Deregulation, Mismanagement, and
Incompetence
Have Squandered Billions in Taxpayer Dollars and
Hurt our Mission in Iraq
The Bush Republican legacy
of waste, fraud and abuse in Iraq contracting is without precedent. In
testimony before the Senate in March, Judge Radhi Hamza al-Radhi, head of Iraq's
Commission of Public Integrity (CPI), exposed the devastating extent of waste
and corruption that has resulted from the Bush Administration's failure to
exercise oversight and ensure accountability in U.S.-led reconstruction
efforts. Judge al-Radhi has estimated that more
than half of the $18 billion worth of corruption that CPI uncovered in Iraq
involved U.S. taxpayer money. He also stated that a portion of that money
had been diverted to militia groups and al-Qaeda terrorists who have been
responsible for killing Iraqi civilians and American soldiers.
Last year, more than four
years after the Bush Administration began spending billions of dollars in Iraq,
U.S. government auditors uncovered an alarming record of waste and abuse: $10
billion in questionable and unsupported contractor costs between 2003 and
2006. In September 2007, the Pentagon also reported that contracts worth
$6 billion were under review by criminal investigators and $88 billion more
were being audited for financial irregularities. As reports from the
Special Inspector for Iraq Reconstruction (SIGIR) and other government and
independent auditors continue to show, theft, reckless spending, and unlawful
and corrupt practices persist -- at great cost to the American people and at
great risk to our troops and to our mission in Iraq.
These failures are not
simply the result of the Bush Administration's mismanagement and short-sighted
policies in Iraq; they are the result of a conservative Republican governing
philosophy that has promoted outsourcing, privatization, and deregulation at
every opportunity. During this Administration, government spending on
contracts has skyrocketed to record levels, nearly doubling from $207 billion
in 2000 to $400 billion last year. Today, almost every federal agency
relies on contractors to perform critical governmental functions, from tax
collection to shipbuilding and even war planning and intelligence
gathering. Even as it has turned to private companies to assume major
governmental responsibilities, the Bush Administration has eschewed regulation
and favored a hands-off approach to government that has led to weak and often
nonexistent oversight and little accountability to the American people.
The
Bush Republican Governing Philosophy Has Promoted Waste, Fraud, and Abuse in
Iraq Contracting
The Bush Administration's
opposition to regulation has allowed contractors to game the system. The Bush Administration has pursued a
hands-off approach to contracting, relying on its market-based worldview that
favors deregulation and minimal oversight and assumes that the private sector
will police itself and ensure cost-effective services. This approach has
created a lawless environment where companies have been allowed to define the
terms of their contracts; set the prices for their services; and even establish
performance indicators and overall contract objectives for their work. As
a result, critical projects like the construction of the U.S. Embassy in Iraq
have fallen years behind schedule, gone millions over budget, and been
undermined by shoddy work. Contractors have passed along higher costs to
American taxpayers while suffering little, if any, consequences for substandard
performance.
The Bush Republican
philosophy puts private business interests over the public interest. Under the assumption that anything that is good
for big business is always good for American taxpayers, the Bush Administration
essentially handed a blank check to contractors operating in Iraq, often
through multi-billion dollar no-bid and sole-source contracts. Instead of
insisting that taxpayers get their money's worth and providing incentives to
protect American taxpayers and ensure quality work, the Bush Administration has
given free-reign to companies and put their bottom-line profits before the
country's best interest. Time and again, the Administration has allowed
contracting firms to outsource work to layers of subcontractors and non-Iraqi
third country nationals who often have less training and are less qualified to
perform the required tasks; turned the other way when companies set up off-shore
shell companies to avoid payroll taxes; and rewarded shoddy work and criminal
behavior with follow-on contracts and contract extensions.
While contractors have raked
in record profits, the American people and our troops have paid a heavy
cost. KBR (the former Halliburton subsidiary) continues to work in Iraq
today - nearly two years after Pentagon auditors uncovered $2.7 billion in
undocumented spending by the company and despite ongoing investigations into
its delivery of unsafe water to U.S. troops in Iraq and faulty electrical work
that has led to troop deaths.
Motivated by its distaste
for government and support for privatization, the Bush Administration has
outsourced roles critical to protecting our troops and ensuring the success of
our mission in Iraq. Since the
outset of the war in Iraq, the Bush Administration has turned to contractors to
fill mission-critical roles, from training the Iraqi Army to providing
logistical and tactical support to our troops on the battlefield; serving as
translators for top military officials; and even handling sensitive
intelligence operations. Contractors have essentially formed a second,
private force, which, even today, outnumbers U.S. troops on the ground in
Iraq. This practice has allowed private contractors to assume inherently
governmental responsibilities and shifted decision-making power away from our
elected representatives and military leaders to companies that are looking out
for the interests of their shareholders. By hiring an unprecedented
number of private contractors to perform functions formerly done by the
military, Bush Republicans have unnecessarily inflated costs - paying millions
to protect contractors when soldiers, in many cases, could have completed the
jobs for much less.
The
Results of These Failed Policies Have Been Disastrous
Misguided Bush Republican
policies have placed our troops at risk and harmed our mission in Iraq. The Bush Administration's lack of oversight in
Iraq, failure to address corruption, and unprecedented reliance on contractors
to fill responsibilities traditionally handled by government and military
employees has resulted in unprecedented waste, fraud and corruption. This
strategy has, according to Iraqi government officials, allowed reconstruction
funds to be diverted to militia and insurgent groups and al-Qaeda terrorists;
left our troops without sufficient body armor and protective equipment on the
battlefield; and severely tarnished America's reputation in Iraq and around the
world.
Misguided Bush Republican
policies have undermined U.S.-led reconstruction efforts in Iraq. The Special Inspector General for Iraq
Reconstruction, along with other government and independent auditors, have
reported millions in reconstruction contracts that have run far over budget,
fallen years behind schedule, and been effectively undermined by shoddy
work. This failure of Executive Branch oversight has meant money that
should have gone to rebuilding Iraq's health care and education systems,
creating jobs and improving the country's infrastructure - initiatives key to
building the capacity of the Iraqi government and gaining the popular support
critical to defeating terrorist and militant forces - has been lost to waste,
fraud and abuse.
Bush
Republican Mismanagement and Flawed Contracting Policies Have Further
Undermined Oversight of Taxpayer Dollars in Iraq
Bush Republicans have not
adequately enforced existing laws. Audits of Iraq reconstruction contracts have repeatedly found that the
Bush Administration has failed to enforce federal laws and regulations,
including the procedures that normally allow fair play, provide incentives for
quality performance and cost-effectiveness, and ensure protection for employees
and taxpayers. Instead, it has conducted faulty bidding processes;
ignored systemic waste; been slow to punish companies that have engaged in
fraudulent and criminal behavior; and threatened retaliation against officials
and contractor employees who have blown the whistle on contracting
abuses.
Bush Republicans have
failed to devote the resources necessary to ensure effective oversight. Despite the dramatic increase in outsourcing to
private contractors, the Bush Administration has failed to provide a sufficient
supply of auditors, leaving its staff with fewer resources and less time to
manage a growing number of contracts. As the bipartisan Gansler Commission recently reported, "the shortage of
people and shortage of the needed training and high level experienced
people" essentially created "an opportunity to create fraud" in
Iraq reconstruction.
The Republican Congress
abdicated its oversight role.
The Republican-controlled Senate held just two hearings to examine Iraq
contracting abuses from the start of the war in March 2003 through November
2006 (when they lost the majority in the Senate), certainly the most critical
period for oversight of Iraq war contracting. Republican Committee
Chairmen repeatedly rejected requests for oversight from Democratic members of
oversight committees during this time - effectively rubber-stamping the Bush
Administration's flawed approach to contracting. Republicans in the
Senate also repeatedly blocked efforts to protect American taxpayers from war
profiteering and bring accountability to contracting in Iraq. On four
separate occasions - in 2005 and 2006 - the Republican Presidential nominee,
Senator McCain, and every other Republican Senator except one (former Senator
Chafee) voted against legislation to establish a Special Committee on War and
Reconstruction Contracting, modeled after the Truman Committee during World War
II that saved taxpayers billions of dollars, which would have had full
oversight authority to oversee military contracting in Iraq, to uncover and
deter waste, fraud and abuse.
By contrast, since assuming
the majority in the Senate in 2006, Democrats have held 15 oversight hearings
on Iraq contracting. These hearings have examined several critical
issues, including efforts to combat war profiteering and enhance the role of
inspectors general, procedures for strengthening competition and accountability
in the federal acquisition process, the role of private security firms in
overseas operations, and initiatives to reform defense contracting and improve
financial and business management at the Department of Defense. To
supplement the work of these committees, the Senate Democratic Policy Committee
has held 18 oversight hearings on Iraq contracting abuses since the start of
the war.
The Bush Administration
used signing statements and claims of executive privilege to undermine
oversight. In the instances
where the Democratic-led Congress has been able to pass legislation to
strengthen contracting oversight, the Bush White House has used signing
statements and improper assertions of executive privilege to undermine
oversight. Citing national security concerns, the Bush Administration
sought to weaken the authority of the Special Inspector for Iraq Reconstruction
and the Commission on Wartime Contracting. The Administration has opposed
the creation of a database to track the past performance of contractors and
opposed the consideration of a company's use of off-shore tax havens when
awarding defense contracts. Further, the Bush Administration has refused
to cooperate with Congressional investigations into contracting abuses, often
stonewalling congressional requests for information and testimony.
Bush Republicans failed
to stop waste and fraud even when abuses were brought to their attention. Instead of addressing contracting problems, the
Bush Administration has consistently ignored evidence of waste, fraud and
abuse. Over the last eight years, contractors with records of wasteful
spending and misconduct have repeatedly been rewarded with contract extensions
and new contracts, including companies that have been the subject of
investigations related to the deaths of U.S. soldiers and Iraqi
civilians. Administration officials also have allowed shoddy contract
work to go unpunished; dismissed repeated warnings from inspectors about contractors
failing to meet safety standards; and even threatened to fire officials and
contractor employees who raised concerns about contracting abuses. These
misguided Bush Republican policies have undermined our troops and led to
inflated prices, overcharging and rampant corruption.