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Wednesday, August 13, 2008

Occupation, Inc.

The number being reported is "at least $85 billion," but when talking about money and Iraq, the truth is always murky. In a war practically run by war profiteers, the number is likely to be higher. The upper estimate of the amount of public dollars we've paid private contractors in Iraq is more than $100 billion. Normally, erring on the side of caution would require you to assume the lower figure -- which is why that number is being used in the media. But when we consider the history of waste, corruption, and corporate malfeasance involved in the occupation of Iraq, the higher number seems the safer estimate.

The higher figure comes from Voice of America. In their story, the cite Peter Orszag of the Congressional Budget Office [CBO], who said, "The federal government has awarded $85 billion in contracts for work in [the] Iraq theater through 2007. If you included this year, the total would exceed $100 billion: roughly one of every $5 for the cost of the war in Iraq." The piece goes on:

Orszag says the use of private contractors in U.S. military engagements is not new. What is new, however, is the extent of the reliance on private firms. The Iraq war marks the first time in which the number of private personnel has equaled or exceeded the number of military personnel. By contrast, the CBO report notes that, during World War II, military personnel outnumbered private contractors by a ratio of seven-to-one.

Given what they're being paid and how much we're relying on them, you'd think that private contractors are doing just an astonishingly great job of whatever the hell it is we're hiring them to do.

Of course, you'd be wrong.

What a lousy job contractors were doing became one of the early stories of the occupation. Mega-construction company Bechtel -- fresh off royally screwing up Boston's "Big Dig" -- was hired in a no-bid contract to reconstruct Iraq's schools. It didn't go well.


Headmaster Abdel-Razzaq Ali's school is located in a predominantly Shi'ite quarter in a poor area of Baghdad. More than 1,500 students attend the Anbariyn School in two shifts: boys in the morning, girls in the afternoon. Looting has never been a problem at his school. But Abdel-Razzaq has his share of problems in the new Iraq. "The parents are constantly complaining to me, but who can I complain to?" he wonders. He is particularly skeptical about the refurbishment plans for the school, which are being carried out by Bechtel Corporation.


At the start of the program Abdel-Razzaq received a visit from a representative of the Iraqi company, Adnan Mussawi, which Bechtel subcontracted to carry out the work. The headmaster was asked to sign a declaration that the work had been completed, which he refused to do until the work had actually been done. Twenty days later, the walls were painted, the rusty doors painted over, new electric cables laid, and some of the sanitary facilities replaced. However, the real problem with the toilets -- namely the sewage pipes -- were left untouched. So Abdel-Razzaq is sure that next winter once more, there will be a lake of sewage in the bathrooms.

Most of the cheap plastic cisterns are already broken. Even a broken banister that resulted in one child falling one floor down - was not considered to be part of Bechtel's renovation plan. So the director ordered to weld it again, paying the work out of his own pocket. The work on the school, according to Abdel-Razzaq, was completed without a single person from the Bechtel corporation appraising the work. "Why do we need Bechtel? They have done absolutely nothing," he said.

"Cronyism is an important factor in our Iraqi debacle. It's not just that reconstruction is much more expensive than it should be," wrote the New York Times' Paul Krugman in 2003. "The really important thing is that cronyism is warping policy: by treating contracts as prizes to be handed to their friends, administration officials are delaying Iraq's recovery, with potentially catastrophic consequences."

Other examples of the great job these corporate cronies/US contractors did were serving contaminated water and spoiled food to troops (while overcharging the government for it) and the scandalous conditions wounded vets were forced to deal with at Walter Reed. We won't even go into mercenary forces like Blackwater.

To add insult to injury, all of this privatization didn't save us anything. "According to the report, the yearly cost of maintaining a single private contractor in Iraq can approach half a million dollars -- far exceeding the annual pay of even the most senior military commanders," VOA reports.

None of this should surprise anyone who's had elementary school math. Where corporations must turn a profit, government doesn't have to. If something costs X, it costs a for-profit X+profit. For the record, the latter is more than the former. The only way to squeeze X+profit out of X is to reduce the value of X. The line given by privatization fans is that this is done magically with "increased efficiency," but history and the facts show that this is done by cutting corners and doing what is normally referred to as a "half-assed job." When you get right down to it, corporations increase their profit margins by doing as little as they can get away with, while charging as much as they can get away with.

And so we have contractors electrocuting troops with lousy wiring. We have contractors whose employees' idea of a good time consists of kidnapping and rape. We wind up spending $100 billion for lousy, sub-standard work performed by corrupt contractors and their sociopathic employees.

And our problems here aren't ending any time soon. A new study finds that troops returning from combat face "the unholy trinity" of "alcohol abuse, post-traumatic stress disorder and depression." For all the drawbacks and limitations of the care these returning vets get, at least it exists. Returning contractors have no such support structure. The war comes home with them.

All in all, I'd say that if the occupation of Iraq proves anything, it proves that privatization of the military turns out to be a real bad idea. It's a failed experiment whose result was entirely predictable -- more business in war means more war profiteering means more corruption, more waste, more crime, and more death.

By having more contractors than troops in Iraq, we've proved that a stupid idea is a stupid idea. Here's hoping that lesson sticks.



Marcie Hascall Clark said...

This report mentions nothing of the DBA Workmans Compensation Insurance which must be purchased by the contract company for each employee working any US Government contract overseas. This insurance is cost reimbursable to the contract company. In some cases it can be as much as 50% of the employees salary.
All claims for contract employees deaths and injuries are also reimbursed to the insurance company by the taxpayer under the War Hazards Act.
The death, medical, disability benefits must be covered by the taxpayer just the same as the soldiers. I should add here that, in an effort to cover up the true costs of the war, the contractors and their families are being treated as badly as the military when it comes to any benefits that are due them.
These figures as posted by this report will be much larger when the aftermath of the carnage are figured in.

Wisco said...

Thanks for the additional info. It adds a lot.

Mark said...

Besides the problems of cronyism, malfeasance, and waste, the trend towards outsourcing war also involves severing a link between our citizenry and the wars being fought in its name. It makes it possible to fight war without demanding too many sacrifices of the country, meaning the country also won't ask too many questions unless it suspects the tab is a little high. There's also a whole host of questions surrounding the legal status of these contractors, subcontractors, sub-subcontractors, sub-sub-subcontractors, and so on.