This is a ten-minute excerpt from a longer speech, text below. Keep up the pressure, Senator!
KBR embroidered towel: 4x the cost, but "doesn't matter," the taxpayer has it covered
Here is another installment on Iraq waste by North Dakota Senator Byron Dorgan. This stuff makes me just as mad as the Senator and I am an enthusiastic supporter of his campaign. Below I can reproduce his floor speech because it appears in the Congressional Record. HERE is a reference to an article by Donald Barlett and James Steele in Vanity Fair magazine that provides much detail about the Pentagon's so-called Iraq "accountant" operating out of a home in San Diego that Senator Dorgan discusses in the speech. More later...
[Congressional Record: March 31, 2008 (Senate)]
[Page S2213-S2216]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
[DOCID:cr31mr08-137]
WASTE, FRAUD, AND ABUSE
Mr. DORGAN. Mr. President, 2 weeks ago, I had a chance to meet Herman Wouk, who is one of America's greatest authors. He wrote ``Caine Mutiny'' and he wrote ``War and Remembrance.'' He is 91 years old and a remarkable man, just a remarkable man. He was telling me something kind of in jest.He said: ``You know, I don't know much about what happened after 1945, but I know everything that happened before 1945."
He was talking about his body of work, his research on the Second World War and prior to that period of time. And he wrote wonderful books, as all of us know. He is one of America's greatest authors.
Herman Wouk and I were talking about the Iraq war and talking about the stories about the Iraq war, and he said to me: ``Do you know anything about the Truman Committee? Do you know anything about what happened in the Second World War with President Harry Truman, then-Senator Harry Truman, who created a committee, a special committee in the United States Senate, bipartisan, to go after this issue of contract fraud that was going on with respect to defense contracting?"
I told him I certainly did know about the Truman committee, and we have had, I believe, four votes in the Senate that I offered as amendments to establish a Truman committee.
At this point I want to show my colleagues a photograph of a man. I don't know this man personally. This comes from a Thursday, March 27, edition of the New York Times. I read an article about this man on an airplane, and I was struck by it because it is such an unbelievable story, and it is another chapter of, in my judgment, a shameful series of chapters of abuse of the American people by contractors with respect to the Iraq war.
The New York Times published this article, and this is a picture of a 22-year-old man from Miami Beach. He had gotten contracts worth over $300 million in U.S. taxpayers' dollars, and he had signed a contract with the U.S. Army to provide arms to Afghan soldiers. Apparently, we, as taxpayers, and the U.S. Army, were trying to provide additional arms for the Afghan Army with which to fight and defend itself. So this 22-year-old man got a $300 million contract from the Army Sustainment Command, through a company that had been a shell for a number of years established by this man's father. Mr. Diveroli is his name. This is a mug shot from the Miami Dade Police Department. He had allegedly assaulted a parking lot attendant and had a forged driver's license when he was arrested, which made him out to be 4 years older than he really was. He told police he had gotten the forged driver's license to buy alcohol, but now that he was over 21 he didn't need it any longer.
So this is a 22-year-old man who was the CEO of a company called AEY based in Miami Beach. And this is a picture of the building that was headquarters for his company, but there was nothing on any door in the building. Apparently, in one part of this building an office was supposed to be his office, but there was nothing that identified his office.
And here is a picture of his vice president, the vice president of this company, this company to which the U.S. Army gave a $300 million contract. The vice president is a 25-year-old masseur named David Packouz. He is the former vice president of the firm that got $300 million. So you have a 22-year-old and a 25-year-old masseur who get $300 million from the U.S. Army.
Now, what did they do with the $300 million? Well, the next photograph, again from the New York Times, shows outdated ammunition sold to Afghan forces, including 40-year-old Chinese-made cartridges. So these folks got $300 million and they were providing mid-1960s cartridges to the Afghan Army, which the Afghan Army was receiving in cardboard boxes that had not been properly taped and were falling apart. The Afghan Army described these armaments as junk. Here is an Afghan policeman surveying 42-year-old Chinese ammunition that arrived in crumbling boxes.
Again, American taxpayers, through the Army Sustainment Command, paid hundreds of millions of dollars to a company that previously had been a shell company, a shell corporation, now run by a 22-year-old who says that he is the only employee of the corporation.
Now, Mr. President, I have spent a lot of time on the floor of the Senate on these kinds of issues. It is pretty unbelievable when you think about it. I don't know Mr. Diveroli personally. Never met him. I do know that three reporters from the New York Times did some extraordinary work—C.J. Chivers, Eric Schmitt, and Nicholas Wood, to expose his activities. I don't know how long it took them to do this investigative piece, but it is two full pages inside the New York Times. They obviously traveled to Afghanistan and other countries to finish this investigative piece. We wouldn't know about this issue were it not for investigative reports by the New York Times.
In January of 2007, that is just 14 months ago, the most recent award, which I believe was $150 million, was given by the Army Sustainment Command, and the Army Sustainment Command said:
``AEY's proposal represented the best value to the government.``
I am telling you, this part of the U.S. Army has a lot of explaining to do to this Congress and to the American people. This is the same Army Sustainment Command and, incidentally, the same general in charge of the Army Sustainment Command who went to a hearing here in the Senate, and following my testimony before a hearing about the water problems in Iraq and about Halliburton Corporation providing water to the troops, nonpotable water that was twice as contaminated as raw water from the Euphrates River, we had the evidence, internal Halliburton memorandums, saying it was a near miss. It could have caused mass sickness or death. This is the same general who went to that Senate committee and said: Never happened.
Well, now the inspector general has finished an investigation and said in fact it did happen. It did happen. This general has some explaining to do.
I have asked Secretary Gates, the Defense Secretary, to ask this general to explain himself, and so should this Congress.
But I don't understand, I just don't understand how even following information sent to this country, to the Army Sustainment Command by U.S. military officers in Afghanistan, saying what they are sending over here in the form of armaments under this contract is junk and it needs to stop, even following that it continued. It is an unbelievable amount of government waste.
This is but one issue. And we wouldn't know about it if it were not for the New York Times. This has been going on for years. We have been fighting in Iraq longer than we were fighting in the Second World War.
Now, let me go back to something they did in the Second World War. Harry Truman, in this Chamber, stood up and offered a proposal to create the Truman Committee, bipartisan. For $15,000, they created a committee, and it worked for 7 years and saved $15 billion investigating waste, fraud, and abuse in defense spending during the Second World War. Now, Mr. President, I have been trying for 4 years to get this Congress to empower a committee and to impanel a bipartisan committee to go after this kind of waste, fraud, and abuse.
Let me go over just a few of the things. I have held, I believe, about 12 hearings in the Policy Committee, but the Democratic Policy Committee does not have subpoena power, and I have only held these hearings because other committees have not. Oversight is a responsibility of this Congress.
Mr. President, I want to show a photograph of Bunnatine Greenhouse. I have done it on many occasions. But the reason I wanted to show the photograph is because Bunnatine Greenhouse is a very courageous woman. This woman rose to become the highest civilian official at the U.S. Army Corps of Engineers. This is a remarkable woman. By all accounts, according to people outside of government, she was the finest purchasing agent and an unbelievable public servant. But she blew the whistle on abusive Halliburton contracts. She said it was the most significant abuse of contracting authority she had seen in her career.
Guess what happened to her. It is what happens to too many whistleblowers. She got demoted and lost her job. She got demoted because she had the guts to speak out.
This whole issue has now been subsumed behind the wall in the Defense Department. We can't talk about it now because it is under investigation. This woman lost her job nearly 4 years ago and was replaced, by the way, by someone who had no experience, not a day's worth of experience in contracting authority. That is the way it works over there. You blow the whistle, you pay for it with your career.
I called the person that hired Bunnatine Greenhouse one night at his home—LTG Joe Ballard. He had since retired from the military. And I said: General Ballard, Bunnatine Greenhouse spoke out about the billions of dollars given the Halliburton Corporation and the abuse and the way those contracts were let and she was demoted. Tell me about Bunnatine Greenhouse. You hired her.
He said: She is the best. She got a raw deal.
This is from General Ballard, since retired. Well, the Pentagon decided to award a big no-bid, sole-source contract to the Halliburton Corporation. It is called Restore Iraqi Oil, the RIO-C, and then they had other contracts—the LOGCAP contract. The waivers that were required were not given. This was short-circuited, and we have seen the result of this now for a long period of time.
Mr. President, I have been to the floor a good many times to talk about the hearings I have held, and I don't mean to single out Halliburton, it is just the company that has gotten the biggest contracts. But when a company gets hundreds of millions of dollars, or billions of dollars and then, in my judgment, is not performing and is taking all the money, we have a right to ask questions. We had $85,000 brand new trucks left beside the road in a zone that was not considered hostile at all, to be torched and set on fire because they didn't have enough equipment, or didn't have a wrench to fix a tire; $85,000 brand new trucks left to be torched beside the road in safe areas because they had a plugged fuel tank. The attitude is that it doesn't matter, the taxpayers will pay for that. It doesn't matter, it is a cost-plus contract. A cost-plus contract, taxpayers will pay for that.
Let me show a towel. It is sometimes the smallest issues that make the biggest points. Henry Bunting came and testified for the Halliburton Corporation. He worked in Kuwait. He was the purchasing agent for our troops in Iraq.
One of his jobs was to purchase towels, so he wrote out a purchase order for towels for the troops and his supervisor looked at that and said no, you can't buy those towels. Bunting wanted to buy plain white towels. He was told that he needed to buy a towel that has KBR's logo, Kellogg Brown & Root, a subsidiary of Halliburton, embroidered on it. He said the problem is that will triple the cost of the towels they are buying for the troops. His supervisor said you don't understand, it doesn't matter. These are cost-plus contracts. It doesn't matter.
Henry Bunting told us about tripling or quadrupling the cost of towels, about paying $45 for a case of Coca-Cola, about $7,600 for a 1-
month lease of an SUV, about 25 tons of nails sitting on the ground, on the sand of Iraq, because somebody ordered 50,000 pounds of nails and ordered them too short. It doesn't matter, the taxpayer pays for all that. Throw them on the sand and reorder.
How about charging for 42,000 meals for the soldiers, a day, and serving only 14,000 meals a day? Missing, 28,000 meals. It doesn't look like an innocent mistake to me. Rory Mayberry came to testify at a hearing I held. He was a supervisor of food service for the Halliburton subsidiary. He said we were told that when an auditor came by, don't you dare talk to an auditor. We forbid you to speak to a government auditor. He said they were routinely charging for more food for soldiers than solders existed—routinely. He said they were routinely serving expired, date-stamped food. The supervisor said it doesn't matter, serve it to the troops.
I mentioned the issue of water quality; again, the issue of requirement in the contract to provide water to our troops at the military bases in Iraq. That was a Halliburton contract. A couple of whistleblowers came to me and gave me the internal memorandum in the company. They were providing water that was twice as contaminated as raw water from the Euphrates River. I had it in writing. Yet Halliburton denied it and so did the U.S. Army. Only when the inspector general did the investigation I requested did we find out Halliburton was not telling the truth, nor was the U.S. Army. That is a sad comment.
I want to show a picture of some money. The fellow who was holding this cash came to testify. I believe I have a chart that shows the money. These are one-hundred dollar bills, in bricks, wrapped with Saran Wrap. This guy, named Frank—this was in a building in Baghdad. Down below in the vault of that building were several billion dollars.
By the way, $18 billion of cash was loaded on C-130s, from this country, to go to Iraq—$18 billion in cash. It was not accounted for.
There was a man who was contracted to be able to do the accounting. His name was Howell. His address was a residential home in San Diego, CA, and his company allegedly was NorthStar Consulting. No one has ever been able to find anything NorthStar Consulting did, except we know they got $1.4 million and there is no evidence they had any accounting on staff, any accountant at all. There is no evidence that any of the $18 billion in cash that was moved by C-130 airplanes to Iraq was accounted for.
This is $2 million. This $2 million.
By the way, Frank said from time to time they would throw these around as footballs in the office because there was a lot of cash around there. He said the refrain in their office was: You bring a bag because we pay in cash. He said it was like the Wild West.
This belonged to Custer Battles, by the way, this cash. They showed up in Iraq with no experience, a new company. They got $100 million in new contracts very quickly and then a whistleblower—at least the whistleblower says they threatened to kill him. He said you can't do this. They took forklift trucks that belonged to the Baghdad Airport, allegedly painted them blue, and then sold them back to the Coalition Provisional Authority. That was us, by the way. We were paying for all of that. Custer Battles, this was one of their payments. I expect they have been under criminal investigation now for some while—and if they have not, they should be. That was only $2 million, but they got $100 million.
There is so much to say about these issues. The Parsons Corporation is a company that was to build health clinics in Iraq. The Parsons Corporation was provided $243 million in a contract by us to build or repair 142 health clinics in the country of Iraq. Three years later the $200 million was gone, but there were only 20 health clinics and those that existed were of shoddy construction. A man who was an Iraqi physician, a doctor, came and talked to me about it. He said he went to the Iraqi health minister because he knew this money was supposed to go to address health issues in Iraq. He said to the Iraqi health minister, I understand an American company got $200-plus million. I want to tour all these healthcare facilities that were supposed to be built. The Iraqi health minister said you don't understand. Many of these were imaginary clinics.
The money is gone. The American taxpayer got fleeced again. The money is all gone, but the clinics don't exist.
We have shoveled money out the door here in this Congress. This President has said I want to send soldiers to war but I do not intend to pay for it. Not a cent of it has been paid for. Since the war started, every single dollar has been requested as an emergency by the President, emergency spending. It is unbelievable; nearly two-thirds of a trillion dollars emergency spending. A substantial amount of money has been shoveled out the door here for contracting, very big contracts in Iraq—some reconstruction, some replenishment of military accounts, but very large contracts with almost no oversight. The American taxpayer has been stolen blind. This is easy to say, in my judgment, the largest amount of waste, fraud, and abuse in the history of this country.
It has gone on for over 5 years. There is no excuse, none, for this Congress not creating a Truman committee with subpoena power, bipartisan, to investigate and bring justice and provide the oversight necessary on this kind of contract abuse. There is no excuse.
I know some over the years have made excuses. I have offered the amendment three times, perhaps four, but we voted on it three times. I have people stand up in the Senate and say we are doing the oversight hearings, we are doing hearings. We are not. That is not true. The Appropriations Committee did one a month ago after I pushed and pushed. I appreciate the Appropriations Committee doing it. We will do another one in about a month, a little less than a month. That is fine. That is not a substitute for doing 60 hearings a year for 7 years, as the Truman committee did.
American taxpayers deserve better than they have gotten from this President and from the Congress for the last 5 years.
Senator Reid and I have talked about this a great deal. Senator Reid has aggressively supported the creation of a special committee, a bipartisan committee to investigate this kind of waste, fraud, and abuse. It is long past the time we do it.
I come back to the point I made originally. When I pick up a New York Times and see that $300 million of contracts is given to a shell corporation in Miami, FL, with no name on the door of the building, a corporation headed by a 22-year-old as president, a 26-year-old masseur as vice president, I ask the question: Who makes those judgments? Who is responsible? Who is accountable?
From that several hundred million dollars, 50-year-old weaponry is sent to Afghanistan in the name of American taxpayers, in boxes that are not taped up properly, weaponry that comes, in some cases, from the 1960s, in China.
That is unbelievable to me. Some might be able to read the New York Times piece and say that is all right, I have read this before. I have read we were double charged for gasoline for our American troops in Iraq. I have read we were overcharged for meals. I read we paid for health clinics that did not get built. I read all these things. You know what, it is not such a big deal.
It is a big deal with me. It ought to be a big deal with this Congress. The American people, I think, are sick and tired of this and they deserve a Congress that is going to do something about it.
I obviously wish I didn't have to come to the floor to talk about this. I wish instead my energy was devoted to a committee that had subpoena power. The very first thing we should do—and, by the way, I am writing a letter to the appropriate subcommittee saying I want you to subpoena the principals in this contract and I want you to subpoena the general in charge of the Army Sustainment Command and I want them to come to testify and explain to the American people and explain to us how is it during wartime that we seem to blink and turn our head to what is, I believe, war profiteering. Who has allowed us be that immune to the interests of the American troops? This undermines and disserves the American soldiers. It certainly disserves the American taxpayers and does not represent the best interests of this country.
In the coming days I intend to come to the floor a good many times to speak about this and be a general burr under the saddle—which is a term that people are perhaps more acquainted with in my home State because we raise a lot of horses. But it seems to me the only way to get this sort of thing done is to be a problem and to embarrass those who do not want to do it, and I am prepared to do that. I think it is long past the time to say to the American people: You don't have to read it anymore in the newspaper. The newspaper is not going to be required to do oversight for this Congress. The Congress finally, at long last, will do its own oversight and will do a good job and tell the American people you can count on us. That has not been the case earlier when this war started because no one wanted to do the necessary kind of oversight because it was the kind of oversight that would probably raise some hackles and embarrass some folks.
I might also say, there was a piece of legislation passed—in fact, the Presiding Officer, Senator Webb, and Senator McCaskill and others put it together last year, which I supported—which deals with a Truman commission. It is not the equivalent of a Truman committee. A Truman committee is a standing committee with subpoena power, but the Truman Commission is a step forward and I supported it. It will be a commission that operates on a one-time basis to develop recommendations and take a look at what is happening.
The Wartime Contracting Commission has a 2-year sunset, and I commend my colleagues for trying to put together and for successfully putting together a commission, but I do say that we need in this Congress a committee, a bipartisan select committee, with subpoena power and we need it now.
I yield the floor. I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll. ...
Comments