Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

$40 billion 'missing' from Iraq accounts

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Latest Breaking News Donate to DU
 
kpete Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 09:45 AM
Original message
$40 billion 'missing' from Iraq accounts
Source: AFP

21 Feb 2011 AFP

$40 billion 'missing' from Iraq accounts

BAGHDAD, Feb 21, 2011 (AFP) - Around $40 billion are "missing" from a post-Gulf War fund that Iraq maintains to protect the money from foreign claims, its parliamentary speaker said on Monday.

"There is missing money, we do not know where it has gone," Osama al-Nujaifi said at a news conference in Baghdad. "The money is around $40 billion in total."

"It may have been spent somewhere, but it does not appear in our accounts, so parliament will investigate where this money has gone."

.............

The Development Fund for Iraq (DFI), which was set up after the 2003 war to handle oil and other revenues, has been protected against claims by a UN resolution that expires on June 30.

Read more: http://www.zawya.com/Story.cfm/sidANA20110221T121159ZSSH64
Printer Friendly | Permalink |  | Top
Solly Mack Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 09:46 AM
Response to Original message
1. K&R
Printer Friendly | Permalink |  | Top
 
xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 09:52 AM
Response to Original message
2. GASP! no -- couldn't possibly be. nt
Printer Friendly | Permalink |  | Top
 
glinda Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 09:54 AM
Response to Original message
3. K & R n/t
Printer Friendly | Permalink |  | Top
 
liam_laddie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:03 AM
Response to Original message
4. Maybe the RNC made a withdrawal? n/t
Printer Friendly | Permalink |  | Top
 
SpiralHawk Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:05 AM
Response to Original message
5. Iraq has a wicked case of Republicon Family Financial Values
Edited on Mon Feb-21-11 10:10 AM by SpiralHawk
How many billions of USA taxpayer cash disappeared in Iraq when George AWOL Bush and Dickie 'Five-Military-Deferments' Cheney were spewing our tax dollars to their war-profiteering RepubliCronies?

Billions and Billions and Billions of our tax money...

Thanks a pantload, Republicon 'conservatives.'

Ptoooey.
Printer Friendly | Permalink |  | Top
 
FreakinDJ Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:05 AM
Response to Original message
6. Outsourcing
Printer Friendly | Permalink |  | Top
 
OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:05 AM
Response to Original message
7. Executive Order 13303
Executive Order 13303
http://edocket.access.gpo.gov/2003/pdf/03-13412.pdf

Executive Order 13303 of May 22, 2003
Protecting the Development Fund for Iraq and Certain Other Property in Which Iraq Has an Interest
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act, as amended (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), section 5 of the United Nations Participation Act, as amended (22 U.S.C. 287c) (UNPA), and section 301 of title 3, United States Code,
I, GEORGE W. BUSH, President of the United States of America, find that the threat of attachment or other judicial process against the Development Fund for Iraq, Iraqi petroleum and petroleum products, and interests therein, and proceeds, obligations, or any financial instruments of any nature whatso- ever arising from or related to the sale or marketing thereof, and interests therein, obstructs the orderly reconstruction of Iraq, the restoration and maintenance of peace and security in the country, and the development of political, administrative, and economic institutions in Iraq. This situation constitutes an unusual and extraordinary threat to the national security and foreign policy of the United States and I hereby declare a national emergency to deal with that threat.
I hereby order:
Section 1. Unless licensed or otherwise authorized pursuant to this order, any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is prohibited, and shall be deemed null and void, with respect to the following:
(a) the Development Fund for Iraq, and
(b) all Iraqi petroleum and petroleum products, and interests therein, and proceeds, obligations, or any financial instruments of any nature whatso- ever arising from or related to the sale or marketing thereof, and interests therein, in which any foreign country or a national thereof has any interest, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of United States persons.
Sec. 2. (a) As of the effective date of this order, Executive Order 12722 of August 2, 1990, Executive Order 12724 of August 9, 1990, and Executive Order 13290 of March 20, 2003, shall not apply to the property and interests in property described in section 1 of this order.
(b) Nothing in this order is intended to affect the continued effectiveness of any rules, regulations, orders, licenses or other forms of administrative action issued, taken, or continued in effect heretofore or hereafter under Executive Orders 12722, 12724, or 13290, or under the authority of IEEPA or the UNPA, except as hereafter terminated, modified, or suspended by the issuing Federal agency and except as provided in section 2(a) of this order. Sec. 3. For the purposes of this order:
(a) The term ‘‘person’’ means an individual or entity;
(b) The term ‘‘entity’’ means a partnership, association, trust, joint venture, corporation, group, subgroup, or other organization;
(c) The term ‘‘United States person’’ means any United States citizen, permanent resident alien, entity organized under the laws of the United
States or any jurisdiction within the United States (including foreign branches), or any person in the United States;
(d) The term ‘‘Iraqi petroleum and petroleum products’’ means any petro- leum, petroleum products, or natural gas originating in Iraq, including any Iraqi-origin oil inventories, wherever located; and
(e) The term ‘‘Development Fund for Iraq’’ means the fund established on or about May 22, 2003, on the books of the Central Bank of Iraq, by the Administrator of the Coalition Provisional Authority responsible for the temporary governance of Iraq and all accounts held for the fund or for the Central Bank of Iraq in the name of the fund. Sec. 4. (a) The Secretary of the Treasury, in consultation with the Secretary of State and the Secretary of Defense, is hereby authorized to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA and the UNPA as may be necessary to carry out the purposes of this order. The Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the United States Government. All agencies of the United States Govern- ment are hereby directed to take all appropriate measures within their statu- tory authority to carry out the provisions of this order.
(b) Nothing contained in this order shall relieve a person from any require- ment to obtain a license or other authorization in compliance with applicable laws and regulations. Sec. 5. This order is not intended to, and does not, create any right, benefit, or privilege, substantive or procedural, enforceable at law or in equity by a party against the United States, its departments, agencies, entities, officers, employees, or agents, or any other person.
Sec. 6. This order shall be transmitted to the Congress and published in the Federal Register.

THE WHITE HOUSE,
May 22, 2003.
Printer Friendly | Permalink |  | Top
 
OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:08 AM
Response to Reply #7
9. self-delete. nt
Edited on Mon Feb-21-11 10:08 AM by OnyxCollie
Printer Friendly | Permalink |  | Top
 
AlphaCentauri Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:17 AM
Response to Reply #7
13. In other words, oil is mine n/t
Printer Friendly | Permalink |  | Top
 
OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 11:08 AM
Response to Reply #13
14. Billions in Oil Missing in Iraq, U.S. Study Says
http://www.nytimes.com/2007/05/12/world/middleeast/12oil.html?_r=2&hp&oref=slogin

Between 100,000 and 300,000 barrels a day of Iraq’s declared oil production over the past four years is unaccounted for and could have been siphoned off through corruption or smuggling, according to a draft American government report.

~snip~

The report does not give a final conclusion on what happened to the missing fraction of the roughly two million barrels pumped by Iraq each day, but the findings are sure to reinforce longstanding suspicions that smugglers, insurgents and corrupt officials control significant parts of the country’s oil industry.

~snip~

But a State Department official who works on energy issues said that there were several possible explanations for the discrepancy, including the loss of oil through sabotage of pipelines and inaccurate reporting of production in southern Iraq, where engineers may not properly account for water that is pumped along with oil in the fields there.

“It could also be theft,” the official said, with suspicion falling primarily on Shiite militias in the south. “Crude oil is not as lucrative in the region as refined products, but we’re not ruling that out either.”


WikiLeaks cables: Saudi Arabia cannot pump enough oil to keep a lid on prices
http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

The US fears that Saudi Arabia, the world's largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.

The cables, released by WikiLeaks, urge Washington to take seriously a warning from a senior Saudi government oil executive that the kingdom's crude oil reserves may have been overstated by as much as 300bn barrels – nearly 40%.

... However, Sadad al-Husseini, a geologist and former head of exploration at the Saudi oil monopoly Aramco, met the US consul general in Riyadh in November 2007 and told the US diplomat that Aramco's 12.5m barrel-a-day capacity needed to keep a lid on prices could not be reached.

According to the cables, which date between 2007-09, Husseini said Saudi Arabia might reach an output of 12m barrels a day in 10 years but before then – possibly as early as 2012 – global oil production would have hit its highest point. This crunch point is known as "peak oil".


Peak Oil, Missing Oil Meters and an Inactive Pipeline:
The Real Reason for the Invasion of Iraq?
http://www.paulchefurka.ca/Iraq%20and%20Saudi%20Arabia.html
Printer Friendly | Permalink |  | Top
 
bvar22 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 02:06 PM
Response to Reply #14
18. There are very few places oil in that quantity can go.
Follow the money.
It leads to Exxon, Shell, and a small handful of other Global Oil Corporations.
They KNOW,
and should be prosecuted for possession of stolen goods.
Printer Friendly | Permalink |  | Top
 
OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 02:49 PM
Response to Reply #18
20. I have an article from the Financial Times
that revealed how Saddam smuggled oil out during the Oil For Food program, and how, after the FT informed the authorities of the conspiracy, no actions were taken to stop it.

IIRC, the oil was smuggled out through Jordan and onto a Greek freighter.

Unfortunately I only have a hard copy of the article, and it's buried in stacks of papers.
Printer Friendly | Permalink |  | Top
 
UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 02:11 PM
Response to Reply #7
19. relevant part:
The term ‘‘Development Fund for Iraq’’ means the fund established on or about May 22, 2003

Printer Friendly | Permalink |  | Top
 
Bonobo Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:07 AM
Response to Original message
8. Let's put that number in perspective.
The LIHEAP (Low Income Heating Energy Assistance Program) was funded at 5 billion last year.

Obama has proposed that it be cut in half, by about 2.5 billion.

This "LOST" money for the Iraq fund is $40 billion.

Wow. Nice priorities to your own citizens, America!
Printer Friendly | Permalink |  | Top
 
chill_wind Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Feb-22-11 01:01 AM
Response to Reply #8
23. Even more! $285 BILLION in waste and fraud by the Pentagon over three years
Printer Friendly | Permalink |  | Top
 
lonestarnot Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:08 AM
Response to Original message
10. Nice another disappear $40 billion. How many billion are we up to now?
Bushitler trade his WMD search to billion dollar piles now?
Printer Friendly | Permalink |  | Top
 
OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:09 AM
Response to Original message
11. K&R. nt
Printer Friendly | Permalink |  | Top
 
JJW Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 10:10 AM
Response to Original message
12. Golly
Hope they're not buying yellow cake again! <snark>
Printer Friendly | Permalink |  | Top
 
Javaman Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 11:14 AM
Response to Original message
15. It's gone into the republican and their crony's pockets.
no bid contracts with no over sight, what do you expect?

We're just a 3rd world country with a bigger budget.

Printer Friendly | Permalink |  | Top
 
OnyxCollie Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 03:07 PM
Response to Reply #15
21. War is a racket.
War is a Racket
©2011 OnyxCollie

War is a Racket.

Well, it’s a racket, all right. A few profit- and the many pay. But there is a way to stop it.
You can’t end it by disarmament conferences. You can’t eliminate it by peace parlays at
Geneva. Well-meaning but impractical groups can’t wipe it out by resolutions. It can be
smashed effectively only by taking the profit out of war.
-Brigadier General Smedley D. Butler1


Contractors have assisted the U.S. military since the Revolutionary War.2 They support the
military by providing goods and services the military can not or chooses not to provide. These
services typically reside at both ends of the spectrum; they are either mundane duties or highly
specialized tasks. In general, contractors provide transportation, engineering and construction,
maintenance, base operations, and medical care (although this is now done primarily by military
personnel).3 Additionally, contractors now provide security for diplomatic envoys, high-value
equipment, and areas of critical importance4

There are some restrictions as to what duties contractors may perform. These duties, determined
to be “inherently governmental”, may only be performed by government personnel.5 Such
duties are regulated under the authority of the Federal Activities Inventory Reform Act and the
Office of Management and Budget (OMB) to be “so intimately related to the public interest “
that they must be performed by government personnel. Similarly, the Department of Defense
(DOD) classifies some military actions as “core” or “military essential.”6

Contractor work in Iraq is primarily in two areas -base support and construction- comprising
approximately 77,669 personnel (58% of contractors) and 19,941 personnel (15% of contractors),
respectively.7



Contractors may be used in lieu of military personnel when circumstances restrict the number
of troops in an area. Force caps are limits on troop capacity “due to law, executive direction, or
agreements with host countries or other allies.”9 Contractors are not included in the number of
troops present.

Contractor levels in Iraq numbered 132,610, with 141,300 military personnel present as of
March 2009.10 The DOD, which includes subcontractor totals in its data, estimates the number to
be as high as 190,000.11 The ratio of contractors to military personnel is 1 to 1.12 Of those
132,610 contractors, 36,000 were U.S. citizens, 36,000 were local nationals, and 60,000 were
third-country nationals.13

In preparation for the Iraq War, Secretary of Defense Donald Rumsfeld objected to the recommendations
that a half-million troops be sent to Iraq.14 Central Command (CENTCOM) chief
of war plans Colonel Mike Fitzgerald explained, “We got told that it was old think, too big,
wasn’t innovative, and to readdress the planning using a different set of assumptions.”15 Believing
such a large number of military personnel would lack the speed and agility needed to counter
new challenges, and encouraged by improvements in military capabilities, Secretary Rumsfeld
requested General Tommy Franks draw up battle plans for 160,000 soldiers.16 This overconfidence
would later prove costly once the security situation became detrimental.

Postwar planning for Iraq, originally under the auspices of the Department of State (DOS),
was turned over to the DOD at the recommendation of Secretary Rumsfeld.17 Secretary of State
Colin Powell agreed: “State does not have the personnel, the capacity, or the size to deal with an
immediate postwar situation in a foreign country that’s eight thousand miles away from here.”18
On January 20, 2003, President Bush issued National Security Presidential Directive 24, which
created the Office of Reconstruction and Humanitarian Affairs (ORHA), the new office in the
DOD for managing postwar Iraq.19

The decision to remove postwar planning from the National Security Council (NSC) in the
DOS and turn it over to the DOD was viewed with hostility. “‘You don’t need to worry about the
nuts and bolts of basic reconstruction,’ NSC Director Frank Miller remembers two Defense officials
saying. ‘It’s now an operation.’ ‘Thereafter,’ Miller
said, ‘it was ‘you guys stay out, we don’t need your help.’’” 20

One month after the invasion of Iraq, President Bush signed P.L. 108-11.21 Born from this
law was the Iraq Relief and Reconstruction Fund (IRRF), a $2.475 billion congressional appropriation
to pay for reconstruction and humanitarian relief. Originally developed by the NSC, it
was based on two premises- that Iraq’s infrastructure would be unimpaired and that oil revenues
would pay for reconstruction costs.22

Following the creation of the IRRF, the United Nations Security Council passed Resolution
1483 (UNSCR 1483).23 UNSCR 1483 formed the Development Fund for Iraq (DFI) which became
a cache for Iraq’s oil and gas revenues. These were to be deposited into the Federal Reserve
Bank of New York, through which Iraq’s temporary government, the Coalition Provisional
Authority (CPA), could withdraw funds for reconstruction costs.24

Less than a month after the formation of the DFI, the CPA passed two regulations. The first
regulation gave the head of the CPA, Ambassador L. Paul Bremer, total control of the DFI.25 The
second regulation created the Program Review Board (PRB).26 The PRB managed the DFI “in a
transparent manner to meet Iraq’s humanitarian needs, support the economic reconstruction, fund
projects to repair Iraq’s infrastructure, continue disarmament programs, and pay for the costs of
the country’s civilian administration.”27

Using its legal status as an “international organization,” the CPA was provided a loophole to
dispense Iraq funds without succumbing to U.S. contracting regulations.28 The CPA then developed
its own procedures, which it failed to follow.29 Additionally, CPA’s Head of Contracting Activity
(HCA) was put in charge of managing Iraqi ministry contracting until the ministries could
be capable of “ the transparent use and management of Iraqi funds.”30
Money from the DFI was loaded onto pallets and transferred by plane:

The CPA relied on the DFI to fund the operations of Iraq’s ministries and
to pay for reconstruction projects. Held in a Federal Reserve Bank account
in New York, DFI cash was flown to Baghdad in very large sums whenever
the CPA requested. These shipments—the largest airborne transfer of
currency in history—proved an enormous logistical challenge. A typical
pallet of DFI cash had 640 bundles, with a thousand bills in each bundle.
Each loaded pallet weighed about 1,500 pounds. The pallets were flown
into Baghdad’s airport at night and were then driven to the Central Bank
of Iraq for deposit.

The first emergency air-lift of money to Iraq was for $20 million, but the
shipments rapidly grew in size. In December 2003, the CPA requested a
$1.5 billion shipment, at the time the largest single payout of U.S. currency
in Federal Reserve Bank history.16 But that record was soon broken when,
in June 2004, more than $4 billion was flown to Iraq, just before the CPA’s
transfer of sovereignty to the Iraqi Interim Government.31


By November 2003, CPA had to scramble to meet growing reconstruction demands.
Congress had appropriated $18.4 billion dollars to the Iraq Relief and Reconstruction Fund
(IRRF2)32 and the CPA appointed Admiral Dave Nash to head the newly formed Program Management
Office (PMO) to get the contracts in place.33 Nash’s solution was to outsource the contract
management to private contractors.34

Nash requested 100 government personnel to staff the PMO, but was never able to get
more than half.35 As of January 2004, he had eight staff members.36 Those whom he did receive
had less than stellar qualifications. Instead, he had to rely on private contractors to perform
the inherently governmental duties. This was a cause for concern in Congress.

Noticing the failure to produce candidates for contracting positions, the DOD used its
White House Liaison Office and a new federal law to fill positions at CPA.37 The new law -Section
3161 in Title 5 of the United States Code- permitted federal hiring for temporary organizations
without the standard requirements.38 Despite this, the shortage of talent meant that the new
law captured only the unqualified, and with the appearance of being politicized as well.

Lack of qualified personnel for contract oversight was a common theme.39 Brigadier
General Stephen Seay experienced similar problems when he became the CPA’s HCA in February
2004.40 Deluged by IRRF2 contracts, Seay struggled to keep up while a third of his 69 contracting
positions remained vacant.41 Retired Rear Admiral David Oliver had only four of his 39
positions filled during his five months as Director of CPA’s OMB.42 Oliver’s replacement, Rodney
Bent, had a staff with no experience with budgets at all. “I had a relatively young staff that
was completely inexperienced and had no particular training either in the Middle East or on
budget matters.”43

The inexperienced, under qualified PMO staff rotated out of country constantly.44 This
was due to the belief that the U.S.’ stay in Iraq would be brief.45 As a result, three month tours of
duty were the norm. The high turnover rate meant that as soon as staff acquired “on the job”
training, they were replaced.46 “If you couldn’t get somebody for 90 days, you’d take somebody
for 60 days,” said retired Lieutenant General Jeffery Oster.47 Over the course of the CPA’s
fourteen-month existence, only seven people served the entire time.48

The lack of understanding of responsibilities by contracting officers resulted in insufficient
monitoring of contractors.49 Logistics Civilian Augmentation Contracts (LOGCAP), such
as the one awarded to Halliburton/KBR in December 2001,50 are cost-plus award fee contracts or
fixed-price contracts.

Cost plus contracts allow the contractor to be reimbursed for reasonable, allowable, and allocable
costs incurred to the extent prescribed in the contract. A cost-plus award fee contract provides
financial incentives on the basis of performance. These contracts allow the government to evaluate
a contractor’s performance according to specified criteria and to grant an award amount within
designated parameters. Award fees can serve as a valuable tool to help control program risk and en
courage excellence in contract performance. To reap the advantages that cost-plus contracts offer,
the government must implement an effective award fee process.51


Award fees based on performance are an incentive to ensure quality work. However, failure
of the contracting officers to require defense contractors to produce a definitized schedule of
when work will be initiated and completed, and an absence of oversight of contractors’ progress
on task orders, permits the possibility of long delays, substandard work, and wasted federal
funds.52

Defense Federal Acquisition Regulation Supplement requires that undefinitized contract actions
include a not-to-exceed cost and a definitization schedule. It also requires that the contract be
definitized within 180 days or before 50 percent of the work to be performed is completed, which
ever comes first.53


10 task orders, valued at $1,401,559,925, were scheduled to be definitized one year after
they were required to be definitized.54 A Special Inspector General for Iraq Reconstruction (SIGIR)
audit revealed contracting officers were not aware that Iraq task orders were required to be
definitized, resulting in the loss of millions of taxpayer dollars.55

When contractors begin work before schedules are definitized, subsequent changes result
in high costs.56 In May 2004, Parsons was awarded a contract to build a maximum security
prison.57 Work on the task order, worth $73 million, was to begin in November. Due to the increase
in hostilities, progress on the prison got off to a slow start. Almost two years later, Parsons
made it known to the U.S. Army Corp of Engineers that completion of the prison could be ex-
pected in September 2008, three years late. The government terminated the contract. Two Iraqi
contractors also failed to meet expectations. The government stopped work on the project completely.
After three years and $40 million dollars, and all that was to show for the effort was a
half-finished prison with poor construction. When the government turned it over to the Iraqis,
they refused to take it. When SIGIR did an inspection of the incomplete facility, they found $1.2
million of material was missing.

The largest Iraq Relief and Reconstruction Fund task order was awarded to KBR.58 The
task order required KBR to restore functionality to Iraq’s natural gas liquid and liquified petroleum
gas plants. The task order, comprising 20.3% of KBR’s LOGCAP contract, was terminated
due to cost overruns, schedule delays, and funding limitations.59 At the time of termination, work
had nearly been completed. The task order had been changed 35 times and $146.7 million worth
of expenses had been incurred by KBR. KBR’s expenses were disputed by the Defense Contract
Audit Agency, which found half ($70 million) to be unsupported. The task order had an original
not-to-exceed funding level of $5 million. The government settled with KBR on February 21,
2005, for a price of $133.5 million.60

Contractors are required to provide workers’ compensation insurance, known as Defense
Base Act (DBA).61 The cost of this insurance is covered by the cost-plus feature of the LOGCAP
contract. An audit conducted by the Defense Contract Audit Agency of KBR’s insurance premi-
ums from 2003 to 2007 found that KBR paid $592 million.62 An audit by the Army Audit
Agency revealed that KBR’s costs for DBA for fiscal year 2005 amounted to $284 million, yet
KBR’s insurance provider, American International Group (AIG) paid out only $73 million in
claims.63 The Army Audit Agency concluded “the cost of DBA insurance substantially exceeded
the losses experienced by the LOGCAP contractor.”64

Current Policy

While it is clear that waste is endemic in the current structure, when taking into account
the difficulty of operating in a war time environment, most of the problems discussed in this essay
are beyond simple repair. However, the DBA insurance provides a foothold for analysis.
Unlike the DOD, which allows contractors to choose from numerous Department of Labor
approved insurance providers, DOS uses a single source insurance provider, CNA.65 Increasing
the pool of clients reduces the costs. The U.S. Agency for International Development
(USAID) also uses a single source insurance provider.66 USAID’s insurance rate is $1.58 per
$100 of salary costs.67 DOD’s insurance premiums have varied, going from as low as $3.75 per
$100 of salary costs to as much as $16.20 per $100 of salary costs.68

According to data provided by AIG to the Commission on Wartime Contracting, AIG’s
expenses are 40% of premiums69, yet they pay only 25% in claims.70






1 Butler, S. (1935) War is a Racket, p. 39
2 Congressional Budget Office. (2008). Contractorsʼ Support of U.S. Operations in Iraq, p. 12
3 Ibid, p. 6
4 Ibid, p. 12
5 Ibid, p. 18
6 Ibid
7 Schwartz, M. (2009). Department of Defense Contractors in Iraq and Afghanistan: Background and Analysis, p. 6
8 Ibid
9 Government Accountability Office. (2003). MILITARY OPERATIONS: Contractors Provide Vital Services to Deployed Forces but Are Not Adequately Addressed in DOD Plans, p. 6
10 Schwartz, M. (2009). Department of Defense Contractors in Iraq and Afghanistan: Background and Analysis, p. 5
11 Congressional Budget Office. (2008) Contractorsʼ Support of U.S. Operations in Iraq, p. 8
12 Ibid
13 Schwartz, M. (2009). Department of Defense Contractors in Iraq and Afghanistan: Background and Analysis, p. 7
14 Special Inspector General for Iraq Reconstruction. (2009). Hard Lessons: The Iraq Reconstruction Experience, p. 35
15 Ibid, p. 34
16 Ibid, p. 35
17 Ibid, p. 33
18 Ibid
19 Ibid, pp. 33, 34
20 Ibid, p. 34
21 Ibid, p. 61
22 Ibid
23 Ibid, p. 80
24 Ibid
25 Ibid
26 Ibid
27 Ibid
28 Ibid, p. 81
29 Ibid
30 Ibid
31 Ibid, p. 88
32 Ibid, p. 103
33 Ibid, p. 105
34 Ibid, p. 106
35 Ibid, p. 107
36 Ibid, p. 108
37 Ibid, p. 83
38 Ibid
39 Government Accountability Office. (2004). MILITARY OPERATIONS: DODʼs Extensive Use of Logistics Support Contracts Requires Strengthened Oversight, p. 42
40 Special Inspector General for Iraq Reconstruction. (2009). Hard Lessons: The Iraq Reconstruction Experience, p. 172
41 Ibid, p. 173
42 Ibid, p. 84
43 Ibid
44 Government Accountability Office. (2003). MILITARY OPERATIONS: Contractors Provide Vital Services to Deployed Forces but Are Not Adequately Addressed in DOD Plans, p. 30
45 Special Inspector General for Iraq Reconstruction. (2009). Hard Lessons: The Iraq Reconstruction Experience, p. 82
46 Government Accountability Office. (2003). MILITARY OPERATIONS: Contractors Provide Vital Services to Deployed Forces but Are Not Adequately Addressed in DOD Plans, p. 29
47 Special Inspector General for Iraq Reconstruction. (2009). Hard Lessons: The Iraq Reconstruction Experience, p. 83
48 Ibid
49 Ibid, p. 177
50 Government Accountability Office. (2004). MILITARY OPERATIONS: DODʼs Extensive Use of Logistics Support Contracts Requires Strengthened Oversight, p. 8
51 Ibid, p. 7
52 Ibid, p. 44
53 Ibid, p. 29
54 Ibid, p. 30
55 Special Inspector General for Iraq Reconstruction. (2009). Hard Lessons: The Iraq Reconstruction Experience, p. 175
56 Government Accountability Office. (2004). MILITARY OPERATIONS: DODʼs Extensive Use of Logistics Support Contracts Requires Strengthened Oversight, p. 28
57 Special Inspector General for Iraq Reconstruction. (2009). Hard Lessons: The Iraq Reconstruction Experience, p. 209
58 Special Inspector General for Iraq Reconstruction. (2009). Cost, Outcome, and Oversight of Iraq Oil Contract with Kellog, Brown & Root Services, Inc. p. 21
59 Ibid, p. 20
60 Ibid, p. 24
61 Grasso, V. (2009). Defense Logistical Support Contracts in Iraq and Afghanistan: Issues for Congress, p. 9
62 Ibid
63 Ibid, p. 10
64 Ibid
65 Grasso, V., Szymendera, S. & Webel, B. (2008). The Defense Base Act (DBA): The Federally Mandated Workersʼ Compensation System for Overseas Government Contractors, p. 11
66 Ibid
67 Ibid, p. 15
68 Ibid, p. 17
69 Grasso, V. (2009). Defense Logistical Support Contracts in Iraq and Afghanistan: Issues for Congress, p. 10
70 Grasso, V., Szymendera, S. & Webel, B. (2008). The Defense Base Act (DBA): The Federally Mandated Workersʼ Compensation System for Overseas Government Contractors, p. 22
Printer Friendly | Permalink |  | Top
 
Kingofalldems Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 11:16 AM
Response to Original message
16. Special Prosecutor needed--subpoena all Bush documents
Printer Friendly | Permalink |  | Top
 
Bandit Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 12:25 PM
Response to Reply #16
17. I am beginning to believe that since that is not happening, those currently in Power
are also taking advantage of "missing billions".. I bet Obama will be a whole lot wealthier when he leaves office than when he arrived...
Printer Friendly | Permalink |  | Top
 
chill_wind Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Feb-22-11 01:56 AM
Response to Reply #16
24. DOJ would just invoke "state secrets". We have a duty to protect Republicans
from BushCo era.

Investigation (one going on right now) into part of billions blown in fraud-- will probably go the way of Yoo and the OLC torture memos. "Bad judgment".


This is some seriously astonishing stuff that would explain a lot about a lot-

Hiding Details of Dubious Deal, U.S. Invokes National Security
By ERIC LICHTBLAU and JAMES RISEN
Published: February 19, 2011

http://www.nytimes.com/2011/02/20/us/politics/20data.html?_r=3&pagewanted=all


Printer Friendly | Permalink |  | Top
 
Blue_Tires Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Feb-21-11 03:34 PM
Response to Original message
22. I'm sure the teabagger deficit hawks will be right on this...
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Tue Apr 30th 2024, 05:58 PM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Latest Breaking News Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC