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U.S. Fraud Corruption Kickbacks Abuse and Waste Worst in U.S. History

 

Billions of tax payers dollars has been stolen or lost since the war in Iraq started.

By the end of this year the war in general is expected to cost a trillion U.S. tax dollars

 

By Michael Webster: Investigative Reporter: March 19, 2008 1:00 PM PST.

 

Some of the worst problems in Iraq are almost beyond comprehension. The U.S. management of the Development Fund for Iraq, which was the fund that held the proceeds of Iraqi oil sales, this Coalition Provisional Authority handed out $8.8 billion in American Taxpayers cash to Iraqi Ministries and has no idea what happened to the money. Almost 9 billion in cash simply vanished with no trace. What happened to all that cash? No one seems to know. There was not even so much as an investigation in to where it went.

 

Other reports of billions of Saddam Hussein's regime stashed loot found by U.S. Military and Iraqis throughout the country has never been found and is believed by many that it found its way into personal pockets on both sides. Many fear much of that money was used to help fund the enemy and still other cash found its way back home via U.S. Troops duffle bags.

 

Frank Willis one former U.S. official who was in Iraq at the time, described conditions as the "wild west." the lack of controls effectively created a "free fraud zone." Iraq was awash in brand-new $100 bills, there were literally pallets stacked with new American green backs and with no accountability to prevent corruption no wonder it run rampant. Another high-ranking official said: "We were squandering the money we were entrusted to handle. We were a blind mouse with money." And all the while, the White House looked the other way - and Congress put its head in the sand.

Signaling a renewed emphasis on combating corruption at home and abroad, incoming Senate Judiciary Committee Chairman Patrick Leahy (D-VT.), introduced a package of bills targeting corrupt officials and private companies seeking to defraud American taxpayers and troops. 

“Americans want the culture of corruption to end.  From war profiteers and corrupt officials in Iraq, to convicted Administration officials, to influence-peddling lobbyists and, regrettably, even members of Congress, too many supposed public servants have been serving their own interests, rather than the public interest,” said Leahy. 

 

President Bush, Vice President Cheney and other senior Administration officials told America they promised: They would find weapons of mass destruction; they would be welcomed as liberators; and that the reconstruction of Iraq would pay for itself.

 

None of the three turned out to be true and in fact have now proven to be totally false.

 

The reconstruction effort in Iraq and the massive waste, fraud, and corruption have undermined our efforts in Iraq big time.

 

Special Inspector General Stuart Bowen for Iraq Reconstruction indicates there is a "reconstruction gap," which is the chasm between the President's promises and reality.

Mr. Bowen is absolutely right - the gap is enormous. But it is dwarfed by the corruption gaps" in Iraq. The consequences of the mismanagement and corruption are serious. According to Congressman Waxman “the waste, fraud, and abuse have flourished in Iraq. The taxpayer has been repeatedly gouged. Iraq is not being rebuilt. We have lost credibility and are now viewed in Iraq as occupiers. And our troops

did not get essential equipment when they needed it.

 

We have now spent $50 billion on Iraq reconstruction, including $30 billion from U.S. taxpayers.

What has the American people gotten for there money. Despite spending $2 billion, Iraq's oil production is still well below pre-war levels, running about a half million barrels below 2003 levels. However with the new high costs of crude there is now a 50 billion surplus of Iraq cash.

 

We've invested $4 billion into improving electricity generation. Not only is the Administration 2,000 megawatts short of reaching its goal for peak output, but generation are actually below prewar levels.

We have spent $6 billion. And oil production and electricity generation have actually lost ground. The situation is the same for drinking water”.

 

Waxman goes on to say in essence, we've squandered $50 billion US dollars. Profiteering has been rampant . . . but the taxpayer has gotten gouged and the work hasn't gotten done. And what's especially shameful about the wasteful spending is that we needed this money to protect our troops.

 

When we went into Iraq, our troops didn't have enough body armor. Families had to purchase armor off the internet and ship it to Iraq in a desperate attempt to protect their loved ones. On congressional delegations, individual service members have taken our staffs aside and begged for more night vision goggles.

Patriotic Americans even had to donate their frequent flyer miles so troops who were dumped at the Baltimore airport by the Pentagon could make it home for the holidays. This should never have happened. It is inexcusable that our troops faced desperate shortages of essential gear while billions of dollars were frittered away.

 

To really comprehend the unbelievable magnitude of the corruption, waste, fraud, and abuse is just look at private contractor Halliburton Cheney’s immediate last employer.

Halliburton is the largest private contractor operating in Iraq. The company has three contracts that total more than $20 billion.

 

It is now known that political appointees - not career civil servants - decided to give Halliburton a secret no-bid contract worth $7 billion to operate Iraq's oil fields. The GAO reported, the key decision that led to the award of the secret contract blatantly violated federal law.

 

We now know that Vice President Cheney’s chief of staff, Scooter Libby, was personally briefed on this entire plan months before the war.

 

The decision to give these big lucrative contracts to Halliburton is very suspicious and has proved very expensive. According to Pentagon audits, Halliburton's total unreasonable and unsupported charges exceed $1.4 billion tax payer dollars.

 

Some of the examples to have surfaced recently of waste, fraud, and abuse are numerous: Halliburton charged $45 per case of soda and $100 per 15-pound bag of laundry. Brand-new $85,000 Halliburton trucks were abandoned or "torched" if they got even just a flat tire or experienced minor mechanical problems.

Halliburton's contracts are cost-plus contracts. This means that Halliburton is reimbursed for all of its costs and over runs and then receives an extra percentage as additional profit. This has the same effect of righting Halliburton a blank check. In practical terms, this

means that the more Halliburton spends, the richer it gets.

 

According to a congressional investigator report it said “we talked to former Halliburton employees who worked in Iraq. They told us that the informal company motto was: "Don't worry about price. It's cost-plus." Halliburton was supposed to be in Iraq to provide support for the troops. But the company used one standard of support for the troops and a completely different standard for its executives.

 

Halliburton employees stayed at the five-star Kempinski hotel in Kuwait, where it cost taxpayers approximately $10,000 per day to house the employees. This luxury hotel offered maid service and complementary fruit baskets to Halliburton employees.

Our troops stayed in tents in the hot desert.

 

At one point, a cost-conscious Army official asked Halliburton to move its employees into air conditioned tent facilities. The company flatly refused.

 

At the same time, according to former Halliburton employees, the company routinely served expired food to the soldiers and exposed soldiers to contaminated water. Because Halliburton wasn't purifying the water as they were paid to do, soldiers had to shower and brush their teeth in dirty unsafe water taken straight from the Tigris River.

 

Halliburton's performance under its oil contracts was, if anything, even worse. The taxpayer was repeatedly gouged as the company charged exorbitant prices to import gasoline from Kuwait. One expert told us: "It's as if they put the gasoline on the Queen Mary and take it around the globe before they deliver it." Another expert called the prices "highway robbery."

 

The New York Times recently had a front page story on Halliburton's "ditch to nowhere" in Iraq.

 

The company spent over $70 million trying to drill holes under the Tigris River for oil pipeline, even though geologists hired by the company told them the project would be impossible to complete. One geologist who advised Halliburton said: "No driller in his right mind would have gone ahead."

But Halliburton went ahead anyway. It made little progress, but lost a lot of money.

 

To their credit, career government auditors identified these overcharges. When they examined Halliburton's second oil contract, they harshly criticized Halliburton's performance, citing "profound systemic problems" and "exorbitant indirect costs."

But their recommendations were too often rejected.

 

After reviewing Halliburton's first oil contract in Iraq, auditors recommended that the Army not pay Halliburton $263 million in unreasonable and unsupported charges. But the Army ignored these recommendations and paid Halliburton $254 million - over 95% of the disputed charges. And despite the auditors' findings, Halliburton was paid nearly $100 million in profits and bonuses for over billing taxpayers.

 

Halliburton and other connected companies symbolize what went astray in Iraq. But it is not the only contractor abusing the system.

 

Parsons received the contract to rebuild health clinics throughout Iraq. But despite spending $186 million, Parsons completed just 20 of 142 health clinics. Another firm, Custer Battles, received two security contracts. A federal jury recently found that the company committed 37 separate acts of fraud.

 

These aren't isolated examples. There are over 100 corruption investigations currently underway in Iraq. These cases involve allegations of contract fraud, false claims, theft, bribery, and kickbacks. Investigators say they are still working on open investigations, including 23 cases under direct Justice Department supervision, implying the possibility of major criminal charges.

Some officials suspect that these investigations could lead to the White House.