Halliburton has been around for 50+ years and has one division (Kellogg Brown & Root : KBR) that uniquely supplies military support services; what they call “force multiplication”. They do most of the logistics, support, and even security and other functions, for both the U.S. and UK, to free up the military to do more the fighting. They are the only ones providing this (at this scale). They provide those services at a fraction of the cost that the military/government does, and they are more “on-demand”. (Rapid hiring of consultants, without long term pensions). It is outsourcing of logistics services. So wehad a war to fight and a choice do we put a lot more troops in to do the job worse and at a higher cost, or outsource the job to specialists for a fraction the cost?
How much of Halliburton is the defense support division? According to their annual report, there was about $3.6B in a peak year. Because it is one of the least profitable divisions (thinnest margins), and it caused so much political pain (and there were plenty of scandals that weren't related to the Iraq War), and it was not a substantial part of their business, they sold off the division in 2006 (completed in 2007). If it was the War Profit machine that the left imagined, this would never have happened. }
Halliburton was picked in a “no-bid” contract. This is not criminal; this is common sense in these cases. We could have debated for months and gone through the normal bid and acquisition process, and lost lives while waiting for the bureaucracy to catch up. But the truth is they were the only American company, or arguably company in the world that does what they do; so fast track it with some auditing, and we’ll do the debate later. This is exactly how Clinton did it in Kosovo which gave Halliburton the same kinds of contracts that George Bushes administration did in Iraq. If GWB’s methods were wrong, then where were the same naysayers under Clinton?
NYT and Fake News
But NYT needed fake news to fuel the readership declines, and tying the hated Dick Cheney, to a small division of his old company, and corruption was gold in their disinformation machine. It hit all the memes: corporate greed, Bush's imaginary puppet master pulling strings, the fantasy that Iraq was about Oil or Corporate profits. They got to spoon feed every liberal trope in these articles. So they ran multiple stories on how big a scandal anything with Cheney's old company had been .
Bunnatine Greenhouse raised a stink that Halliburton had been unlawfully receiving special treatment for work in Iraq, she said that military auditors caught Halliburton overcharging the Pentagon for fuel deliveries into Iraq. She also complained that Defense Secretary Donald Rumsfeld's office took control of every aspect of Halliburton's $7 billion Iraqi oil/infrastructure contract. She of course found plenty of voice in the NYT, again.
This lead to the liberal myths about Cheney (who had left the company), and how much money was made because of the Iraq War (all grotesquely overstated). Because of these claims, Criminal investigations were opened by the U.S. Justice Department, the Federal Bureau of Investigation (FBI) and the Pentagon's inspector general. These investigations found no wrongdoing within the contract award and execution process.
There were laters disputes on some of those contracts, as there always are on huge contracts of this size. Again, perspective. So far, the disputed billing amounted to less 1% of the value of the contracts (nearly $10B, and there’s like $100M in dispute). They negotiated them out, and signed off on everything. So if they are crooks, they aren’t very good ones; 1% was disputed? Under Clinton we had scandals of far larger amounts. If we had paid the Military to do it, it would have cost 5 times that amount, and congress would have rightly complained that we didn’t save money and outsource. And the Democrats would have whined about something else. So this was just people looking for any excuse to attack the administration and throw up a smoke screen and not a legitimate complaint.
Imagine what a better world that would be with those people unemployed? Or the company/division which employs over 100,000 people (not counting contractors) would be vilified or even shut down by over politics and misinformation. How much better off would we be if we had to pay more to get less, or didn’t have them as an option? That hardly seems to be the huge conspiracy that a few make it out to be. So those making noise about Halliburton are either the gullible (advocating wasting more money), or the partisans that know better but want politics over fairness, savings, or truth.
Written: 2005.08.04 Edited 2010.09.11