Patriots And Profits
by Paul Krugman, The New York Times, December 16,
Last week there were major news stories about possible profiteering
by Halliburton and other American contractors in Iraq. These stories
have, inevitably and appropriately, been pushed temporarily into
the background by the news of Saddam's capture. But the questions
remain. In fact, the more you look into this issue, the more you
worry that we have entered a new era of excess for the military-industrial
complex. [The United States Government will spend more on the
military in fiscal year 2003, than all the rest of the countries
on Earth combined]
The story about Halliburton's strangely expensive gasoline imports
into Iraq gets curiouser and curiouser. High-priced gasoline was
purchased from a supplier whose name is unfamiliar to industry
experts, but that appears to be run by a prominent Kuwaiti family
(no doubt still grateful for the 1991 liberation). U.S. Army Corps
of Engineers documents seen by The Wall Street Journal refer to
"political pressures" from Kuwait's government and the
U.S. embassy in Kuwait to deal only with that firm. I wonder where
that trail leads.
Meanwhile, NBC News has obtained Pentagon inspection reports of
unsanitary conditions at mess halls run by Halliburton in Iraq:
"Blood all over the floors of refrigerators, dirty pans,
dirty grills, dirty salad bars, rotting meat and vegetables."
An October report complains that Halliburton had promised to fix
the problem but didn't.
And more detail has been emerging about Bechtel's much-touted
school repairs. Again, a Pentagon report found "horrible"
work: dangerous debris left in playground areas, sloppy paint
jobs and broken toilets.
Are these isolated bad examples, or part of a pattern? It's impossible
to be sure without a broad, scrupulously independent investigation.
Yet such an inquiry is hard to imagine in the current political
environment — which is precisely why one can't help suspecting
Let's be clear: worries about profiteering aren't a left-right
issue. Conservatives have long warned that regulatory agencies
tend to be "captured" by the industries they regulate;
the same must be true of agencies that hand out contracts. Halliburton,
Bechtel and other major contractors in Iraq have invested heavily
in political influence, not just through campaign contributions,
but by enriching people they believe might be helpful. Dick Cheney
is part of a long if not exactly proud tradition: Brown &
Root, which later became the Halliburton subsidiary doing those
dubious deals in Iraq, profited handsomely from its early support
of a young politician named Lyndon Johnson.
So is there any reason to think that things are worse now? Yes.
The biggest curb on profiteering in government contracts is the
threat of exposure: sunshine is the best disinfectant. Yet it's
hard to think of a time when U.S. government dealings have been
less subject to scrutiny.
First of all, we have one-party rule — and it's a highly disciplined,
follow-your-orders party. There are members of Congress eager
and willing to take on the profiteers, but they don't have the
power to issue subpoenas.
And getting information without subpoena power has become much
harder because, as a new report in U.S. News & World Report
puts it, the Bush administration has "dropped a shroud of
secrecy across many critical operations of the federal government."
Since 9/11, the administration has invoked national security to
justify this secrecy, but it actually began the day President
Bush took office.
To top it all off, after 9/11 the U.S. media — which eagerly played
up the merest hint of scandal during the Clinton years — became
highly protective of the majesty of the office. As the stories
I've cited indicate, they have become more searching lately. But
even now, compare British and U.S. coverage of the Neil Bush saga.
The point is that we've had an environment in which officials
inclined to do favors for their business friends, and contractors
inclined to pad their bills or do shoddy work, didn't have to
worry much about being exposed. Human nature being what it is,
then, the odds are that the troubling stories that have come to
light aren't isolated examples.
Some Americans still seem to feel that even suggesting the possibility
of profiteering is somehow unpatriotic. They should learn the
story of Harry Truman, a congressman who rose to prominence during
World War II by leading a campaign against profiteering. Truman
believed, correctly, that he was serving his country.
On the strength of that record, Franklin Roosevelt chose Truman
as his vice president. George Bush, of course, chose Dick Cheney.