One-Fifth of Iraq Funding Paid to Contractors

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POLITICS-US: One-Fifth of Iraq Funding Paid to Contractors

By William Fisher

August 14, 2008, Inter Press Service News Agency

http://www.ipsnews.net/news.asp?idnews=43565

NEW YORK, Aug 14 (IPS) - As a new report forecasts that the

190,000 private contractors in Iraq and neighbouring

countries will cost U.S. taxpayers more than 100 billion

dollars by the end of 2008, an under-the-radar Florida court

case suggests that U.S. President George W. Bush -- a staunch

contractor supporter -- is preparing to throw security

contractors such as Blackwater under the political bus. In

the Florida case, relatives of three American servicemen

killed in the 2004 crash of an aircraft owned by Blackwater

Aviation in Afghanistan are suing the company for damages,

based in part on U.S. government reviews that concluded that

errors committed by Blackwater staff were responsible for the

deaths. This week, despite Bush’s support for what he has

called the critical roles played by overseas contractors, his

administration failed to meet a deadline for presenting the

court with any defence of Blackwater.

The administration’s silence has caused consternation for

Blackwater and its supporters. Erik Prince, Blackwater’s

chairman, told TIME magazine, "After the president has said

that, as commander-in-chief, he is ultimately responsible for

contractors on the battlefield it is disappointing that his

administration has been unwilling to make that interest clear

before the courts."

Some observers have speculated that the Administration’s

silence can be attributed to the controversial nature of the

contractor issue and a reluctance to address it during a

hotly contested presidential election year.

The Florida battle, which could eventually find its way to

the U.S. Supreme Court, turns on the question of whether

Blackwater and other overseas contractors are subject to U.S.

law. That question arises because of a decree issued in 2005

by the then U.S. Iraq administrator, L. Paul Bremer, granting

contractors legal immunity.

The Iraqi government claims that Blackwater and other

contractors have been responsible for the deaths of Iraqi

civilians and wants to make them subject to Iraqi law. The

U.S. has resisted this move, which is thought to be part of

the ongoing stalemate in negotiations with Iraq over the

future status of U.S. forces in that country.

The White House has also attacked a bill recently passed by

the House of Representatives that would place combat-zone

contractors under the jurisdiction of U.S. courts. It called

the measure an unacceptable extension of federal jurisdiction

overseas, and said it would place additional burdens on the

military.

Blackwater’s argument is that the company should be covered

by the same "sovereign immunity" that protects the U.S.

military from lawsuits because the downed flight in question

in the Florida case was under the command and control of the

U.S. military.

Last month, this argument was rejected by three federal

judges, who cited the U.S. government’s failure to take a

position in defence of Blackwater as one of their reasons. In

their decision to allow the lawsuit to proceed, the judges

ruled, "The apparent lack of interest from the United States

fortifies our conclusion that the case does not yet present a

political question."

Lawyers for many major contractors including DynCorp, Kellogg

Brown and Root (KBR), Blackwater and others, say a dangerous

precedent would be established if this and similar cases are

allowed to go forward. Such a decision, they say, would open

contractors to large money damages and greatly higher risk

insurance costs that could adversely affect their ability to

carry out the jobs the U.S. government has hired them to do.

As the Florida case made its way through the U.S. legal

system, a new report from the Congressional Budget Office

(CBO) contends that the cost of having military personnel

provide security services in Iraq might be little different

from the prices charged by private security contactors.

The report said that 6-10 billion dollars has been spent on

security contactors thus far in 2008 and estimated that about

25,000-30,000 employees of security firms were in Iraq as of

early this year. It estimates that, if spending for

contractors continues at about the current rate, 100 billion

dollars will have been paid to military contractors for

operations in Iraq .

The CBO report revealed that about 20 percent of funding for

operations in Iraq has gone to contractors. Currently, it

said, there are at least 190,000 contractors in Iraq and

neighbouring countries -- a ratio of about one contractor per

U.S. service member. It noted that the U.S. has relied more

heavily on contractors in Iraq than in any other war for

functions ranging from food service to guarding diplomats.

The report also noted that the legal status of contractor

personnel is a grey area of U.S. law, particularly for those

who are armed. It said that military commanders have less

direct authority over contractors because a government

contracting officer rather than a military commander manages

their contracts.

The CBO review was requested by Senator Kent Conrad, a North

Dakota Democrat who is chairman of the Senate Budget

Committee. In a statement, Conrad said the Bush

Administration’s reliance on military contractors has set a

dangerous precedent. The use of contractors "restricts

accountability and oversight; opens the door to corruption

and abuse; and, in some instances, may significantly increase

the cost to American taxpayers," he said.

The report comes at a time when the actions of contractors in

Iraq and Afghanistan are coming under increased scrutiny.

Contractors -- including Blackwater and KBR -- have been

investigated in connection with shooting deaths of Iraqis and

the accidental electrocutions of U.S. troops. The Senate

Democratic Policy Committee heard testimony a few weeks ago

from a former Defence Contract Audit Agency (DCAA) contract

overseer who was effectively fired because he refused to

authorise 1 billion dollars in unsubstantiated charges from

KBR. The Government Accountability Office released a report

that confirmed whistleblower complaints of DCAA supervisors

issuing unsupported findings that were favourable to

contractors. And last week, Government Executive magazine

reported that nearly a dozen former DCAA employees see DCAA

as a very troubled agency that is more concerned with

performance goals than actually overseeing contracts.

The death of a U.S. soldier, who was electrocuted in January

while showering in Iraq , prompted a House committee oversight

hearing last month into whether KBR has properly handled the

electrical work at bases it maintains. The military has also

said that five other deaths were due to improperly installed

or maintained electrical devices, according to a

congressional report.

Contractors’ activities have drawn sharp criticism from

private non- governmental watchdog groups, such as OMB Watch.

OMB stands for the Office of Management and Budget, which

prepares and presents the president’s budget to congress.

Craig Jennings, OMB’s Federal Fiscal Policy Analyst, told

IPS, "100 billion dollars is a very large amount of money --

in fact, Iraq ’s GDP was just over 100 billion dollars in

2007. But what staggers my imagination is how sober adults

would be willing to divert such vast sums of America ’s

financial resources to the bank accounts of private firms

whose dealings are opaque to taxpayers and, for the most

part, held unaccountable."

Jennings added, "I think advocates of unaccountable

privatisation are beginning to reap what they have sown:

defending privatisation of war- making on such an enormous

scale is becoming tenuous. It’s hard to paint a picture of

contractors providing taxpayers value when so many instances

of contractor misconduct have found their way into the

public’s consciousness."

Jennings also called attention to the shortcomings of the

military auditing process. He told IPS, "This magnitude of

expenditures on private contractors is especially striking in

light of recent government and media reports of dysfunction

in the DCAA. The protection of the interests of American

taxpayers is apparently suffering a number of impediments."

(END/2008)