Reply #42: The Carlyle Group: Crony Capitalism without Borders

[Octafish]

The writer asks, "How much are you making on the war, Daddy?"

Dick Cheney and the Self-Licking Ice Cream Cone

The Carlyle Group: Crony Capitalism without Borders

excerpted from the book

How Much Are You Making On The War Daddy?

A Quick and Dirty Guide to War Profiteering in the Bush Administration

by William D. Hartung
Nation Books, 2003, paper

EXCERPT...

p27

The revolving door between the government and weapons contractors isn't new, but it has reached new heights (monetarily) and depths (ethically), in recent years. Cheney's relationship with Halliburton is a perfect case study of all that is wrong with the relationship between our democratic form of government and the corporations that finance our elections and feed at the government trough on a daily basis.

p29

Halliburton's biggest "cash cow" during his tenure was definitely in the area of military support services, and the company's ability to earn so much in this area was directly tied to a decision Cheney had made back when he was secretary of defense in the first Bush administration. It was under Cheney's watch that the decision was made to privatize not only specific services in support of U.S. troops overseas-such as food services, or doing the laundry, or repairing vehicles-but to privatize the actual planning process that went into providing logistics for U.S. troops when they had to be sent into an inhospitable foreign hot spot on short notice.

In 1992, near the end of Cheney's tenure as defense secretary, Halliburton won a contract from the U.S. Army's Logistics Civil Augmentation Program (LOGCAP), which P.W. Singer has described as a deal to "work with the military in planning the logistical side of contingency operations." Singer notes that "it was the first time the U.S. military had ever contracted such global planning to a private organization." In a pattern that would mark both Halliburton's and Cheney's business paths, the firm got the LOGCAP contract after conducting a top secret $3.9 million report for the Pentagon on how private companies could essentially provide the bulk of the logistics involved in major U.S. contingency deployments, from transportation and base-building to cooking the food and doing the laundry. The initial study contract called for a plan for how a private company could bear the bulk of the logistical burden for deploying 20,000 troops to 5 separate bases overseas within a 1 80-day period. Later in the year, Halliburton got a $5 million follow-on study contract to outline how a private firm might supply logistics for a series of more specific contingencies. By the end of the year, Halliburton had been selected to receive a five-year contract to be the U.S. Army's "on call" private logistics arm.

The work started almost immediately. Halliburton was called upon to provide support services for U.S. forces deployed to Somalia as part of "Operation Restore Hope," an operation that began at the end of the Bush administration and carried over into the first Clinton term. As Singer notes, "Brown and Root employees arrived in Mogadishu just 24 hours after the first U.S. troops arrived and stayed until the final withdrawal in March 1995, when its employees left with the last U.S. marines." The company did everything from hiring local women to hand wash Army laundry to importing "a mortician to clean up the bodies of killed UN peacekeepers before shipping them out of the country." Singer notes that for a good portion of its time in country, Halliburton was "the largest employer in Somalia, with some 2,500 local employees."

The Somalia operation led to additional, more limited work on behalf of smaller U.S. deployments to Rwanda and Haiti. But the big payoff came in the Balkans, where Halliburton's Brown and Root Services unit started out supplying logistical support for Operation Deny Flight, the United Nations-mandated no-fly zone in Bosnia, and ended up building and operating bases and refugee camps in Croatia, Bosnia, and, most lucratively of all, in KOSOVO. The firm's Balkan adventures started during the same year that Cheney took over as CEO of the company, and accounted for a good deal of the company's growth on the military side of its operations during his five-year tenure at the head of the firm.

The Army contract to provide logistical support for 20,000 U.S. troops deployed as part of the NATO IFOR forces in Bosnia came in at a cool $546 million, and it resulted in Halliburton doing work on behalf of U.S. and allied forces in Hungary, Bosnia, and Croatia. Just as it seemed that Halliburton had struck pure gold, there was a setback in 1997 when the company lost in its bid to renew its overall LOGCAP contract with the Army to a competitor, DynCorp, who had underbid them for the next round of work. But the sting was taken out of the loss when the Army decided to remove the BaIkans work from the larger LOGCAP contract, allowing Halliburton to go full speed ahead on its lucrative support operations there.

The Bosnia work set the stage for an even bigger role for Halliburton in Kosovo, where the company was involved in everything from building make-shift refugee quarters to building two major Army bases from scratch. The company's contract for its first year in Kosovo alone ballooned from the base level fee of $180 million to $1 billion. During its first three months in Kosovo alone, Singer reports that the company did the following: "built 192 barracks . . . thirteen helipads, two aviation-maintenance facilities, twelve mess-kitchen dining facilities, two large base dining facilities, and 37 temporary bathing facilities," even as it was delivering over I million meals, providing more than 55 million gallons of water, supplying over 383,000 gallons of diesel fuel, collecting over 89,000 cubic meters of trash, and loading and off-loading over 4,200 containers with needed supplies.

Halliburton's growth under Cheney's leadership is nothing compared to what it has done since he became vice president. In 2001, it won back the Army's LOGCAP contract, just in time to cash in on the logistical bonanza involved in providing facilities and provisions for U.S. troops in Afghanistan, Uzbekistan, Qatar, Kuwait, Iraq, and all the other far-flung outposts of the Bush administration's war on terrorism. The company is also in charge of making the cages used to house Taliban members and terror suspects at Guantanamo Bay, Cuba. A late August 2003 analysis in the Washington Post estimated that Halliburton had raked in $1.7 billion in military contracts in Iraq, Afghanistan, and beyond since the start of the Bush administration.

The company's biggest prize-which it was awarded on a no-bid basis by the Army Corps of Engineers after Halliburton officials had helped the Defense Department write the specs for the contract-was an open-ended, two year contract worth up to $7 billion for putting out oil fires and repairing oil infrastructure in Iraq.

It was only after dogged questioning from Rep. Henry Waxman that it was revealed that the no-bid Halliburton contract was not merely for putting out oil fires, but for rebuilding and operating Iraq's extensive oil infrastructure.

CONTINUED...

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