Blackwater, the taste of American Kool Aid

U.S. Representative Jan Schakowsky (D-IL) issued this statement after reading Blackwater USA’s Nov 2004 newsletter in which the president of the private military contractor cheered the re-election of President Bush:
“Blackwater USA, one of the private military contractors whose business flourished as a result of lucrative, multi-million dollar, tax-payer funded contracts in Iraq, cheered the re-election of George Bush. “Like Halliburton, which received billions in contracts and whose stock prices spiked after Bush’s re-election, Blackwater, four of whose employees were brutally murdered in Fallujah, looks forward to four more years of war-time contracts. ...

“These private military contracts raise critical questions about both cost effectiveness and mission effectiveness. An investigative report by The News & Observer newspaper published at the end of October concluded that many contracts, including Blackwater’s, drive up rather than reduce costs for the government. U.S. soldiers are paid a fraction of the close to $200,000 salaries earned by Blackwater employees for performing the same type of training and security jobs. (See Story Below) ...


The Associated Press State & Local Wire
October 25, 2004, Monday, BC cycle
Use of private contractors in war zones proves costly
By JOSEPH NEFF and JAY PRICE,

The News & Observer of Raleigh
RALEIGH, N.C.

Jerry Zovko's contract with Blackwater USA looked straightforward: He would earn $600 a day guarding convoys that carried food for U.S. troops in Iraq.
But that cost - $180,000 a year - was just the first installment of what taxpayers were asked to pay for Zovko's work.
Blackwater, based in Moyock, N.C., and three other companies would add to the bill, and to their profits.
Several Blackwater contracts obtained by The News & Observer open a small window into the multibillion-dollar world of private military contractors in Iraq. The contracts show how costs can add up when the government uses private military contractors to perform tasks once handled by the Army.
Here's how it worked in Zovko's case: Blackwater added a 36 percent markup, plus its overhead costs, and sent the bill to a Kuwaiti company that ordinarily runs hotels. That company, Regency Hotel, tacked on its costs for buying vehicles and weapons and a profit and sent an invoice to a German food services company called ESS that cooked meals for the troops.
ESS added its costs and profit and sent its bill to Halliburton, which also added overhead and a profit and presented the final bill to the Pentagon.
It's nearly impossible to say whether the cost for Zovko doubled, tripled or quadrupled. Congressional investigators and defense auditors have had to fight the primary contractor, Halliburton, for details of the spending. The companies say the subcontracts are confidential and won't discuss them.
About 20,000 private security contractors are now in Iraq, escorting convoys, protecting diplomats, training the Iraqi army and maintaining weapons.
The bills for this work flow from the bottom up. They start with Blackwater's $600-a-day guns for hire such as Zovko and his three comrades, who were killed escorting a convoy through Fallujah in March...
At the top is Houston-based Halliburton, which has an open-ended "cost-plus" contract to supply the U.S. military with food, laundry and other necessities. Cost-plus means the U.S. government pays Halliburton all its expenses - its costs - plus 2 percent profit on top.
So far the Army has committed $7.2 billion on this cost-plus contract to Halliburton, which has been criticized for its performance in Iraq. The company has drawn additional political fire because of its ties to Vice President Dick Cheney, a former Halliburton CEO.
Henry Bunting, a former Halliburton purchasing officer, said he heard a common refrain in 2003 in Kuwait from managers at KBR - also known as Kellogg Brown & Root - a division of Halliburton: "Don't worry about price. It's cost-plus."
"There is no question the taxpayer is getting screwed," said Bunting, who was an Army staff sergeant in Vietnam. "There is no incentive for KBR or their subs to try to reduce costs. No matter what it costs, KBR gets 100 percent back, plus overhead, plus their profit.
"The Army said it is satisfied with Halliburton's performance.

...


A recent audit by the Defense Contract Audit Agency said Halliburton could not document 42 percent of a $4 billion invoice submitted to the Pentagon. Much of the $1.8 billion that lacked documentation was for subcontractors who helped feed U.S. troops - the area in which Blackwater was working.

...
"We don't have accountability, we don't have transparency on where the money is spent," Waxman said. "Taxpayer money is being wasted. Huge amounts are going to subcontractors, and we have no idea how the money is being spent."
The private companies have also acted to protect themselves from their individual contractors and subcontractors.
For example, at least some private contracts protect the companies from their workers' becoming whistle-blowers. Contractors wanting to work for Blackwater in Iraq, such as Zovko, must sign contracts that compel them to pay Blackwater a quarter of a million dollars in instant damages if they violate their contract for doing things such as discussing details of the contracts or work.
The contract between Blackwater and Regency also contains explicit confidentiality clauses. Singer, the Brookings Institution analyst, said that is typical but troubling: The agreement is between private companies, but their activities are wholly in the public interest.
"The public is paying for it, and it is taking place in a war zone," Singer said. "It illustrates the lack of transparency in this whole business."
http://www.house.gov/schakowsky/press2004a/pr11_09_2004bwusa.html

As long as we continue to fund war and allow the spin and patriotic pap of psychpathic monsters
to "lead us" - rigidly demanding their narcissistic reflction - we will have the likes of George W. Bush. We have tasted the American kool aid of profit over humanity and now must come to terms with just how long we have been ingesting it.