.6 billion came from Iraqi assets. The rest was provided by that gushing faucet, the American taxpayers (some of whom might be realizing, a tad late, that a great deal of their hard-earned money is going down the Bush drain in ever-increasing amounts to rather strange outfits like Halliburton that was run for five years by the vice-president of the United States, who still receives "deferred payments" of over a hundred thousand dollars a year from Halliburton, with which, of course, he has no monetary or any other connection).

The Monitoring Board thought it strange that there were no independent checks and balances involved in committing this enormous sum of money to Halliburton, so on April 5 last year, after the Fund had been operating for a year, it asked for details. Specifically, it wanted to know why Iraqi money (the US taxpayers' money being none of its business) went to prosper a US company that had been awarded a monster contract by the US government without any competitive bids being sought. In doing this, the Board was performing the supervisory task it had been specifically instructed to carry out by the Security Council, of which the most influential member is the United States.

The Monitoring Board asked repeatedly for audit details. Seven months after its first request it was given "redacted copies of the Defense Contract Audit Agency audit reports on sole source contracts". So marvelous Mark was right, in a sort of way, because Halliburton was indeed audited. But the Pentagon refused to release details of the audit. These were far too secret and sensitive to be given to the Board appointed by the Security Council to oversee how US administrators spent $1.6 billion of Iraqi money.

As Congressman Waxman discovered, however, the secret and sensitive parts of the audit that the Pentagon refused to release, and blacked-out - "redacted" - to prevent the Board seeing them, consisted of observations that Rumsfeld's Pentagon presumably considered would have been threatening to national or commercial security if anyone outside the Pentagon was allowed to know them. These included such censored comments as "KBR was unable to reconcile the proposed costs to its accounting records" ; and "KBR did not always provide accurate information" ; and "KBR did not comply with the stated terms and conditions of its own subcontract clauses" ; and "We found significant purchasing system deficiencies during related audits".

Not one of these critical audit observations (and there are many others of equal seriousness) could possibly be interpreted as having either national security implications or information that would be detrimental to commercial competitiveness. There had been, after all, no commercial competition of any sort. And the idea that national security might be involved is absurd. The reason for the Pentagon's censorship was simple : Halliburton/KBR had made a howling (but extremely profitable) nonsense of everything they touched, and those responsible for allowing them to do so are Pentagon people. So of course there must be "redaction". It would be terrible for the image of the Bush administration to make it possible to identify exactly who is to blame for wasting billions of dollars.

The real lulu in the Iraq tragedy-as-farce is that "KBR faces a number of investigations for overcharging, including one case where it charged the Army more than 27 million dollars to transport $82,000 worth of fuel from Kuwait to Iraq . . . In a written statement, Halliburton defended the cost, explaining that delivering the fuel was 'fraught with danger'." Oh wow. 27 million dollars of danger money. So where did it go, all that cash-for-danger? Into the pockets of the Egyptian and Turkish truck drivers who are in Iraq doing jobs that should have been given to Iraqis? (Which was one of the dumbest Bush administration decisions of all time.) Don't believe it. The money went where that sort of money always goes - into the pockets of the people who thought up the scam and knew they would be allowed to get away with it.

The tale of the US occupation of Iraq is one of incompetence and chicanery followed by stone-walling and cover-up, ending with fat wallets, promotions and devalued medals all round. It's a cash cow for crooked companies and career progression for generals. Maybe that's why marvelous Mark said it would be a success story.

Brian Cloughley writes on military and political affairs. He can be reached through his website www.briancloughley.com







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