On the 10th anniversary of the Iraq war, I wrote a column that laid out the losers in the conflict. I argued there were still no clear winners.
One reader responded that there are obvious winners: the private civilian contractors who provided security and supplies for the war effort, and were paid tens of billions of dollars by the U.S. government. A hefty chunk of those billions was wasted due to overbilling, shoddy work and fraud.
The reader was correct. He fingered an important problem we still haven’t come to grips with: Our military and civilian agencies seem unable to conduct massive nation-building efforts in war zones effectively, or to supervise the private contractors to whom we often outsource this job.
In 2011, a bipartisan congressional commission estimated that between $31 billion and $60 billion of the $206 billion paid to contractors since the start of the Iraq and Afghanistan wars had been wasted.
The heart of the problem, said the Commission on Wartime Contracting in Iraq and Afghanistan, is excessive reliance on badly supervised private contractors engaging in “vast amounts of spending for no benefit.”
Anyone who has spent time in Iraq could testify to the truth of those words.
One man with particular knowledge of the problem is Stuart Bowen, the special inspector general for Iraq reconstruction, whose agency (referred to as SIGIR) has documented the failings of Iraq reconstruction and some of its most egregious contractor fraud. Speaking recently at the Center for Strategic and International Studies in Washington, Bowen warned: “We have yet to learn our lessons from Iraq [or Afghanistan] when it comes to nation-building under fire.”
I’ll get back to Bowen’s lessons, but first a word about our runaway spending on war contractors. In Iraq, our reliance on contractors — who provided many of the services that used to be carried out by grunts in the regular Army — permitted the military to hold down the number of troops sent to the country. It also permitted the government to go to war without re-instituting the draft.
In 2008, at the height of the war, the Congressional Budget Office estimated that one of every five dollars spent on the Iraq war had gone to contractors; at that point, the contracts were worth about $85 billion. That year, contractors employed about 180,000 people in Iraq — often from Third World countries — who worked as bodyguards, translators, construction workers, launderers, cooks and drivers. They amounted to a second private army that was larger than the U.S. military force in Iraq.
Perhaps the biggest beneficiary of the contract largesse, as you may recall, was Kellogg Brown & Root, or KBR, then a subsidiary of Halliburton Co. — whose CEO from 1995 to 2000 was Dick Cheney. KBR received huge, no-bid government contracts and reaped tens of billions of dollars for its Iraq work. A highly placed Pentagon procurement officer who tried to blow the whistle on some KBR contracts was drummed out of her job in 2005. In 2009, Halliburton agreed to pay $559 million to the U.S. government to settle corruption charges linked to KBR.
SIGIR has documented scores of egregious scams, including one that featured a Kuwait-based U.S. contractor who reaped millions by bribing corrupt American military officers to give him contracts. The agency estimates that at least $8 billion of $60 billion spent on Iraq reconstruction was “wasted.” I’d guess the number is probably much higher.
The most frustrating aspect of the contracting problem is that it was so obvious from the start of the Iraq war. With so much U.S. money flowing into Iraq — often in bricks of cash — almost any scamster could qualify as a contractor and reap millions, such as the two adventurers who won a $16 million contract to guard the Baghdad airport even though they had no experience. Iraqi friends of mine in Baghdad constantly told me stories of rip-offs by Iraqi and American wheeler-dealers, and then asked in amazement why the Americans let them continue.
The answer, as Bowen makes clear, was (and is) systemic. It involved not only the United States’ need to rely on contractors, but also its officials’ inability to track the money allotted, as well as their unwillingness to consult with locals on what projects were really needed and workable.
TRUDY RUBIN is a columnist and board member for the Philadelphia Inquirer.