Category Archives: Halliburton/KBR

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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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.

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 Globalsecurity.org].”

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.

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[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 opensecrets.org website, at http://www.opensecrets.org/

[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 http://www.opensecrets.org/

[9] As reported in “Koch Industries and the Pollution of the Bush Whitehouse,” at http://www.mediawhoresonline.com/

[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 http://www.aei.org/about/c

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 http://www.rockisland.com/~rwbehan/. Behan is currently working on a more broadly rendered critique, Citizens, Arise! A Patriotic Call to Retrieve Our Democracy.

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
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.)