Soldiers of Misfortune 

Critical elements of the war in Iraq have been outsourced to private contractors. John Mancini's story shows the many perils of that approach.

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On February 12, Waxman released an open letter to the Pentagon, demanding an investigation and summarizing what Bunting and Mancini had told his office. Halliburton was leasing cars at a rate of $7,500 a month. Plywood was being bought for $100 a sheet. The company bought 50,000 pounds of nails that were the wrong size, and dumped them in the desert. Their employees' mobile homes were falling apart. Company employees were splitting purchase orders into pieces to get around rules about securing the lowest possible bid; Mancini estimated that up to 80 percent of purchase orders were manipulated.

"What is most disturbing about these allegations from the whistleblowers is the regular and routine nature of the overcharging," Waxman wrote. "The whistle-blowers describe a company that paid inflated prices for goods and services on a daily basis and then passed these overcharges on to the US taxpayer. An approach of 'Don't worry — it's cost-plus' may be lucrative for Halliburton, but it should be of great concern to the government and the taxpayer."

The investigation began to snowball. Waxman set up a hotline for Halliburton employees, and informers crept out from the shadows. Truck driver David Wilson told Waxman's office that Kellogg, Brown and Root would drive empty trucks around Iraq, billing taxpayers for transporting phantom cargo. In addition, he claimed that KBR managers refused to stockpile spare tires and oil for the engines, and whenever employees got a flat tire, they abandoned the $85,000 vehicles to looters. Employee Marie De Young claimed that the company spent up to $1.2 million on laundry services, or $100 per bag. In July, Bunting testified before Congress, where he displayed one of hundreds of towels KBR had monogrammed at $7.50 apiece, or three times the going rate. Meanwhile, Mancini was providing anonymous tips to the Washington Post and the Los Angeles Times, claiming KBR had spent $750,000 buying fire trucks whose hose mountings couldn't work with the hoses in Kuwait; at one point, he said, firefighters had to sit back and watch as a building burned to the ground.

After Bunting's testimony, the Pentagon's Defense Contract Audit Agency initiated an investigation into two Halliburton contracts and identified $1.4 billion in questionable or unsupported costs. Jeff Mazon, the employee who negotiated the cell-phone contract Mancini found so excessive, was indicted by a federal grand jury in March 2005 on ten counts of fraud. Mazon allegedly bid up a contract to supply fuel tankers for the occupation by as much as $3.5 million, in return for a $1 million kickback. His trial is still pending. Last July, Army spokespeople announced they were ending Halliburton's contract for logistical help in Iraq. By then, the company had earned approximately $18.5 billion.

Halliburton representative Melissa Norcross did not respond to several requests for comment, but issued the following statement at the time of the contract's dissolution: "By all accounts, KBR's logistical achievements in support of the troops in Iraq, Kuwait, and Afghanistan have been nothing short of amazing."


Halliburton's Iraq windfall has defined the era of the privatized war machine. According to Brookings Institution scholar Peter Singer, who documented the trend in a Foreign Affairs article last year, three elements converged to place global military action in the hands of private armies and supporting companies. The end of the Cold War led to a substantial reduction in the size of standing armies around the world, even as civil wars and tribal conflicts created a new demand for mercenaries. The American military grew to depend on high-tech tools innovated by private companies, and a general ideological trend toward privatization led policymakers to apply the new standards to the military, which had heretofore been the exclusive province of the state. Sixteen years later, the results are clear, according to author Pratap Chatterjee, who has been tracking corporate involvement in Iraq and Kuwait. During the first Persian Gulf War, one in one hundred personnel was a private contractor. Today, Chatterjee claims, that ratio is one in three.

These private employees, who number around seventy thousand in Iraq and Kuwait, do everything from shooting the enemy to feeding the army. Soldiers hired by Blackwater and Erinys International patrol the oil pipelines and guard convoys driving through Baghdad. Employees from CACI and Titan Corporation participated in interrogations at Abu Ghraib. And, of course, Halliburton was responsible for a vast array of support services, operating at least sixty camps in Kuwait and Iraq, shipping in supplies and serving food, purifying water and delivering mail — even setting up movie theaters, videogame arcades, and Subway sandwich outlets. Chatterjee, the author of Iraq, Inc. and executive director of the Oakland-based Corpwatch, claims that Halliburton is so intertwined with official military strategy that many of its employees actually enter the theater of operations ahead of soldiers. "In Bosnia, the military invaded, and Halliburton followed," he said. "In Afghanistan, the military invaded, and Halliburton followed. ... Here, Halliburton arrived before the military. This was unique to Iraq."

In the surreal world of bases such as Camp Anaconda, located just north of Baghdad, the globalized economy has been eerily replicated. The Army's old quartermaster battalions have been replaced with tens of thousands of Indian and Filipino migrant laborers, who clean the toilets and serve three flavors of ice cream to American troops. Many soldiers are grateful to Halliburton for the first-class treatment, but Chatterjee notes that the outsourcing of support services focuses the troops' duties on nothing but killing and patrolling, leaving them more vulnerable to post-traumatic stress disorder.

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