Staff writers for the Raleigh News and Observer Joseph Neff and Jay Price wrote an article that appeared in today's paper, detailing steps Rep. Henry Waxman has begun to take to start the accountability train rolling when it comes to contracting in Iraq. Read full article here:
http://www.newsobserver.com/...
I think the participants in this great American rip-off are already starting to feel the heat, and it's only going to get hotter courtesy of the honorable Mr. Waxman.
Blackwater is a North Carolina Company and the paper has been following with some interest what has been happening. It appears that Mr. Waxman wrote a letter to the departing Mr. Rumsfeld yesterday telling him that he was not sure just how much in overpayments had been made to Blackwater because nobody had bothered to answer questions he had raised two years ago with the Army.
The California congressman said that Blackwater's services were not just pricey, but prohibited, because the Army never authorized Blackwater or any other Halliburton subcontractors to guard convoys or carry weapons. Houston-based Halliburton has been paid at least $16 billion to provide food, lodging and other support for troops in Iraq, and $2.4 billion to work on Iraqi oil infrastructure.
Blackwater as you recall was the subcontractor that had four of it's employees brutally murdered in Fallujah in March of 2004 which caused an escalation in violence in the aftermath.
At the lowest level, Blackwater security guards were paid $600 a day. Blackwater added a 36 percent markup, plus overhead costs, and sent the bill to a Kuwaiti company that ordinarily runs hotels, according to the contract.
Tacked on costs, profit
That company, Regency Hotel, tacked on costs and profit and sent an invoice to ESS. The food company added its costs and profit and sent its bill to Kellogg Brown & Root, a division of Halliburton, which added overhead and profit and presented the final bill to the Pentagon.
Waxman detailed in his letter to the Penagon what he felt were untruthful answers to questions when both the Army and Blackwater testified to congress under oath to the House Government Reform committee.
It appears that the VP for Blackwater testified before the committee that a 36% markup was the entirety of their costs, but the N&O had posted Blackwaters contracts on its website. It detailed seperate billing for room, board, insurance, travel, and vehicles etc...
From an article published in the N&O Oct 24, 2004 by the same writers:
Contractors in Iraq make costs balloon
http://www.newsobserver.com/...
a very telling quote,
Henry Bunting, a former Halliburton purchasing officer, said he heard a common refrain in 2003 in Kuwait from managers at KBR -- also known as Kellogg Brown & Root -- a division of Halliburton: "Don't worry about price. It's cost-plus."
"There is no question the taxpayer is getting screwed," said Bunting, who was an Army staff sergeant in Vietnam. "There is no incentive for KBR or their subs to try to reduce costs. No matter what it costs, KBR gets 100 percent back, plus overhead, plus their profit."
The Army said it is satisfied with Halliburton's performance.
So, basically this is where it stands. Waxman discovered that Halliburton's contract did not include services that it subcontracted out to Blackwater. Not only that, the markup was in the stratosphere. It seems Halliburton was illegally charging the Government for contract work it had NO contract for. Ouch.
This entire sordid mess was allowed to fester under the Republican control of congress. It's mind boggling to think that these companies were allowed to back up their trucks to the U.S. treasury and just start unloading taxpayer money, seemingly at will, while Republicans shielded their eyes. The party of fiscal responsibility my ass. They were complicit in what we should start to refer to as the Great American Snow Job.
Henry Waxman, good luck. Please get to the bottom of this mess, turn up the heat and watch the vermin scramble. Hold them accountable, one snow job at a time.