September 22, 2006

Iraq (And Everything Else) For Sale

Iraq for Sale - The War Profiteers

Back in his first term, Bill Clinton eliminated more than 425,000 government jobs as part of an effort to "reinvent government." His idea was that inefficiencies inherent to not-for-profit organizations - such as federal agencies and even the armed services - could be reduced by leveraging the market forces that drive performance and profitability in the private sector. Under George W. Bush, there has been a massive increase in the use of private contractors to fulfill government functions, from Afghanistan, to Iraq, to New Orleans in the aftermath of Hurricane Katrina, but rather than resulting in savings, costs have ballooned.

There are a number of reasons for this failure.

  • First, contractors often simply escape oversight because government agencies are no longer staffed to effectively monitor them, an unforeseen consequence of staff cuts.
  • Second, there appears to be a certain amount of corruption involved, with companies such as Halliburton (and its subsidiaries) - which has close ties to the Bush Administration - gaining sweetheart contracts to the exclusion of nearly all others. The entrenchment of this corruption is abetted by the not-uncommon punishment of those who have attempted to bring any rigor to the government's relationship with such firms, or to call attention to misdeeds. To make matters worse, many of those chosen to provide government leadership - notably in Iraq and New Orleans - have been selected not for their ability, but their loyalty to President Bush, adding healthy doses of inexperience and incompetence to the mix.
  • Third, there is no real competition for many of the products and services that are provided to the government, and there is only one buyer - the United States - which greatly diminshes what were hoped to be efficiency-driving market forces. This circumstance is magnified by the fact that contracts related to the conflicts in Afghanistan and Iraq - as well as the clean-up of New Orleans after Hurricane Katrina - are awarded on a no-bid basis, completely eliminating competition and leaving in its place only the profit motive, unrestrained by duty-to-country.

Given that there has not been a single hearing by any Congressional committee to examine the way that taxpayer money is being spent in Iraq, it is unlikely that much will be accomplished to reduce the waste associated with out-sourcing to private contractors. When the time comes to do so, it will be important to keep in mind the underlying issues. As Lee Drutman put it in a recent article at

Perhaps its time to stop blaming cronyism and instead take a good hard look at the underlying policies that make it possible for such cronyism and profiteering to run rampant in the first place.

One approach might be to establish an independent commission to study the overall effects of contracting out. Were we to seriously re-assess the whole policy of private contracting, we would probably learn that in many cases, it actually costs more to contract out. It’s hard to imagine that an expanded U.S. military force would have done a worse job in Iraq than Halliburton. In other cases, such as unexpected disasters that call for sudden expanded capacity, it may still make sense to contract out, but agencies that do contract out should be properly equipped to monitor the contractors and be empowered to hold them accountable.

But until we thoroughly study the issue, we won’t know. Instead we’ll keep wasting taxpayer money on a policy that has demonstrated a remarkable capacity to generate waste, fraud and abuse.

PODCAST: September 20, 2006 Interview wih Richard Greenwald on NPR (KWMU-Saint Louis) Until that time, we are left, ironically enough, with only private-sector efforts to bring notice to this matter. One such effort is director Robert Greenwald's new film, Iraq for Sale, which attempts to shed light on not only how deeply companies like Bechtel and Kellogg Brown & Root have drunk at the public trough, but the callousness with which they treat their employees, and their often poor performance, which has imperiled the health and lives of the very service people they ostensibly support.
[Click on radio tower icon for podcast of interview with Robert Greenwald.]

In the 1980's, headlines were made when it became known that lax oversight had put the Pentagon in the habit of spending $400 for a hammer and $600 for a toilet seat. The situation today however, is much worse. Where the Department of Defense is beholden to Congress and by extension, the American people, private firms are beholden to no one but their shareholders, and are routinely protected from investigation by the language in their government contracts.

60 Minutes has reported that billions of American dollars allocated for funding the reconstruction of Iraq are missing and untraceable, but despite this and similar stories, nothing is being done. There is outrage from neither the Oval Office nor the president's echo chamber, the GOP-controlled Congress, and the waste and cronyism that is occurring on an epic scale make up only one more in a long, long list of reasons to vote for change this November.

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