Monday, March 10, 2008

From American Progress - Progress Report 2008 - 03 - 10

March 10, 2008
by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Ali Frick, and Benjamin Armbruster

More Money, More Problems

With an estimated $16 billion in defense contracts, KBR is by far the largest contractor in Iraq, "with eight times the work of its nearest competitor." The firm has 54,000 people working on its projects in Iraq. Until last year, KBR operated as a subsidiary of Halliburton, the oil services conglomerate over which Vice President Cheney once presided. Prior to the Iraq war, KBR received no-bid contracts from the Bush administration to "rebuild Iraq's oil infrastructure" and to "provide support services to troops." The company has profited handsomely from its sweetheart deals, racking up a $71 million profit in the fourth-quarter of 2007 alone. Yet for all the financial success it has attained, KBR has repeatedly engaged in abusive corporate practices and has shirked its duty to preserve and protect those men and women who are serving on the front lines of war.

DON'T DRINK THE WATER: According to a new report from the Pentagon Inspector General, dozens of American troops in Iraq fell sick at bases using "unmonitored and potentially unsafe" water supplied by KBR. The Associated Press writes that the medical records for troops at one KBR-run site indicated "38 cases of illnesses commonly attributed to problem water. These include skin abscesses, cellulitis, skin infections and diarrhea. Doctors diagnosed 24 of the cases in January and February 2006, the same period when medical officials warned of a rise in bacterial infections at the base." In January 2006, former Halliburton employees accused the company of "supplying contaminated water to American troops and Iraqi civilians at a marine base in Ramadi." In an internal e-mail, a Halliburton employee warned, "The level of contamination was roughly 2x the normal contamination of untreated water from the Euphrates river." Halliburton denied the allegations, and more soldiers continued to fall sick because of the water. Sen. Byron Dorgan (D-ND), who has led investigations in contract abuses, said, "I think it's outrageous that KBR tried to deny that there was a problem, especially when it turned out that there were dozens of U.S. troops reporting water-related illnesses."

DODGING SOCIAL SECURITY AND MEDICARE TAXES: Despite the massive profits KBR has been earning, it has worked hard to shelter those revenues from the U.S. government and its own employees. According a detailed investigation by the Boston Globe, KBR has "avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies" based in the Cayman Islands -- a scheme established by Halliburton under Cheney's tenure. In doing so, the firm deprived KBR employees of guaranteed future retirement benefits and unemployment insurance should they lose their jobs. Since at least 2004, the Pentagon has known about KBR's practices, but has chosen to ignore the issue. The use of the shell companies to divert millions from Social Security and Medicare gives KBR an unfair advantage over its rivals, almost all of whom pay the federal taxes. "It is both shocking and disappointing that some American companies continue to exploit our system in wartime by setting up shell corporations via a tax haven mailbox," said Rep. Richard Neal (D-MA). "You have to wonder why the Pentagon continues to do business with these contractors who skirt the rules."

COVERING UP RAPE: There is one circumstance in which KBR does claim its employees as its own: "when it comes to receiving the legal immunity extended to employers working in Iraq." When former KBR employee Jamie Leigh Jones revealed late last year that she was gang-raped by her co-workers while serving in Baghdad, the company pushed hard for the case to be heard in private arbitration, without a public record or transcript. "Legal experts say Jones' alleged assailants will likely never face a judge and jury, due to an enormous loophole that has effectively left contractors in Iraq beyond the reach of United States law." Last week, lawyers for Jones argued that her case should be "tried in court, not settled in private arbitration," but KBR insists her contract binds her to settle all claims through arbitration. Rep. Ted Poe (R-TX) has said his office has been contacted by other KBR employees who say they were sexually assaulted in Iraq. The Pentagon has refused to investigate these cases, and thus far, the Bush administration "has not offered to develop a coordinated response to the problem."


IMMIGRATION -- NUMBER OF ANTI-IMMIGRANT HATE GROUPS ROSE IN 2007: A new report by the Southern Poverty Law Center (SPLC) released today finds that "anti-immigrant sentiment is fueling nationwide increases in the number of hate groups and the number of hate crimes targeting Latinos." The report "found that the number of hate groups operating in America rose to 888 last year, up 5% from 844 groups in 2006. That capped an increase of 48% since 2000 -- a hike from 602 groups attributable to the exploitation by hate groups of the continuing debate about immigration." This year, SPLC added the prominent anti-immigration group Federation for American Immigration Reform (FAIR) to its list of hate groups, prompted by FAIR's promotion of the conspiracy theory of the "North American Union" and the "theory that Mexico is involved in a secret plot to 'reconquer' the American southwest." Last year, FAIR warned that the so-called "McKennedy" comprehensive immigration reform bill proposed in the Senate "will destroy America."

CIVIL LIBERTIES -- NSA'S DOMESTIC SURVEILLANCE' HAS 'EVOLVED' TO REACH AMERICANS 'MORE BROADLY': In 2003, Congress voted to terminate funding for Total Information Awareness (TIA) a controversial data mining program set up by the Pentagon that "collected electronic data about people in the U.S. to search for suspicious patterns." The program continued in various forms by being spread across different intelligence agencies. The Wall Street Journal reports today that the National Security Agency (NSA), "once confined to foreign surveillance, has been building essentially the same system." An inquiry by the paper reveals that the agency's "efforts have evolved to reach more broadly into data about people's communications, travel and finances in the U.S. than the domestic surveillance programs brought to light since the 2001 terrorist attacks." "When it got taken apart, it didn't get thrown away," a former top government official said of the TIA program. Two current officials also told the Wall Street Journal that "the NSA's current combination of programs now largely mirrors the former TIA project. But the NSA offers less privacy protection." "A number of NSA employees" expressed concerns "that the agency may be overstepping its authority by veering into domestic surveillance."

ADMINISTRATION -- KARL ROVE RATTLED BY STUDENTS AND PROTESTERS AT UNIVERSITY OF IOWA SPEECH: Students and citizens protested former White House adviser Karl Rove before and during a speech he gave last night at the University of Iowa. Before the speech, "groups from around eastern Iowa had been protesting his presence for two hours" and "protesters staged a mock trial" for Rove inside the student union, draping the "side of a nearby parking ramp with a 60-foot anti-Rove banner." Rove also received tough questions from the audience. One attendee asked Rove about the "true" body count in Iraq, prompting Rove to accuse the individual of "perpetuating libel on the military of the United States by accusing them of killing innocent Iraqis." Rove chastised what he said were "stupid statements" from the audience and said a comment from one man showed "a simple, stupid mind." Responding to a question about CIA operative Valerie Plame Wilson's outing, Rove said, "I haven't been indicted yet, but I fully expect to be by the end of the year." According to an agreement with the university, "Rove only allowed journalists to videotape the first few minutes of his remarks. After that, the media had to turn off all cameras and tape recorders."

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