Saturday, April 16, 2005


By William Fisher

The Halliburton Corporation, already the Iraq war’s poster child for ‘waste, fraud and abuse’, got a double-whammy this week. A new report from the U.S. State Department accused the company of “poor performance” in its $1.2 billion contract to repair Iraq's vital southern oil fields. And a powerful California congressman charged that new Department of Defense audits showing additional over-charges totaling $212 million were concealed from United Nations monitors by the Bush Administration.

The new over-charges bring to $2 billion, or 42 per cent of the contract amounts, the total of questionable billings from Halliburton.

Rep. Henry Waxman, the top Democrat on the House of Representatives Subcommittee on Government Reform, charged that “both the amount of Halliburton's overcharges and the extent of the information withheld from the auditors at the UN’s International Advisory and Monitoring Board (IAMB) were much greater than previously known.”

Waxman said the Defense Contract Audit Agency (DCAA), which monitors all Defense Department contracts, had identified Halliburton overcharges and questionable costs of totaling $212.3 million -- double the total amount of known overcharges under Halliburton's Iraq oil contract. In one case, Waxman said, the overcharges exceeded 47% of the total value of the task order.

But DOD – at Halliburton’s request – withheld the new amount from the International Advisory and Monitoring Board (IAMB), the U.N. audit oversight body for the Development Fund for Iraq (DFI), Waxman charged.

In letters to government auditors, Halliburton subsidiary KBR explained that it redacted statements it considered proprietary or "factually inaccurate or misleading" and gave consent for the release of the audits to international auditors "in redacted form." The Administration then sent the heavily redacted report to the IAMB overseeing the DFI.

Rep. Waxman’s letter to Subcommittee Chairman Shays says, “The extensive redactions in the audit were apparently made at the specific request of Halliburton…the withholding of this information is highly unusual and raises serious issues. The evidence suggests that the U.S. used Iraqi oil proceeds to overpay Halliburton and then sought to hide the evidence of these overcharges from the international auditors.” Waxman also renewed his request that the Subcommittee hold hearings on the Administration's “mismanagement of the Development Fund for Iraq”.

Previously, Waxman disclosed that DOD auditors found $108 million in fuel-related overcharges by Halliburton for work in Iraq under one of several Halliburton task orders for the importation of fuel into Iraq. He also revealed that, although Halliburton was paid in significant part from Iraqi oil proceeds in the DFI, the Administration — acting at Halliburton’s request — concealed these overcharges from the international auditors charged by the United Nations with monitoring the expenditures from the DFI, Waxman alleges.

In these new audit reports, he says, “extensive additional information has been withheld by the Administration from the IAMB. A review of these audits shows that references to overcharges and other questioned costs were blacked out over 450 times in the versions of audits sent to the IAMB.”

Rick Blum of advocacy group ‘’, said, “Once again, the secrecy system fails us. They wouldn't have done it if they thought anyone cared or would find out. If the public had known about this earlier, we could stop it, better protect our troops, and better use our taxpayer dollars to make our families safer. This should be a wake up call to ensure more openness to strengthen our national defense.”

And Scott H. Amey,General Counsel of the Project on Government Oversight, a non-partisan government watchdog, declared, “DCAA’s audit reports document a total of approximately $2 billion (approximately 37% of the total proposed value of the contracts) in questioned, unresolved, or unsupported costs. If a taxpayer was able to support only 63% of their tax-return, he or she would be brought to justice. In the case of Halliburton, however, the government continues to let it slide.”

The State Department’s report focused on Kellogg, Brown & Root (KBR), the Halliburton subsidiary contracted to repair Iraq's southern oil fields.

The report does not provide detail about what it called “poor performance and excess spending”, but it says that the American Embassy had issued a "Cure Notice," a threat to terminate the contract unless Kellogg, Brown & Root replaced some senior managers. It says the government remains dissatisfied.

As a consequence, one of KBR’s competitors, Parsons Corporation, has been asked "to execute some of the remaining work" in the south, originally meant for KBR. KBR has previously been criticized for excess spending in its multibillion-dollar contract to provide logistical support for the military and in an earlier, $2.2 billion contract for oil repairs and fuel imports that was granted secretly as the Iraq invasion began. KBR won the contract to work on northern oil fields.

The Embassy has reallocated an additional $832 million in planned spending away from huge projects managed by American companies toward smaller repairs using local businesses and the training of Iraqis to maintain power and water systems.

Halliburton has attributed its slow progress to attacks by insurgents, years of neglect and lack of investment in the country’s oil facilities, and delays in repairs. The State Department report says Iraq's oil output of 2.1 million barrels a day in February was lower than it was last fall.

Halliburton – of which Vice President Dick Cheney was formerly chief executive officer -- is the largest single contractor in Iraq. The Pentagon has already awarded the company contracts worth up to $18 billion for its work in Iraq. Many of them were no-bid contracts that drew widespread criticism on Capitol Hill and in the press.

The company says it performed well under difficult circumstances in the aftermath of the invasion of Iraq and that cost disputes "are part of the normal contracting process." But former Halliburton employees have alleged intentional and systemic waste.

Lower-than-expected oil exports are exacerbating the Iraqi government's budget deficit, which the report estimates could reach $5 billion this year. A quarterly update on Iraqi reconstruction that was delivered to Congress last week.

A former Halliburton employee, Marie deYoung, audited accounts for Halliburton subsidiary KBR. She claims there was no effort to hold down costs because all costs were passed on directly to taxpayers. She repeatedly complained to superiors of waste and fraud. The company's response, according to deYoung was: "We can be as dumb and stupid as we want in the first year of a war, nobody’s going to care."

The former Army chaplain produced documents detailing alleged waste even on routine services: $50,000 a month for soda, at $45 a case; $1 million a month to clean clothes — or $100 for each 15-pound bag of laundry.

"That money could have been used to take care of soldiers," she said.

Another former employee, Mike West, says he was paid $82,000 a year to be a labor foreman in Iraq, but never had any laborers to supervise. "They said just log 12 hours a day and walk around and look busy," he said.


William Fisher

Three quarters of American voters “support comprehensive, bipartisan immigration reform proposal that combines toughness, fairness, a guest worker program, family reunification, and a path to legal residency for undocumented immigrants who are already here”, according to results of an opinion poll conducted by two leading immigration advocacy groups.

Sponsors of the survey, the American Immigration Lawyers Association (AILA) and the National Immigration Forum, said, “Americans understand that our immigration system is broken and needs to be fixed. We cannot continue with the status quo.”

Judith Golub, Senior Director of Advocacy at the American Immigration Lawyers Association, declared, “We decided to see what the American people really thought about immigration given all the heat and noise portrayed in the media. The opinion research confirmed what we thought -- that American voters are ready for comprehensive immigration reform. We hope that the President and the Congress follow the American people's lead and put something concrete into action soon.”

AILA said in a statement, “The public supports the kind of reform promoted by President Bush and Congressional leaders, not the extreme proposals from the anti-immigrant lobby. Such reform will create a safe, orderly, and legal system – one that is characterized by just and reasonable rules, consistent with basic American values of fairness and equal treatment under the law. Our current system keeps families separated for long periods of time, makes it difficult for U.S. businesses to employ needed workers, and forces people to live underground, fearful that our government will separate them from their families and jobs. The current enforcement system fails to prevent illegal immigration and wastes precious resources that should be spent on enhancing our security on stopping hard-working people from filling our labor market needs.”

Among the survey’s key findings:

Support for (a Bush-style) proposal is solid across party, regional and demographic lines.

Voters support each component of the proposal as well as the overall package.

Support for the proposal holds firm after voters hear positive and negative messages.

Most voters do not base their support for political candidates on the immigration issue. However, even those that do are solidly in favor of this immigration reform proposal.

Over two thirds of all voters say they would be more likely to vote for a candidate who supports this type of immigration proposal.

Voters overwhelmingly believe the immigration system is broken and needs to be fixed. They want a controlled system that would replace an illegal immigration flow with a legal immigration flow.

The vast majority of voters believe that deporting the 10 million undocumented immigrants currently in the United States is unrealistic.

More than 8 in 10 believe that if an immigrant has been in this country working, paying taxes, and learning English, there should be a way for them to become a citizen.

These poll results, based on a telephone survey of 800 likely voters nationwide, appear to indicate that most American voters reject the piecemeal approach contained in the so-called REAL I.D. bill. That bill passed the House of Representatives and is now awaiting action by the Senate.

The sponsor of the bill, Rep. James Sensenbrenner of Wisconsin, wants his bill attached to a massive “must pass” spending measure now wending its way through the Senate. The bill would provide support for U.S. operations in Iraq and Afghanistan, and help for tsunami victims.

But Senate Republican Majority Leader Bill Frist appears to be resisting this move, and President Bush is also saying he prefers a more comprehensive approach to the whole immigration issue.

The REAL I.D. Act would establish stronger security standards for the issuance of drivers’ licenses, including proof of lawful presence in the U.S. All states would be required to comply, to “eliminate weak links in domestic identity security.” It would also set up tough physical security requirements to reduce counterfeiting, have drivers’ licenses expire when an alien’s visa expires, and close the three-mile hole in the fortified U.S./Mexico border fence near San Diego, California.

The bill also contains asylum provisions that have drawn fire from human rights organizations. These would tighten the asylum system, which Rep. Sensenbrenner says have been “abused by terrorists”, allow immigration judges to determine witness credibility in asylum cases, and keep terrorists out of U.S. by making all terrorism-related grounds of inadmissibility causes for deportation.

Mark Dow, author of "American Gulag: Inside U.S. Immigration Prisons", said, "Sensenbrenner continues the congressional tradition of targeting genuine asylum-seekers to score rhetorical points against terrorists. He is simply unconcerned with the damage that his political maneuvering may do to human beings and their families."

Tim Edgar, legislative counsel for the American Civil Liberties Union (ACLU), declared, “It is deeply unfortunate that Chairman Sensenbrenner has made his top priority an unwarranted attack on immigrants and would even consider attaching such divisive ‘poison pill’ provisions to critical ‘must-pass’ legislation such as the Tsunami relief bill or supplemental funding for the troops in Iraq.”

Most of the Sensenbrenner immigration provisions were included in the House version of the Intelligence Reorganization Act at the end of 2004, but were removed because of strong opposition from the Senate and the White House. The intelligence measure enacted into law many of the recommendations made by the 9/11 Commission.

Rep. Sensenbrenner rejects the idea of putting the President’s proposals and his own together. He believes Congress should act first to prevent illegal immigrants from getting driver's licenses and pass other immigration restrictions. "I think it's important to get this legislation enacted and we ought to divide the debate between security and immigration. If we mix the two, the word will get out that immigrants are a security threat," Sensenbrenner said.

Meanwhile, House Majority Leader Tom DeLay, a Texas Republican, said, “The federal government must prove it can protect the nation's borders before Congress can pass a guest-worker program. He vowed that the House will insist that the emergency war-spending bill contain the immigration security provisions that passed in the chamber.

Thus, House Republicans and some conservative Democrats appear to be on a collision course with much of the Senate as well as the White House.



By William Fisher

In March 2003, Dr. John Brown resigned from the U.S. State Department after 20 years as a senior Foreign Service officer, telling then Secretary of State Colin Powell he could not "in good conscience" support President George W. Bush's war plans against Iraq.

In his letter of resignation, Brown wrote: "The president has failed to explain clearly why our brave men and women in uniform should be ready to sacrifice their lives in a war on Iraq at this time... (and) to take international public opinion against the war into serious consideration."

Recently, I conducted an email interview with Brown, now a research associate at the Institute for the Study of Diplomacy at Georgetown University in Washington. Here are excerpts.

Q: All the polling I’ve seen suggests that Arabs and other Muslims don't hate the United States -- they hate our policies. If that's true, can we ever conduct an effective public diplomacy program?

A: It's clear that Muslims and the Arab world admire many aspects of America, including its educational system and technological achievements. American popular culture also fascinates -- but at times repels -- them. As for US foreign policy, both its style and substance have angered the Middle East and elsewhere.

In formulating its confused and confusing policies, the Bush administration has failed to take foreign public opinion into serious consideration. Its current calls for democratizing Arab countries are viewed with suspicion in the region, given the way it imposed "democracy" in Iraq -- from the barrel of a gun. America the hypocrite -- that's how we're seen abroad.

As a practitioner of public diplomacy for many years, I'm aware that it's not the magic bullet that'll solve all our policy problems in the Middle East. What is terribly important, however, is that U.S. policymakers consider public diplomacy not after they've come to a decision, but in the process of reaching it. The old-fashioned mindset toward public diplomacy -- here's the policy, now sell it -- simply doesn't work anymore.

Q: Much of our public diplomacy energy goes into "overhead" communications, i.e. TV and radio, etc. versus "on the ground" communications at the embassy level. How important are these "on the ground" efforts?

A: Person-to-person contact continues to be the most important work of public diplomacy. For America to be understood abroad, it's essential that our diplomats come into close contact with the key players in the countries where they're posted. Really knowing "who's who" in a given society -- and knowing how to communicate with them -- is what defines success for a practitioner of public diplomacy.

This involvement in the local scene requires an in-depth knowledge of its culture and language. Unfortunately, the way the State Department is currently organized doesn't encourage Foreign Service officers (FSOs) to develop in-depth expertise about individual countries or regions. With some largely accidental exceptions, FSOs are moved from one post to another like pawns on a global chess board, and by the end of their career all too often have been just about everywhere and thus practically nowhere.

Q: Do you have views on the content of Al Hurra, Sawa, etc? They are widely seen as "propaganda". What should we be showing Arab and other Muslim audiences?

A: Some time ago I took my Georgetown undergraduate class on public diplomacy for a visit to Radio Sawa, where the Sawa reps played the music aired over the station -- a mixture of U.S. and Arabic pop music. It was interesting to see how the class came alive when listening to this sound, which was to them "goofy but kinda cool." I suppose many Arab youth react in much the same way.

But "pop-aganda" over a music station should be only an auxiliary means to "win hearts and minds" in the Middle East. Most important, to obtain meaningful public-diplomacy results in the region, are long-term educational exchanges, in-depth information programs, and serious (but not solemn) cultural presentations that make participants in such activities really discover the US rather than just "feel good" about it for a few moments.

I'm not a great fan of US Government television stations for overseas audiences, for the simple reason that our government, given the way it's funded and organized, can't produce quality, round-the-clock television.

So, if we're going to have special TV programs for the Arab world, I'd forget about winning the ratings race with Al-Jazeera and other local outlets. Instead of trying to overtake Arab "competitors," why not focus on C-Span-type programming that -- granted -- wouldn't automatically appeal to large audiences but could provide a unique window to the Arab chattering classes of admittedly "dull" American democracy in action.

More generally, the USG should approach the problem of media "market share" in the Middle East modestly. With so many media in the region, it's an illusion to think that USG broadcasts can play the role in the Arab world that Voice of America and Radio Free Europe played in the USSR and Eastern Europe during the Cold War.

Q: Some critics of our public diplomacy efforts have said we should be working with local media rather than creating media of our own. Given our shortage of Arabic speakers, is this feasible?

A: As a rule I believe that working with local media is far more effective than creating our own. My experience in cooperating with the opposition station B-92 when I was posted in Belgrade (1995-1998) convinced me of this. B-92 was effective because, while accepting US support (e.g., free equipment), its bright young staff was saying what it wanted to say -- and doing its own thing. Their programs were fresh, innovative, and informative in ways no government media, with its bureaucratic strictures, can ever be.

Q: Do you think non-governmental organizations (NGOs) could make more of a contribution to our public diplomacy?

A: NGOs can bring people together in ways no formal US government program can. At the same time, the USG "label" on public diplomacy should not be abandoned. It's been my experience in some countries that it certainly isn't against American interests to publicize programs -- a State Department-funded art exhibit, for example -- that were made possible by the United States government. Indeed, such open sponsorship is seen by local audiences as a sign of the interest that the American people, through their government, takes in them.

Q: If you were an advisor to Karen Hughes, what would you counsel her to do?

A: Get real! Face the fact that the Bush administration's foreign policy is leading to an anti-American century, unless strong corrective measures are taken.

Don't assume the world is like (or likes) America, and that what worked in getting George W. Bush elected will work in "selling" America's policies abroad. Don't treat foreigners as just potential Republicans. Listen to what they have to say about the U.S.

Q: Is there something about our PD efforts that really keeps you awake at night?

A: I do worry about the declining respect toward America throughout the world that, sooner than we think, will come to haunt us. The failure of American public diplomacy is part of a much greater problem: America's inability -- despite (because of?) its enormous power -- to admit that an outside world really exists, except as an enemy or overseas market.

We can't afford such an attitude in the 21st century, when the world is becoming smaller by the minute. We need a more human approach to our relations with the rest of mankind, on both a governmental and non-governmental level. That's where public diplomacy, at its best, can make a lasting contribution.