fraud, waste, and abuse, pt. 1

A few days before we’re scheduled to leave FOB Warhorse and begin the journey home, everyone in the world is trying to do laundry. Not only are all the soldiers who are going home trying to get their clothes clean (in order to roll or fold them neatly, so they take up less room in the rucksack than they would wadded up in a laundry bag), but there’s an entire extra brigade on the FOB as we hand off to the incoming unit. The turnaround time at the main post laundry increases from 36 hours to 48, and then to 72 or beyond.

(I’ve wished all along that they would just supply us with washing machines. Sure, sometimes it’s nice to hand off your laundry to some KBR foreign national and forget about it for a couple of days. But it’s not like using a washing machine is particularly labor- or time-intensive. It’s perfectly understandable that the soldiers stationed out at the local police stations and joint service stations would need a laundry service, but as for the rest of us, there’s no reason to pay a private company to do our washing.)

Desperate, and with far too much dirty clothing to pack efficiently, we are finally clued in by one of the contractors to Warhorse’s best-kept secret: there is another laundry. Somewhere, perhaps just down one of these broad, dusty roads, there’s a laundry, reputed to have a turnaround time of less than 48 hours, run by the Quartermaster Corps. Some soldiers, it transpires, are doing washing.

This answers one of my longstanding questions about the prosecution of the war in Iraq, and contemporary military life in general. I went to Basic with dozens of cooks, truck drivers, fuellers, carpentry and masonry specialists, and, yes, laundry and textile specialists. But if KBR and other contractors have taken over those functions, what has happened to all those soldiers?

It turns out that in many cases, they still do some version of their jobs — it’s just that no one knows about it. That morning we walk to very nearly the end of the road, just short of the wire, our laundry sacks over our shoulders, until at the last turn-in on the right, we find a chained-off, unavailable-looking pad, and behind the chain is a traditional olive drab Army tent with a handpainted sign in front informing us of hours, and another one stating that the laundry is CLOSED. We step over the chain and come closer. Behind the tent, on the second story of a large iron scaffolding, a young female soldier sits reading a magazine in front of industrial-sized, olive drab washing machines.

We enter the tent hesitantly, but soon discover that not only is the laundry not CLOSED, but that the paperwork at this facility is far more streamlined than that at the contractor-run one. In less than a minute, the friendly, efficient young PFC behind the desk has guided us through the process, and — best of all — she tells us that our laundry will be ready that afternoon. As we’re about to leave, all smiles, she notes, “2-1 Cav, huh? We don’t see too many of you guys here.” She’s perhaps three-quarters of a mile from our tent.

But until there’s a crunch, you don’t hear about the soldier-run laundry service. Most of the chain of command is as surprised as we are to discover its existence. Unlike the contractor laundry, which is practically at the geographical center of the camp, right next to the chow hall, the military laundry is pushed out to the edge of post, in an area inaccessible to vehicles, and it’s practically invisible among the other tents, trailers, and shipping containers surrounding it. Somehow, even on a forward operating base in Baqubah, private enterprise, however corrupt and inefficient, manages to bury a government-run operation, however useful and well-managed.

There’s a terrific Matt Taibbi article on the subject of contractor fraud in issue 1034 of Rolling Stone, and I won’t try to rehash the whole thing here. But one paragraph, in particular, sums it up fairly well:

What the Bush administration has created in Iraq is a sort of paradise of perverted capitalism, where revenues are forcibly extracted from the customer by the state, and obscene profits are handed out not by the market but by an unaccountable government bureaucracy. This is the triumphant culmination of two centuries of flawed white-people thinking, a preposterous mix of authoritarian socialism and laissez-faire profiteering, with all the worst aspects of both ideologies rolled up into one pointless, supremely idiotic military adventure…. It was an awful idea, perhaps the worst America has ever tried on foreign soil. But if you were in on it, it was great work while it lasted.

And Rolling Stone is not alone: CNN reported last month on a soldier who died in the shower because KBR electricians failed to properly ground the electrical wiring in his building. KBR’s reaction is hilarious, stunning, and typical:

Army documents obtained by CNN show that U.S.-paid contractor Kellogg, Brown and Root (KBR) inspected the building and found serious electrical problems a full 11 months before Maseth was electrocuted. KBR noted “several safety issues concerning the improper grounding of electrical devices.” But KBR’s contract did not cover “fixing potential hazards.” It covered repairing items only after they broke down.

(This is not, by the way, an isolated incident. A friend stationed at a remote outpost had no electricity for weeks — not to mention several fried appliances and zapped lightbulbs — when contractors mistakenly wired his trailer for 440v instead of 220.)

Unsurprisingly, American skilled laborers are not thronging to get hired in Iraq, and those who do volunteer are often pressed into service well outside their skill-sets: Taibbi interviewed an air-conditioning repairman who was suckered into coming to Iraq, only to discover he would be repairing Humvees. Far more often, foreign nationals of dubious and unverifiable job experience are carted in by the busload and forced to figure things out as they go.

KBR’s contract to repair items after they break goes a long way toward explaining why everything in Iraq is cheap and shitty. Why install a decent faucet or shower door or air conditioner when the government will gladly pay you to replace or repair a cheap one over and over again? In a system free of oversight or meaningful cost control, there’s no benefit to the contractor to buy better components or to hire skilled laborers to do the job right the first time — in the long run the company will make far more money on the endless maintenance required as things constantly fall apart, malfunction, or kill people.

But it’s not the constant irritation of power outages, air conditioning failures, and pools of raw sewage and algae under the latrine trailers that gets to me. After all, if that’s the worst that happens to us as soldiers, that’s not too bad. In terms of the horrors of war, Iraq is decidedly lightweight. With the greatest possible respect for the sacrifices of the fallen in Iraq, the entire “war” has so far generated fewer casualties than the Guadalcanal naval campaign in World War II, and the day-to-day conditions under which we live are far, far better than those in any other major American campaign, ever.

Some of that comparative luxury, one can’t help feeling, is the result of guilt. The Iraq campaign is the second major American war effort not to enjoy the support of the general public, but it’s the first one to be unpopular and be fought entirely by an all-volunteer military. For thirty years we’ve asked soldiers, Marines, and the rest to be both our buffer against the violence and anarchy that plague much of the rest of the world and the long, strong arm of enforcement in our foreign policy negotiations, and we’ve asked them to do it voluntarily rather than requiring such service from all as a condition of citizenship. And there was and is an implicit agreement in the social contract between the military (a tiny minority) and the country as a whole — take this job, do this on behalf of the rest of us, and we promise to send you into harm’s way only for matters of the utmost importance to national security. The harm we’re in the way of, in this case, has turned out to be relatively small, but every death, every mutilation, registers on the public conscience with crushing weight precisely because this campaign was, in the minds of most Americans, founded on error and lies, and not remotely necessary to our survival as a nation, or even the good of the world as a whole. To compensate for this, American taxpayers can’t remotely tolerate the idea that we are denying soldiers any possible comfort or safeguard.

All of which is very well, and I use the KBR laundry like everyone else, not to mention greater extravagances like the swimming pools at Taji and Balad. But that kind of guilt lends itself to overspending and undermonitoring. There was a lot of talk, when Democrats took control of the Congress in 2006, about whether the Congress would vote to cut off funding for the war. But of course that was never going to happen, because it’s impossible, once a military invasion has taken place and troops are deployed, to distinguish between funding the war and funding the troops. And nobody wants to take money away from the troops because, well, most people feel they’ve screwed the troops enough. And unfortunately, the same guilt makes it impossible for most people to seriously contemplate the idea of curtailing or even properly overseeing contractor spending in Iraq. Paradoxically, this actually degrades quality of life for deployed soldiers. But soldiers don’t complain. Well, they do complain — complaining is the number one leisure activity in the Army — but they also recognize that discomfort and inconvenience are part of the job.

So as a soldier, I’m not complaining particularly about the circumstances under which we’ve labored. They could have been a lot worse. But as a taxpayer and a citizen, I’m appalled by the catastrophic financial burden we’ve incurred in this campaign, to such a staggering lack of effect. Arguably, this military expedition has done the opposite of what military campaigns are supposed to do; it has endangered the security of the nation.

I’ve wondered many times in my adult life whether America would lose its way morally, but this is the first time I’ve seriously begun to contemplate the failure of the United States as an entity. Ignoring for the moment the looming and apparently quite real peril of global warming, the simple fact is that the world is running out of oil. America probably cannot re-organize itself fast enough to adjust its energy consumption to stay in line with skyrocketing oil prices. That means that either fewer goods and services will be purchased in America, or that they will be less profitable to sell, or both. But unfortunately, as noted by Bloomberg News a few months ago, even if America’s economy slows, the price of oil will continue to rise:

“The U.S. recession will be a footnote as far as the oil market is concerned,” says Jeffrey Rubin, chief economist at CIBC World Markets Inc. in Toronto, who has correctly forecast higher oil prices since 2000. “Supply isn’t growing and demand is growing robustly in the developing world.”

Oil will average $120 a barrel for all of 2008, compared with almost $98 in the first quarter of the year, and reach $150 “by the end of the decade,” Rubin said.

Historically, a recession in the U.S. would lead to lower prices. Oil fell 26 percent to $19.84 a barrel in New York in 2001 when the economy contracted. The U.S. consumes 24 percent of the world’s oil, down from 26 percent seven years ago.

Rubin’s prediction, made in March, now looks conservative; as of late June, oil prices have risen to $140 a barrel. Meanwhile,

Prices may rise as much as $20 a barrel this summer because of Middle East power needs, Morse said. A hot summer would likely result in more burning of crude oil for power generation and a diversion of natural gas from enhanced recovery of oil deposits.

“The predominant market view is that the emerging economies will overcompensate for any possible demand slump in OECD countries,” said Eugen Weinberg, an analyst at Commerzbank AG in Frankfurt. “I couldn’t rule out that oil may go to $150.”

And all this after five years of a “war” that was universally acknowledged, at least outside of official channels, to be about securing our oil supply. According to a study published by the Brookings Institute in the summer of 2003, 80% of Arabs in the Middle East believed that the war in Iraq was motivated primarily by a desire for Iraq’s oil. Proponents of the invasion more or less agreed, arguing that America wouldn’t have to foot the bill in Iraq, especially for reconstruction, because the oil would flow forth in big rivers of liquid money. As noted in a hilarious short compilation of quotes published in The Nation, the now-thoroughly-discredited Richard Perle sang this sweetest of siren songs in support of the war:

Iraq is a very wealthy country. Enormous oil reserves. They can finance, largely finance the reconstruction of their own country. And I have no doubt that they will.

But the most bitterly laughable affirmation has to be from Kenneth Pollack, former National Security Council director for Persian Gulf affairs:

It is unimaginable that the United States would have to contribute hundreds of billions of dollars and highly unlikely that we would have to contribute even tens of billions of dollars.

If we include providing security in the country in the cost of reconstruction — and it would be dishonest not to — this was obviously unduly optimistic.

Not only has an invasion of Iraq not been an oil windfall for the United States, not only has it not paid for itself or even fuelled itself (especially since, according to The New York Times, “[A]t least one-third, and possibly much more, of the fuel from Iraq’s largest refinery here is diverted to the black market… and some of the earnings go to insurgents who are still killing more than 100 Iraqis a week.”), but it actually consumes oil and money that could be going to other purposes or at least buying us more time to think about a long-term energy policy. The American Conservative, not a stronghold of greens and hippies, published the following dismaying statistics in a recent cover article:

In 2007 alone, the U.S. military in Iraq burned more than 1.1 billion gallons of fuel. (American Armed Forces generally use a blend of jet fuel known as JP-8 to propel both aircraft and automobiles.) About 5,500 tanker trucks are involved in the Iraqi fuel-hauling effort. That fleet of trucks is enormously costly. In November 2006, a study produced by the U.S. Military Academy estimated that delivering one gallon of fuel to U.S. soldiers in Iraq cost American taxpayers $42—and that didn’t include the cost of the fuel itself. At that rate, each U.S. soldier in Iraq is costing $840 per day in fuel delivery costs, and the U.S. is spending $923 million per week on fuel-related logistics in order to keep 157,000 G.I.s in Iraq. Given that the Iraq War is now costing about $2.5 billion per week, petroleum costs alone currently account for about one-third of all U.S. military expenditure in Iraq.

Part of the reason for all this fuel expenditure is that nothing on military installations in the Middle East is permanent. Indeed, there’s a general sense, even in friendly countries like Kuwait, that we’re just waiting to be told — any moment now — to pack all this up. Army facilities, referred to as “posts” or “forts” in the States, are called “camps” or “forward operating bases” in the Middle East. There are practically no real buildings unless, in the case of places like Baghdad and Taji, they existed before the invasion. Instead there’s been a massive deployment of semi-permanent structures like tents and “containerized” housing which must be powered by generators, cooled by individual AC units, and kept sanitary by trucking in water and trucking out waste. Peculiarly, the electrical architecture is usually Iraqi — 220v, 50 hz, using British-style outlets — as though we’re hoping that someday all these tents and trailers will be plugged into some vast, smoothly-functioning Iraqi infrastructure. But the overall ephemerality of our construction in Iraq reflects our ambivalence about our presence there. Whereas in Germany and Japan we were unambiguously the conquering occupiers, determined to leave our stamp on the place, in Iraq we’ve tried to be something impossible — a hands-off imperial presence; a superpower whose will cannot be denied but who, uh, will be leaving any minute.

Recent developments make it more likely that not only will the U.S. eventually make at least some of its installations in Iraq permanent, but also that we’ll finally get some of that sweet, sweet oil.

First, in January, President Bush responded to the National Defense Authorization Act for 2008 with one of his quasi-legal “signing statements,” in which he essentially authorized himself to nullify certain passages in the Act. These passages forbid the use of defense appropriation “to establish any military installation or base for the purpose of providing for the permanent stationing of United States Armed Forces in Iraq” or “to exercise United States control of the oil resources of Iraq.” Citing the executive branch’s apparently limitless powers in protecting a nebulously defined “national security,” the signing statement flatly rejects the attempt by Congress to curtail military empire-building. (And thank God. What a bunch of nancies. Oh, wait — one of them actually is a Nancy. Sorry, Madam Speaker.)

Anyway, in some ways the President’s objection to these provisions makes sense. If we end up keeping troops in Iraq for much longer — i.e., barring Senator Obama being elected and making good on his promise to bring the units home as fast as is technically feasible — it’s ridiculous not to establish permanent facilities. (On the other hand, Iraqi officials are starting to get restive, with Al-Maliki demanding a timetable for withdrawal this week, and Iraqi general Muhammad Al-Askari proposing one of his own.)

As far as oil is concerned, just a few weeks ago, the International Herald Tribune reported that:

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields, according to ministry officials, oil company officials and an American diplomat.

So, um, it looks like “United States control of the oil resources of Iraq” is already being established, regardless of anything the National Defense Authorization Act has to say about it.

Not that that’s going to benefit you or me. In large part because of war spending, U.S. deficit spending has exploded in the past several years. That deficit has to be made up either by direct investment (for example, U.S. Treasury bonds), or by “monetization of the debt,” in which the Federal Reserve essentially makes up money out of thin air and acquires bonds using this imaginary money. But both of these roads ultimately lead to inflation and the devaluation of U.S. currency. (Briefly, if foreign investors begin to lose confidence in their purchased American assets, which they will as we get deeper and deeper into debt, the sell-off will create an excess of dollars in the foreign marketplace. At the same time, the “monetization” process creates imaginary money in the Federal Reserve which can be borrowed against, in essence inflating the number of dollars in the domestic market. Thanks to Ted Koppel, Wikipedia, and Dollars & Sense Magazine for helping me to piece this together.)

And since oil is traded and purchased in dollars, even on the international market, a weak dollar causes oil prices to rise, because the oil-producing Middle Eastern countries can’t buy as much with the dollars they’re being paid. Paradoxically, and somewhat frustratingly for Francophobes, it also makes gas cheaper in Europe (because a euro will now buy more gas after the exchange rate is factored in). Even American oil companies are, at least for the moment, more than offsetting rising costs with increasing revenues. The only people really suffering from this situation are American consumers. Ironically, our “war for oil” has directly contributed to making our gas more expensive.

There’s nothing wrong with private industry — it’s the engine that moves the world. And, where necessary, there’s nothing wrong with government spending — it solves some basic problems of problems of political economy (you can’t privately invest in national defense), and it invests in the health and welfare of the society in ways that no individual is motivated to do (by, for example, providing universal basic education). But when government asks private industry to do what the government was supposed to do itself, or when private industry asks government to manufacture business opportunities for it, the result is often hair-raisingly bad.

Government workers are as hard to get rid of as crabgrass, but at least they’re directly accountable to the people. Soldiers are even more accountable — the Army is designed, basically, as a giant babysitting machine to make sure soldiers are forced to do their jobs. And of course, private companies and their workers are accountable to the buying public. Do a bad job, provide lousy service, and customers will go elsewhere. Neither of these systems is perfect — soldiers are endlessly creative at goldbricking, and private firms can get away with a lot until a viable competitor arrives on the scene. But at least they have built-in checks and prods that most of the time work to keep them more-or-less on track.

When the government hires a soldier to do a job, nearly every aspect of his job performance is regulated by Congressional mandate and DOD regulations. This makes the soldier’s job harder, but it does provide a minimum floor of competence and efficiency. But when the government hires a contractor, all too often only the result and the price are contracted for, and in the case of “cost-plus” and “no-bid” contracts, even those constraints go out the window. In other words, even the normal constraints a company would face in the marketplace vanish. This is not a recipe for good work.

Similarly, when two oilmen take charge of an entire branch of government and, apparently, concoct a war to free up some oil resources for the exclusive use of American energy companies, not to mention providing a goldmine in outsourced “services” for American logistics companies, it’s undoubtedly highly profitable. But while profitability should be good for America, it’s not if it comes about through massive deficit spending; you can’t generate wealth by paying corporations with imaginary capital. And, more crucially, it’s not good for the customer, the “end user” — i.e., it’s not good for the soldier.

None of this is to say that there’s no room for private industry in Iraq. At the beginning of our deployment, we were the last unit in the “surge” to arrive at Camp Taji, and we were stuck in the worst part of the camp, right near the trash pits. We were piled into warehouses and tents, and to communicate with our families we had to take a five-mile bus ride “downtown” to the main part of camp.

But after a couple of months, private industry got involved. Two different companies, one American, the other run by a local Iraqi entrepreneur named Sadiq. Sadiq was already responsible for one of the quasi-legal “hajji shops” on post that sold pirated DVDs and cheap electronics, so initially he had a leg up. For a week or so, his men scurried around the inside and outside of the barracks-warehouse, stringing up lines, screwing wireless routers to the rafters, until at last a wireless network suddenly appeared on our computers: “Sadiq.” (He’s a brand name on Camp Taji.)

I didn’t touch it, for a couple of reasons. First, like all American tourists in foreign lands, I’m vaguely suspicious of local technology. Second, the rumor goes around that money given to Sadiq ends up in the hands of local, erm, “militias.” Third, I’m a late adopter — I like watching other people try things first, to see if they’re any good.

Some people did sign on to Sadiq’s, and we got some mixed reviews back on that. It wasn’t very fast (remember dial-up?), but it was internet, right there in your bunk. The chief complaint seemed to be about customer service — the guys in charge of fixing stuff seemed not to be in their office very much, and when they were they were often deliberately obtuse. And there wasn’t going to be any getting your money back for times when the service went down, which was often. Not only that, but there was an upfront, non-refundable hookup charge.

Not long after that, though, an American company called OIFNet was invited by the command to install internet. So there was another week of stringing and screwing and scurrying, and then a wireless network called “radiusicafe” appeared out of the air.

And that worked fairly well. It was still slow — you could download podcasts (SLOWLY), but downloading quality video was pretty much out of the question, and even watching cruddy flash stuff like YouTube was dicey. Pages with a lot of blinking crap on them tended to load slowly. The system frequently booted you off for no reason. But Gmail worked, Flickr mostly worked, chat usually worked, and according to people even nerdier than I, World of Warcraft often worked.

Best of all, there was no hook-up required — just a login and a credit card number. It was $60 a month, which seemed steep for their pokey satellite connection, but on the other hand, it was internet. It seemed, frankly, a little surreal that we would have that while living in old Iraqi Army warehouses. And OIFNet, while they had no particular sense of urgency about customer service, would at least credit you the days missed if service went down.

When our unit moved to Warhorse, OIFNet moved with us, setting up “radiusicafe” access points all over the camp. They worked pretty well for those of us in the tents — people in the CHUs often ended up having to buy an external antenna to get signal.

All things considered, internet in Iraq was remarkably reliable — more so than showers or air conditioners or the official DOD-supplied computers we used for work. There were occasional small outages while we were at Taji and a couple of major outages at Warhorse. But you could complain, and if you got pissed off you could also go to another supplier (there was Sadiq on Taji, and even on Warhorse you could usually go to MWR). If you felt you needed it badly enough, you put up with the minor hassles. But the choice was always up to you. In short, there was a primitive free market in internet.

This is the proper relationship of American business to Iraq — scrappy, badly-managed Iraqi businesses going head-to-head with smoother, more capable American businesses. This is the clash that makes the spark that energizes the whole world. God bless Sadiq, with his lousy internet service and his cheap pirated movies. God bless that symbol of undauntable capitalism, that bearded, swarthy Horatio Alger, that cheeky bootstrapper of Mesopotamia!

I heard he was later thrown off post for involvement in a Filipina prostitution ring.

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One Response to fraud, waste, and abuse, pt. 1

  1. Pingback: more about fighting commies, less about health insurance! « Fighting Commies For Health Insurance!

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