The Rip-off in Iraq:
You Will Not Believe How Low the War Profiteers Have Gone
by Matt Taibbi, Rolling Stone.com
www.alternet.org, August 30, 2007
How is it done? How do you screw the taxpayer
for millions, get away with it and then ride off into the sunset
with one middle finger extended, the other wrapped around a chilled
martini? Ask Earnest O. Robbins -- he knows all about being a
successful contractor in Iraq.
You start off as a well-connected bureaucrat:
in this case, as an Air Force civil engineer, a post from which
Robbins was responsible for overseeing 70,000 servicemen and contractors,
with an annual budget of $8 billion. You serve with distinction
for thirty-four years, becoming such a military all-star that
the Air Force frequently sends you to the Hill to testify before
Congress -- until one day in the summer of 2003, when you retire
to take a job as an executive for Parsons, a private construction
company looking to do work in Iraq.
Now you can finally move out of your dull
government housing on Bolling Air Force Base and get your wife
that dream home you've been promising her all these years. The
place on Park Street in Dunn Loring, Virginia, looks pretty good
-- four bedrooms, fireplace, garage, 2,900 square feet, a nice
starter home in a high-end neighborhood full of spooks, think-tankers
and ex-apparatchiks moved on to the nest-egg phase of their faceless
careers. On October 20th, 2003, you close the deal for $775,000
and start living that private-sector good life.
A few months later, in March 2004, your
company magically wins a contract from the Coalition Provisional
Authority in Iraq to design and build the Baghdad Police College,
a facility that's supposed to house and train at least 4,000 police
recruits. But two years and $72 million later, you deliver not
a functioning police academy but one of the great engineering
clusterfucks of all time, a practically useless pile of rubble
so badly constructed that its walls and ceilings are literally
caked in shit and piss, a result of subpar plumbing in the upper
You've done such a terrible job, in fact,
that when auditors from the Special Inspector General for Iraq
Reconstruction visit the college in the summer of 2006, their
report sounds like something out of one of the Saw movies: "We
witnessed a light fixture so full of diluted urine and feces that
it would not operate," they write, adding that "the
urine was so pervasive that it had permanently stained the ceiling
tiles" and that "during our visit, a substance dripped
from the ceiling onto an assessment team member's shirt."
The final report helpfully includes a photo of a sloppy brown
splotch on the outstretched arm of the unlucky auditor.
When Congress gets wind of the fiasco,
a few members on the House Oversight Committee demand a hearing.
To placate them, your company decides to send you to the Hill
-- after all, you're a former Air Force major general who used
to oversee this kind of contracting operation for the government.
So you take your twenty-minute ride in from the suburbs, sit down
before the learned gentlemen of the committee and promptly get
asked by an irritatingly eager Maryland congressman named Chris
Van Hollen how you managed to spend $72 million on a pile of shit.
You blink. Fuck if you know. "I have
some conjecture, but that's all it would be" is your deadpan
The room twitters in amazement. It's hard
not to applaud the balls of a man who walks into Congress short
$72 million in taxpayer money and offers to guess where it all
might have gone.
Next thing you know, the congressman is
asking you about your company's compensation. Touchy subject --
you've got a "cost-plus" contract, which means you're
guaranteed a base-line profit of three percent of your total costs
on the deal. The more you spend, the more you make -- and you
certainly spent a hell of a lot. But before this milk-faced congressman
can even think about suggesting that you give these millions back,
you've got to cut him off. "So you won't voluntarily look
at this," Van Hollen is mumbling, "and say, given what
has happened in this project "
"No, sir, I will not," you snap.
" 'We will return the profits.' "
"No, sir, I will not," you repeat.
Your testimony over, you wait out the
rest of the hearing, go home, take a bath in one of your four
bathrooms, jump into bed with the little woman . A year later,
Iraq is still in flames, and your president's administration is
safely focused on reclaiming $485 million in aid money from a
bunch of toothless black survivors of Hurricane Katrina. But the
house you bought for $775K is now assessed at $929,974, and you're
sure as hell not giving it back to anyone.
"Yeah, I don't know what I expected
him to say," Van Hollen says now about the way Robbins responded
to being asked to give the money back. "It just shows the
contempt they have for us, for the taxpayer, for everything."
Operation Iraqi Freedom, it turns out,
was never a war against Saddam Hussein's Iraq. It was an invasion
of the federal budget, and no occupying force in history has ever
been this efficient. George W. Bush's war in the Mesopotamian
desert was an experiment of sorts, a crude first take at his vision
of a fully privatized American government. In Iraq the lines between
essential government services and for-profit enterprises have
been blurred to the point of absurdity -- to the point where wounded
soldiers have to pay retail prices for fresh underwear, where
modern-day chattel are imported from the Third World at slave
wages to peel the potatoes we once assigned to grunts in KP, where
private companies are guaranteed huge profits no matter how badly
they fuck things up.
And just maybe, reviewing this appalling
history of invoicing orgies and million-dollar boondoggles, it's
not so far-fetched to think that this is the way someone up there
would like things run all over -- not just in Iraq but in Iowa,
too, with the state police working for Corrections Corporation
of America, and DHL with the contract to deliver every Christmas
card. And why not? What the Bush administration has created in
Iraq is a sort of paradise of perverted capitalism, where revenues
are forcibly extracted from the customer by the state, and obscene
profits are handed out not by the market but by an unaccountable
government bureaucracy. This is the triumphant culmination of
two centuries of flawed white-people thinking, a preposterous
mix of authoritarian socialism and laissez-faire profiteering,
with all the worst aspects of both ideologies rolled up into one
pointless, supremely idiotic military adventure -- American men
and women dying by the thousands, so that Karl Marx and Adam Smith
can blow each other in a Middle Eastern glory hole.
It was an awful idea, perhaps the worst
America has ever tried on foreign soil. But if you were in on
it, it was great work while it lasted. Since time immemorial,
the distribution of government largesse had followed a staid,
paper-laden procedure in which the federal government would post
the details of a contract in periodicals like Commerce Business
Daily or, more recently, on the FedBizOpps Web site. Competitive
bids were solicited and contracts were awarded in accordance with
the labyrinthine print of the U.S. Code, a straightforward system
that worked well enough before the Bush years that, as one lawyer
puts it, you could "count the number of cases of criminal
fraud on the fingers of one hand."
There were exceptions to the rule, of
course -- emergencies that required immediate awards, contracts
where there was only one available source of materials or labor,
classified deals that involved national security. What no one
knew at the beginning of the war was that the Bush administration
had essentially decided to treat the entire Iraqi theater as an
exception to the rules. All you had to do was get to Iraq and
the game was on.
But getting there wasn't easy. To travel
to Iraq, would-be contractors needed permission from the Bush
administration, which was far from blind in its appraisal of applicants.
In a much-ballyhooed example of favoritism, the White House originally
installed a clown named Jim O'Beirne at the relevant evaluation
desk in the Department of Defense. O'Beirne proved to be a classic
Bush villain, a moron's moron who judged applicants not on their
Arabic skills or their relevant expertise but on their Republican
bona fides; he sent a twenty-four-year-old who had never worked
in finance to manage the reopening of the Iraqi stock exchange,
and appointed a recent graduate of an evangelical university for
home-schooled kids who had no accounting experience to manage
Iraq's $13 billion budget. James K. Haveman, who had served as
Michigan's community-health director under a GOP governor, was
put in charge of rehabilitating Iraq's health-care system and
decided that what this war-ravaged, malnourished, sanitation-deficient
country most urgently needed was an anti-smoking campaign.
Town-selectmen types like Haveman weren't
the only people who got passes to enter Iraq in the first few
years. The administration also greenlighted brash, modern-day
forty-niners like Scott Custer and Mike Battles, a pair of ex-Army
officers and bottom-rank Republican pols (Battles had run for
Congress in Rhode Island and had been a Fox News commentator)
who had decided to form a security company called Custer Battles
and make it big in Iraq. "Battles knew some people from his
congressional run, and that's how they got there," says Alan
Grayson, an attorney who led a whistle-blower lawsuit against
the pair for defrauding the government.
Before coming to Iraq, Custer Battles
hadn't done even a million dollars in business. The company's
own Web site brags that Battles had to borrow cab fare from Jordan
to Iraq and arrived in Baghdad with less than $500 in his pocket.
But he had good timing, arriving just as a security contract for
Baghdad International Airport was being "put up" for
bid. The company site raves that Custer spent "three sleepless
nights" penning an offer that impressed the CPA enough to
hand the partners $2 million in cash, which Battles promptly stuffed
into a duffel bag and drove to deposit in a Lebanese bank.
Custer Battles had lucked into a sort
of Willy Wonka's paradise for contractors, where a small pool
of Republican-friendly businessmen would basically hang around
the Green Zone waiting for a contracting agency to come up with
a work order. In the early days of the war, the idea of "competition"
was a farce, with deals handed out so quickly that there was no
possibility of making rational or fairly priced estimates. According
to those familiar with the process, contracting agencies would
request phony "bids" from several contractors, even
though the winner had been picked in advance. "The losers
would play ball because they knew that eventually it would be
their turn to be the winner," says Grayson.
To make such deals legal, someone in the
military would simply sign a piece of paper invoking an exception.
"I know one guy whose business was buying weapons on the
black market for contractors," says Pratap Chatterjee, a
writer who has spent months in the Mideast researching a forthcoming
book on Iraq contracts. "It's illegal -- but he got military
people to sign papers allowing him to do it."
The system not only had the advantage
of eliminating red tape in a war zone, it also encouraged the
"entrepreneurship" of patriots like Custer and Battles,
who went from bumming cab fare to doing $100 million in government
contracts practically overnight. And what business they did! The
bid that Custer claimed to have spent "three sleepless nights"
putting together was later described by Col. Richard Ballard,
then the inspector general of the Army, as looking "like
something that you and I would write over a bottle of vodka, complete
with all the spelling and syntax errors and annexes to be filled
in later." The two simply "presented it the next day
and then got awarded about a $15 million contract."
The deal charged Custer Battles with the
responsibility to perform airport security for civilian flights.
But there were never any civilian flights into Baghdad's airport
during the life of their contract, so the CPA gave them a job
managing an airport checkpoint, which they failed miserably. They
were also given scads of money to buy expensive X-ray equipment
and set up an advanced canine bomb-sniffing system, but they never
bought the equipment. As for the dog, Ballard reported, "I
eventually saw one dog. The dog did not appear to be a certified,
trained dog." When the dog was brought to the checkpoint,
he added, it would lie down and "refuse to sniff the vehicles"
-- as outstanding a metaphor for U.S. contractor performance in
Iraq as has yet been produced.
Like most contractors, Custer Battles
was on a cost-plus arrangement, which means its profits were guaranteed
to rise with its spending. But according to testimony by officials
and former employees, the partners also charged the government
millions by making out phony invoices to shell companies they
controlled. In another stroke of genius, they found a bunch of
abandoned Iraqi Airways forklifts on airport property, repainted
them to disguise the company markings and billed them to U.S.
taxpayers as new equipment. Every time they scratched their asses,
they earned; there was so much money around for contractors, officials
literally used $100,000 wads of cash as toys. "Yes -- $100
bills in plastic wrap," Frank Willis, a former CPA official,
acknowledged in Senate testimony about Custer Battles. "We
played football with the plastic-wrapped bricks for a little while."
The Custer Battles show only ended when
the pair left a spreadsheet behind after a meeting with CPA officials
-- a spreadsheet that scrupulously detailed the pair's phony invoicing.
"It was the worst case of fraud I've ever seen, hands down,"
says Grayson. "But it's also got to be the first instance
in history of a defendant leaving behind a spreadsheet full of
evidence of the crime."
But even being the clumsiest war profiteers
of all time was not enough to bring swift justice upon the heads
of Mr. Custer and Mr. Battles -- and this is where the story of
America's reconstruction effort gets really interesting. The Bush
administration not only refused to prosecute the pair -- it actually
tried to stop a lawsuit filed against the contractors by whistle-blowers
hoping to recover the stolen money. The administration argued
that Custer Battles could not be found guilty of defrauding the
U.S. government because the CPA was not part of the U.S. government.
When the lawsuit went forward despite the administration's objections,
Custer and Battles mounted a defense that recalled Nuremberg and
Lt. Calley, arguing that they could not be guilty of theft since
it was done with the government's approval.
The jury disagreed, finding Custer Battles
guilty of ripping off taxpayers. But the verdict was set aside
by T.S. Ellis III, a federal judge who cited the administration's
"the CPA is not us" argument. The very fact that private
contractors, aided by the government itself, could evade conviction
for what even Ellis, a Reagan-appointed judge, called "significant"
evidence of fraud, says everything you need to know about the
true nature of the war we are fighting in Iraq. Is it really possible
to bilk American taxpayers for repainted forklifts stolen from
Iraqi Airways and claim that you were just following orders? It
is, when your commander in chief is George W. Bush.
There isn't a brazen, two-bit, purse-snatching
money caper you can think of that didn't happen at least 10,000
times with your tax dollars in Iraq. At the very outset of the
occupation, when L. Paul Bremer was installed as head of the CPA,
one of his first brilliant ideas for managing the country was
to have $12 billion in cash flown into Baghdad on huge wooden
pallets and stored in palaces and government buildings. To pay
contractors, he'd have agents go to the various stashes -- a pile
of $200 million in one of Saddam's former palaces was watched
by a single soldier, who left the key to the vault in a backpack
on his desk when he went out to lunch -- withdraw the money, then
crisscross the country to pay the bills. When desperate auditors
later tried to trace the paths of the money, one agent could account
for only $6,306,836 of some $23 million he'd withdrawn. Bremer's
office "acknowledged not having any supporting documentation"
for $25 million given to a different agent. A ministry that claimed
to have paid 8,206 guards was able to document payouts to only
602. An agent who was told by auditors that he still owed $1,878,870
magically produced exactly that amount, which, as the auditors
dryly noted, "suggests that the agent had a reserve of cash."
In short, some $8.8 billion of the $12
billion proved impossible to find. "Who in their right mind
would send 360 tons of cash into a war zone?" asked Rep.
Henry Waxman, chairman of the House Oversight Committee. "But
that's exactly what our government did."
Because contractors were paid on cost-plus
arrangements, they had a powerful incentive to spend to the hilt.
The undisputed master of milking the system is KBR, the former
Halliburton subsidiary so ubiquitous in Iraq that soldiers even
encounter its customer-survey sheets in outhouses. The company
has been exposed by whistle-blowers in numerous Senate hearings
for everything from double-charging taxpayers for $617,000 worth
of sodas to overcharging the government 600 percent for fuel shipments.
When things went wrong, KBR simply scrapped expensive gear: The
company dumped 50,000 pounds of nails in the desert because they
were too short, and left the Army no choice but to set fire to
a supply truck that had a flat tire. "They did not have the
proper wrench to change the tire," an Iraq vet named Richard
Murphy told investigators, "so the decision was made to torch
In perhaps the ultimate example of military
capitalism, KBR reportedly ran convoys of empty trucks back and
forth across the insurgent-laden desert, pointlessly risking the
lives of soldiers and drivers so the company could charge the
taxpayer for its phantom deliveries. Truckers for KBR, knowing
full well that the trips were bullshit, derisively referred to
their cargo as "sailboat fuel."
In Fallujah, where the company was paid
based on how many soldiers used the base rec center, KBR supervisors
ordered employees to juke the head count by taking an hourly tally
of every soldier in the facility. "They were counting the
same soldier five, six, seven times," says Linda Warren,
a former postal worker who was employed by KBR in Fallujah. "I
was even directed to count every empty bottle of water left behind
in the facility as though they were troops who had been there."
Yet for all the money KBR charged taxpayers
for the rec center, it didn't provide much in the way of services
to the soldiers engaged in the heaviest fighting of the war. When
Warren ordered a karaoke machine, the company gave her a cardboard
box stuffed with jumbled-up electronic components. "We had
to borrow laptops from the troops to set up a music night,"
says Warren, who had a son serving in Fallujah at the time. "These
boys needed R&R more than anything, but the company wouldn't
spend a dime." (KBR refused requests for an interview, but
has denied that it inflated troop counts or committed other wrongdoing
One of the most dependable methods for
burning taxpayer funds was simply to do nothing. After securing
a contract in Iraq, companies would mobilize their teams, rush
them into the war zone and then wait, citing the security situation
or delayed paperwork -- all the while charging the government
for housing, meals and other expenses. Last year, a government
audit of twelve major contracts awarded to KBR, Parsons and other
companies found that idle time often accounted for more than half
of a contract's total costs. In one deal awarded to KBR, the company's
"indirect" administrative costs were $52.7 million,
and its direct costs -- the costs associated with the actual job
-- were only $13.4 million.
Companies jacked up the costs even higher
by hiring out layers of subcontractors to do their work for them.
In some cases, each subcontractor had its own cost-plus arrangement.
"We called those 'cascading contracts,' " says Rep.
Van Hollen. "Each subcontractor piles on a lot of costs,
and eventually they would snowball into a huge payout. It was
a green light for waste."
In March 2004, Parsons -- the firm represented
by Earnest O. Robbins -- was given nearly $1 million to build
a fire station in Ainkawa, a small Christian community in one
of the safest parts of Iraq. Parsons subcontracted the design
to a British company called TPS Consult and the construction to
a California firm called Innovative Technical Solutions Inc. ITSI,
in turn, hired an Iraqi outfit called Zozik to do the actual labor.
A year and a half later, government auditors
visited the site and found that the fire station was less than
half finished. What little had been built was marred by serious
design flaws, including concrete columns so shoddily constructed
that they were riddled with holes that looked like "honeycombing."
But getting the fuck-ups fixed proved problematic. The auditors
"made a request that was sent to the Army Corps, which delivered
it to Parsons, who then asked ITSI, which asked TPS Consult to
check on the work done by Zozik," writes Chatterjee, who
describes the mess in his forthcoming book, Baghdad Bonanza. The
multiple layers of subcontractors made it almost impossible to
resolve the issue -- and every day the delays dragged on meant
more money for the companies.
Sometimes the government simply handed
out money to companies it made up out of thin air. In 2006, the
Army Corps of Engineers found itself unable to award contracts
by the September deadline imposed by Congress, meaning it would
have to "de-obligate" the money and return it to the
government. Rather than suffer that awful fate, the corps obligated
$362 million -- spread out over ninety-six different contracts
-- to "Dummy Vendor." In their report on the mess, auditors
noted that money to nobody "does not constitute proper obligations."
But even obligating money to no one was
better than what sometimes happened in Iraq: handing out U.S.
funds to the enemy. Since the beginning of the war, rumors have
abounded about contractors paying protection money to insurgents
to avoid attacks. No less an authority than Ahmed Chalabi, the
head of the Iraqi National Congress, claimed that such payoffs
are a "significant source" of income for Al Qaeda. Moreover,
when things go missing in Iraq -- like bricks of $100 bills, or
weapons, or trucks -- it is a fair assumption that some of the
wayward booty ends up in the wrong hands. In July, a federal audit
found that 190,000 weapons are missing in Iraq -- nearly one out
of every three arms supplied by the United States. "These
weapons almost certainly ended up on the black market, where they
are repurchased by insurgents," says Chatterjee.
For all the creative ways that contractors
came up with to waste, mismanage and steal public money in Iraq,
the standard remained good old-fashioned fucking up. Take the
case of the Basra Children's Hospital, a much-ballyhooed "do-gooder"
project championed by Laura Bush and Condi Rice. This was exactly
the sort of grandstanding, self-serving, indulgent and ultimately
useless project that tended to get the go-ahead under reconstruction.
Like the expensive telephone-based disease-notification database
approved for use in hospitals without telephones, or the natural-gas-powered
electricity turbines greenlighted for installation in a country
without ready sources of natural gas, the Basra Children's Hospital
was a state-of-the-art medical facility set to be built in a town
without safe drinking water. "Why build a hospital for kids,
when the kids have no clean water?" said Rep. Jim Kolbe,
a Republican from Arizona.
Bechtel was given $50 million to build
the hospital -- but a year later, with the price tag soaring to
$169 million, the company was pulled off the project without a
single bed being ready for use. The government was unfazed: Bechtel,
explained USAID spokesman David Snider, was "under a 'term
contract,' which means their job is over when their money ends."
Their job is over when their money ends.
When I call Snider to clarify this amazing statement, he declines
to discuss the matter further. But if you look over the history
of the Iraqi reconstruction effort, you will find versions of
this excuse everywhere. When Custer Battles was caught delivering
broken trucks to the Army, a military official says the company
told him, "We were only told we had to deliver the trucks.
The contract doesn't say they had to work."
Such excuses speak to a monstrous vacuum
of patriotism; it would be hard to imagine contractors being so
blithely disinterested in results during World War II, where every
wasted dollar might mean another American boy dead from gangrene
in the Ardennes. But the rampant waste of money and resources
also suggests a widespread contempt for the ostensible "purpose"
of our presence in Iraq. Asked to cast a vote for the war effort,
contractors responded by swiping everything they could get their
hands on -- and the administration's acquiescence in their thievery
suggests that it, too, saw making a buck as the true mission of
the war. Two witnesses scheduled to testify before Congress against
Custer Battles ultimately declined not only because they had received
death threats but because they, too, were contractors and feared
that they would be shut out of future government deals. To repeat:
Witnesses were afraid to testify in an effort to recover government
funds because they feared reprisal from the government.
The Bush administration's lack of interest
in recovering stolen funds is one of the great scandals of the
war. The White House has failed to litigate a single case against
a contractor under the False Claims Act and has not sued anybody
for breach of contract. It even declined to join in a lawsuit
filed by whistle-blowers who are accusing KBR of improper invoicing
in Fallujah. "For all the Bush administration claims to do
in the war against terrorism," Grayson said in congressional
testimony, "it is a no-show in the war against war profiteers."
In nearly five years of some of the worst graft and looting in
American history, the administration has recovered less than $6
What's more, when anyone in the government
tried to question what contractors were up to with taxpayer money,
they were immediately blackballed and treated like an enemy. Take
the case of Bunnatine "Bunny" Greenhouse, an outspoken
and energetic woman of sixty-three who served as the chief procurement
executive for the Army Corps of Engineers. In her position, Greenhouse
was responsible for signing off on sole-source contracts -- those
awarded without competitive bids and thus most prone to corruption.
Long before Iraq, she had begun to notice favoritism in the awarding
of contracts to KBR, which was careful to recruit executives who
had served in the military. "That was why I joined the corps:
to stop this kind of clubby contracting," she says.
A few weeks before the Iraq War started,
Greenhouse was asked to sign off on the contract to restore Iraqi
oil. The deal, she noticed, was suspicious on a number of fronts.
For one thing, the company that had designed the project, KBR,
was the same company that was being awarded the contract -- a
highly unusual and improper situation. For another, the corps
wanted to award a massive "emergency" contract to KBR
with no competition for up to five years, which Greenhouse thought
was crazy. Who ever heard of a five-year emergency? After auditing
the deal, the Pentagon found that KBR had overcharged the government
$61 million for fuel. "The abuse related to contracts awarded
to KBR," Greenhouse testified before the Senate, "represents
the most blatant and improper contract abuse I have witnessed
during the course of my professional career."
And how did her superiors in the Pentagon
respond to the wrongdoing highlighted by their own chief procurement
officer? First they gave KBR a waiver for the overbilling, blaming
the problem on an Iraqi subcontractor. Then they dealt with Greenhouse
by demoting her and cutting her salary, citing a negative performance
review. The retaliation sent a clear message to any would-be whistle-blowers.
"It puts a chill on you," Greenhouse says. "People
are scared stiff."
They were scared stiff in Iraq, too, and
for good reason. When civilian employees complained about looting
or other improprieties, contractors sometimes threatened to throw
them outside the gates of their bases -- a life-threatening situation
for any American. Robert Isakson, a former FBI agent who worked
for Custer Battles, says that when he refused to go along with
one scam involving a dummy company in Lebanon, he was detained
by company security guards, who seized his ID badge and barred
him from the base in Baghdad. He eventually had to make a hazardous,
Papillon-esque journey across hostile Iraq to Jordan just to survive.
(Custer Battles denies the charge.)
James Garrison, who worked at a KBR ice
plant in Al Asad, recalls an incident when Indian employees threatened
to go on strike: "They pulled a bus up, got them in there
and said, 'We'll ship you outside the front gate if you want to
go on strike.' " Not surprisingly, the workers changed their
mind about a work stoppage.
You know the old adage: You don't pay
a hooker to spend the night, you pay her to leave in the morning.
That maxim also applies to civilian workers in Iraq. A soldier
is a citizen with rights, a man to be treated with honor and respect
as a protector of us all; if one loses a limb, you've got to take
care of him, in theory for his whole life. But a mercenary is
just another piece of equipment you can bill to the taxpayer:
If one is hurt on the job, you can just throw it away and buy
another one. Today there are more civilians working for private
contractors in Iraq than there are troops on the ground. The totality
of the thievery in Iraq is such that even the honor of patriotic
service has been stolen -- we've replaced soldiers and heroes
with disposable commodities, men we expected to give us a big
bang for a buck and to never call us again.
Russell Skoug, who worked as a refrigeration
technician for a contractor called Wolfpack, found that out the
hard way. These days Skoug is back home in Diboll, Texas, and
he doesn't move around much; he considers it a big accomplishment
if he can make it to his mailbox and back once a day. "I'm
doing a lot if I can do that much," he says, laughing a little.
A year ago, on September 11th, Skoug was
working for Wolfpack at a base in Heet, Iraq. It was a convoy
day -- trucks braved the trip in and out of the base every third
day -- and Skoug had a generator he needed to fix. So he agreed
to make a run to Al Asad. "If I would've realized that it
was September 11th, I never would've went out," he says.
It would turn out to be the last run he would ever make in Iraq.
An Air Force vet, Skoug had come to Iraq
as a civilian to repair refrigeration units and air conditioners
for a KBR subcontractor called LSI. But when he arrived, he discovered
that LSI had hired him to fix Humvees. "I didn't know jack-squat
about Humvees," he says. "I could maybe change the oil,
that was it." (Asked about Skoug's additional assignment,
KBR boasted: "Part of the reason for our success is our ability
to employ individuals with multiple capabilities.")
Working with him on his crew were two
other refrigeration technicians, neither of whom knew anything
about fixing Humvees. Since Skoug and most of his co-workers had
worked for KBR in Afghanistan, they were familiar with cost-plus
contracting. The buzz around the base was that cost-plus was the
reason LSI was hiring air-conditioning guys to work on unfamiliar
military equipment at a cost to the taxpayer of $80,000 a year.
"They was doing the same thing as KBR: just filling the body
count," says Skoug.
Thanks to low troop levels, all the military
repair guys had been pressed into service to fight the war, so
Skoug was forced to sit in the military storeroom on the base
and study vehicle manuals that, as a civilian, he wasn't allowed
to check out of the building. That was how America fought terrorism
in Iraq: It hired civilian air-conditioning techs to fix Humvees
using the instruction manual while the real Humvee repairmen,
earning a third of what the helpless civilians were paid, drove
around in circles outside the wire waiting to get blown up by
After much pleading and cajoling, Skoug
managed to convince LSI to let him repair some refrigeration units.
But it turned out that the company didn't have any tools for the
job. "They gave me a screwdriver and a Leatherman, and that's
it," he recalls. "We didn't even have freon gauges."
When Skoug managed to scrounge and cannibalize parts to get the
job done, he impressed the executives at Wolfpack enough to hire
him away from LSI for $10,000 a month. The job required Skoug,
who had been given no formal security training, to travel regularly
on dangerous convoys between bases. Wolfpack issued him an armored
vehicle, a Yugoslav-made AK-47 and a handgun, and wished him luck.
For nearly a year, Skoug did the job,
trying at each stop to overcome the hostility that many troops
felt for civilian contractors who surfed the Internet and played
pool and watched movies all day for big dollars while soldiers
carrying seventy-pound packs of gear labored in huts with broken
air conditioning the civilian techs couldn't be bothered to repair.
"They'd have the easiest thing to fix, and they wouldn't
do it," Skoug says. "They'd write that they'd fixed
it or that they just needed a part and then just leave it."
At Haditha Dam, Skoug witnessed a near-brawl after some Marines,
trying to get some sleep after returning from patrol, couldn't
get a group of "KBR dudes" to turn down the television
in a common area late at night.
Toward the end of Skoug's stay, insurgent
activity in his area increased to the point where the soldiers
leading his convoys would often drive only at night and without
lights. Skoug and his co-workers asked Wolfpack to provide them
with night-vision goggles that cost as little as $1,000 a pair,
but the company refused. "Their attitude was, we don't need
'em and we're not buying 'em," says Thomas Lane, a Wolfpack
employee who served as Skoug's security man on the night of September
On that evening, the soldiers leading
the convoy refused to let Skoug drive his own vehicle back to
Heet without night-vision goggles. So a soldier took Skoug's car,
and Skoug was forced to be a passenger in a military vehicle.
"We start out the front gate, and I find out that the truck
that I was in was the frickin' lead truck," he recalls. "And
I'm going, 'Oh, great.' "
The bomb went off about a half-hour later,
ripping through the truck floor and destroying four inches of
Skoug's left femur. "The windshield looked like there was
a film on it," he says. "I find out later it was a film
-- it was blood and meat and stuff all over the windshield on
the inside." Skoug was loaded into the back of a Humvee,
his legs hanging out, and evacuated to an Army hospital in Germany
before being airlifted back to the States.
When Skoug arrived, it was his wife, Linda,
who had to handle all his affairs. She was the one who arranged
for an air ambulance to take him to Houston, where she had persuaded
an orthopedic hospital to admit him as a patient. She had to do
this because almost right from the start, Wolfpack washed its
hands of Russell Skoug. The insurance policy he had been given
turned out to be useless -- the company denied all coverage, beginning
with a $72,597 bill for his stay in the German hospital. Despite
assurances from Wolfpack chief Mark Atwood that he would cover
all Skoug's expenses, neither he nor the insurance company would
pay for the $16,000 trip in the air ambulance. Nobody paid for
the operations Skoug had in Houston -- as many as three a day,
every day for a month. And nobody paid for his subsequent rehab
stint in another Houston hospital -- despite the fact that military
law requires every company contracting with the government to
fully insure all of its employees in the war zone.
Now that he's out, sitting at home on
his couch with only partial use of his left hand and left leg,
Skoug has a stack of unpaid medical bills almost three inches
tall. As he speaks, he keeps fidgeting. He apologizes, explaining
that he can't sit still for very long. Why? Because Skoug can
no longer afford pain medication. "I take ibuprofen sometimes,"
he says, "but basically I just grin and bear it."
And here's where this story turns into
something perfectly symbolic of everything that the war in Iraq
stands for, a window into the soul of for-profit contractors who
not only left behind a breathtaking legacy of fraud, waste and
corruption but, through their calculating, greed-fueled hijacking
of this generation's broadest and most far-reaching foreign-policy
initiative, pushed America into previously unknown realms of moral
insanity. When I contact Mark Atwood and ask him to explain how
he could watch one of his best employees get blown up and crippled
for life, and then cut him loose with debts totaling well over
half a million dollars, Atwood, safe in his office in Kuwait City
and contentedly suckling at the taxpayer teat, decides that answering
this one question is just too much to ask of poor old him.
"Right now," Atwood says, "I
just want some peace."
When Linda Skoug petitioned Atwood for
help, he refused, pointing out that he had kept his now-useless
employee on the payroll for four whole months before firing him.
"After I have put forth to help you all out," he wrote
in an e-mail, "you are going to get on me for your husband
not having insurance." He even implied that Skoug had brought
the accident upon himself by allowing the Army to place him at
the head of the convoy: "He was not even suppose [sic] to
be in the lead vehicle to begin with."
And that, ladies and gentlemen, is the
story of the Iraq War in a nutshell. In the history of balls,
the world has never seen anything like the private contractors
George W. Bush summoned to serve in Operation Iraqi Freedom. Collectively,
they are the final, polished result of 231 years of natural selection
in the crucible of American capitalism: a bureaucrat class capable
of stealing the same dollar twice -- once from the taxpayer and
once from a veteran in a wheelchair.
The explanations that contractors offer
for all the missing dollars, all the myriad ways they looted the
treasury and screwed guys like Russell Skoug, rank among the most
diabolical, shameless, tongue-twisting bullshit in history. Going
back over the various congressional hearings and trying to decipher
the corporate responses to the mountains of thefts and fuck-ups
is a thrilling intellectual journey, not unlike tackling the Pharaonic
hieroglyphs or the mating chatter of colobus monkeys. Standing
before Congress, contractors and the officials who are supposed
to monitor them say things like "As long as we have the undefinitized
contract issue that we have ... we will continue to see the same
kinds of sustension rates" (translation: We can't get back
any of the fucking money) and "The need for to-fitnessization
was viewed as voluntary, and that was inaccurate as the general
counsel to the Army observed in a June opinion" (translation:
The contractor wasn't aware that he was required to keep costs
down) and "If we don't know where we're trying to go and
don't have measures, then we won't know how much longer it's going
to take us to get there" (translation: There never was a
plan in place, other than to let contractors rip off every dollar
According to the most reliable estimates,
we have doled out more than $500 billion for the war, as well
as $44 billion for the Iraqi reconstruction effort. And what did
America's contractors give us for that money? They built big steaming
shit piles, set brand-new trucks on fire, drove back and forth
across the desert for no reason at all and dumped bags of nails
in ditches. For the most part, nobody at home cared, because war
on some level is always a waste. But what happened in Iraq went
beyond inefficiency, beyond fraud even. This was about the business
of government being corrupted by the profit motive to such an
extraordinary degree that now we all have to wonder how we will
ever be able to depend on the state to do its job in the future.
If catastrophic failure is worth billions, where's the incentive
to deliver success? There's no profit in patriotism, no cost-plus
angle on common decency. Sixty years after America liberated Europe,
those are just words, and words don't pay the bills.