Those following the bouncing bankroll during the Waxman show yesterday forgot to cheer when Rep. Henry Waxman and his Oversight Committee forced the U.S. Army to save them $19.6 million dollars. Ka-ching.
That was the money that KBR spent on unauthorized security when they subcontracted their LOGCAP contract to people like Regency and ESS--both providers of catering services that ended up hiring Blackwater.
And of course the decision was made to dock KBR just before the hearings.
Also, the sharper TV watchers would have heard Blackwater's lawyer say that they actually weren't paid much for the ESS/Regency contract that led to the murder of four of their employees in March 2004. So there might be a double hit here if KBR isn't paid and Blackwater wasn't paid...where did the money go?
Tina Ballard looking and acting about as bureacratic as you can get estimated that the "cost of security" on government contracts was between 9.5 and 12.8%. That sounds very official (I've been told you always put a decimal point on any number you make up), but in truth the use of a centralized single contractor is not supposed to have a security cost.
The U.S. military is supposed to provide security for contractors, according to the Army FM 3-100.21 "Contractors on the Battlefield"fm3_100x21.pdf , specifically in Chapter 6 it says, "Protecting contractors and their employees is the commander's responsibility."
That wouldn't leave much work available for the private security firms that now populate Iraq, would it?
In the Fallujah incident, it's clear Blackwater was providing security to a convoy of trucks moving kitchen equipment from one military base to another. Blackwater insists they were working for the U.S., but are really working for Kuwaiti and German companies instead?
The answer begins in 1992 when then-SecDef Dick Cheney hired Brown & Root (now KBR) to figure out how private industry could support U.S. expeditionary needs in a post-Soviet drawdown.
LOGCAP was born with the idea that the military could divest itself of its large support brigades and focus on war fighting, thus reducing the overall required size of the standing army. Mundane things like potato peeling and latrine cleaning would be done by civilians. For example, the first people on the beach in Somalia were KBR contractors. And they were the last ones to pack up and fly out.
That ability to "outsource" was put to its maximum usage when the Bush administration decided to fight a war while trying to rebuild a country. It might be considered noble to both destroy and rebuild at the same time, but the grand idea was short circuited by the insurgency.
Bremer's 363 tons of cash were not to tossed in the air to reach the hands of hungry Iraqis, or used to reopen Iraqi factories or construction firms, it went into Western corporations building things that would soon be destroyed, protecting facilities and people that were under constant attack--playing an endless game of build it/blow it up.
Then there was the corruption--soldiers, Iraqis, contractors, politicians and others--simply saw mountains of cash available and absconded with it. Others used so many layers of subcontractors--or spent so much on security--that their projects never achieved completion.
When Ms. Ballard mentioned that using layers of subs was just like the construction trade, she must have been joking.
The construction trade applies a 10 or 15% markup on each level (and sometimes an architect adds another 10 or 15%). But the person marking up the subs manages the project for that money, and they know exactly how many subs they have, where the money goes, and if the work is satisfactory.
Ms. Ballard seemed put out when asked to deliver the number and cost of contractors. But she was never asked why anyone would invest in building something they knew would have a truck bomb driven into it after completion.
I spent time last July with security contractors guarding gravel that had to go from the Green Zone to a police station being built in Taramiya, just north of Baghdad. Every person knew that not only would they be attacked every night on the road, but that once the building was complete it would flattened.
Kudos to the men that can risk their life for that, but its an appropos example of where the reconstruction money goes.
Every contractor is trackable by three different methods. First they are paid, second they must have an ID card issued with their photo and critical data, and finally they are insured through DBA or Defense Base Act insurance.
The big question that no one in government wants to answer is: How much is the TOTAL cost of the war (both short term and long term) and when can we start spending it on domestic items that are both trackable and beneficial.
The bottom line? Taxpayers are starting to get a clearer focus on how the administration has backdoored its responsibility by hiring "for profit" entities. Iraq is a fiscal disaster and hopefully these types of hearings will prevent future abuses from happening.