Halliburton, Cheney, Corruption
Sam Gardiner, a retired Air Force colonel who has taught at the National War College, told me that so many of the contracts in Iraq are going to companies with personal connections with the Bush Administration that the procurement process has essentially become a “patronage system.” Major Joseph Yoswa, a Department of Defense spokesman, denied this. He told me that multiple safeguards exist to insure that the department’s procurement process for Iraq contracts is free of favoritism. Most important, he said, career civil servants, not political appointees, make final decisions on contracts.
Gardiner remains unconvinced. “The system is sick,” he told me. Cheney, he added, can’t see the problem. “He doesn’t see the difference between public and private interest,” he said.
George Sigalos, a Halliburton executive, recently gave a speech at a conference in Washington for businesspeople who hoped to obtain government contracts in Iraq. Many in the crowd had paid nearly four hundred dollars to attend, drawn by descriptions of Iraq as “the next Klondike,” as James Clad, an official with the U.S. Overseas Private Investment Corporation, a federal agency, put it. Sigalos began by pointing out that private contractors supplied the bullets that the Continental Army used in the American Revolution. “This didn’t begin with Halliburton,” he said.
Halliburton’s construction-and-engineering subsidiary, Brown & Root Services, started working with the U.S. military decades before Cheney joined the firm. Founded in Texas, in 1919, by two brothers, George and Herman Brown, and their brother-in-law, Dan Root, the firm grew from supervising small road-paving projects to building enormously complex oil platforms, dams, and Navy warships. The company’s engineering feats were nearly matched by its talent for political patronage. As Robert A. Caro noted in his biography of Lyndon Johnson, Brown & Root had a symbiotic relationship with L.B.J.: the company served as a munificent sponsor of his political campaigns, and in return was rewarded with big government contracts. In 1962, Brown & Root sold out to Halliburton, a booming oil-well construction-and-services firm, and in the following years the conglomerate grew spectacularly. According to Dan Briody, who has written a book on the subject, Brown & Root was part of a consortium of four companies that built about eighty-five per cent of the infrastructure needed by the Army during the Vietnam War. At the height of the resistance to the war, Brown & Root became a target of protesters, and soldiers in Vietnam derided it as Burn & Loot.
Around this time, in 1968, Dick Cheney arrived in Washington. He was a political-science graduate student who had won a congressional fellowship with Bill Steiger, a Republican from his home state of Wyoming. One of Cheney’s first assignments was to visit college campuses where antiwar protests were disrupting classes, and quietly assess the scene. Steiger was part of a group of congressmen who were considering ways to cut off federal funding to campuses where violent protests had broken out. It was an early lesson in the strategic use of government cutbacks.
Instead of returning to graduate school, Cheney got a job as the deputy for a brash congressional colleague of Steiger’s, Donald Rumsfeld, whom Richard Nixon had appointed to head the Office of Economic Opportunity. The O.E.O., which had played a prominent role in Johnson’s War on Poverty, was not favored by Nixon. According to Dan Guttman, who co-wrote “The Shadow Government” (1976), Rumsfeld and Cheney diminished the power of the office by outsourcing many of its jobs. Their tactics were not subtle. At nine o’clock on the morning of September 17, 1969, Rumsfeld distributed a new agency phone directory; without explanation, a hundred and eight employee names had been dropped. The vast majority were senior career civil servants who had been appointed by Democrats.
The purging of the office was a mixed success. Bureaucratic resistance stymied Cheney and Rumsfeld on several fronts. But by the time Ronald Reagan became President the overriding principle that had guided their actions at the O.E.O.—privatization—had become a central precept of the conservative movement.
For most of the eighties, Cheney served in the House of Representatives. In 1988, after the election of George H. W. Bush, he was named Secretary of Defense. The end of the Cold War brought with it expectations of a “peace dividend,” and Cheney’s mandate was to reduce forces, cut weapons systems, and close military bases. Predictably, this plan met with opposition from every member of Congress whose district had a base in peril.
Cheney was widely admired for his judicious handling of the matter. By the time he was done, the armed forces were at their lowest level since the Korean War. However, a Democratic aide on the House Armed Services Committee during those years told me that “contrary to his public image, which was as a reasonable, quiet, soft-spoken, and inclusive personality, Cheney was a rank partisan.” The aide said that Cheney practiced downsizing as political jujitsu. He once compiled a list of military bases to be closed; all were in Democratic districts. Cheney’s approach to cutting weapons systems was similar: he proposed breathtaking cuts in the districts of Thomas Downey, David Bonior, and Jim Wright, all high-profile Democrats. The aide told me that Congress, which was then dominated by the Democrats, beat back most of Cheney’s plans, because many of the cuts made no strategic sense. “This was about getting even,” he said of Cheney. Cheney’s spokesman disputed this account, saying that the armed services had specified which bases should be cut, and “Congress approved it without changes.”
As Defense Secretary, Cheney developed a contempt for Congress, which, a friend said, he came to regard as “a bunch of annoying gnats.” Meanwhile, his affinity for business deepened. “The meetings with businessmen were the ones that really got him pumped,” a former aide said. One company that did exceedingly well was Halliburton. Toward the end of Cheney’s tenure, the Pentagon decided to turn over to a single company the bulk of the business of planning and providing support for military operations abroad—tasks such as preparing food, doing the laundry, and cleaning the latrines. As Singer writes in “Corporate Warriors,” the Pentagon commissioned Halliburton to do a classified study of how this might work. In effect, the company was being asked to create its own market.
Halliburton was paid $3.9 million to write its initial report, which offered a strategy for providing support to twenty thousand troops. The Pentagon then paid Halliburton five million dollars more to do a follow-up study. In August, 1992, Halliburton was selected by the U.S. Army Corps of Engineers to do all the work needed to support the military during the next five years, in accordance with the plan it had itself drawn up. The Pentagon had never relied so heavily on a single company before. Although the profit margins for this omnibus government contract were narrower than they were for private-sector jobs, there was a guaranteed profit of one per cent, with the possibility of as much as nine per cent—making it a rare bit of business with no risk.
In December, 1992, working under its new contract, Halliburton began providing assistance to the United States troops overseeing the humanitarian crisis in Somalia. Few other companies in the world could have mobilized as fast or as well. Halliburton employees were on the ground within twenty-four hours of the first U.S. landing in Mogadishu. By the time Halliburton left, in 1995, it had become the largest employer in the country, having subcontracted out most of the menial work, while importing experts for more specialized needs. (A mortician was hired, for example, to clean up the bodies of the slain soldiers.) For its services in Somalia, Halliburton was paid a hundred and nine million dollars. Over the next five years, the company billed the government $2.2 billion for similar work in the Balkans.
Halliburton’s efforts in the field were considered highly effective. Yet Sam Gardiner, the retired Air Force colonel, told me that the success of private contractors in the battlefield has had an unforeseen consequence at the Pentagon. “It makes it too easy to go to war,” he said. “When you can hire people to go to war, there’s none of the grumbling and the political friction.” He noted that much of the scut work now being contracted out to firms like Halliburton was traditionally performed by reserve soldiers, who often complain the loudest.
There are some hundred and thirty-five thousand American troops in Iraq, but Gardiner estimated that there would be as many as three hundred thousand if not for private contractors. He said, “Think how much harder it would have been to get Congress, or the American public, to support those numbers.”
No comments yet.