Since December 2003, the Democratic Policy Committee (DPC) has held twenty oversight hearings on waste, fraud, and corruption in Iraq. Over the course of these hearings, the DPC has heard from numerous witnesses, including former employees of the Department of Defense, the State Department, the Coalition Provisional Authority, the Iraqi Government, Halliburton/KBR, and other American contractors in Iraq. These witnesses have testified that the Bush Administration failed to follow long-established regulations for awarding contracts, mismanaged the performance of contracts it did award, and allowed contractors and Iraqi government officials to engage in fraudulent and wasteful conduct. 

As the examples below demonstrate, the DPC’s investigations have revealed a disturbing pattern of abuse and mismanagement by the Department of Defense, the Department of State, the Department of Justice, the Coalition Provisional Authority, and the Iraqi government. Inability to maintain proper oversight of military and reconstruction contractors has cost American taxpayers billions of dollars. That figure will continue to rise unless the federal government takes prompt and effective action to bring waste, fraud, and corruption in Iraq under control. The DPC is working with the Obama Administration to ensure that the failings of the Bush Administration are not repeated and that the Administration holds contractors accountable.

 

 

Top Ten Wasteful Spending and Health and Safety Findings

  1. The Pentagon Awarded Bonuses to KBR for Dangerously Substandard Electrical Work That Electrocuted a Green Beret in Iraq

“In reality, the electrical work performed by KBR in Iraq was some of the most hazardous, worst quality work I have ever inspected. During my theater-wide inspections, I concluded that roughly 90 percent of the new construction buildings worked on by KBR were not properly wired. This means that over 70,000 buildings in Iraq were not up to code.” (Jim Childs, Former Project Manager and Electrical Subject Expert for the Army Corps of Engineers in Iraq, 5/20/2009) 

“I would estimate approximately 50 percent of KBR electricians in Iraq do not understand the basic principles of bonding and grounding… By the time I left Iraq, I concluded that KBR was not capable of performing quality, legal electrical installations in Iraq. I worried every day that people would be seriously injured or killed by this defective work.” (Eric Peters, former KBR electrician, 5/20/2009) 

“I believe it was highly inappropriate for KBR to receive what amounted to a‘bonus’ for its faulty work in Iraq. The Defense Department is supposed to issue these ‘bonuses’ – known as ‘award fees’ – only for outstanding work. The electrical work that KBR performed was dangerously substandard, and therefore should not have been rewarded with bonuses. Had I not been removed from my position, I would have objected to the awarding of these bonuses.” (Charles M. Smith, former Head of Field Support, Contracting Division, Army Field Support Command, 5/20/2009).

 

  1. Halliburton/KBR Failed to Test and Treat Water that Troops in Iraq Used to Shower and Bathe -- Which Instead Tested Positive for E. Coli and Coliform Bacteria

“In January I noticed the water in our showering facility was cloudy and had a foul odor. At the same time (over a two-week period) I had a sudden increase in soldiers with bacterial infections presenting to me for treatment. All of these soldiers live in the same living area (PAD 103) and use the same water to shower… During a discussion (on 1 Feb 2006) between [Lieutenant] Stratingand a newly hired KBR water quality technician (Mr. Bill Gist) [Lieutenant] Strating mentioned the bacterial infections that I had been seeing in my clinic. Mr. Gist told [Lieutenant] Stratinghe had concerns that the [Reverse Osmosis Water Purification Unit (ROWPU)] concentrate reject was being used to fill the water tanks at the PADs. After hearing this [Lieutenant] Stratinginvestigated. He went to the water treatment site and followed the lines from the ROWPU concentrate drain to water trucks filling up with this water. He then followed this truck and observed it pumping the water into the water storage tank at PAD 206. The PM team tested the water at the ROWPU concentrate distribution point. The results are as follows: …Coliform Positive, E. coli Positive… After discovering that KBR was filling the water storage tanks with ROWPU concentrate, [Lieutenant] Strating gathered the base mayor ([Colonel] Grayson), the Q-West KBR site manager (Bernardo Torres), Rachel Vanhorn (KRB LNO), Mathew Wallace (KBR ROWPU Manager) and Bill Gist (water quality technician) to the ROWPU site and told them all at the same time that he had identified that KBR was filling the water storage tanks with ROWPU concentrate. Mr. Wallace stated that it has always been done this way and there is not a problem with it. [Lieutenant] Stratingexplained that it is against Army regulations (TB MED 577) to use ROWPU reject for personal hygiene.”(E-mail from Captain A. Michelle Callahan, Brigade Surgeon, 101st Sustainment Brigade, 3/31/2006)

 

  1. Halliburton/KBR Knowingly Exposed U.S. Troops and Its Own Employees to the Deadly Chemical Sodium Dichromate

“Two [KBR] health, safety and environmental supervisors from Kuwait…told us that the plant was safe, that the plant had been checked out, and that it was OK for us to go back to work. When asked specifically about the chromium contamination, they said, and I quote, that it was ‘at most a minor irritant’and that ‘exposure to it would not pose any serious health risk’… I was also concerned about the Army personnel who were providing security for us. Those soldiers were from the Indiana National Guard and they were suffering from the same sort of symptoms that we suffered, as were the Iraqi workers whose exposure to the sodium dichromate was, if anything, worse than anyone else’s.” (Danny Langford, former KBR employee and technician, 6/20/2008) 

“…I know without question that [KBR was] keenly aware of the circumstances. They had had access to the United Nations post-conflict report…they had access to their own in-house industrial hygienist report -- they knew sir. Motivation was that, quite frankly, if I had not been on the site with my medical background…this would have been swept under the rug, that piece of the contract would have been done on time and under money -- they would have made money on the project.” (Edward Blacke, former KBR health and safety coordinator, 6/20/2008)

 “Hexavalent chromium is one of the most potent carcinogens known to man… I’ve never seen such high concentrations of hexavalent chromium… I would say they had a very severe exposure over the several months… It is my understanding that [an] inadequate and improper test was conducted on approximately 250 members of the Indiana National Guard who were exposed at the QarmatAli plant, not the proper test that measures the red blood cell level of chromium.” (Dr. Max Costa, Chairman of the Department of Environmental Medicine at the New York University School of Medicine, 6/20/2008)

 

  1. Pentagon Provided Misleading and Inaccurate Information to Soldiers Exposed to Sodium Dichromate

“I would say there is evidence of significant exposure because of the symptoms people have experienced. The kinds of symptoms -- perforated septum -- that sort of thing --indicates significant exposure… I would communicate that sodium dichromate is a recognized human carcinogen and they should be aware of that… I think [the Army’s risk advisory to soldiers] should be more than modified, I think they should start again.” (Dr. Herman Gibb, former EPA official, 8/3/09) 

“But I mean there are just inconsistencies in the CHPPM report that you would have to scratch your head at. For one thing I don’t know where they [the Army] got their reference values that they’re comparing. They’re saying these are normal reference values. We don’t know what those reference values are and we sort of get this disclaimer saying there are other reference values that are lower but they don’t tell you what those lower reference values are. I don’t understand the CHPPM release or information.” (Dr. Herman Gibb, former EPA official, 8/3/09) 

“Also, I had a call from a Colonel in the Army, I think in about mid-June. I think that he was told to call me, and ask me a few questions of my experience. Unfortunately, it was more like a check in the box type thing for him. He called me up and asked me, he already knew my symptoms, and my experience. And he just let me know, I think that he was reading off the same sheet we all have, that I wasn’t exposed much, I should be all right, should live a normal life. It didn’t give me a warm fuzzy about the talk with him, or the Army’s future stance on it, that they were really going to look into it and do the right thing.” (Russell Kimberling, former Indiana National Guard Company Commander who was exposed to sodium dichromate in 2003, 8/3/09)

 

  1. Pentagon Ousted a Senior Auditor for Refusing to Approve Paying More than $1 Billion in Questionable Charges to Halliburton/KBR

“The years that I spent overseeing the LOGCAP III contract were initially the most fulfilling of my career, because I felt that the services provided under the contract were a key component to the well-being of U.S. troops during wartime. Were it not for the Army’s decision to remove me from my position managing the LOGCAP III contract, I would still be serving the military. The Army’s decision to remove me from supervision of the LOGCAP contract essentially ended my career with the Army, and made it impossible for me to be promoted to positions of greater responsibility. This was a bitter end to my 31-year career.” (Charles M. Smith, former Head of Field Support Contracting Division of the Army Field Support Command, 7/9/2008) 

Testimony of Charles M. Smith, former Head of Field Support Contracting Division of the Army Field Support Command, 7/9/2008: 

QUESTION: You indicated that you didn’t know you were dismissed as the top contract officer of LOGCAP III until you showed up at a meeting and the person that replaced you was sitting at a meeting in your chair. Is that correct?

 

SMITH: He wasn’t in my chair, but my recollection is it was after the phone conversation with General Johnson where I went off to work with my contracting officer, retrieve the 15 percent letter, draft up a new version, get that done. I returned to the overall conference we were having, with KBR and other government people, and I noticed in attendance was the chief of ammunition contracting office. I found that peculiar. And I asked Colonel Tim Considine, “Why is Mr. Laurel here when this isn’t his business?” Colonel Considine said, “Well, yes it is. You’re being replaced.” And that’s when I found out I was being replaced—when I walked into the room.”

 

  1. Pentagon Allowed Still-Useable Equipment to Be Thrown Into “Burn Pits”

“I observed burn pits throughout my time in Iraq, which resulted in millions of U.S. taxpayer dollars being wasted. Burn pits were used by the military and others to dispose of still-useable equipment and items that were no longer needed for a particular project, might need minor repair, or were difficult to transport and find storage.” 

“In Fallujah, I observed Iraqis scavenging in the burn pits for items that they could use. They would jump in the back of my truck and try to remove items I was not discarding.” 

“I saw flack vests, black and green jungle style combat boots, olive drab field jackets, ammunition crates, tires, inner tubes, and a large volume of food items. These items were going to waste in the burn pits.” (Frank Cassaday, former KBR employee, 4/28/2008)

 

  1. Halliburton/KBR Served Spoiled and Expired Food to the Troops

“Food items were being brought into the base that were outdated or expired as much as a year. We were told by the KBR food service managers to use these items anyway. This food was fed to the troops. A lot of these were frozen foods: chicken, beef, fish, and ice cream. For trucks that were hit by convoy fire and bombings, we were told to go into the trucks and remove the food items and use them after removing the bullets and any shrapnel from the bad food that was hit. We were told to turn the removed bullets over to the managers for souvenirs. When I had the military check some of the food shipments, they would turn the food items away. But there wasn’t any marking of the record, so KBR just sent the food to another base for use. The problem with expired food was actually worsened with the switch to PWC because it took longer for the food items to get to the base as they were shipped from the U.S. to a warehouse in Kuwait.” (Rory Mayberry, former KBR Food Production Manager, 6/27/2005) 

“KBR also paid for spoiled food. When Tamimi dropped off food, there was often no place to put it in to the freezers or refrigeration. Food would stay in the refrigeration and freezer trucks until they ran out of fuel. KBR wouldn’t refuel the trucks so the food would spoil. This happened quite a bit.” (Rory Mayberry, former KBR Food Production Manager, 6/27/2005)

 

  1. Halliburton/KBR Charged for Meals Never Served

“KBR charged the government for meals it never served to the troops. Until late 2003, Anaconda was a transition site for army personnel. Because there could be large numbers of extra personnel passing through everyday, KBR would charge for a surge capacity of 5,000 troops per meal. However, KBR continued to charge for the extra headcount even after Anaconda was no longer a transition site. When I questioned these practices, the managers told me that this needed to be done because KBR lost money in prior months, when the government suspended some of the dining hall payments to the company. The managers said that they were adjusting the numbers to make up for the suspended payments.” (Rory Mayberry, former KBR Food Production Manager, 6/27/2005) 

“KBR was supposed to feed 600 Turkish and Filipino workers meals according to their custom. Although KBR charged the government for this service, it didn’t prepare the meals. Instead, these workers were given leftover food in boxes and garbage bags after the troops ate. Sometimes there were no leftovers to give them.” (Rory Mayberry, former KBR Food Production Manager, 6/27/2005)

 

Testimony of Barry Godfrey, former KBR Subcontracts Administrator, 12/7/2007:

“QUESTION: And the [sub] contractor was being paid as if they were serving 5,500 food – 5,500 troops?

GODFREY: Yes. 

QUESTION: And you found out they were serving only a thousand? 

GODFREY: On the average.” 

 

  1. Parsons Failed to Build 122 of 142 Health Clinics, Despite Being Paid $200 Million of a $243 Million Contract

Testimony of Ali Fadhil, Iraqi doctor and Fulbright Scholar, 7/28/2006:

“QUESTION: [Y]ou took a look at the projects that Parsons had done and you say shoddy workmanship, bad products, badmaterials? Is that a fair assessment?

FADHIL: Yes, in fact, our first approach is to find out what Parsons exactly…what was more interesting for us is the one hundred fifty clinics, the super clinics…

QUESTION: Right.

FADHIL: Which then turned into one hundred forty-two. But, in fact, when I went to the Ministry of Health, where I spent almost a month trying to find out where all these health clinics, simply the officials said: there are no clinics, they are imaginary clinics... 

QUESTION: You’re saying the other clinics don’t exist?

FADHIL: The other clinics, there were only like… it’s just a building, it’s like a half-finished buildings: marble at the front, bricks at the side, you see inside it’s just a ghost building, you can’t find anything. It’s just, as you said, it’s just bricks and walls. That’s, that’s all that it is.”

 

  1. The Pentagon Spent $40 Million on a Prison that Was Never Finished and the Iraqis Did Not Want 

“I attended meetings in 2005 and 2006 between U.S. government officials, the Iraqi Minister of Justice and his Deputy, and representatives of the Parsons Corporation to discuss the Kahn Bani Sa’adprison project. During one of the meetings, the Minister of Justice clearly stated that the government of Iraq did not want the prison to be built because, among other reasons, it was too close to the Iranian border. The U.S. government officials -- in front of the American contractor -- said that the prison was going to be built anyway, despite the opposition of the Iraqi government. Even now, four years and $40 million dollars later, roofs are missing, floors have collapsed, there is no plumbing or electricity, windows have not been installed, and roads in the complex remain unpaved.” (Testimony of Anonymous Witness, Former Senior Advisor to the U.S. Government in Iraq, 9/22/2008)