Category Archives: The Military/Industrial Complex

The Week in Bush: Gitmo, Warrantless Wiretaps, and Inspecting Inspectors (Updated)

This has been a week in which the Bushies have pulled out all the stops. Under siege from every direction, it seems, up to and including their own party, and in the face of scandals, investigations, and tumbling approval numbers, the White House has significantly stepped up its war against – us.

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Halliburton Loses $$2B, Shrugs

Halliburton, the Veep’s former corporate incubator, appears to have simply lost almost $$2Bil that it can’t account for–$$$1.8BIL$$$ to be precise, almost exactly 10% of the $18.2 Bil it has in contracts for work in Iraq, and–get this–almost half the $4.2Bil they collected so far. This corporation has lost not a tenth or a quarter or even a third of what it’s been paid. They lost HALF OF IT.

WASHINGTON — Pentagon auditors have found that Halliburton Co. cannot properly document more than $1.8 billion worth of work done under its contracts in Iraq and Kuwait, Army officials said Wednesday.The latest setback for the Houston oil services company came in an audit by the Defense Contract Auditing Agency, which also found that the firm’s system for generating cost estimates used in negotiations with the government was “inadequate.”

The agency recommended that government contracting officials demand fixes within 45 days and seek more detailed information during negotiations with Halliburton, which has contracts worth as much as $18.2 billion in Iraq to feed and house troops and restore the country’s oil infrastructure.

Army contracting officials said they were studying the auditors’ recommendations but had not decided how to proceed, leaving open the question of how the audit would affect the bottom line of Halliburton, which was run by Vice President Dick Cheney from 1995 to 2000.

“What the final outcome will be, I can’t speculate. It’s under review now,” said Dan Carlson, a spokesman for the Army Field Support Command in Rock Island, Ill., which oversees Halliburton’s largest contract in Iraq and Kuwait.

The cost estimate system is used to come up with a price that the government agrees to pay Halliburton as it performs work in Iraq. Later, auditors try to reconcile the estimates with actual costs and determine whether the government has paid too much or too little.

It is important because the government does not want to pay too much to a contractor and have to seek reimbursement later. The audit found that Halliburton’s estimating systems suffered from “a lack of current, accurate and complete cost and pricing data.”

Halliburton defended its system and said it disagreed with the results of the audit, which were first reported Wednesday in the Wall Street Journal.

Oooo, that’s a good one.

So kids, in BushAmerica when you flunk a math test because you’re hopelessly unprepared, you can just tell the teacher you ‘disagree with the results’ of the test. After all, the questions ‘What does 2+2 equal?’ or ‘How much is $18.2 Bil minus $1.8Bil?’ are subject to interpretation. They’re not cut and dried at all. Why, there may be several answers, depending on whether or not the principal of the school used to work for your parents and may want to work for them again.

Company officials said they were working with the government to address issues raised in the report, including the inadequate accounting for work done under the so-called Logcap contract, which supplies logistics aid for U.S. troops.The $1.8 billion amounts to about 42% of the $4.3 billion the company has billed to the U.S. government under the contract. In the past, the company has acknowledged that its work in a war zone has made paperwork difficult.

And for you kids who may live in gang-infested areas where drive-by shootings are a common occurrence and you wake up to gunfire every morning, just say it’s too much for anyone to expect you to keep accurate figures when you’re scrunched down in the bathtub or laying on the floor to do your homework in order not to get hit by stray bullets. Finally, point out that the teacher is really just ‘an advisor’.

Halliburton said it did not expect its financial liquidity to be affected by concerns about the estimating system, or by the possibility that the government could withhold as much as 15% of its payments because of problems with arriving at fixed prices within the contract.The Pentagon audit “is just an opinion,” said Wendy Hall, a Halliburton spokeswoman. “The [auditing agency] is advisory only. They do not have the authority to make final decisions.”

You can always go over the teacher’s head and appeal directly to the principal, who actually secretly still does work for your parents and won’t want to do anything to jeopardize that.

Remember: a failing grade is just a basis for negotiation. Try that–it works for the Vice President’s friends and it will work for you, too.

It’s ‘Morning in America’. Be optimistic. Steal the lunch money from the cafeteria cash register while you’re at it–we’ve got lots more excuses where those came from.

27 Candles in the Dark

The looting in Iraq may have started with Iraqis, but they got peanuts compared to what was stolen when the US corporations came to town. According to the LAT, besides on-going investigations into Halliburton, KB&R, and several other sub-contractors, the CPA Inspector General’s Office has launched 27 criminal investigations of individuals accused of fraud and theft.

WASHINGTON — A comprehensive examination of the U.S.-led agency that oversaw the rebuilding of Iraq has triggered at least 27 criminal investigations and produced evidence of millions of dollars’ worth of fraud, waste and abuse, according to a report by the Coalition Provisional Authority’s inspector general.The report is the most sweeping indication yet that some U.S. officials and private contractors repeatedly violated the law in the free-wheeling atmosphere that pervaded the multibillion-dollar effort to rebuild the war-torn country.

More than $600 million in cash from Iraqi oil money was spent with insufficient controls. Senior U.S. officials manipulated or misspent contract money. Millions of dollars’ worth of equipment could not be located, the report said.

“We found problems in the CPA’s financial management, procurement practices and operational controls,” Stuart W. Bowen Jr., the inspector general, wrote in the report. “These results are not surprising: The CPA faced a variety of daunting challenges, including extremely hazardous working conditions.”

The report raises anew questions surrounding the occupation government under Ambassador L. Paul Bremer III, who turned over control in June to an interim Iraqi government.

The coalition’s failures continue to haunt the country today as Iraqis struggle with security issues and infrastructure problems with electricity, transport

Not surprising, really, considering that the attitude of those at the top of the US govt is pretty much the same: Taxpayer money belongs to us and we can do what we want with it, including steal it. The charges, for anyone familiar with the corporate mind, aren’t exactly a surprise, either.

The Times has reported on several cases in which a small circle of former Republican administration officials had drawn scrutiny for their actions in Iraq, including a deputy undersecretary of Defense under investigation by the FBI in connection with a telecommunications contract. In another case, officials have said, a former senior U.S. advisor conducted negotiations with a family connected to Saddam Hussein to form a new Iraqi airline.

In one case, a senior U.S. advisor “manipulated” the contracting system to award a $7.2-million security contract. The contract was later voided and the money returned.In another incident, a contractor billed $3.3 million for nonexistent personnel working on an oil pipeline repair contract. A security contractor guarding the pipeline overcharged the CPA by $20,000. Both incidents are under criminal investigation.

In another example, a military assistant to a Pentagon employee gambled away part of a $40,000 grant issued to help coach an Iraqi sports team, the report found.

What is a tad surprising is the number of excuses coming, not from the perps, but from the IGO.

Iraq was “a much more Wild West environment. It’s a wartime environment,” said Steven Kelman, a Harvard professor and contracting expert. “I wouldn’t be surprised if, psychologically, some folks have the idea that they’re risking their lives under difficult conditions. They justify that they’re entitled to a salary increase.”

“In the early days, there was no record keeping. They were flushed with money and seized assets. People just didn’t follow established procedures,” said Charles Krohn, a former CPA official. “You were dealing with inexperienced people who didn’t understand that there’s always a day of reckoning.”

So ‘Boys will be boys, heh-heh’, is that it? There weren’t enough flak jackets or boots to go around for the troops, but hey, I’m a corporate snowbunny in a war zone, I got serious perks coming! And these are people inside the CPA, not war profiteers like the Halliburton crowd; you’d expect this sort of thing from them. The message these guys got from their leaders was: ‘Take whatever you can get your hands on. We are.’

And for those who will say, as they always do, ‘Well, it was only a few bad apples….’, I say:

Uh, $$$20BILLION$$$ missing and 27 separate investigations of criminal misconduct in a single govt entity means a significant chunk of the barrel was rotten, don’t it?

Halliburton in the Jug–Again

You know, as Island Dave says, this gets old. Another day, another charge that Halliburton broke the law while Little Dick was CEO, this time by setting up a shadow subsidiary in the Cayman Islands so it could avoid the sanctions against Iran.

WASHINGTON — A Halliburton controversy erupted Tuesday, fueled by a grand jury investigation into whether the oil services giant violated federal sanctions by operating in Iran while Vice President Dick Cheney was running the company.The investigation centers on Halliburton Products and Services Ltd., a subsidiary registered in the Cayman Islands and headquartered in Dubai that provided oil field services in Iran. The unit’s operations in Iran included Cheney’s stint as chief executive from 1995 to 2000, when he frequently urged the lifting of such sanctions.

Numerous U.S. companies operate in Iran, but under strict guidelines requiring that their subsidiaries have a foreign registry and no U.S. employees, and that they act independently of the parent company.

At issue is whether Halliburton’s subsidiary met those criteria.

The Treasury Department has been investigating the matter since 2001. But Halliburton disclosed in public financial filings this week that the department had forwarded the case to the U.S. attorney in Houston for further investigation. The company said a federal grand jury had subpoenaed documents on its Iranian operations.

The Treasury Department refers such complaints only after finding evidence of “serious and willful violations” of the sanctions law, a government official said.

Sen. Frank R. Lautenberg (D-N.J.), whose office has provided information on the case to the Treasury Department, said Tuesday that Halliburton Products and Services was a sham that existed only to circumvent the sanctions.

“It’s unconscionable that an American company would skirt the law to help Iran generate revenues,” Lautenberg told reporters during a conference call arranged by the campaign of the presumed Democratic presidential nominee, Sen. John F. Kerry of Massachusetts.

Note that last sentence. I believe I mentioned once or twice that those of you who aren’t familiar with Kerry may not know that he’s perfectly capable of playing hardball, and the closer the election, the harder it gets. This is just a taste, a smidgen, as my mother used to say, of what’s to come.

The Bushies of course answered the charges against Cheney by insisting that the Veep had done nothing wrong and providing evidence that Halliburton met all the legal criteria.

Oops. Nooooooooo, sorry. They responded by…attacking Kerry for arranging the call.

“The Democrats have made clear that their all-purpose strategy, no matter the issue, whether it’s healthcare or John Kerry’s plans to raise taxes or John Kerry’s votes against our men and women in uniform or John Kerry’s proposals to cut the intelligence budget, will be met by one word: Halliburton,” Schmidt said. “The Kerry campaign has become increasingly flailing in their attacks as there has been increasing focus on John Kerry’s record.”

Actually, everybody’s been so busy focusing on the BA’s attempt to evade and/or subvert the Geneva Conventions with dubious legal theories, and their attempt to use the PATRIOT Act to evade and/or subvert the Constitution with even more dubious legal theories, and their attempt to sell off the govt piece-by-piece to private corporations, and their cronyism and their Orwellian lies and their mess in Iraq and…and…and…that they really haven’t had a chance to get to Kerry yet. They keep trying but every day brings yet another charge, yet another anti-democratic, anti-Constitutional law or imperial edict, yet another fresh proof that these people have no agenda, no conscience, no respect for the law, and no humility.

Lautenberg’s office distributed copies of four letters from 1997 sent from a London arm of the Iranian state oil company to Halliburton Products and Services in Dubai.The four letters, all requests for goods and services from the Halliburton subsidiary, included handwritten notations to specific individuals. Lautenberg’s staff questioned whether the individuals worked for the foreign subsidiary or for a U.S. subsidiary, in violation of the sanctions.

Halliburton confirmed the authenticity of the documents, but said that two of the individuals were British citizens who had never worked for any U.S. Halliburton subsidiary.

The other two handwritten notations did not list first names of the individuals, and Halliburton said it was unable to locate records for them.

“These documents do not suggest that any violation of the applicable regulations occurred,” Halliburton spokeswoman Wendy Hall said in a statement.

I’m not going to bother going into the specifics here–it would bore you to tears–but suffice it to say that their ‘explanation’ is skating on a very thin legal technicality.

There came a time when we all got tired of hearing about Clinton’s escapades with Monica. I don’t know about anybody else, but I’m getting awfully tired of reading and writing about Bush and Cheney’s built-in contempt for little things like the law and the concept of ‘public service’ when it doesn’t lead directly to private profit. The prospect of a second term, unbridled by the need for re-election, should be scaring the bejeezus out of us right about now.

Offered Without Comment

From today’s Washington Post:

UNITED NATIONS, July 15 — The Bush administration is withholding information from U.N.-sanctioned auditors examining more than $1 billion in contracts awarded to Halliburton Co. and other companies in Iraq without competitive bidding, the head of the international auditing board said Thursday.

Jean-Pierre Halbwachs, the U.N. representative to the International Advisory and Monitoring Board (IAMB), said that the United States has repeatedly rebuffed his requests since March to turn over internal audits, including one that covered three contracts valued at $1.4 billion that were awarded to Halliburton, a Texas-based oil services firm. It has also failed to produced a list of other companies that have obtained contracts without having to compete.

The Security Council established the IAMB, which includes representatives from the United Nations, the World Bank and the International Monetary Fund, in May 2003 to ensure that Iraq’s oil revenue would be managed responsibly during the U.S. occupation. The council extended its mandate in July so it could continue to monitor the use of Iraq’s oil revenue after the United States transferred political authority to the Iraqis in June.

The dispute comes as the board released an initial audit by the accounting firm KPMG on Thursday that sharply criticized the U.S.-led coalition’s management of billions of dollars in Iraqi oil revenue. The audit also raised concerns about lax financial controls in some Iraqi ministries, citing poor bookkeeping and duplicate payments of salaries to government employees.

The Pentagon did not specifically answer questions about withholding information to auditors, but released a statement saying the Coalition Provisional Authority worked hard to manage Iraq’s oil resources.

Halliburton Under Fire, Finally

Halliburton’s standard treatment of the US govt as a Golden Goose whose treasury it could loot at will, what with the Vice President having once been its CEO and getting the contracts without having to bid along with a blank check and all the other seemingless endless perks, like total non-oversight, is at last coming in for a beating at the hands of the Pentagon Audit Agency and its own ex-employees.

The Pentagon’s Defense Contract Audit Agency found that Halliburton’s system of billing the government for billions of dollars in contracts was “inadequate in part,” failing to follow the company’s internal procedures or even to determine whether subcontractors had performed work.At the same time, four former Halliburton employees issued signed statements charging that the company had routinely wasted money. Among other things, they said the company had paid $45 apiece for cases of soda and $100 per bag of laundry, and had abandoned nearly new, $85,000 trucks in the desert for lack of spare parts.

“There was this whole thought process that we can spend whatever we want to because the government won’t crack down in the first year of a war,” said Marie deYoung, a former logistics officer with the company.

Trust me, the ‘first year of a war’ bit is totally irrelevant: Halliburton has a long history of acting this way even when there’s no war to excuse it. They have been regularly accused of outrageous overcharging, ‘questionable’ accounting practices, lack of oversight of subcontractors and their own people, and lack of accountability. There isn’t a damn thing new here. Some of us pointed out that history when the Veep’s office handed his ex-employer a $$Billion$$ worth of govt contracts on the Golden Platter of a no-bid process that pointedly excluded more comepetent, reputable firms before they’d even had a chance to make their case.

But when the Vice president of the United States used to be your CEO and still gets a cut of your profits, you don’t figure you have to worry about little shit like curtailing the level of your theft. In fact that’s a good reason to steal even more than usual. So they did.

This is your corporate-owned-and-operated govt in action. Hope you enjoy it.

CCR Sues CACI and Titan

The Center for Constitutional Rights announced today that it was suing Iraq contractors CACI and Titan under the RICO racketeering law for violations relating to the torture at Abu Ghraib. This is the first time any private contractor has been threatened with legal punishment for the torture their employees oversaw, largely because Bush signed an executive order declaring that no private American company working for the US govt in Iraq could be held responsible, legally, for anything it did that may have contravened either domestic or international law.

Racketeering charges may seem like a stretch but hang in there for a minute: CCR is basically arguing that RICO is relevant because the companies engaged in patently illegal activities for the purpose of making money–precisely what RICO forbids.

CACI and TITAN are publicly traded corporations that provide interrogation and translation services to U.S. government agencies. According to the complaint, beginning in January 2002, and continuing to the present, the two companies began providing services ranging from interrogation and interpretation to intelligence gathering and security. The complaint reveals that both companies were increasingly dependent on government contracts for revenue. Titan, for example, developed a unit known as “National Security Solutions,” which added 21 percent to its revenue growth in 2003.“We believe that CACI and Titan engaged in a conspiracy to torture and abuse detainees, and did so to make more money,” said Susan Burke of Montgomery, McCracken, Walker and Rhoads, an attorney for the plaintiffs. “It is patently clear that these corporations saw an opportunity to build their businesses by proving they could extract information from detainees in Iraq, by any means necessary. In doing so they not only violated a raft of domestic and international statutes but diminished America’s stature and reputation around the world.” (emphasis added)

In other words, the assumption here is that the Bush Admin had made it clear to the companies that if they didn’t get the information that was wanted, by whatever means necessary, their contracts would be in jeopardy and they would lose a fifth of their revenue–or more. Faced with the choice of losing business or breaking the law to keep it, CCR is arguing, CACI and Titan made a deliberate corporate decision to break the law, bringing RICO into force.

It’s a brilliant legal strategy in a way because it could force the companies to defend themselves by admitting that the BA pressured them into illegal activity and that they had government approval of their tactics. It’s also a dicey legal strategy because unless the companies provide proof of such pressure in their defense, a direct connection between company business decisions and govt policy is going to be hard to prove in court.

To make it as easy as possible for the companies to mount such a defense, and to provide evidentiary support for its own position, CCR has obtained a copy of the internal Pentagon report outlining the new rules on torture.

CCR President Michael Ratner stated, “This memo and others show there was planning far up the chain of command to torture detainess; the atrocities at Abu Ghraib and elsewhere cannot be swept under the rug by going after low-level soldiers. Apparently highly placed U.S. officials were willing to approve interrogation methods that violate every convention on torture the United States has ever signed. But they needed to find cover for their actions and a defense to possible criminal prosecution. Government lawyers writing this report wildly distorted the law in an effort to exempt officials from potential criminal prosecution.”

A pdf. facsimile of the full Pentagon report is available here.

This suit is bound to run head-on at some point into the question of whether or not Bush had the authority to declare American companies legally untouchable for any illegal activities in which they may have taken part while carrying out their contracts. In this connection, the Bush directive looks like little more than the equivalent of a DA on the Mafia payroll telling his attorneys that no matter what the Mafia did, it was not to be prosecuted. Such an order would have the appearance of making Mafia activities exempt from prosecution but the order itself would be illegal. Imagine that that DA had requested that illegal activity, making the directive a device to cover his own ass, and the metaphor is complete.

I don’t know how far these guys are going to get with this suit, but one certainly hopes they get as far as calling into serious question the power of the US president to place himself above the law just by issuing an order that says he is.

(Tip courtesy of MoJo)

A Privatized War

by Kryton

(moved from Comments and mildly edited by Mick–I exchanged an already published quote for another from K’s second link)

The Abu Ghraib story has shed an unwelcome spotlight on private contractors like CACI, Titan and Halliburton and their central role in waging America’s new wars. Many of these contractors are soldiers by another name, more commonly called mercenaries. They are not subject to the Uniform Code of Military Justice, nor to the Geneva Conventions. Contractors have been identified as “giving orders” to the MPs who abused Iraqis; none have lost their jobs, and CACI is still advertising interrogator jobs on its Web site. It is estimated that 10,000-15,000 are on the ground in Iraq, but their operations are shrouded in secrecy.

Many of these contractors have been called “retired military,” with the innocent-sounding explanation that retired soldiers have the most appropriate background. Now reports are emerging that all is not as it seems. Twenty-six-year old soldiers, in the military for three years, are being recruited while on active duty. If they accept, they are temporarily “retired.” When done with their contractor assignments, they return to their units.

Why would the U.S. military engage in this shell-game, moving soldiers from active duty to contractor status and back again? While working for the contractors, they are essentially indistinguishable from the military, with three exceptions: No uniform. No chain of command. And no accountability to any legal authority.

In a related story, it was revealed — but not widely circulated — that the U.S. is setting up a secret police in Iraq to keep control over the country after the formal handover1. This police force will be staffed by contractors paid for by U.S. taxpayers. From the Washington Post:

The events of the last few days illustrate those differences well. When reports of abuses at Abu Ghraib surfaced, it was clear that the 800th Military Police Brigade (which includes the 372nd Military Police Company, home to many of the accused) was in charge of the prison; prisoner interrogations were run by the 205th Military Intelligence Brigade. But Taguba’s report also mentions four civilian contractors, all of whom were assigned to the 205th Military Intelligence Brigade. Two of those civilians, Steven Stephanowicz and John Israel, were “either directly or indirectly responsible for the abuses” at Abu Ghraib, the report says. A third contractor, Adel Nakhla, is named as a translator — and a suspect. A fourth, Torin Nelson, was said to be a witness. Both Nakhla and Nelson are listed as employees of Titan Corp., a security contractor based in San Diego.The report identified Stephanowicz as an interrogator working for CACI; Israel, an interpreter, was also said to be working for CACI, although the company has denied that. Some news reports have identified Israel as an employee of Titan, which in turn has said he works for one of its subcontractors.

So, we are not even sure for whom these contractors work or worked. Nor do we know how many other contract employees were — and may still be — working at the prison.

Is this how we’re spreading the light of democracy around the world?

Note: 1. This would likely be our old friend, Ahmad Chalabi. Viceroy Paul Bremer turned over all of Saddam’s Secret Police files to Chalabi when he replaced Gen Garner. Ahmad, so the (perfectly believable) rumors say, has been using them to blackmail his way to power ever since.–M

Wanted: Torturer – Good Pay Plus Benefits

Tim Dunlop at The Road to Surfdom, our favorite Aussieblog, has interrupted his exegesis of Joe Wilson’s book to post the text of a CACI job ad. Here’s just part of it:

Interrogator/Intel Analyst Team Lead Asst.Assists the interrogation support program team lead to increase the effectiveness of dealing with Detainees, Persons of Interest, and Prisoners of War (POWs) that are in the custody of US/Coalition Forces in the CJTF 7 AOR, in terms of screening, interrogation, and debriefing of persons of intelligence value. Under minimal supervision, will assist the team lead in managing a multifaceted interrogation support cell consisting of database entry/intelligence research clerks, screeners, tactical/strategic interrogators, and intelligence analyst.

Tim notes, “Might be a good idea to tighten up that ‘under minimal supervision’ clause. Just a thought.” Um, yeah.

There’s more, and it doesn’t get better.

Privatizing the Military

A Dutch journalist named Peter Speetjens writes in the Daily Star, a Lebanese newspaper, that private military forces are a much bigger segment of the world’s armies than ever before, and he estimates that as many as 10% of the US forces in Iraq are civilians.

According to Peter Singer, author of the book Corporate Warriors: The Rise of the Privatized Military Industry, there are some 90 companies worldwide offering military services and expertise to an overall security market worth upward of $100 billion. The reasons for this spectacular expansion are, on the one hand, the post-Cold War trimming of national armies (as a consequence of which there are some 7 million fewer soldiers under arms today than in 1989); and on the other, the fact that the world seems far less of a safe place, particularly after the Sept. 11, 2001, attacks.The post-Cold War gap between supply and demand has been quickly filled by private military companies, most of which are based in the US, England, South Africa, Russia and the Ukraine, where laid-off soldiers are abundant. The firms operate anywhere in the world to secure people and assets. Yet by far their most lucrative market today is Iraq. According to Singer, 10 percent of US soldiers in Iraq are civilians, which is ten times more than during the Gulf war of 1991. This makes the invasion of Iraq, and its aftermath, the most privatized conflict in the last 250 years.

One’s initial reaction is liable to be, “Well, they’re probably just providing support services, running mess halls, washing uniforms, transporting real soldiers from one place to another, that sort of thing.” But one would be wrong.

Apart from offering military support services, thousands of civilians, most of whom have a military past, operate Predator spy planes, maintain B-2 Stealth bombers, de-mine, destroy enemy ammunition and, last but not least, protect individuals and companies active in the reconstruction of Iraq.

In the last job of which they have actually seen combat. Eight of these private soldiers have been killed in military actions since the start of the Occupation. Viceroy Paul Bremer, in fact, is not protected by Army troops or Marines “but by a contingent of Ghurkas and former SAS commandos working for the British firm Global Risk International.”

This trend is growing, and Speetjens thinks the reasons are simple enough: advocates claim it’s cheaper to outsource the kinds of tasks they take on. Whether it is or not is debatable.

Dyncorp, an American company founded by former Los Angeles police officers, won a contract worth $50 million to train the Iraqi police force. The company needs 1,500 former policemen to do the job and offers an average tax-free salary of $150,000 a year. Likewise, the British-American firm Armorgroup recently paid an ex-Special Forces soldier $150,000 a year to protect a senior member of the Coalition Provisional Authority in Iraq. Compare this to the average salary of a regular American or British soldier.

Mercs used to crawl around on the fringes of military society. Now, under Bush/Cheney/Halliburton, they are moving centerstage. This is a troubling development on many fronts, not the least of which is the growing identification of these corporate armies with corporate rather than public goals.

The links between private military companies that benefit from insecurity, instability and warfare, and a political establishment tightly linked to the corporate world, can be disturbing. Take KBR: In 1992, former Defense Secretary Dick Cheney commissioned the firm to research (at a cost of $3.9 million) the privatization of US Army logistics. KBR concluded that privatization would be much cheaper than allowing the armed forces to carry the task out themselves. Subsequently, Cheney granted the firm a contract to implement its own recommendations, mainly in overseas US operations.As KBR followed the US Army around the world, Cheney became chief executive of Halliburton in 1995, remaining in the post until he became the US vice-president in 2000, when he was paid a bonus of $35 million. Cheney was one of the main advocates of war in Iraq and the fact that both KBR and Halliburton have profited hugely from its aftermath raises serious questions about the possible conflicts of interest involved.

As one surveys the close links between private military companies, the corporate world and political establishments, the image that comes to mind is not so much that of an individual gun-for-hire like Denard, but that of the British East India Company and its Dutch equivalent in Indonesia, both of which controlled large armies. Jan Coen, the former governing general of the Dutch colonial empire, put it succinctly: “There’s no trade without war; no war without trade.”

Explains a lot, don’t it?

Step 1: Cheney commissions a firm to “research” military privatization.

Step 2: The firm (surprise! surprise!) concludes that privatization would be cheaper.

Step 3: Cheney hires said subsidiary to carry out its own recommendations and promptly becomes CEO of the parent company, keeping all the money nicely in-house.

Step 4: As Veep, Cheney vigorously supports a war that will keep that subsidiary very busy.

Step 5: Cheney sees to it that that subsidiary is awarded fat contracts in a no-bid process that totally eliminates the possibility that said subsidiary will face competition.

Neat, huh? A closed loop that begins–and ends–with Cheney and his (sort of) ex-company. Given the total lack of legitimate rationale for the Iraq War, isn’t it at least possible that between the oil, the reconstruction contracts, and the “security” business, Bush/Cheney and Co took us into this thing because it was good for their bottom lines? It wouldn’t be the first time. The British East India Company was finally dissolved because of its willing use of force in backing company interests that were in direct conflict with the interests of the British govt. Corporations have their own agendas, and democracy isn’t even on the list. Do we really want them brandishing their own private armies?

(Thanks to Major Barbara for the link)

King CONG Flexes Its Muscles: The Dominance of Energy Corps

In Mother Jones this month, Harvey Wasserman warns against assuming that Cheney’s pork-fed scandal of an energy bill, written entirely by the Coal-Oil-Nuclear-Gas (CONG) industries and their lobbyists, has been safely defeated. It hasn’t.

Two months ago, Senate Democrats – supported by seven Republicans — barely beat back a Bush Administration-backed national energy plan. The proposal was a fossil/nuke grab-bag, bloated by $20-30 billion in subsidies, tax breaks and other giveaways for some of the nation’s biggest polluters.*****************************

The Bush energy plan that failed in December was an unvarnished partisan play. Drafted in secret by Vice President Dick Cheney’s infamous task force, it was fine-tuned in secret by Sen. Pete Domenici and Rep. Billy Tauzin — two of King CONG’s most ardent Capitol Hill guerillas. The resulting pork-laden legislation and the steamroller approach offended scores of lawmakers, and prompted scathing editorials nationwide. But in the Senate, the final straw was a rider providing a legal shield for makers of MTBE, a gasoline additive that’s a suspected carcinogen (both Tauzin and House Majority Leader Tom DeLay have big MTBE producers in their districts). Some have opined, reassuringly, that the Bush/Cheney/Tauzin/Domenici CONG nightmare is dead – that it could never pass in an election year. Unlikely. Bush now says he’s shooting for a mid-February passage.

It’s coming back, pushed by the same interests responsible for its creation and the same Pubs who tried to shove it through the first time, only this time the fragile coalition that narrowly defeated it is showing cracks and King CONG is moving in to exploit them. They’re not going to let go–there’s too much at stake. And the Bush WH is so larded with ex-industry execs and lobbyists that it’s sometimes hard to tell where the industry leaves off and govt begins. Maybe it doesn’t.

Two examples from MJ’s Informed Dissent newsletter suggest pretty strongly that the Bush Admin is functioning as little more than a King CONG subsidiary. In a host of uncertain ventures, the BA–at the direct behest of King CONG–is arranging for the US taxpayers, you and me, to put up the money both the banks and the corporations themselves are afraid to risk.

Baku, the capital of Azerbaijan on the shores of the oil-rich Caspian Sea, is point-of-origin for a 1000-mile-long oil pipeline that will be blasted through the mountains of Georgia and Turkey. Its purpose is to provide 1M barrels of oil a day, “a gusher of profits to the consortium of 10 companies headed by British Petroleum that is developing the project.” But here’s the rub:

[R]egional conflicts and uncertain production make the $3.5 billion pipeline so risky that the oil executives who devised the venture don’t want to pay for it — and the commercial banks they normally deal with don’t want to lend them the money. So the oil companies are turning to another big lender for help: Uncle Sam. The U.S. government, which helped broker the pipeline deal and has paid for engineering studies in Azerbaijan, is expected to provide as much as $500 million this year to help finance the project, supplying some of the world’s wealthiest companies with what British Petroleum CEO John Browne calls “free public money.”

Reporter Daphne Eviatar makes it clear that this is hardly the only such project being subsidized by American taxpayers; the Cheney energy bill contains a number of them.

***$350Mil for an American energy company called Unocal to develop an oil-and-gas field in Indonesia

***$116Mil to Marathon Oil and Royal Dutch/Shell for an oil field in Russia

***$135Mil to a subsidiary of Halliburton to expand a natural gas facility in Nigeria

And that’s only a partial list. The money is provided mainly by two US Agencies: OPIC (the Overseas Private Investment Corp) and the Export-Import Bank, known as Ex-Im. In theory, the money was provided by the Congress to increase trade and create jobs, but in fact the bulk of the financing is going to King CONG corps that do neither.

[This] public financing is doing little to achieve its stated goal of creating jobs. Since 2000, the two largest oil companies subsidized by Ex-Im — ExxonMobil and ChevronTexaco — have actually slashed their workforces by more than 20,000. Oil and gas companies that apply for financing are not required to submit any information on the economic impact of their projects, and many of the documents they do provide are kept secret even from those charged with monitoring the agencies. “We don’t have a lot of confidence in the process,” says Thea Lee, the AFL-CIO’s chief international economist, who sits on an Ex-Im advisory committee. “There’s simply no way to know whether it’s helping support U.S. jobs.”

Meanwhile, reports of corruption and massive environmental damage tied to these projects that we are paying for surround them like maggots on decaying meat:

Overseas, the loans contain no safeguards against corruption or human rights abuses, and applicants do not have to meet even the minimal environmental standards mandated by the World Bank. The Unocal project in Indonesia has polluted rice fields and fishing waters; when residents held a protest in October 2000, state security forces shot and beat nearly two dozen demonstrators. In Cameroon, where ExxonMobil has received $500 million in U.S. financing for a pipeline, international observers say the project has destroyed rainforest and fueled a public health crisis. And in Russia, environmentalists warn that oil projects off Sakhalin Island threaten 11 endangered species, including the Western Pacific gray whale.In Azerbaijan, where the U.S.-backed pipeline broke ground in September, the CIA reports that “corruption is ubiquitous.” Few observers expect the project to help the nearly two-thirds of Azeris who live in poverty. “People are afraid the pipeline won’t benefit them,” says Farda Asadov, director of the Open Society Institute’s office in Azerbaijan.

They’re right–it won’t. It isn’t about creating jobs for them, it’s about putting the risks of development capital on somebody else while King CONG takes the profits for themselves at the same time they’re cutting jobs. And if Azerbaijani land and water gets polluted along the way because poluuting is cheaper than not polluting, tough luck–the King CONG execs don’t have to live there.

The rampant cynicism of blatantly appropriating govt funds intended to create jobs and turning them into nothing more than a hidden form of corporate welfare is outdone by the breath-taking hypocrisy of trumpeting a project in public whose whole rationale is to undercut our reliance on fossil fuels while privately insuring that this “alternative energy initiative” will in fact maintain our reliance on fossil fuels. You think I’m kidding? Barry Lynn lays it out:

When President Bush unveiled his plans for a hydrogen-powered car in his State of the Union address in January, he proposed $1.2 billion in spending to develop a revolutionary automobile that will be “pollution-free.” The new vehicle, he declared, will rely on “a simple chemical reaction between hydrogen and oxygen” to power a car “producing only water, not exhaust fumes.” Within 20 years, the president vowed, fuel-cell cars will “make our air significantly cleaner, and our country much less dependent on foreign sources of oil.”By launching an ambitious program to develop what he calls the “Freedom Car,” Bush seemed determined to realize the kind of future that hydrogen-car supporters have envisioned for years. Using existing technology, hydrogen can be easily and cleanly extracted from water. Electricity generated by solar panels and wind turbines is used to split the water’s hydrogen atoms from its oxygen atoms. The hydrogen is then recombined with oxygen in fuel cells, where it releases electrons that drive an electric motor in a car. What Bush didn’t reveal in his nationwide address, however, is that his administration has been working quietly to ensure that the system used to produce hydrogen will be as fossil fuel-dependent — and potentially as dirty — as the one that fuels today’s SUVs. According to the administration’s National Hydrogen Energy Roadmap, drafted last year in concert with the energy industry, up to 90 percent of all hydrogen will be refined from oil, natural gas, and other fossil fuels — in a process using energy generated by burning oil, coal, and natural gas. The remaining 10 percent will be cracked from water using nuclear energy.

So, after years of attempts to block, buy out, or otherwise destroy the potential of alternative energy sources, King CONG has finally found a way to have its cake and eat it, too: it will take (or let its political puppet take) credit for developing a pollution-free alternative to dirty gas-combustion engines while using its muscle to ram through laws that will tie the creation of a clean fuel to their unimaginably dirty fuel for the indefinite future. Neat, huh? And the BA was a big help.

Mike Nicklas, chair of the American Solar Energy Society, was one of 224 energy experts invited by the Department of Energy to develop the government’s Roadmap last spring. The sessions, environmentalists quickly discovered, were dominated by representatives from the oil, coal, and nuclear industries. “All the emphasis was on how the process would benefit traditional energy industries,” recalls Nicklas, who sat on a committee chaired by an executive from ChevronTexaco. “The whole meeting had been staged to get a particular result, which was a plan to extract hydrogen from fossil fuels and not from renewables.” The plan does not call for a single ounce of hydrogen to come from power generated by the sun or the wind, concluding that such technologies “need further development for hydrogen production to be more cost competitive.”But instead of investing in developing those sources, the budget that Bush submitted to Congress pays scant attention to renewable methods of producing hydrogen. More than half of all hydrogen funding is earmarked for automakers and the energy industry. Under the president’s plan, more than $22 million of hydrogen research for 2004 will be devoted to coal, nuclear power, and natural gas, compared with $17 million for renewable sources. Overall funding for renewable research and energy conservation, meanwhile, will be slashed by more than $86 million. “Cutting R&D for renewable sources and replacing them with fossil and nuclear doesn’t make for a sustainable approach,” says Jason Mark, director of the clean vehicles program for the Union of Concerned Scientists.

That may be the understatement of the year. What used to be a genuine effort to find a real alternative to destructive fossil fuels has been subverted by King CONG into little more than another fraud perpetrated on consumers.

To protect its fuel franchise, the energy industry has moved swiftly in recent years to shape government policy toward hydrogen. In 1999, oil companies and automakers began attending the meetings of an obscure group called the National Hydrogen Association. Founded in 1989 by scientists from government labs and universities, the association was a haven for many of the small companies — fuel-cell designers, electrolyzer makers — that were dabbling in hydrogen power. The group promoted the use of hydrogen but was careful not to take any position on who would make the fuel or how.All that changed once the energy industry got involved. “All of a sudden Shell joined our board, and then the interest grew very quickly,” says Karen Miller, the association’s vice president. “Our chair last year was from BP; this year our chair is from ChevronTexaco.” The companies quickly began to use the association as a platform to lobby for more federal funding for research, and to push the government to emphasize fossil fuels in the national energy plan for hydrogen. Along with the big automakers, energy companies also formed a consortium called the International Hydrogen Infrastructure Group to monitor federal officials charged with developing fuel cells. “Basically,” says Neil Rossmeissl, a hydrogen standards expert at the Department of Energy, “what they do is look over our shoulder at doe to make sure we are doing what they think is the right thing.”

As hydrogen gained momentum, the oil companies rushed to buy up interests in technology companies developing ways to refine and store the new fuel. Texaco has invested $82 million in a firm called Energy Conversion Devices, and Shell now owns half of Hydrogen Source. BP, Chevron-Texaco, ExxonMobil, Ford, and General Electric have also locked up the services of many of America’s top energy scientists, devoting more than $270 million to hydrogen research at MIT, Princeton, and Stanford.

Not to promote clean energy, mind you, but to protect their own interests by making sure it isn’t too clean. Ever.

Lest you mistakenly believe that there are limits to King CONG’s corporate greed, I will leave you with this from Tom Engelhardt (link on sidebar):

In a briefing NASA administrator Sean O’Keefe quickly reassured reporters that Bush’s “exploration program” [to the moon and Mars–m] would be “industry-driven.” And who wouldn’t claim that industry is driven? The space exploration program seems, by the way, to have emerged at least in part from our vice president’s office, where the swinging door has Halliburton written all over it. And even if none of this pans out in anybody’s lifetime, in a week in which Halliburton agreed to pay back $6.3 million in overcharges for its Iraq operations without even scratching the surface of things, imagine the overcharges in space. I mean, there’s no limit in space, is there?And let’s not forget the helium 3 isotope, supposedly to be found in abundance on the moon. Jim Wolf of Reuters (U.S. Eyes Space as Possible Battleground) wrote of it as “a near perfect fuel source: potent, nonpolluting and causing virtually no radioactive byproduct in a fusion reactor. ‘And if we could get a monopoly on that, we wouldn’t have to worry about the Saudis and we could basically tell everybody what the price of energy was going to be,’ said [John] Pike [of].”

Interestingly in regard to that small cast of characters, Wolf writes:

“Among companies that could cash in on Bush’s space plans are Lockheed Martin Corp., Boeing Co. and Northrop Grumman Corp., which do big business with the National Aeronautics and Space Administration as well as with the Pentagon.”

All this and yet, as Dr. Seuss might have written, oh no, that is not all; oh no, that is not all. Wolf adds:

“President Bush’s plan to expand the exploration of space parallels U.S. efforts to control the heavens for military, economic and strategic gain. Defense Secretary Donald Rumsfeld long has pushed for technology that could be used to attack or defend orbiting satellites as well as a costly program, heavily reliant on space-based sensors, to thwart incoming warheads.”

Ah, Donald Rumsfeld. Michelle Ciarrocca of the World Policy Institute in “Bush’s Space Odyssey,” a piece included below, discusses just how long our Secretary of Defense has been eyeing the military (and industrial) control of space, while warning of future “space Pearl Harbors.” As she points out, “the military has long eyed the moon as a potential base of operations as warfare is moved into the heavens.” (Those of you who go to the new Errol Morris film, The Fog of War, will hear a little anecdote by former Defense Secretary Robert McNamara about how the Joint Chiefs tried to scuttle a bit of arms control by claiming, in a blame-it-on-the-neighbors moment — this was the wild-eyed 1960s, of course — that the Russians might avoid scrutiny by secretly testing atomic weapons on the other side of the moon.)

Ciarocca points out that the normal cast of characters was well represented on Rumsfeld’s “Space Commission” of 2001 and that the new presidential commission to be formed soon to consider the President’s space goals will be headed by Edward C. “Pete” Aldridge Jr., former Air Force secretary and presently on the board of… you guessed it, Lockheed Martin.

Even if you don’t take all this too seriously, it certainly reveals a good deal about the kinds of dreams that are deeply lodged in the Bush administration’s overheated brain trust. For them, space exploration is evidently the final fantasy, the Iraq that should have been: Industry-driven; backed by government; involving a few large corporations; no guerrillas anywhere in sight; totally “privatized”; and, at the end of the “rainbow,” energy sources beyond anyone’s wildest imaginings, and all ours. Or maybe I’m wrong and this was all preparation work for the next Star Trek movie, Space, The Final Dollar Frontier or the Wrath of Vice-President Khan.

Let’s hope so. If there are limits to King CONG’s ambitions, they don’t appear to be terrestrial.

How Radical Conservatives Took Over the GOP

Remember how I talked in The Cult of Personality about the role of conservative foundations, think tanks, and corporate media in the Radcon take-over of the Republican Party? Well, I’m not the only one who sees it.

Benedict Spinoza of American Samizdat has his own blog called Benedict@Large from which I stole the following article. Entitled The GOP, Inc. – Selling Public Policy as a Commodity, it lays out clearly both the path and the players I was talking about and explains exactly how and when corporations took control–and why. Author Richard Behan calls the radcon philosophy “Movement Conservatism”, but, as you’ll see for yourself, we’re talking about the same thing–a dump by any other name still smells of rotting fruit. Or words to that effect.

I’m reprinting it here in full. including the source-notes. It’s long but, like the Kuttner piece, required reading for anyone who wants to understand how we got here–and to get a handle on how we get out….

The GOP, Inc. – Selling Public Policy as a Commodity
by Richard W. BehanThe G.O.P. was once a respectable political party, giving voice to cautious citizens who saw much to protect in the affairs of the nation. The Democratic Party offered a forum for less sanguine citizens to disagree and seek reform, and in the healthy conflict between the two a robust democracy served the nation well.

Neither party was rigidly ideological, driven passionately to impose a set of beliefs, as the Taliban, say, imposed Islam in prewar Afghanistan. Both parties respected democracy.

Except in their Orwellian rhetoric, the Republicans no longer do, and the G.O.P. has withdrawn from serving the nation at large. About 25 years ago it became the political arm of “Movement Conservatism,” and today it promotes not the general welfare but the commercial interests of corporate enterprise.

Movement Conservatism is a self-serving and socially malevolent cabal of mega-corporations, right-wing think tanks in Washington, their archconservative foundation benefactors, and an intricate nationwide network of linkages in the communications media, religion, higher education, and law. It has been called the “conservative labyrinth,” and common to all its elements is a theology of “free markets,” an ideology coming to full bloom in the Administration of George W. Bush. Today, the G.O.P. seeks to impose it at every turn.

In the abstract, and historically, “free markets” are hugely appealing.

In the primitive markets of The Wealth of Nations, Adam Smith’s seminal book of 200 years ago, there was absolute parity in bargaining power between autonomous consumers and subservient, proprietary producers. There were enough of both, competing among and between each other, that no one on either side could fix the market price. Prices were set only by the aggregated bargaining of the market as a whole, and hence were powerful signals of social preferences.

Smith detailed how such “free markets” assured the socially optimum allocation of raw materials, capital, labor, goods, services, and incomes, “as if by an invisible hand.”

“Free markets” so conceived still enchant the simplistic and determined thinking of Movement Conservatives, especially as they perceive and attack “government intervention” in the markets. They choose to ignore, however, 200 years of subsequent economic history.

“Free markets” today are a fantasy, because contemporary markets are wholly dominated by corporate, not proprietary enterprise, and characterized by its features: among others, by administered prices, branded goods and services, transnationalization, vertical integration, wholesale externalization of costs, consolidation by mergers and acquisitions, the instantaneous and international mobility of capital, and the subjugation, by ubiquitous advertising, of consumer sovereignty. Corporate domination of “free markets” has destroyed the ability of markets to make socially optimum allocations, but none of this seems to penetrate the minds of Movement Conservatives. Nor do they see that trumpeting “free markets” gives free reign to corporate license. (A cynic might suspect otherwise.)

There is nothing socially optimum about the calamitous conditions in the nation today.

A dangerous, unjust, and growing gap between rich and poor festers ominously. Public education is collapsing. Homelessness is rampant. Health care is denied 16% of our citizens. Real wages are stagnant or declining. The nation’s physical infrastructure is crumbling. According to the U.S. Department of Agriculture, eleven percent of American families are not adequately fed,[1] while an epidemic of obesity, diabetes, and other “lifestyle diseases” ravishes the rest of society. State and municipal governments retrench in fiscal panic, and federal deficits transcend anything ever known. Our economy survives only by exporting high-paying jobs and importing daily a billion dollars of foreign capital_to finance not investment, but consumption. For the first time ever we have invaded a sovereign nation without provocation, sundering the world community and enraging much of it. In approximately 25 years, this is what Movement Conservatism has delivered, while trumpeting “free markets.”

Public policy is malfunctioning. It is no longer fashioned to promote the welfare of the nation at large, but to create, enhance, or protect the profit opportunities of American corporations.

Two things occurred in sequence to enable corporations first to intervene and then to dominate politics, just as they have come to dominate markets.

Political campaigning switched, in the 1960’s, from party-centered rallies and print media to candidate-centered television_which was vastly more expensive. Then, in the 1970’s the campaign finance laws were rewritten, political action committees were authorized, and corporate PAC money soon flowed in floods. Today, about * of all campaign financing comes from corporate sources, and it is not contributed as a public service.[2]

Often the payoffs are effected with infuriating arrogance.

Noncompetitive contracts come to mind, for the Halliburton and Bechtel Corporations to rebuild Iraq. The purchase of energy policy by the Enron Corporation is another example. Yet another is the Medicare Prescription Drug and Modernization Act, signed by President Bush on December 8, 2003.

This law so heavily subsidizes the pharmaceutical and health insurance industries nearly 700 lobbyists were deployed to see it enacted.[3] At the photo-op signing ceremony, President Bush was joined by five Senators and five Representatives. Together, these eleven public servants accepted more than $14 million in campaign contributions from the health and drug companies.[4] (Roughly half went to Mr. Bush.) Among other provisions, the law makes it illegal for Medicare, using its market clout, to bargain down the cost of drugs, and effectively prohibits senior citizens from buying their prescriptions at far lower prices in Canada. Public policy to serve corporate well being? What, conceivably, else? Free markets at work?

Public policy is now a commodity, to be exchanged for value received.

The fantasy of “free markets” is politically expedient for Republicans and economically rewarding for their corporate clients. It suggests that parity still exists between producers and consumers, making palatable any policy said to increase the freedom of the market. (Deregulating markets for electricity comes to mind. Think Enron.) Such policies tend to increase only the freedom of corporate producers, typically at great expense to consumers. (Ask any Californian.) Only a malcontent would accuse Republicans of seeking this result intentionally.

How did the “free market” fantasy destroy the Republican party? First it had to be institutionalized as a coherent, secular theology, and that was done with skill, dispatch, money, and patience as Movement Conservatism took shape.

In the writings of Friedrich von Hayek (The Road to Serfdom, 1944), and his student Milton Friedman (Capitalism and Freedom, 1962) the ideology was at hand. Free markets, not governments, should regulate the affairs of society: that is the extent of the argument. “Government is not the solution,” a devotee proclaimed, “government is the problem.” And that is the extent of the vision.

Nuanced thinking is not a trademark of Movement Conservatism, however, and the need to apply the ideology was seen to be acute in the 1960’s and ’70’s. The nation’s campuses were percolating with protest, the result of anti-business, “liberal” faculties encouraging their impressionable students. On the national stage Nader’s Raiders were mounting successful attacks on what they alleged were excesses of corporate capitalism.

A seminal critique of the nation’s leftward drift was written in 1971 by Lewis F. Powell, Jr., a corporate attorney, a former president of the American Bar Association, a member of 11 corporate boards, and eventually a Supreme Court Justice. The “Powell Manifesto” saw the future of the free market at stake, and advocated a confrontational counterattack. It would become a long term, comprehensive, nationwide campaign to implant the “free market” paradigm, focusing on four primary arenas: higher education, the mass media, politics, and the court system. The “Manifesto” was widely circulated and it would achieve stunning success.

First Adolph Coors was persuaded. Beginning with a quarter-million dollar gift in the early 1970’s he transformed the obscure Analysis and Research Association into the Heritage Foundation. It has prospered with Coors funding ever since, channeled through his Castle Rock Foundation.

Endowed with corporate profits from the past, other archconservative foundations also established right-wing think tanks in Washington in the ’70’s and ’80’s or strengthened existing ones. In addition to Castle Rock, twelve other foundations form the financial core of Movement Conservatism. They are the Lynde and Harry Bradley Foundation, the Carthage Foundation, the Earhart Foundation, The Charles G. Koch, David H. Koch, and Claude R. Lambe foundations, the Phillip M. McKenna Foundation, the JM Foundation, the John M. Olin Foundation, the Henry Salvatori Foundation, the Sarah Scaife Foundation, and the Smith Richardson Foundation.[5]

The Heritage Foundation is the largest and best financed beneficiary, but many others are familiar. The American Enterprise Institute, the Cato Institute, the Manhattan Institute, Citizens for a Sound Economy, the National Association of Scholars, Accuracy in Academe, the Media Research Center, and Accuracy in Media are prominent on the national level. Less well known are hundreds of “free market” cells scattered nationwide, all funded by these few foundations. (One such is F.R.E.E._the Foundation for Research in Economics and the Environment. It provides week-long indoctrinations into “free market” ideology, at luxury resorts near its home in Bozeman, Montana.. The invited participants, with all expenses paid by F.R.E.E., are federal judges.)

The top 20 conservative think tanks spend about $150 million a year, but not on short-term projects. Coordinated by an umbrella group, the Philanthropy Roundtable, they concentrate on a long-term ideological program: sustaining and expanding the free-market paradigm, and enshrining it in public thought, action, and policy.

Taking shape in the late ’70’s, Movement Conservatism became a sort of economic Taliban, absolutist in conviction, righteous, and anxious to impose its ideology on the American people. It found its vehicle in the presidential candidacy and election of Ronald Reagan, and over the next eight years Movement Conservatism and the Republican Party came to be coterminous.

There was little resistance. Since the Republican Party traditionally has been the party of commerce and finance, Movement Conservatism had only to sell an appealing ideology to a receptive constituency. As the pursuit of “free markets” came to mean “corporate well being,” the transaction was consummated. The Republican Party took on the ideology, and also assumed a commercial function: marketing public policy as a product. It became the G.O.P., Inc., and forfeited its role as a party of the people.

President Reagan’s agenda came almost whole-cloth from the Heritage Foundation. His massive tax cut slashed current revenues, but Reagan shoveled trillions of dollars to corporations in the defense industries anyway. In so doing he added twice as much to the national debt as all his predecessors combined, from George Washington to Jimmy Carter.

This was the first shot from the most vicious and despicable weapon in the arsenal of Movement Conservatism: pile more and more indebtedness onto future generations so that debt service increasingly forecloses public expenditures for anything else. The stupendous deficits of George W. Bush preordain a starving public sector for decades to come.

In 1988 the Democrats learned how effectively corporate financing can facilitate television-based campaigns. A lot of money can make Willy Horton a household name. And so by 1992, dominated by the Democratic Leadership Council, the Democrats veered sharply toward the center, seeking corporate financing for the Clinton campaign. Clinton delivered, enthusiastically embracing “free trade,” a global version of the free market fantasy. The Democrats were flirting with their own transformation to corporate status, and they continued in 2000, running free-trader Al Gore and Joe Lieberman, once chairman of the DLC.

Ralph Nader’s Greens couldn’t see much distinction between the G.O.P., Inc., and its Democratic emulators, and they high-centered the election. The Supreme Court, sporting a couple of Movement Conservatives on the bench, did the rest.

Some Democrats today are openly critical of a centrist, corporate-friendly stance for the party. Others still cling to it: the threat remains.

This is how the GOP, Inc., sells public policy as a commodity today.

45 million Americans have no health care coverage, as President Bush, on Heritage Foundation cue, undertakes the privatizing of Medicare. The greater his success, the more the Hospital Corporation of America will benefit. HCA operates the country’s largest chain of for-profit hospitals, but can’t make enough money honestly when Medicare is public. The company has paid $1.7 billion in fines for overcharging Medicare and Medicaid, the largest fraud settlement ever. HCA was formed by a Mr. Thomas Frist. One of his sons, Thomas Jr., earned $160 million a year as CEO. Another son, William, has a $26 million interest in HCA, and he is the Majority Leader of the United States Senate. Health care corporations and PAC’s have contributed over $2 million to William Frist’s campaigns.[6] Mr. Frist engineered a provision in the Homeland Security Bill shielding the Eli Lilly drug company from liability lawsuits. Lilly contributed $1.6 million to Senate election campaigns in the 2000 election cycle, 79% to the G.O.P., Inc. And now Mr. Frist has steered through the Senate the Medicare Prescription Drug and Modernization Act. Drug sales are expected to increase, under the law, by $13 billion a year.[7]

The American Enterprise Institute, the Cato Institute, and the Heritage Foundation have crafted or influenced virtually the entire programs of both domestic and foreign policy for the George W. Bush Administration. They display the intricate personal networks_mutually beneficial and self-serving_that characterize Movement Conservatism.

Mr. Jeb Bush, the President’s brother, served as a Trustee of the Heritage Foundation. Virginia Lamp Thomas is the Director of Executive Branch Relations there. Jeb Bush’s father appointed Ms. Thomas’ husband to the Supreme Court, which decided the 2000 election in favor of Jeb Bushs’ brother. Privatizing Medicare and public education are two of the targets at Heritage.

Mr. Rupert Murdoch served on the Board of The Cato Institute. He owns Fox Television News and the Weekly Standard, virtual house organs of the Bush Administration. Mr. Murdoch’s application to acquire Direct TV was finally approved by the Federal Communications Commission, chaired by Colin Powell’s son Michael. The approval was delayed because Mr. Murdoch’s communications empire exceeds the national media ownership cap of 35%. The Republican House raised the cap with a rider on the Omnibus spending bill to 39%–precisely the number Mr. Murdoch needs.

Charles Koch is a founder of the Cato Institute. His brother David is a Director. The Cato Institute wants to privatize both Social Security and the federal public lands. Charles and David own Koch Industries, a $35 billion oil company indicted in 1999 for cheating on its federal-land oil leases. It faced charges of $214 million. The Kochs and their employees contributed generously to George Bush’s several campaigns. David Koch and his wife gave $487,500 exclusively to Republican candidates in the 2000 election cycle. In that cycle Koch Industries contributed over a million dollars, 90% to the G.O.P., Inc.[8]

The Clinton Administration charged Koch Industries with $352 million in pollution and hazardous waste violations. The Bush Administration dropped the charges when Koch Industries agreed to settle for $332 million less. Shortly after that, the Bush Justice Department settled the lease-cheating case for $20 million, saving Koch Industries another $194 million.[9]

The Kochs have given handsomely to the Mercatus Center at George Mason University. So did Enron CEO Kenneth Lay. Wendy Gramm, Senator Phillip Gramm’s wife, was an ardent deregulator at Mercatus, and sat on Enron’s Board of Directors.[10]

Mr. Lay in turn was a Trustee of the American Enterprise Institute. He no longer is, but more than half the current trustees are CEO’s of American corporations, including Dow Chemical, State Farm Insurance, Mead Westvaco Corporation, American Express, Merck & Co., Motorola, and Exxon/Mobil.

Vice President Richard Cheney has been a Trustee of the American Enterprise Institute. His wife, Dr. Lynn Cheney, is currently a senior staffer there. So is Richard Perle, a chief architect of the National Security Strategy that drove the invasion of Iraq. So is Michael A. Ledeen who, grateful for Perle’s work, reveled in the success of the Iraqi war. “Every ten years or so,” Ledeen said recently, “the United States needs to pick up some crappy little country and throw it against the wall, just to show the world we mean business.”[11]

The Annual Dinner of the American Enterprise Institute was held last February 26th, in Washington. The featured speaker was President Bush, who “…delivered a historic address on the need for a new government in Iraq and the role it could play in spreading democracy in the Middle East.” [12] Soon thereafter, justified by a threat we now realize he fabricated, Mr. Bush picked up Iraq and threw it against the wall.


[1] “Household Food Security in the United States, 2001.” U.S. Department of Agriculture, ERS Food Assistance and Nutrition Research Report No. FANRR29, October, 2002.

[2] See website, at

[3] See Public Citizen Congress Watch, June 2003

[4] See Center for American Progress, “The Progress Report, December 9, 2003.”

[5] See “How Conservative Philanthropies and Think Tanks Transform US Policy,” by Sally Covington, in Covert Action Quarterly #63, Winter, 1998.

[6] See “The Bad Doctor; Bill Frist’s long record of corporate vice,” by Doug Ireland, in the L.A. Weekly, January 10-16, 2003.

[7] See “Understanding the New Medicare Prescription Drug Benefit,” published by Families, USA, Nov. 25, 2003

[8] As reported in “Oil & Gas: Top Contributors,” at

[9] As reported in “Koch Industries and the Pollution of the Bush Whitehouse,” at

[10] See “Bull Market,” by Garance Franke-Ruta, cover story in the Washington City Paper, March 8-14, 2002

[11] As quoted in “The Demonstration Effect,” by Lewis H. Lapham, Harper’s Magazine, June, 2003, p. 11

[12] Described on the American Enterprise Institute website, at

Richard W. Behan’s latest book is Plundered Promise: Capitalism, Politics, and the Fate of the Federal Lands (Island Press, 2001). For information about the book go to Behan is currently working on a more broadly rendered critique, Citizens, Arise! A Patriotic Call to Retrieve Our Democracy.

Why Isn’t Lauri Fitz-Pegado In Jail?

This is not a rhetorical question.

Lauri Fitz-Pegado was the PR rep at Hill & Knowlton who orchestrated a massive fraud on behalf of her clients, the Kuwaiti govt, in an attempt–ultimately successful–to convince the people of the US to back the First Gulf War. Using real Congressmen friendly to Bush I’s agenda, she rigged a phony “Congressional investigation” of atrocities in Iraq and coached a member of the Kuwaiti Royal Family in giving phony “testimony” in which she claimed, among other things, to have seen Iraqi soldiers ripping premature infants from their incubators and impaling them on their bayonets.

Her “dramatization” was a key element in pushing the US into supporting Poppy’s war, but the incidents “Nayirah” testified to never happened and the Congressional Committee which Fitz-Pegado presented as “real” in fact was anything but. It was not discovered until after the war was over that the whole thing had been staged by Hill & Knowlton, an advertising agency. The incident inspired the film, Wag the Dog, and became infamous as the most elaborate–and expensive–political dirty trick on record.

I assumed she’d gone to jail behind that stunt since she’d broken a number of the laws around fraud and misrepresentation. But now I read (via Mark Crispin Miller) that she is still working, this time for The Livingston Group (a Washington lobbying firm with a lot of powerful connections), and that she will be promoting a book by the doctor who helped Jessica Lynch when she was injured.

Considering that she perpetrated a gigantic fraud that started a war, why is this woman not in jail?

Suing Unocal/Halliburton/KBR for Murder

A lawyer named Katie Redford (no relation to Robert) is suing Unocal in a California Federal court for aiding the Burmese military in its brutal actions to clear peasants from the land the company needed for it gas pipeline. Based on an almost unknown Federal statute that goes back to the time of George Washington called the Alien Torts Claims Act, her suit, after being dismissed by a lower court, has been upheld by an appeals panel which said the case has merit and should go to trial:

In her 1994 law school paper, Redford had argued that such violations would include human rights abuses by the Burmese military, which was guarding construction in its country at a pipeline partly owned by Unocal, a California oil company. That is precisely what will be argued by lawyers on Dec. 3, when the case is heard in California Superior Court.As for the federal case, a decision on whether it will proceed to trial is pending. A three-judge appeals panel reversed a lower court’s decision and ruled that Unocal may be liable for “aiding and abetting” the military in forced labor, murder, and rape since the company hired the soldiers and provided maps and information about the pipeline. The lower court had dismissed the suit because the company did not directly participate in the alleged abuses — though the judge said there was evidence that Unocal knew forced labor was being used and that it benefited from the project. Unocal has appealed the appellate court’s ruling. Redford says she is confident the case will proceed to trial. “You can’t put corporations above the law when fighting human rights abuses,” says Redford, now a 35-year-old mother of two. (emphasis added–m)

The major American contractor in Iraq, Halliburton (Dick Cheney’s company), is tied up with Unocal because its subsidiary, Brown & Root, is a subcontractor responsible for the actual construction of the pipeline. This is one of those unreported (by the American media, anyway) scandals in which American corporations either aid or countenance mass murder on behalf of their foreign interests, and they always get away with it by claiming either ignorance or lack of judicial jurisdiction. But Katie may have found a way to make them accountable. Finally.

You go, girl.

Have They No Shame?

Bush’s request for funds (which will be borrowed, as usual, since he’s bankrupted the Treasury) includes $600Million to continue Kay’s attempt to find the WMD’s that don’t exist, and that he as good as admitted didn’t exist (except in the long-shot faerieland of a gambler’s imagination). So how did they spend the first $300M? Into a bleak landscape of food shortages, job shortages (they all went to Halliburton/Bechtel), electricity shortages, and water shortages they came, and this is what they wrought:

[T]he Iraq Survey Group spent its first weeks installing air-conditioned trailers, a new dining facility, state-of-the-art software and even a sprinkler system for a new lawn, according to officials and experts who worked with the group this summer.”They kept unloading crates and crates of new Dell laptops,” said one Pentagon official…. (emphasis added)

I’m certainly glad they’re not wasting it.

But then if there’s so much money we can afford a lawn in the desert, would somebody mind telling me why we’re cutting our troops’ combat pay, death benefits, and access to health care, and making them buy their own equipment? Not to mention the latest outrage, making them pay their own way back home if they’re lucky enough to get leave? From the Spokane Spokesman-Review:

Soldier must pay for his trip homeWe are usually quiet individuals, expressing little about world events and politics, etc. However, we have to stand up and say something now.

Our son-in-law is in the Army, serving our country for several months in Iraq. He was recently authorized to return home for two weeks. We are all grateful for this news! However, there is one catch _ he has to pay for the journey!

How can the government expect him to pay his own airfare? It seems unfair the government won’t foot the bill to send troops home, after they risk their lives for our country. They have had to leave their families struggling emotionally and some financially. Then when they do have the opportunity to come home briefly, they are expected to pay their own way.

This is an atrocity! And, too often, there is no way some of these families can afford the airfare.

Our country is spending a fortune on behalf of another country. But, our fighting forces should be the main priority, including traveling home for a reprieve. We truly believe our armed forces should be rewarded with a paid visit to their loved ones. Don’t you?

Randy and Pam Forcier
Spokane, WA

Anybody think Junior’s G-Men need to do something about re-ordering their priorities?

(Thanks to Tom Engelhardt of The Nation, whose blog, TomDispatch–you’ll find a link at the side of the page–is usually Must-Reading.)