Behind the Lines

Protecting War Profiteers

A U.S. House/Senate conference committee in November stripped out of the final version of the $87 billion spending bill for Iraq and Afghanistan a provision that would have penalized war profiteers who defraud American taxpayers.

Republican and Democratic Senate conferees consistently supported the provision, which had been unanimously accepted during Senate Appropriations Committee markup of the bill. But House negotiators simply refused to negotiate on the issue.

The Senate provision was authored by Senator Patrick Leahy, D-Vermont, Senator Dianne Feinstein, D-California, and Senator Richard Durbin, D-Illinois.

"Congress is about to send billions and billions of dollars to a place where there is no functioning government, under a plan with too little accountability and too few financial controls," said Leahy. "That's a formula for mischief. We need strong disincentives for those who would defraud taxpayers, and removing this protection is another major blot on this bill."

U.S. fraud statutes protect against waste of tax dollars at home, but none expressly prohibit war profiteering and none expressly confer extraterritorial jurisdiction overseas.

The Leahy-Feinstein-Durbin amendment would have criminalized "war profiteering" -- overcharging taxpayers for any good or service with the specific intent to excessively profit from the war or reconstruction efforts in Iraq.

The amendment also would have prohibited fraud and false statements in any matter involving a contract or the provision of goods or services in Iraq.

Iraq Contract Cronyism

More than 70 U.S. companies and individuals have won up to $8 billion in contracts for work in postwar Iraq and Afghanistan over the last two years, according to a study released in October by the Center for Public Integrity.

Those companies donated more money to the presidential campaigns of George W. Bush -- a little over $500,000 -- than to any other politician over the last dozen years, the report found.

Kellogg, Brown & Root, the subsidiary of Halliburton, which Vice President Dick Cheney led prior to being chosen as Bush's running mate in August 2000, was the top recipient of federal contracts for the two countries, with more than $2.3 billion awarded to the company. Bechtel Group, a major government contractor with similarly high-ranking ties, was second at around $1.03 billion.

However, dozens of lower-profile, but well-connected, companies shared in the reconstruction bounty. Their tasks ranged from rebuilding Iraq's government, police, military and media to providing translators for use in interrogations and psychological operations. There are even contractors to evaluate the contractors.

The report found that nearly all of the 10 largest contracts awarded for Iraq and Afghanistan went to firms employing former high-ranking government officials or individuals with close ties to federal agencies or Congress.

The Center's six-month investigation provides the most comprehensive list to date of U.S. contractors in Iraq and Afghanistan. Based on the findings, it did not appear that any one government agency knew the total number of contractors or what they were doing. Congressional sources said they hoped such a full picture would emerge from the General Accounting Office, which has begun investigating the postwar contracting process amid allegations of fraud and cronyism.

The Polluters' Pardon

The Bush Administration has ordered enforcement staff and attorneys at the U.S. Environmental Protection Agency (EPA) to stop any pending enforcement investigations against electric utilities and other industries that violated the New Source Review (NSR) provision of the Clean Air Act.

The assistant administrator for EPA's enforcement office, J.P. Suarez, told EPA staff of the decision in November.

The pullback means that EPA will no longer pursue pending enforcement actions against 50 power plants, refineries and other facilities that received a Notice of Violation under the NSR rules in effect before the Bush administration's decision to loosen the rules by creating new loopholes for polluting industries.

"This is easily the most vile, radical and illegal enforcement stance ever taken by the EPA in its 30-plus-year history," says John Walke, a clean-air specialist with the Natural Resources Defense Council.

The new loopholes allow plant owners to significantly change their plant operations and increase emissions without adopting pollution controls, effectively gutting a key part of the Clean Air Act and undermining several cases already in court.

Senator Patrick Leahy, D-Vermont, the ranking member of the Senate Judiciary Committee, says that he wants the committee to conduct hearings on the administration's actions. "The White House's policy is to coddle the big polluters, and the public be damned," says Leahy. "Doling out pollution pardons may make some big political contributors happy, but the American people will pay the price by breathing dirtier air."

New York Attorney General Eliot Spitzer jumped into the fray after the Bush administration announcement, saying that if the Justice Department will not enforce the cases, he will. He called on the Justice Department to turn over the case files to him so his staff can review them for possible prosecution.