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<http://www.publicintegrity.org/wow/report.aspx?aid=75>

Windfalls of War

>From the Executive Director Charles Lewis' remarks to
the press on the release of Windfalls of War 10/30/2003

Good morning. The Center for Public Integrity is a
nonprofit, nonpartisan watchdog organization that
investigates public service and ethics-related issues.
We opened our doors here in Washington in May 1990, and
since then, we have issued more than 250 investigative
reports and 12 books that serve as vital reference
material for journalists, academics, policymakers and
citizens alike. The Center for Public Integrity is
funded by foundations and individuals and the sale of
our publications. We do not accept advertising or
contributions from companies, labor unions or
governments. We do not take positions or lobby on
specific public policy or legislative matters. The names
of our major donors and other information about the
Center are available on our award-winning Web site,
www.publicintegrity.org.

In recent years, we have become increasingly curious
about defense contractors and their activities. In
August 2000 within days of Dick Cheney being named as
George W. Bush's running mate, we published a report
about Halliburton, its government contracts, and how
they had doubled while Mr. Cheney was CEO of the
company. A year ago, the Center issued an 80,000-word
report by its International Consortium of Investigative
Journalists entitled Making a Killing: The Business of
War, which featured a comprehensive Web database of 90
private military companies operating in the world today,
including Halliburton subsidiary, Kellogg Brown & Root.
In December, 2002, we published a report, Outsourcing
Big Brother, about the Pentagon's controversial Total
Information Awareness program and its private, data-
mining contractors. And this past spring, during the
Iraq war, the Center issued a report detailing how nine
of the 30 members of the Defense Policy Board had ties
to defense companies with $76 billion in Pentagon
contracts in just the preceding two years.

Today, we are releasing The Windfalls of War, which
consists of a summary report, six "sidebar" reports,
profiles of 71 companies and individuals awarded
contracts in Afghanistan and Iraq in 2002 and 2003, plus
numerous charts. The Center's six-month investigation
has produced the most comprehensive information to date
-- inside or outside of the government -- about the
American companies that landed U.S. taxpayer money
contracts in the two nations targeted in Washington's
war on terror. At the same time, it should be noted that
we specifically focused on contracts awarded by the
Pentagon, the State Department and the U.S. Agency for
International Development. Our 62,000-word investigative
report has been produced by 20 researchers, writers and
editors, who filed 73 Freedom of Information Act
requests and appeals to the various relevant agencies.
Besides studying thousands of pages of secondary source
accounts, we analyzed millions of federal campaign
contribution records, lobbying registration records,
government contracts, and agency Web site and private
company Web site pages.

What we are presenting today is quite cautious and
conservative. We have been careful to only mention and
include companies and contracts that we could confirm,
but these numbers will continue to grow as the
government provides us with more information over the
coming weeks and months. As a result of this somewhat
fluid situation, we will update our site and post new
contracts as they become available to us.

What did we find? More than 70 American companies and
individuals have won up to $8 billion in contracts for
work in postwar Iraq and Afghanistan over the last two
years. Those companies contributed more money to the
presidential campaigns of George W. Bush -- more than
$500,000 -- than to any other politician over the last
dozen years.

Kellogg, Brown & Root, the subsidiary of Halliburton --
which Vice President Dick Cheney led prior to being
chosen as Bush's running mate in August 2000 -- was the
top recipient of federal contracts for the two
countries, with more than $2.3 billion awarded to the
company. Bechtel Group, a major government contractor
with similarly high-ranking ties, was second at around
$1.03 billion.

However, dozens of lower-profile, but well-connected
companies shared in the reconstruction bounty. Their
tasks ranged from rebuilding Iraq's government, police,
military and media to providing translators for use in
interrogations and psychological operations. There are
even contractors hired to evaluate the other
contractors.

Nearly 60 percent of the companies had employees or
board members who either served in or had close ties to
the executive branch for Republican and Democratic
administrations, for members of Congress of both
parties, or at the highest levels of the military.

Most of the companies that won contracts in Iraq and
Afghanistan are political players. According to the
Center's analysis, the companies, their political action
committees and their employees contributed a total of
nearly $49 million to national political campaigns and
parties since 1990. Donations to Republican Party
committees -- the Republican National Committee, the
Republican Senatorial Campaign Committee and the
National Republican Congressional Committee -- outpaced
those to Democratic committees, 12.7 million to $7.1
million.

These two wars in two years and their aftermaths have
brought out the Beltway Bandit companies in full force,
and there is a stench of political favoritism and
cronyism surrounding the contracting process in both
Iraq and Afghanistan. I am not just talking about the
large political payments and excessive lobbying fees to
land these fat contracts, or the already reported,
cushy, no-bid circumstances surrounding the Vice
President's former company, Halliburton. We found
numerous instances in which companies with thin or no
credentials landed major multimillion dollar contracts.
We also found a current Pentagon official whose spouse
has been getting Iraq contracts. Carol Haave has been
deputy assistant secretary of defense for security and
information operations since November 2001, and her
husband, Terry Sullivan, still works for their
contractor company, Sullivan Haave. He told us, with a
straight face, that "People need to know how we operate
as a husband and wife. We keep things completely
separate and always have."

In another case, a company called Creative Associates
International, a private for-profit company based in
Washington D.C., landed an educational reform contract
in Iraq of up to $157 million just months after a
Creative Associates employee attended internal meetings
at the U.S. Agency for International Development
meetings on -- you guessed it -- educational reform.

Regarding another situation, an Afghanistan contractor
in Nebraska bluntly told us that efficiency and quality
are secondary to politics in the process of selecting
companies and organizations to work in that country, "It
depends on who knows who in the Administration, USAID
and the State Department."

Incidentally, contract spending in Iraq was more than
double that in Afghanistan. According to our
investigation, at least $5.7 billion in government
funding was slated for U.S. contractors in Iraq,
compared to nearly $2.7 billion for Afghanistan.

Frankly, what surprised us the most was the Keystone
Kops, rank amateur nature of the government contracting
process. Federal officials sent us documents affixing a
contract amount at $600 million and then months later
told us, oops, it was actually $600,000. The Center for
Public Integrity found no uniformity across the
government in how contract values are reported. The
amount listed for an individual contract either
represented only what had been paid to date on a
multiyear contract, or a minimum and maximum dollar
range of the contract; or in some instances, a single
figure, without any specification as to whether it
represented a first payment, a first-year total, or a
multiyear total. In some instances, the Center could not
determine anything about a particular contract cost or
other details because neither the company nor the
government agency responsible for it would divulge that
information.

We are only talking about primary contractors here.
Because of the paucity of disclosure requirements for
subcontractors, we were unable to examine them in any
systematic way, and it was not clear how much of the
postwar Iraq and Afghanistan business they actually
hold. USAID Administrator Andrew Natsios has said that
more than 50 percent of the money that goes to
contractors actually ends up with subcontractors.

A few times, when the government stiffed us, we found
that the companies actually had bragged about landing
the contracts on their Web sites or to investors in the
industry trade press. We would then forward this useful
information to federal officials, and lo and behold,
they suddenly found the contracts.

This is all outrageous. We are talking about the
expenditure of billions of dollars in taxpayer money. As
Americans, we have a right to know how our hard-earned
money is spent. When American soldiers are at risk or
worse, are being killed, the stunning incompetence and
deliberate stonewalling become even more offensive and
unacceptable.

Too often, we found that federal officials were
reluctant to release contract information, wanting to
check first with the companies, to see if they minded
releasing the contracts and related information. The
last time I checked, in this democracy we are supposed
to have a government of the people, by the people and
for the people, not public officials protecting private
companies behind closed doors.

The General Accounting Office is investigating the
entire contracting mess in Iraq and Afghanistan, and
acknowledging the almost incomprehensible confusion, the
Pentagon has announced that it is creating a
centralized, consolidated contracts office in Baghdad
next month. These all sound like improvements, but does
anyone really believe the substantial political
influence problems and perceptions will go away? That
hardly seems possible.

I'm certainly not holding my breath.

But just as bothersome are the secrecy and obfuscation.
Indeed, the government's responses to our Freedom of
Information Act requests were sporadic, at best, and
yesterday, the Center filed suit in U.S. District Court
in Washington, D.C., against the State Department and
the Army after both agencies failed to respond fully to
our request for information as outlined under federal
FOIA law. This is only the second time in our 14-year
history as an organization, in which we have filed a
lawsuit to pry public information out of the federal
government. By the way, the last case, involving Vice
President Al Gore and the sale of federal lands to
Occidental Petroleum, we won.

For the complete report, visit www.publicintegrity.org.

Before taking your questions, I want to thank publicly
the extraordinary folks who have made this important
report possible. First and foremost, we would not be
here today without the dogged perseverance and
determined leadership of six-year Center veteran Maud
Beelman, project manager, editor, writer and director of
the Center's International Consortium of Investigative
Journalists. She led a spectacular team of writers
(alphabetically) Kevin Baron, Neil Gordon, Laura
Peterson, Daniel Politi, André Verloy, Bob Williams,
Brooke Williams; researchers Aubrey Bruggeman, Alex
Cohen, Sarah Dalglish, Alex Knott, Estelle Levresse,
Adam Mayle and Susan Schaab. I want to thank our
wonderful editors, managing editor Bill Allison, Teo
Furtado, Aron Pilhofer, and Peter Smith; production
staff Mohammad Ismail, Javed Khan and Jonathan Werve,
and Webmaster Han Nguyen.

Thank you.


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DECLARATION & DISCLAIMER
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CTRL is a discussion & informational exchange list. Proselytizing propagandic
screeds are unwelcomed. Substance—not soap-boxing—please!   These are
sordid matters and 'conspiracy theory'—with its many half-truths, mis-
directions and outright frauds—is used politically by different groups with
major and minor effects spread throughout the spectrum of time and thought.
That being said, CTRLgives no endorsement to the validity of posts, and
always suggests to readers; be wary of what you read. CTRL gives no
credence to Holocaust denial and nazi's need not apply.

Let us please be civil and as always, Caveat Lector.
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