Report criticizes process for postwar contracts

Companies have close ties to government, it says

October 31, 2003|By COX NEWS SERVICE

WASHINGTON - Many of the companies chosen by the United States to do about $8 billion worth of work in Iraq and Afghanistan have been large contributors to President Bush and other political campaigns and have close links to the federal government or the military, according to a report released yesterday.

The Center for Public Integrity's report listed 71 companies and individuals who had contracts with the Pentagon, the State Department or the U.S. Agency for International Development.

Called "Windfalls of War," the report did not allege illegalities or wrongdoing. The center's executive director, Charles Lewis, said at a news conference that the center's researchers did uncover things that "look very peculiar."

"These two wars in two years and their aftermaths have brought out the `Beltway bandit' companies in full force," Lewis said. "There is a stench of political favoritism and cronyism surrounding the contracting process in both Iraq and Afghanistan."

The report said campaign contributions linked to the companies totaled almost $49 million for national political campaigns and parties since 1990, with $11 million coming from the top 10 contractors. According to the center, contributions to Bush exceeded $500,000, more than was donated to any other politician in the past 12 years.

Nearly 60 percent of the companies had board members or employees who "served in or had close ties to the executive branch for Republican and Democratic administrations, for members of Congress of both parties or at the highest levels of the military," according to the report.

KBR, a subsidiary of Halliburton, had contracts worth more than $2.3 billion, topping the center's list. Vice President Dick Cheney led Halliburton before joining Bush on the 2000 presidential ticket.

Bechtel Corp., with contracts of about $1.03 billion, was listed next by the center.

Representatives of the two companies defended the process and their role in it.

Jonathan Marshall, a spokesman for the privately held Bechtel, said allegations made this spring were rehashed by the center.

"I think they very unfairly create the innuendo that there was some connection between those political contributions and the award of the contract," Marshall said. "In the case of Bechtel, that's flat-out untrue. ... Bechtel won, according to USAID, both on the basis of technical merit and low price."

Wendy Hall at Halliburton said in an e-mail response that the firm was selected "on its merits to do the work in Iraq because it is the only company with the right skills and experience to handle such wartime emergencies."

USAID released a letter, dated Wednesday, that an official had written to the center stating that the agency had "strict firewalls that separate the career workers who participate in procurement evaluation decisions from political appointees."

At a State Department news briefing yesterday, spokesman Richard A. Boucher defended the operation, saying that "an objective look at the process shows you that it is an open process, it is transparent, and it's done as fairly as the government requires."

The General Accounting Office, the investigative arm of Congress, is looking into the contract situation.

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