If the Bush administration made a good-faith effort to root out and prevent corruption in Iraq, but it happened anyway, I suppose it’d be a little easier to tolerate. But a rather devastating piece in the current issue of Newsweek suggests the Bush gang is well aware of the very expensive corruption, but just doesn’t care.
By many accounts, Custer Battles was a nightmare contractor in Iraq. The company’s two principals, Mike Battles and Scott Custer, overcharged occupation authorities by millions of dollars, according to a complaint from two former employees. The firm double-billed for salaries and repainted the Iraqi Airways forklifts they found at Baghdad airport — which Custer Battles was contracted to secure — then leased them back to the U.S. government, the complaint says. In the fall of 2004, Deputy General Counsel Steven Shaw of the Air Force asked that the firm be banned from future U.S. contracts, saying Custer Battles had also “created sham companies, whereby [it] fraudulently increased profits by inflating its claimed costs.” An Army inspector general, Col. Richard Ballard, concluded as early as November 2003 that the security outfit was incompetent and refused to obey Joint Task Force 7 orders: “What we saw horrified us,” Ballard wrote to his superiors in an e-mail obtained by Newsweek.
Yet when the two whistle-blowers sued Custer Battles on behalf of the U.S. government — under a U.S. law intended to punish war profiteering and fraud — the Bush administration declined to take part. “The government has not lifted a finger to get back the $50 million Custer Battles defrauded it of,” says Alan Grayson, a lawyer for the two whistle-blowers, Pete Baldwin and Robert Isakson. In recent months the judge in the case, T. S. Ellis III of the U.S. District Court in Virginia, has twice invited the Justice Department to join the lawsuit without response. Even an administration ally, Sen. Charles Grassley, demanded to know in a Feb. 17 letter to Attorney General Alberto Gonzales why the government wasn’t backing up the lawsuit. Because this is a “seminal” case — the first to be unsealed against an Iraq contractor — “billions of taxpayer dollars are at stake” based on the precedent it could set, the Iowa Republican said.
The official reaction from the administration shows how lackadaisical the Bush gang is about the billions that have gone missing. In response to the Battles case, for example, the administration has argued that the Coalition Provisional Authority wasn’t an arm of the U.S. government, so we technically weren’t defrauded and there’s no reason for the administration to intervene in the case. That might work as a defense, except:
Lawyers for the whistle-blowers point out, however, that President George W. Bush signed a 2003 law authorizing $18.7 billion to go to U.S. authorities in Iraq, including the CPA, “as an entity of the United States government.” And several contracts with Custer Battles refer to the other party as “the United States of America.”
Oops.
Reports of rampant corruption in post-invasion Iraq are not exactly new. In December, there was an almost-comedic report about the U.S. losing track of up to $8.8 billion in oil money. In one of the report’s more interesting anecdotes, Frank Willis, a former senior American official in Iraq, turned over $2 million in cash to a guy with a bag claiming to be a security contractor.
Having said that, what is new is the evidence that the Bush administration simply hasn’t cared about the corruption since it began and seems unprepared to take action to prevent it in the future.
Willis and other critics worry that with just $4.1 billion of the $18.7 billion spent so far, the U.S. legal stance will open the door to much more fraud in the future. “If urgent steps are not taken, Iraq … will become the biggest corruption scandal in history,” warned the anti-corruption group Transparency International in a recent report. Grassley adds that if the government decides the False Claims Act doesn’t apply to Iraq, “any recovery for fraud, waste and abuse of taxpayer dollars … would be prohibited.”
And yet, the administration won’t lift a finger. As far as they’re concerned, their “accountability moment” has come and gone.