| http://www.sfbg.com/36/31/cover_soldiersoffortune.html Soldiers of fortune Civilian employees of Dick Cheney's former company are carrying out military missions around the world – for profit. By Pratap Chatterjee IN EARLY JANUARY, Jon France, transportation officer at the Sierra Army Depot in Herlong, Calif., was asked to help support the war in Afghanistan by sending prefabricated military bases that could be run by private corporations. With just two days to complete the job, France scrambled to get 100 containers of a package code-named Force Provider (see "Force Provider: The Base-in-a-Box," page 26) to Reno, Nev. where the Nevada Air National Guard was standing by to load them onto three Air Force C-5s and four 747s headed to Ramstein, Germany, Larry Rogers, a spokesperson for the army depot, told us. A day later the 21st Theater Support Command arrived in Ramstein to airlift the Force Provider package to Central Asia. Employees of Kellogg Brown and Root, a subsidiary of the Dallas-based Halliburton Corp. (once run by Vice President Dick Cheney), are scheduled to arrive at the Bagram air base in southern Afghanistan to take over the day-to-day support services at the Force Provider camp starting in late April or early May (the exact date is classified). They are also set to arrive at the Khanabad air base in Uzbekistan, one of the main military support stations for the war in Afghanistan, to run three Air Force Harvest Eagle camps (an older version of Force Provider) for the 1,500 U.S. troops based there since October, according to Daniel McGinty, a spokesperson at the Defense Contract Management Agency, which will be overseeing the contracts. "They [Brown and Root] will be maintaining these packages, [doing] base camp maintenance, facilities maintenance, laundry services, food services, airfield services, property accountability, and supply operations," says Gale L. Smith, a spokesperson for the U.S. Army Operations Support Command in Alexandria, Va. (Brown and Root is now named Kellogg Brown and Root, following a corporate merger, but is often referred to by its previous name.) She refused to confirm or deny whether Brown and Root would be working on similar bases in Manas, Kyrgyzstan, or other sites in Afghanistan and Pakistan to support Operation Enduring Freedom. The new job is one of the first examples of a private company being awarded a lucrative contract from the Pentagon to run the day-to-day support operations on the battlefield. In December 2001, Brown and Root secured a 10-year deal called Logistics Civil Augmentation Program (LOGCAP), according to a Pentagon press release. The contract is a "cost-plus-award-fee, indefinite-delivery/indefinite-quantity service," which basically means that the federal government has an open-ended mandate and budget to send Brown and Root anywhere in the world to run humanitarian or military operations for a profit. And critics are alarmed. The military has a long-celebrated, cozy relationship with private industry, but Brown and Root's goes much further. For private industry will now essentially run a war operation. And the potential problems are legion, military critics warn. Not only will civilians be running around overseas with guns, but they'll also be answering to nobody. "The Bush-Cheney team have turned the United States into a family business," says Harvey Wasserman, author of The Last Energy War (Seven Stories Press, 2000). "That's why we haven't seen Cheney – he's cutting deals with his old buddies who gave him a multimillion-dollar golden handshake. Have they no grace, no shame, no common sense? Why don't they just have Enron run America? Or have Zapata Petroleum [George W. Bush's failed oil-exploration venture] build a pipeline across Afghanistan?" Deep roots Halliburton, Brown and Root's parent company, is a Fortune 500 construction corporation working primarily for the oil industry. In the early 1990s the company was awarded the job to study and then implement the privatization of routine army functions under then-secretary of defense Dick Cheney. When Cheney quit his Pentagon job, he landed as chief executive of Halliburton, bringing with him his trusted deputy David Gribbin. The two substantially increased Halliburton's government business until they quit in 2000, once Cheney was elected vice president. Since then another confidante of Cheney, Adm. Joe Lopez, former commander in chief for U.S. forces in southern Europe, took over Gribbin's old job of go-between for the government and the company, according to Brown and Root's own press releases (see "Dick Cheney: Soldier of Fortune," page 23). Other close friends include Richard Armitage, the assistant secretary of state, who worked as a consultant to Halliburton before taking up his present job. Last year the company took in $13 billion in revenues, according to its latest annual report. Currently, Brown and Root estimates it has $740 million in existing U.S. government contracts (approximately 37 percent of its global business), most of which are in addition to the LOGCAP deal. For example, in mid November 2001, Brown and Root was paid $2 million to reinforce the U.S. embassy in Tashkent, Uzbekistan, under contract with the State Department, according to the New York Times. More recently Brown and Root was paid $16 million by the federal government to go to Guantánamo Bay, Cuba, to build a 408-person prison for captured Taliban fighters, according to Pentagon press releases. That's by no means all: Brown and Root employees can be found back home running support operations from Fort Knox, Ky., to a naval base in El Centro, Calif., according to information provided by the company. And it is also snapping up contracts with American allies, according to company press releases: In September 2001 the company signed on to a $283 million project for Russia's Defense Threat Reduction Agency to eliminate liquid-fueled intercontinental ballistic missiles and their silos. In November 2001 the Philippines awarded the company a $100 million order to convert the U.S. Navy's former ship-repair facilities in Subic Bay into a modern commercial port facility. And in December it won a $420 million contract from the British Army to support a fleet of new mammoth tank transporters. Critics charge that this is a classic example of the revolving door between government and big business. "Cheney gives new meaning to the term 'revolving door.' " says Bill Hartung, senior research fellow at the World Policy Institute in New York. "If he does not get elected president next, I have no doubt he will return to Halliburton when he leaves the White House." Jennifer Millerwise, a spokesperson for Cheney's office, denies that there was any contact help from the White House: "The vice president did not discuss this with anybody from Halliburton or any subsidiary of Halliburton. Nor does he comment on Halliburton's policies, since he doesn't work there any more." The business of war But Brown and Root is no stranger to the war business. From 1962 to 1972 the Pentagon paid the company tens of millions of dollars to work in South Vietnam, where they built roads, landing strips, harbors, and military bases from the demilitarized zone to the Mekong Delta. The company was one of the main contractors hired to construct the Diego Garcia air base in the Indian Ocean, according to Pentagon military histories. The privatization of services at military camps is a relatively new concept that was introduced in 1992, when the Pentagon, then under Cheney's direction, paid Brown and Root $3.9 million to produce a classified report detailing how private companies (like itself) could help provide logistics for U.S. operations abroad (see "Dick Cheney: Soldier of Fortune," page 23). Several months later the Pentagon gave the company an additional $5 million to update its report. That same year Brown and Root won its first five-year LOGCAP contract from the U.S. Army Corps of Engineers, which would send them to work alongside G.I.s in places such as Somalia, Haiti, the Balkans, Bosnia, and Saudi Arabia. Brown and Root's work in the Balkans has been the most profitable for the company – the General Accounting Office (GAO) estimates the company made $2.2 billion in revenue during the military operations there, building sewage systems, kitchens, and showers and even washing underwear for the 20,000 soldiers stationed there. A student research report written by Maj. Maria Dowling and published by the Air University at Maxwell Air Force Base in Alabama shows that Brown and Root employees can be required to live with soldiers, wear battle dress uniforms, and be issued guns (ostensibly for personal protection). They are substituting for conventional military support units – with acronyms that would make a vegetarian cringe – such as Prime Base Engineer Emergency Force (Prime BEEF), Rapid Engineer Deployable Heavy Operational Repair Squadron Engineer (RED HORSE), and Prime Readiness in Base Service (Prime RIBS). The ratio of such contractors to military personnel is rapidly rising from 1 in 50 during Operation Desert Storm in the Gulf War to 1 in 10 in Operation Just Endeavor in the Balkans, according to other Air University research papers. Praise from the army, criticism from outside Col. Tom Palmer, maintenance chief for Task Force Eagle in Bosnia, admiringly describes how closely he worked with private contractors such as Brown and Root in Bosnia at a Sept. 18, 1997, operation to seize and maintain control of a transmission tower on Mount Zep that was transmitting continuous, inflammatory anti-NATO Stabilization Force messages to the public. In a recent issue of Army Logistician, he wrote, "For soldiers familiar with the Bosnian area of operations, the name 'Brown and Root Services Corporation' (BRSC) became synonymous with "contractor support." But other government agencies are more sceptical. "It is convenient to contract a lot of this work out," says Neil Curtin, director of operations and readiness issues for the GAO defense capabilities and management team. "The problem is that the government doesn't do the best job of oversight." Policy analysts say it's simply a matter of time before something goes wrong. Thomas Donnelly, deputy executive director of the Project for the New American Century in Washington, D.C., says, "We've been pretty lucky so far that nothing has gone wrong. The Balkans were one thing, but Central Asia is a much tougher neighborhood. Suppose a local Afghani contractor gets kidnapped or used for mischief? This has not been thought through at the policy level or opened up for public debate. There's a lot of opportunity for things to fall through the cracks and a huge security risk." Christopher Helmand, research analyst at the Center for Defense Information, a think tank on military affairs, believes that privatization can help reduce waste and inefficiency in the military but points out that security is a big concern. "What do we do when somebody infiltrates a U.S. military base and blows it up? If we have civilians walking in and out of our bases because they are 'our allies' in the Northern Alliance or private contractors, we increase our risk considerably," he says. "We simply don't have all the bugs worked out because this is such a new area." Sometimes the risks have come from inside. In 1994, United Nations troops armed with batons and tear gas had to be brought in to quell protests by workers Brown and Root dismissed at the end of its engagement in Somalia. In Saudi Arabia the army was alarmed when it discovered locally contracted drivers were firing up portable propane tanks to cook meals in the desert while transporting high-explosive ordnance weapons, according to the Dowling report. Certain contractors, including Brown and Root, have also complained that the army treats them as second-class citizens. On at least one occasion, food-service contractors walked off the job in Saudi Arabia when they were not provided with proper protection against chemical attacks; another time, contractors moved out of army tents and checked into a hotel in defiance of army orders, according to a research report by Major Lisa Turner of the U.S. Air Force. Independent agencies are still sceptical about claimed financial savings from the privatization of military support operations, and the GAO has conducted several investigations. A February 1997 study showed that an operation estimated at $191.6 million when presented to Congress in 1996 had ballooned to $461.5 million a year later. Examples of overspending by contractors have included flying plywood from the United States to the Balkans at $85.98 a sheet and billing the army to pay its employees' income taxes in Hungary. A subsequent GAO report, issued September 2000, showed that Brown and Root was still taking advantage of the contract in the Balkans, noting that army commanders were unable to keep track of the contract, as they were typically rotated out of camps after a six-month duration, erasing institutional memory. The GAO painted a picture of Brown and Root contract employees sitting idly most of the time. The report also noted that a lot of staff time was spent doing unnecessary tasks, such as cleaning offices four times a day. Allegations of fraud In February 2002, Brown and Root paid out $2 million to settle a suit with the Justice Department that alleged the company defrauded the government during the mid-1990s closure of Fort Ord in Monterey, Calif. The allegations in the case surfaced several years ago when Dammen Gant Campbell, a former contracts manager for Brown and Root turned whistle-blower, charged that between 1994 and 1998 the company fraudulently inflated project costs by misrepresenting the quantities, quality, and types of materials required for 224 projects. Campbell said the company submitted a detailed "contractors pricing proposal" from an army manual containing fixed prices for some 30,000 line items. Once the proposal was approved, the company submitted a more general "statement of work," which did not contain a breakdown of items to be purchased. Campbell maintained the company intentionally did not deliver many items listed in the original proposal. The company defended this practice by claiming the statement of work was the legally binding document, not the original contractors pricing proposal. "Whether you characterize it as fraud or sharp business practices, the bottom line is the same: the government was not getting what it paid for," says Michael Hirst, of the United States Attorney's Office in Sacramento, who litigated the suit on behalf of the government. "We alleged that they exploited the contracting process and increased their profits at the governments expense." Campbell's attorney Dan Schrader has a guess as to why the company was so eager to compromise. "If the company was indicted, I suspect that it might have been far more difficult for them to get new government contracts," he says. Indeed, the company's 2001 annual report says just that in its notes on the settlement of the lawsuit: "Brown and Root's ability to perform further work for the U.S. government has not been impaired." Hirst adds, "Brown and Root was very cooperative and eager to settle. They said they wanted to maintain a good relationship with the government." The company will have a harder time milking the contract in Afghanistan, because the government is now dispatching auditors from the Defense Contract Management Agency to monitor all purchases, but it still stands to at least make a profit on whatever it can bill. The contract allows for the company to charge a fee of up to 9 percent over cost. The exact amount depends on performance in the field. And if the war on terrorism expands to the size of the Balkan operations, profits could add up to a few hundred million dollars. In addition to the bases in Uzbekistan and Afghanistan, the army started dispatching Force Provider units to Kyrgyzstan's Manas air base as recently as January 2002 to support up to 3,500 soldiers. Whether or not Brown and Root will follow them there, the army has yet to tell the public. "Brown and Root has not deployed nor been tasked to provide support in either country," company spokesperson Zelma Branch said, refusing to give any more details about the current LOGCAP contract. When provided with evidence that the company was indeed going to both countries, she e-mailed us, "We can not elaborate at this time. Recommend you contact the Army." The Pentagon, on the other hand, is considering expanding the role of the private sector to do a variety of services, from refueling fighter jets and bombers in midair to running missile-tracking systems. Inside military circles, talk has it that the Defense Security Cooperation Agency (DSCA) is considering hiring private contractors to train the new Afghan police and army, which it has done in the past in places such as Croatia, where it hired Military Professionals Resources Inc. MPRI, founded in 1988 by former army chief of staff Carl Vuono and seven other retired generals, was harshly criticized after the Croatian military, in a highly effective offensive called Operation Storm, captured the Serb-held Krajina enclave later that year, uprooting more than 150,000 Serbs from their homes. David Des Roches, a DSCA spokesman, denied that the Pentagon had a proposal on the table at the moment but did not rule out the future possibility: "A lot of people have said, 'Ding, ding, ding, gravy train.' But in point of fact, it makes sense. They're probably better at doing these sorts of missions than anyone else I could think of." The World Policy Institute's Hartung disagrees. "This is a company that has more experience with insider dealing and corruption than with efficiency," he says. "During the Second World War, there was a Senate committee on war profiteering. Personally I think we should set it up again and investigate Brown and Root," he says. |
