Truth - Al Franken [106]
All told, Custer Battles stands accused of stealing somewhere in the neighborhood of $50 to $60 million. That’s nowhere near the $1.8 billion that Halliburton was able to make disappear, but still, pretty good for a start-up.
Ironically, as all this money was being showered on contractors, very little of the money appropriated for reconstruction was actually being spent. By late June 2004, only $366 million of the $18.4 billion appropriated for reconstruction had actually been spent to address the urgent and growing needs of Iraqis. The two most fundamental services, electricity and clean water, were absolute disasters. Hepatitis shot up 70 percent in Iraq in 2003 because of untreated water. A particularly virulent form killed pregnant women in Baghdad’s vast slum of Sadr City. Before the war, residents of Baghdad had about twenty hours of electricity a day. By June 2004, that was down to less than ten hours a day, in DVD-viewing-experience-ruining two-hour chunks.
The longer we waited to spend the money, the more the price of rebuilding Iraq went up. By the fall of 2004, only 27 cents of every dollar spent on reconstruction actually reached projects to help Iraqis. The rest went to contractors, administrative costs, mismanagement and corruption, and, most of all, security. The less progress was made on rebuilding Iraq, the more alienated Iraqis became, the less they trusted America, and the more the insurgency was able to attract recruits. That September, the Pentagon announced that $3.46 billion was going to be rerouted from reconstruction to security.
A responsible administration would have been apoplectic about all of this. It certainly would have responded to the new facts on the ground by changing course, flip-flopping, if you will. But here again, the administration’s incapacity to admit a single mistake assured that mistake after mistake after mistake would go uncorrected.
Even the seemingly noncontroversial issue of cracking down on corruption ran afoul of the Bush administration’s policy of rewarding cronies. As of today, unlike the people of Iraq, Custer and Battles are thriving, though no longer as Custer Battles LLC, which was finally banned from bidding on further government contracts. Instead, the executives formed new companies that are housed in the firm’s old offices and run by the company’s old executives. When two whistleblowers sued Custer Battles for defrauding the United States, Bush’s Justice Department refused to take part. Justice lawyers took the dubious position that the entity that was ripped off, the Coalition Provisional Authority, was an international agency rather than a part of the U.S. government—and therefore outside of their jurisdiction.
As you might imagine, Halliburton has enjoyed an even more airtight immunity from government busybodies. On October 8, 2004, the Defense Contract and Audit Agency discovered that Halliburton’s KBR had overcharged the U.S. government $108 million for importing fuel from Kuwait to Iraq. When a U.N. monitoring board asked for the DCAA’s report, the Pentagon allowed KBR to black out almost