Friday, September 02, 2005


By William Fisher

Whistleblowers – those who go public with allegations of waste, fraud and abuse – continue to have a tough time, despite a law protecting them, and repeated assurances from the White House, many government agencies and congress that they maintain a policy of zero tolerance for retaliation.

The latest victim of apparent retaliation is Bunnatine H. “Bunny” Greenhouse,
the senior contracting officer for the Army Corps of Engineers, who objected – first, internally, then publicly – to a multi-billion dollar, no-bid contract with the Halliburton Company for work in Iraq.

Lt. Gen. Carl A. Strock, commander of the Army Corps, told Greenhouse she was being removed from the senior executive service, the top rank of civilian government employees, because of poor performance reviews.

But Greenhouse's attorney, Michael D. Kohn, has appealed the decision in a letter to Defense Secretary Donald H. Rumsfeld, saying the performance review cited by Strock to justify his action "was conducted by the very subjects" of Greenhouse's allegations, including the general.”

Greenhouse went public with her concerns over the volume of Iraq-related work given to Halliburton by the Corps without competition. Previously, her complaints within the agency having been ignored, she started giving interviews to national publications, and testified before a Democrat-sponsored Capitol Hill event on contracting in Iraq.

"I can unequivocally state that the abuse related to contracts awarded to (Halliburton subsidiary) KBR represents the most blatant and improper abuse I have witnessed" in 20 years working on government contracts, Greenhouse said at the Democratic forum.

Greenhouse, the Army Corps' top procurement official since 1997, has developed a reputation among those in both government and industry as being a stickler for the rules.

That has led her critics to characterize her as a rule-bound bureaucrat. But those who support her see her as a defender of the public trust.

In the run-up to the invasion of Iraq in 2003, KBR had been hired to design a program to extinguish the oil fires the Pentagon believed retreating Iraqi troops would set when the invasion took place.

The government’s request for proposals to implement the KBR plan stipulated
that contractors had to have knowledge of KBR's plan. Consequently, KBR was the only bidder deemed eligible. The company was then hired to implement the program in a five-year, no-bid contract. Government contacting rules generally forbid contractors hired to prepare plans and budget estimates from bidding for the work that grows out of these plans.

Government contractors who spoke on condition of anonymity said “contracts officers who insist on dotting every ‘i’ and crossing every ‘t’ can drive you crazy and delay your start-date”. But all agreed that contracting regulations “are there for a purpose – to protect the taxpayers’ money – and. In the end, you just accept delays as a cost of doing business.”

Greenhouse is only the latest in a lengthening string of whistleblowers whose cases have been rejected by the government.

Most prominent is Sibel Edmonds, who is waiting for the Supreme Court to review her charges that the behavior of some of her fellow employees at the Federal Bureau of Investigation (FBI) compromised national security. Lower courts turned down her case when the FBI claimed the ‘state secrets’ privilege, contending that disclosure of Edmonds’ evidence would reveal classified information.

Edmonds, a contract linguist for the bureau, was the subject of an investigation by the Department of Justice inspector general, who found that her charges were the major reason for her dismissal.

She organized and now leads the National Security Whistleblowers Coalition (NSWBC), which includes more than 50 former employees of national security agencies. The group has called on congress to permit whistleblowers to sue government retaliators in their personal and official capacities and to bring suit against agencies for failure to rectify misdeeds by employees or provide sufficient safeguards against whistleblower retaliation.

The government is increasingly using the ‘state secrets’ privilege to block whistleblowers’ suits. The State Secrets Privilege gives the federal government the ability to dismiss legal cases it claims would threaten foreign policy, military intelligence or national security.

It was used in 2002 in the case of Notra Trulock, who launched a defamation suit against Wen Ho Lee, a Taiwanese American computer scientist charged with stealing nuclear secrets for China from the Los Alamos National Laboratory in New Mexico.

President George W. Bush said national security would be compromised if Trulock were allowed to seek damages from Lee. In a plea bargain with Lee -- who had been imprisoned for 278 days in solitary confinement -- Lee pled guilty to improper handling of classified data and was cleared of all charges relating to espionage.

The government again invoked the privilege when Maher Arar, a Canadian citizen, sought to sue then Attorney General John Ashcroft for his role in taking Arar from New York’s John F. Kennedy International Airport to Syria against his will. He says he was first held incommunicado by U.S. immigration authorities, and eventually “rendered” to Syria, where he was imprisoned for close to a year and claims he was tortured. He was released without charges.

Former Deputy Attorney General James B. Comey said in legal papers filed at the time that “Litigating [the] plaintiff's complaint would necessitate disclosure of classified information." The Arar case is currently being appealed to the U.S. Supreme Court.

Barbara Olshansky, the assistant legal director of the Center for Constitutional Rights, which is representing Arar, charged that government lawyers “think they can do anything they want in the name of the global war on terrorism.”

Again, in August 2005, a Federal Appeals Court affirmed the dismissal of a racial discrimination lawsuit against the Central Intelligence Agency (CIA) based on the state secrets privilege.

Jeffrey Sterling, a CIA Operations Officer, claimed he was told he was “too big and black” to receive certain CIA assignments, and that CIA management placed expectations on him “far above those required of non-African-American Operations Officers.” He also contended he was retaliated against for using the CIA’s internal equal employment opportunity process.

The court ruled that Sterling cold not prove employment discrimination without exposing classified details of his covert employment.

Jeff Ruch, executive director of the civil service support group Public Employees for Environmental Responsibility, said, “The stark absence of whistleblower rights in security, intelligence and military agencies is a growing vacuum that requires dedicated efforts to address.''


William Fisher

“The rich got richer and the poor got poorer” is a sentence most often used to describe the economic plight of underdeveloped countries.

But last week, it was being used to describe the economy of the world’s lone superpower: The USA.

The U.S. Census Bureau released new figures that many economists say reflects the negative impacts of President George W. Bush’s “Ownership Society”.

Four measurements tell the tale: Household incomes, the poverty rate, the rising percentage of total income received by the top 20, 5, and 2 percent of Americans, and the number of Americans without health insurance.

Last year, America’s poverty rate rose to 12.7 percent of the population, the fourth consecutive annual increase. That means there were 37 million people living on incomes below $19,157 or less for a family of four, up 1.1 million in 2003.

This income inequality was near all-time highs in 2004, with 50.1 percent of income going to the top 20 percent of households. Only the top five percent of households experienced real income gains in 2004. Incomes for the other 95 percent of households were flat or falling.

The poverty threshold differs by the size and makeup of a household. For example, a family of four with two children was considered living in poverty if its income was $19,157 or less. For a family of two with no children, it was $12,649. For a person 65 and over living alone, it was $9,060. These figures must also be viewed against the background of the cost of living in each state or location, which varies widely around the country.

Asians were the only ethnic group to show a decline in the proportion in poverty -- from 11.8 percent in 2003 to 9.8 percent last year. The poverty rate among the elderly declined as well, from 10.2 percent in 2003 to 9.8 percent last year.

The last decline in overall poverty was in 2000, when 31.1 million people lived under the threshold -- 11.3 percent of the population. Since then, the poverty rate has increased steadily from 11.7 percent in 2001, when the economy slipped into recession, to 12.5 percent in 2003.

The situation may in fact be worse, because it is unclear whether the Census Bureau counts alien immigrants. If so, the data would be skewed even more heavily toward greater poverty.

Median household income, meanwhile, stood at $44,389, unchanged from 2003 -- the longest stretch of income stagnation on record.

Among racial and ethnic groups, African Americans had the lowest median average income and Asians the highest. Median income refers to the point at which half of households earn more and half earn less.

Regionally, the South had the lowest median incomes, with the, Northeast and the West the highest.

The increase in poverty came despite strong economic growth -- the economy grew a solid 3.8 percent -- which helped create 2.2 million jobs last year. But these new jobs were overwhelmingly in the services sector, where salaries are far lower than in manufacturing. Manufacturing jobs were disappearing, and the American workforce continued to lack the skills needed to fill the service sector jobs that did pay higher salaries.

A majority of Americans now must seek two jobs to replace the income lost from one.

Moreover, much of the growth in economic wealth over the last few years has been purely in financial assets going to the rich in the form of capital income -- interest, rents, and dividends, many economists say.

The official net percentage of people without health insurance grew by 800,000 -- up from 45 million to 45.8 million. But the Census Bureau said the percentage of uninsured remained relatively steady only because of an ''increase in government coverage, notably Medicaid and the state children's health insurance program, that offset a decline in employment-based coverage.''

But Medicaid and similar programs are experiencing punishing cuts because cash-poor states cannot afford to fund them. That will leave the poor with even fewer health resources.

The view of the economy from the White House and Capital Hill is obviously a very different picture than that seen from below the poverty line. During its last session, congress passed a law backed by the Administration and the credit card industry, making it far more difficult for average Americans to use bankruptcy to get out of debt. It also passed a so-called ‘tort reform’ law ensuring that the poor – and everyone else – who have a lot more trouble suing product manufacturers.

And the credit-card companies are encouraging borrowing to increase the likelihood of defaults – which are just as profitable because of the exorbitant interest and fees charged for debit balances.

When Congress returns next week, it will be pushing to repeal the estate tax (which affects only the wealthiest families), extending tax cuts for investment income (another gift to the richest Americans), and yet again resisting efforts to raise the minimum wage (which has been at $5.15 an hour since 1997 while inflation has risen at least by 3% a year).

Lawmakers will also be taking up proposals for deep budget cuts in programs intended to assist the poor --like Medicaid, food stamps and federal student loans.

At the same time, the White House and Congress remain paralyzed over the Social Security issue. The public has robustly rejected President Bush’s pitch that private investment accounts would increase retirement and disability income for the next generation of retirees. Republican congress members, with an eye on the 2006 elections, are increasingly distancing themselves from the president. Democrats have simply taken a ‘just say no’ position, putting forth no proposals of their own, and angering many rank-and-file Democrats in the process.

During the last few years, the U.S. economy has been driven far more by consumer spending than by investments from the wealthy recipients of the Bush tax cuts. But what happens to that engine of growth as the poor get poorer?

That, economists say, is a no-brainer. As their salaries dwindle, and their credit cards get maxed out, they will simply stop spending. And more and more of them will descend even further into a financial abyss – and become the government’s responsibility, at untold cost to all taxpayers.

Given the huge deficits posted by politicians who profess to be committed to fiscal responsibility, present and future taxpayers will be severely burdened to finance the debt piled up by the government.

At least half that debt is owned by foreigners who expect to receive interest incomes. This, in turn, puts additional pressure on the U.S. international balance of payments and depresses the value of the dollar, which in turn raises prices of many imports among the consumer baskets of the poor.

"All in all," says former Assistant Secretary of Commerce Dr. Jack Behrman, professor emeritus at the University of North Carolina business school, “America is failing in the key criterion of economic progress -- raising the standard of living of the poorest segment of society.”

The distinguished economist told IPS, “Current policies favor the wealthy and focus on financial success rather than production of real goods and services. These are a recipe for economic and social conflict rather than building a cohesive community".