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Annals of Outrage III | The Nation

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Katrina vanden Heuvel

Katrina vanden Heuvel

Politics, current affairs and riffs and reflections on the news.

Annals of Outrage III

Last May, I wrote an Annals of Outrage II chronicling the waste, fraud and abuse in the federal government in the first half of 2004. Plenty of time has passed since my last piece and much has happened. Here, then, is my latest attempt to guide you through the Bush Administration's most egregious corruption scandals. The information comes to us courtesy of the federal government's internal investigations into administration fraud, waste and abuse. The cronyism and corruption have hit a new low. 

1) Bat Mitzvah Corruption: In terms of sheer outrage, millionaire defense contractor David H. Brooks is hard to top. The New York Daily News recently reported that Brooks spent an estimated $10 million on his daughter's bat mitzvah reception. Aerosmith performed at the reception (reportedly earning a cool two million dollars), and Kenny G, 50 Cent, Tom Petty and The Eagles' Don Henley and Joe Walsh also played. Here's the kicker: Brooks has reportedly made more than $250 million in wartime profits as the CEO of DHB Industries-- which has had thousands of defective bulletproof vests recalled by the government! 

According to a government investigation into the faulty vests that was uncovered by the Marine Corps Times, DHB's equipment saw "multiple complete penetrations" when 9mm pistol rounds were fired into the vests. One government ballistics expert quoted in the government's findings said he had "little confidence" in DHB's equipment. Meanwhile, the SEC is looking into Brooks' 2004 sale of $186 million worth of company stock. Institute for Policy Studies' Sarah Anderson, who co-authored a report called "Executive Excess 2005," called Brooks a "world champion war profiteer," concluding, he has "no shame." 

2) CPA's Bribes: The war in Iraq continues to churn out profiteering scandals on a weekly basis. The New York Times reported in November that the special inspector general for Iraq reconstruction had uncovered a scheme involving a US comptroller in the Coalition Provisional Authority, Robert J. Stein, and other co-conspirators who accepted "kickbacks and bribes…to steer lucrative construction contracts" to an American-run company. According to the criminal complaint, Stein and his wife spent the bribes he received on cars, jewelry, and home improvements. In the meantime, the contracted work either wasn't performed or was shabbily done. Most outrageous of all, Stein was given control over eighty-two million dollars in funds for Iraq rebuilding despite the fact that he had spent eight months in jail in the 1990s on a felony fraud conviction. 

More broadly, the special inspector faulted the CPA for failing to adequately account for 8.8 billion dollars in funds designated for Iraqi rebuilding projects. As the Boston Globe reported this month, "11 investigators in Iraq [are] looking into more than 50…cases of graft involving civilians and the US military." 

3) Halliburton Redux, Redux: Annals of Outrage just wouldn't be the same if Cheney's ex-company didn't make my list. The company, of course, has spawned a cottage industry of government investigations into the corporate construction giant's nebulous billing and spending practices. Halliburton remains under intense scrutiny today. Just last month, CNN.com explained how whistleblower Bunnatine Greenhouse who had worked for the US Army Corps of Engineers charged that Halliburton's subsidiary Kellogg, Brown and Root was operating under government contracts rife with "the most blatant and improper contract abuse I have witnessed." Waste was ubiquitous. Greenhouse told a Democratic hearing sponsored by Sen. Byron Dorgan that instead of fixing $85,000 trucks in need of relatively minor repairs like flat tires, KBR decided to torch them. The Justice Department told Dorgan that it was looking into the mounting allegations of widespread fraud at Halliburton.

4) No-bid contracts: The effort to rebuild after Hurricane Katrina has created a massive amount of new work for the government's inspectors general. One example, according to the Washington Post, was the Department of Homeland Security's inspector general's report that the government had awarded an $80 billion no-bid contract to an Alabama company, Clearbrook LLC, for building camps for emergency work, but that the company had "mathematically inaccurate [billings] indicating over three million dollars in overcharges" and a "complete lack of documentation supporting price reasonableness." 

That's just the tip of the iceberg. The Post also reported that over at the Pentagon, the Inspector general's office is examining an Army Corps of Engineers contract to distribute ice in Katrina's aftermath and a contract for putting temporary roofs over damaged homes. In fact, by late October, a whopping 92 investigations had been initiated into allegations of corruption, overpayments and other improprieties associated with the federal response to Hurricanes Katrina and Rita. By early November, the website Govexec.com was reporting that investigations had already led to 23 arrests, 12 indictments, and more than 400 investigators reviewing "3,000 contracts worth more than $5.1 billion...."

5) Manna from FEMA: In response to questions from the South Florida Sun-Sentinel in October, the Dept. of Homeland Security's inspector general Richard Skinner said that he was investigating complaints that FEMA wily-nilly provided checks for $2,000 to residents of Mississippi, Alabama and Louisiana unaffected by Katrina's destructive path. "In three Louisiana parishes," the paper reported, "FEMA issued more checks than there are households, at a cost to taxpayers of at least $70 million." One Mississippi official told the Sun-Sentinel that folks "made a ton of money." "We're talking plasma TVs...stereos...bicycles." While FEMA has told Congress that the disbursement problems have been fixed, Skinner said that he couldn't confirm FEMA's claim. By mid-October, 14 people faced charges of fraud in relation to the $2,000 payouts. Skinner said that "we expect many more" to be indicted. 

6) Bilking TSA: As I reported last May, the Transportation Security Administration has its own share of fraud, waste and abuse problems. And so in late October, Rep. Henry Waxman pointed to news reports citing "egregious waste under contracts awarded and administered by the Department of Homeland Security [and TSA]."

Pentagon investigators have found, for instance, that one contractor--the technology company Unisys--might have over-charged TSA by some 171,000 hours in labor and overtime by billing out their employees to TSA "at up to twice their actual rate of compensation," as Waxman's statement put it. One former TSA official told Congress that senior administration officials had ordered him to deflate cost estimates of TSA's deal with Unisys to mislead the public about the true costs of the contract. 

7) No Science Allowed: The Government Accountability Office found in mid-November that the FDA, according to the Los Angeles Times, had "compromised their usual science-based decision making process when they ruled in 2004 against letting the morning-after birth control pill be sold without a prescription." The GAO issued a report saying that the FDA's review process for the Plan B pill was "unusual," "not typical," "novel," "did not follow FDA's traditional practices." Before the scientific review had even concluded, senior FDA officials allegedly told mid-level employees that Plan B was not going to be approved for over-the-counter sales, regardless of the scientific findings. Henry Waxman concluded that the "GAO's final report describes an appalling level of manipulation and suppression of the science. It appears that the decision…was preordained from the outset." 

8) Politicizing Public Programming: The Corporation for Public Broadcasting's Inspector General Kenneth Konz recently delivered a report in which he found that CPB's former chairman, Kenneth Tomlinson, was trying to politicize PBS's programming by urging PBS to put a conservative talk show on the air and by hiring lobbyists and consultants without the CPB board's approval. Konz's devastating report concluded that Tomlinson (who resigned shortly before the report was publicly released) had "directly violated the agency's statutes and procedures," as the Washington Post put it. 

9) Abramoff: I could have devoted an entire Annals to chronicling the government investigations spawned by the notorious GOP super-lobbyist Jack Abramoff. But in brief, there's a Justice Department criminal probe into allegations that Abramoff bribed lawmakers and their staffs, bilked millions of dollars from Indian tribal clients, and committed assorted other frauds and abuses. The Inspector general's office in the Dept. of Interior (which is part of the DoJ's Abramoff task force) has been interviewing witnesses to determine whether former Deputy Interior Secretary J. Steven Griles had agreed to prevent the Gun Lake Indian tribe from building a casino in Michigan in deference to Gun Lake's competitor, an Abramoff client. Apparently, Abramoff had also talked to Griles about giving him a job with Abramoff's firm, and if there was a quid pro quo, it would violate conflict-of-interest laws. 

10) Abramoff II: Former General Services Administration Chief of Staff David Safavian was arrested on charges that he made false statements and obstructed the investigation by the GSA's Inspector General's office into his connections to Abramoff. Safavian told the IG, according to a Justice Dept. news release, that Abramoff "had no business with GSA prior to the August 2002 golf trip" Safavian took to Scotland with Abramoff, Bob Ney, Ralph Reed and others. But Safavian's claims weren't true: "Safavian concealed the fact that the lobbyist had business before GSA prior to the August 2002 golf trip," and he had apparently assisted Abramoff's bid to acquire federally-controlled property in the Washington area. 

Government investigators have their work cut out for them in the new year. Already, House Democratic Leader Nancy Pelosi has urged the House's inspector general to review Bob Ney's House Administration Committee's decision to award a big contract to a wireless company, Foxcom Wireless, an Abramoff client, to improve cell phone reception for the House of Representatives. 

And Edward Kennedy recently urged the Pentagon's Inspector general to investigate the Pentagon contractor, the PR firm Lincoln Group, that reportedly paid Iraqi newspapers to publish favorable news stories written by US soldiers without acknowledging the article's origins -- blatant propaganda that erodes America's stated commitment to defending a free press. Kennedy called planting news stories part of a "devious scheme." 

Here's one bet you can take to the bank: The Pentagon's propaganda scandal will appear on my next Annals of Outrage top ten list, so stay tuned in 2006. 

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