Tag Archives: War Contractors

It’s a $cam! The American Way of War in the Twenty-First Century

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By Tom Engelhardt

Source: TomDispatch.com

Let’s begin with the $12 billion in shrink-wrapped $100 bills, Iraqi oil money held in the U.S.  The Bush administration began flying it into Baghdad on C-130s soon after U.S. troops entered that city in April 2003.  Essentially dumped into the void that had once been the Iraqi state, at least $1.2 to $1.6 billion of it was stolen and ended up years later in a mysterious bunker in Lebanon.  And that’s just what happened as the starting gun went off.

It’s never ended.  In 2011, the final report of the congressionally mandated Commission on Wartime Contracting estimated that somewhere between $31 billion and $60 billion taxpayer dollars had been lost to fraud and waste in the American “reconstruction” of Iraq and Afghanistan.  In Iraq, for instance, there was that $75 million police academy, initially hailed “as crucial to U.S. efforts to prepare Iraqis to take control of the country’s security.”  It was, however, so poorly constructed that it proved a health hazard.  In 2006, “feces and urine rained from the ceilings in [its] student barracks” and that was only the beginning of its problems.

When the bad press started, Parsons Corporation, the private contractor that built it, agreed to fix it for nothing more than the princely sum already paid.  A year later, a New York Timesreporter visited and found that “the ceilings are still stained with excrement, parts of the structures are crumbling, and sections of the buildings are unusable because the toilets are filthy and nonfunctioning.”  This seems to have been par for the course.  Typically enough, the Khan Bani Saad Correctional Facility, a $40 million prison Parsons also contracted to build, was never even finished.

And these were hardly isolated cases or problems specific to Iraq.  Consider, for instance, those police stations in Afghanistan believed to be crucial to “standing up” a new security force in that country.  Despite the money poured into them and endless cost overruns, many were either never completed or never built, leaving new Afghan police recruits camping out.  And the police were hardly alone.  Take the $3.4 million unfinished teacher-training center in Sheberghan, Afghanistan, that an Iraqi company was contracted to build (using, of course, American dollars) and from which it walked away, money in hand.

And why stick to buildings, when there were those Iraqi roads to nowhere paid for by American dollars? At least one of them did at least prove useful to insurgent groups moving their guerrillas around (like the $37 million bridge the U.S. Army Corps of Engineers built between Afghanistan and Tajikistan that helped facilitate the region’s booming drug trade in opium and heroin).  In Afghanistan, Highway 1 between the capital Kabul and the southern city of Kandahar, unofficially dubbed the “highway to nowhere,” was so poorly constructed that it began crumbling in its first Afghan winter.

And don’t think that this was an aberration.  The U.S. Agency for International Development (USAID) hired an American nonprofit, International Relief and Development (IRD), to oversee an ambitious road-building program meant to gain the support of rural villagers.  Almost $300 million later, it could point to “less than 100 miles of gravel road completed.” Each mile of road had, by then, cost U.S. taxpayers $2.8 million, instead of the expected $290,000, while a quarter of the road-building funds reportedly went directly to IRD for administrative and staff costs.  Needless to say, as the road program failed, USAID hired IRD to oversee other non-transportation projects.

In these years, the cost of reconstruction never stopped growing.  In 2011, McClatchy Newsreported that “U.S. government funding for at least 15 large-scale programs and projects grew from just over $1 billion to nearly $3 billion despite the government’s questions about their effectiveness or cost.”

The Gas Station to Nowhere

So much construction and reconstruction — and so many failures.  There was the chicken-processing plant built in Iraq for $2.58 million that, except in a few Potemkin-Village-like moments, never plucked a chicken and sent it to market.  There was the sparkling new, 64,000-square-foot, state-of-the-art, $25 million headquarters for the U.S. military in Helmand Province, Afghanistan, that doubled in cost as it was being built and that three generals tried to stop.  They were overruled because Congress had already allotted the money for it, so why not spend it, even though it would never be used?  And don’t forget the $20 million that went into constructing roads and utilities for the base that was to hold it, or the$8.4 billion that went into Afghan opium-poppy-suppression and anti-drug programs and resulted in… bumper poppy crops and record opium yields, or the aid funds that somehow made their way directly into the hands of the Taliban (reputedly its second-largest funding source after those poppies).

There were the billions of dollars in aid that no one could account for, and a significant percentage of the 465,000 small arms (rifles, machine guns, grenade launchers, and the like) that the U.S. shipped to Afghanistan and simply lost track of.  Most recently, there was the Task Force for Business Stability Operations, an $800-million Pentagon project to help jump-start the Afghan economy.  It was shut down only six months ago and yet, in response to requests from the Special Inspector General for Afghanistan Reconstruction, the Pentagon swears that there are “no Defense Department personnel who can answer questions about” what the task force did with its money.  As ProPublica’s Megan McCloskey writes, “The Pentagon’s claims are particularly surprising since Joseph Catalino, the former acting director of the task force who was with the program for two years, is still employed by the Pentagon as Senior Advisor for Special Operations and Combating Terrorism.”

Still, from that pile of unaccountable taxpayer dollars, one nearly $43 million chunk did prove traceable to a single project: the building of a compressed natural gas station.  (The cost of constructing a similar gas station in neighboring Pakistan: $300,000.)  Located in an area that seems to have had no infrastructure for delivering natural gas and no cars converted for the use of such fuel, it represented the only example on record in those years of a gas station to nowhere.

All of this just scratches the surface when it comes to the piles of money that were poured into an increasingly privatized version of the American way of war and, in the form ofovercharges and abuses of every sort, often simply disappeared into the pockets of the warrior corporations that entered America’s war zones.  In a sense, a surprising amount of the money that the Pentagon and U.S. civilian agencies “invested” in Iraq and Afghanistan never left the United States, since it went directly into the coffers of those companies.

Clearly, Washington had gone to war like a drunk on a bender, while the domestic infrastructure began to fray.  At $109 billion by 2014, the American reconstruction program in Afghanistan was already, in today’s dollars, larger than the Marshall Plan (which helped put all of devastated Western Europe back on its feet after World War II) and still the country was a shambles. In Iraq, a mere $60 billion was squandered on the failed rebuilding of the country.  Keep in mind that none of this takes into account the staggering billions spent by the Pentagon in both countries to build strings of bases, ranging in size from American towns (with all the amenities of home) to tiny outposts.  There would be 505 of them in Iraq and at least 550 in Afghanistan.  Most were, in the end, abandoned, dismantled, or sometimes simply looted.  And don’t forget the vast quantities of fuel imported into Afghanistan to run the U.S. military machine in those years, some of which was siphoned off by American soldiers, to the tune of at least $15 million, and sold to local Afghans on the sly.

In other words, in the post-9/11 years, “reconstruction” and “war” have really been euphemisms for what, in other countries, we would recognize as a massive system of corruption.

And let’s not forget another kind of “reconstruction” then underway. In both countries, the U.S. was creating enormous militaries and police forces essentially from scratch to the tune of at least $25 billion in Iraq and $65 billion in Afghanistan.  What’s striking about both of these security forces, once constructed, is how similar they turned out to be to those police academies, the unfinished schools, and that natural gas station.  It can’t be purely coincidental that both of the forces Americans proudly “stood up” have turned out to be the definition of corrupt: that is, they were filled not just with genuine recruits but with serried ranks of “ghost personnel.”

In June 2014, after whole divisions of the Iraqi army collapsed and fled before modest numbers of Islamic State militants, abandoning much of their weaponry and equipment, it became clear that they had been significantly smaller in reality than on paper.  And no wonder, as that army had enlisted 50,000 “ghost soldiers” (who existed only on paper and whose salaries were lining the pockets of commanders and others).  In Afghanistan, the U.S. is still evidently helping to pay for similarly stunning numbers of phantom personnel, though no specific figures are available.  (In 2009, an estimated more than 25% of the police force consisted of such ghosts.)  As John Sopko, the U.S. inspector general for Afghanistan,warned last June: “We are paying a lot of money for ghosts in Afghanistan… whether they are ghost teachers, ghost doctors or ghost policeman or ghost soldiers.”

And lest you imagine that the U.S. military has learned its lesson, rest assured that it’s still quite capable of producing nonexistent proxy forces.  Take the Pentagon-CIA program to train thousands of carefully vetted “moderate” Syrian rebels, equip them, arm them, and put them in the field to fight the Islamic State.  Congress ponied up $500 million for it, $384 million of which was spent before that project was shut down as an abject failure.  By then, less than 200 American-backed rebels had been trained and even less put into the field in Syria — and they were almost instantly kidnapped or killed, or they simply handed over their equipment to the al-Qaeda-linked al-Nusra Front.  At one point, according to the congressional testimony of the top American commander in the Middle East, only four or five American-produced rebels were left “in the field.”  The cost-per-rebel sent into Syria, by the way, is now estimated at approximately $2 million.

A final footnote: the general who oversaw this program is, according to the New York Times, still a “rising star” in the Pentagon and in line for a promotion.

Profli-gate

You’ve just revisited the privatized, twenty-first-century version of the American way of war, which proved to be a smorgasbord of scandal, mismanagement, and corruption as far as the eye could see.  In the tradition of Watergate, perhaps the whole system could be dubbed Profli-gate, since American war making across the Greater Middle East has represented perhaps the most profligate and least effective use of funds in the history of modern warfare.  In fact, here’s a word not usually associated with the U.S. military: the war system of this era seems to function remarkably like a monumental scam, a swindle, a fraud.

The evidence is in: the U.S. military can win battles, but not a war, not even against minimally armed minority insurgencies; it can “stand up” foreign militaries, but only if they are filled with phantom feet and if the forces themselves are as hollow as tombs; it can pour funds into the reconstruction of countries, a process guaranteed to leave them more prostrate than before; it can bomb, missile, and drone-kill significant numbers of terrorists and other enemies, even as their terror outfits and insurgent movements continue to grow stronger under the shadow of American air power.  Fourteen years and five failed states later in the Greater Middle East, all of that seems irrefutable.

And here’s something else irrefutable: amid the defeats, corruption, and disappointments, there lurks a kind of success.  After all, every disaster in which the U.S. military takes part only brings more bounty to the Pentagon.  Domestically, every failure results in calls for yet more military interventions around the world.  As a result, the military is so much bigger and better funded than it was on September 10, 2001.  The commanders who led our forces into such failures have repeatedly been rewarded and much of the top brass, civilian and military, though they should have retired in shame, have taken ever more golden parachutes into the lucrative worlds of defense contractors, lobbyists, and consultancies.

All of this couldn’t be more obvious, though it’s seldom said.  In short, there turns out to be much good fortune in the disaster business, a fact which gives the whole process the look of a classic swindle in which the patsies lose their shirts but the scam artists make out like bandits.

Add in one more thing: these days, the only part of the state held in great esteem by conservatives and the present batch of Republican presidential candidates is the U.S. military.  All of them, with the exception of Rand Paul, swear that on entering the Oval Office they will let that military loose, sending in more troops, or special ops forces, or air power, and funding the various services even more lavishly; all of this despite overwhelming evidence that the U.S. military is incapable of spending a dollar responsibly or effectively monitoring what it’s done with the taxpayer funds in its possession.  (If you don’t believe me, forget everything in this piece and just check out the finances of the most expensive weapons system in history, the F-35 Lightning II, which should really be redubbed the F-35 Overrun for its madly spiraling costs.)

But no matter. If a system works (particularly for those in it), why change it?  And by the way, in case you’re looking for a genuine steal, I have a fabulous gas station in Afghanistan to sell you…

 

Tom Engelhardt is a co-founder of the American Empire Project and the author of The United States of Fear as well as a history of the Cold War, The End of Victory Culture. He is a fellow of the Nation Institute and runs TomDispatch.com. His latest book is Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World.

Multi Billion Dollar Bonanza: Companies which Make Money By Keeping Americans “Terrified of Terror Attacks”

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A massive industry profits off the government-induced fear of terrorism.

By Alex Kane

Source: Alternet

Michael Hayden, the former director of the National Security Agency, has invaded America’s television sets in recent weeks to warn about Edward Snowden’s leaks and the continuing terrorist threat to America.

But what often goes unmentioned, as the Guardian’s Glenn Greenwald pointed out, is that Hayden has a financial stake in keeping Americans scared and on a permanent war footing against Islamist militants. And the private firm he works for, called the Chertoff Group, is not the only one making money by scaring Americans.

Post-9/11 America has witnessed a boom in private firms dedicated to the hyped-up threat of terrorism. The drive to privatize America’s national security apparatus accelerated in the aftermath of the terrorist attacks, and it’s gotten to the point where 70 percent of the national intelligence budget is now spent on private contractors, as author Tim Shorrock reported. The private intelligence contractors have profited to the tune of at least $6 billion a year. In 2010, the Washington Post revealed that there are 1,931 private firms across the country dedicated to fighting terrorism.

What it all adds up to is a massive industry profiting off government-induced fear of terrorism, even though Americans are more likely to be killed by a car crash or their own furniture than a terror attack.

Here are five private companies cashing in on keeping you afraid.

1. The Chertoff Group

On August 11, former NSA head Michael Hayden, the man at the center of the Bush administration’s 2005 surveillance scandal, was defending his former agency on CBS News in the wake of the latest NSA spying scandal. Commenting on President Obama’s half-hearted promises to reform some NSA practices, Hayden told host Bob Schieffer that “the President is trying to take some steps to make the American people more comfortable about what it is we’re doing. That’s going to be hard because, frankly, Bob, some steps to make Americans more comfortable will actually make Americans less safe.”

Former Homeland Security chief Michael Chertoff had a similar message when he appeared on ABC News August 4. Speaking about the purported threat from an Al Qaeda affiliate in Yemen that led to the closure of 19 U.S. embassies, Chertoff said that “the collection of this warning information [about Al Qaeda] came from the kinds of programs we’ve been discussing about, the ability to capture communications overseas.”

CBS and ABC did not see fit to inform viewers that both Hayden and Chertoff are employees of the Chertoff Group, a private firm created in 2009 that companies hire to consult on best practices for security and combatting terrorism. Some of the companies the firm advises go on to win government contracts. Chertoff is the founder and chairman of the group, while Hayden serves as a principal. So they profit off a war on terror they say is crucial to keeping Americans safe.

Though it’s unclear how much in total exactly the firm makes, there are some known numbers. After the failed attempt in 2010 to blow up an airliner on Christmas Day with a bomb hidden in underwear, Chertoff pushed for better airport security procedures. One of the suggestions Chertoff made was for the Transportation Security Agency to use full-body scanners like the ones Rapiscan, one of the Chertoff Group’s clients, made. And sure enough, after the Christmas Day plot, the TSA ordered 300 Rapiscan machines. The Huffington Post reported that Rapiscan made $118 million from the government between 2009-2010.

2. Booz Allen Hamilton

This private intelligence contractor has become a household name in the wake of the NSA scandal. Edward Snowden, the man responsible for leaking secret documents that exposed the breadth of NSA surveillance, was working for Booz Allen when he downloaded the documents he handed off to media outlets. As the New York Times reported in June, the company parlays its technology expertise for intelligence uses into massive government contracts. Thousands of employees of the company provide services to the NSA, like analyzing the massive amounts of data the government agency collects every day. The company is also the shining symbol of the government-private security complex’s revolving door: its vice president is the former director of national intelligence, while the current director of national intelligence is a former employee of Booz Allen.

Despite the Snowden security breach, Booz Allen continues to work with the government. And they’re making a lot of money from the U.S. In the last fiscal year, the company made $1.3 billion from working in U.S. intelligence. In total, Booz Allen Hamiltion made over $5 billion last fiscal year. And the cash keeps coming: in January, the company announced that it had won a contract with the Defense Department to provide intelligence services. The amount of money it could make from the deal is up to $5.6 billion.

And like Hayden and Chertoff, Booz Allen’s vice president Mike McConnell has publicly hyped up the threat of terrorism to blast Snowden’s leaks. McConnell told a government contracting conference in July 2013 that Snowden’s leaks have done “irrevocable damage” to the U.S.’s ability to stop terrorism. “It’s going to inhibit our ability to understand nuclear activity in North Korea, what’s going on in Syria, what might be happening with the Taliban in Afghanistan,” said McConnell.

3. Science Applications International Corporation

Sometimes referred to as “NSA West” because so many former NSA employees go on to work for the formerly California-based Science Applications International Corporation (SAIC), this firm makes a ton of cash off government contracts. And they do so by hawking their expertise in combatting the terrorist threat.

Browse through SAIC’s website and you’re constantly greeted with the words “terrorist threat” and information on how the SAIC can help the government and others battle it. SAIC developed a “Terrorism Protection Manual” for Florida law enforcement that was developed to fight “today’s national terrorist threat and implement recommended security best practices.” They boast of their “experience meeting the terrorism incident response training needs of a wide variety of customers, from training for a national Weapons of Mass Destruction (WMD) scenario, applicable at agency response levels, to lesser levels of incidents affecting a city, a military installation or a special facility.”

Back when John P. Jumper, the current CEO of SAIC, was an Air Force general, he said the threat of terrorism is “greater than Nazism, greater than communism. This threat that we have of terrorist zealots is the most dangerous because these are people who care nothing about life. They care nothing about our lives, for sure, and they care nothing about their own lives.” And Larry Prior, a U.S. intelligence veteran who used to run the company’s Intelligence and Security Group, said in an internal newsletter that “the future of the nation rests on their backs,” referring to employees in his group.

SAIC is an immensely lucrative and large company. It boasts 42,000 employees—20,000 of whom hold U.S. government security clearances. It is the NSA’s largest contractor, according to CorpWatch, and is deeply involved in the NSA’s collection of intelligence. Last year it reported a net income of $525 million.

4. Center for Counterintelligence and Security Studies 

U.S. intelligence agencies aren’t the only sectors of government where the private sector has cashed in on the fear of terrorism. The post-9/11 world has seen the blossoming of a cottage industry of self-styled “experts” on Islam from private companies that market their supposedly ironclad analysis of the threat from Islamists to other federal agencies and state and local law enforcement. These companies have profited from law enforcement taking part in the “war on terror.”

Through Homeland Security grant programs like the State Homeland Security Program and the Urban Areas Security Initiative, the federal government has doled out over billions of dollars to these private companies to provide Islamophobic training. One of these companies is called the Center for Counterintelligence and Security Studies.

Based in Virginia, the center “posits radical Islam as a new global ideological menace on the order of the old communist threat from the Soviet Union,” as Political Research Associates (PRA) noted in a 2011 report on private firms doing counter-terror training. Staff members include former FBI, CIA and Defense Department personnel.

Their claim to fame is providing education and training to members of the U.S. national security community—including law enforcement agencies, according to their website. They say they have trained over 67,000 people over the past decade.

It’s unclear exactly how much this firm makes per year. But according to the PRA report, a five-day course for government employees on the “Global Jihadist Threat Doctrine” costs $39,280. The firm also lists the costs of individual courses on their website. For a 30-person class titled “Dying to Kill Us: Understanding the Mindset of Suicide Operations,” the cost is $7,856. For a three-day course for 30 people on “Informant Development for Law Enforcement to FighTerrorism,” the cost is $23,568.

The training pushes anti-Muslim ideology. On the section of their website where they list feedback from participants of the courses, one wrote: “An eye-opener. Especially how many Muslim Brotherhood front organizations there are and that the government doesn’t get it.”

5. Security Solutions International

Security Solutions International is yet another private firm hawking anti-Muslim training to law enforcement. This Miami-based company founded in 2004 uses its Israeli security connections to boost its standing in the market. They use Israeli security trainers in their courses and their president, Henry Morgenstern, is a dual Israeli-U.S. citizen who says he “developed excellent high level contacts with the Security Establishment [in Israel], making SSI the premiere training company for counter-terror related subjects.”

The company has trained over 700 law enforcement agencies since 2004. Officials from law enforcement agencies like the Massachusetts Bay Transportation Authority and the Department of Homeland Security have participated in the conferences they put on for profit. While SSI claims that they don’t cast aspersions on the whole of Islam, an examination of their trainings, conferences and the speakers they use indicate otherwise.

At a 2009 conference sponsored by Police magazine, an SSI instructor who is the company’s “expert” on Islam used a video that showed a terrorist beheading a hostage. After the course was met with criticism, the company’s CEO said “their religion got linked to terrorism a long time ago.”

The conferences they hold are usually well-attended, and this year SSI is putting on a conference in Orlando, Florida for three days. The cost for each attendee is $400. The keynote speaker this year is Steve Emerson, a well-known member of what’s been termed the “Islamophobia industry.” SSI also makes money off its Counter Terrorist magazine. A yearly subscription is $35, and the company says it has 15,000 subscribers.

Editor’s note: Dishonorable mentions that should be added to the list include corporate news media, all crony contractors including Boeing, Lockheed Martin, Halliburton, Bechtel, etc., Neocon Pro-war Activists, and the SITE Intelligence Group.