Webdiary - Independent, Ethical, Accountable and Transparent
header_02 home about login header_06
sidebar-top content-top

The Pentagon's cubicle mercenaries

Frida Berrigan is a senior program associate at the New America Foundation's Arms and Security Initiative. She is a columnist for Foreign Policy in Focus and a contributing editor at In These Times. She is the author of reports on the arms trade and human rights, US nuclear weapons policy, and the domestic politics of US missile defense and space weapons. Part one of her series on Bush's Pentagon Legacy at Tomdispatch.com, "Entrenched, Embedded, and Here to Stay," can be read by clicking here.   This article, first published on TomDisptach.com) apears on Webdiary with the author's (much appreciated) permission.


The Pentagon's cubicle mercenaries
By Frida Berrigan

Seven years into George W Bush's global "war on terror", the Pentagon is embroiled in two big wars, a potentially explosive war of words with Tehran, and numerous smaller conflicts - and it is leaning ever more heavily on private military contractors to get by.

Once upon a time, soldiers did more than pick up a gun. They picked up trash. They cut hair and delivered mail. They fixed airplanes and inflated truck tires.

Not anymore. All of those tasks are now the responsibility of private military corporations. In the service of the Pentagon, their employees also man computers, write software code, create

integrating systems, train technicians, manufacture and service high-tech weapons, market munitions, and interpret satellite images.

People in ties or heels, not berets or fatigues, today translate documents, collect intelligence, interpret for soldiers and interrogators, approve contracts, draft reports to Congress, and provide oversight for other private contractors. They also fill prescriptions, fit prosthetics, and arrange for physical therapy and psychiatric care. Top to bottom, the Pentagon's war machine is no longer just driven by, but staffed by, corporations.

Consider the following: In fiscal year 2005 (the last year for which full data is available), the Pentagon spent more contracting for services with private companies than on supplies and equipment - including major weapons systems. This figure has been steadily rising over the past 10 years. According to a recent Government Accountability Office report, in the last decade the amount the Pentagon has paid out to private companies for services has increased by 78% in real terms. In fiscal year 2006, those services contracts totaled more than $151 billion.

Ever more frequently, we hear generals and politicians alike bemoan the state of the military. Their conclusion: The wear and tear of the president's war on terror has pushed the military to the breaking point. But private contractors are playing a different tune. Think of it this way: while the military cannot stay properly supplied, its suppliers are racking up contracts in the multi-billions. For them, it's a matter of letting the good times roll.

What a difference a war makes As we prepare to close the book on the Bush presidency, it is worth exploring just how, in the last seven-plus years, the long war on terror has actually helped build a new, privatized version of the Pentagon. Call it Military Industrial Complex 2.0.

Consider fiscal year 2001, which conveniently ended in September of that year. It serves as a good, pre-war on terror baseline for grasping just how the Pentagon expanded ever since - and how much more it is paying out to private contractors today.
Back then, the Pentagon's top 10 suppliers shared $58.7 billion in Department of Defense (DoD) contracts, out of a total of $144 billion that went to the top 100 Pentagon contractors. Number 100 on the list was The Carlyle Group with $145 million in contracts. Keep in mind, of course, that this was the price of "defense" for a nation with no superpower rival.

Fast forward to 2007 and the top 10 companies on the Pentagon's list of private contractors were sharing $125 billion in DoD contracts, out of a total of $239 billion being shared among the top 100 contractors. The smallest contract among those 100 was awarded to ARINC and came in at $495 million.

In those seven years, in other words, contracts to the top 10 more than doubled, the size of the total pay-out pie increased by two-thirds, and the lowest contract among the top 100 went up almost four-fold.

Just as revealing, almost half the companies on the Pentagon's Top 100 list in 2007 were not even on it seven years earlier, including McKesson, which took in a hefty $4.6 billion in contracts and MacAndrews and Forbes which garnered $3.3 billion.

And here's a fact that makes sense of all of the above: given the spectrum of services offered and the level of integration that has already taken place between the Pentagon and these private companies, the US can no longer wage a war or even run payroll without them.

These have been the good times for defense contractors, if not for the military itself. Since September 2001, many companies have made a quantum leap from receiving either no Pentagon contracts or just contracts in the low hundred millions to awards in the billion-dollar range. Here are just a few portraits of companies that are booming, even as the military goes bust.

  • URS Corporation: This engineering, construction, and technical services firm based in San Francisco employs more than 50,000 people in 34 countries. A publicly held firm, which recently acquired Washington Group International, it had numerous reconstruction contracts in Iraq. More than 40% of the company's revenue ($5.4 billion in 2007) comes from the federal government. Between 2001 and 2007, its Pentagon contracts increased more than a thousand fold (by 1,400%) from $169 million to $2.6 billion.

    URS began the "war on terror" at number 91 on the Pentagon's Top 100 list. It is now number 15.
  • Electronic Data Systems Corporation: Founded by political maverick Ross Perot, EDS is a global technology services company headquartered in Plano, Texas. In March, the Pentagon awarded it a $179 million contract to provide information technology support services to the Pentagon's Defense Manpower Data Center, its central archive of all kinds of data on personnel, manpower and casualties, pay and entitlements, as well as the whole gamut of financial information. The company - which employs 139,000 people in 65 countries - boasted $22.1 billion in revenue in 2007. Computer giant Hewlett-Packard bought EDS in August 2008.

    In 2001 the company occupied slot 71 on the DoD's Top 100 list with $222 million in contracts. By 2007, it had climbed to number 16 with $2.4 billion in contracts, an increase of almost 1,000%.
  • Harris Corporation: This communications and information technology company is headquartered in Melbourne, Florida, and employs 16,000 people. Harris boasted $4.2 billion in revenue in 2007, with more than one-quarter of that ($1.6 billion) coming from Pentagon purchases of communications and electronics capabilities like Falcon II high-frequency radio systems.

    When the "war on terror" began, Harris had a modest $380 million in Pentagon contracts (and was number 43 on that top 100 list); over the last seven years, it has steadily risen in rank and now is number 30.

    KBR: Gaming the system
    The United States first heard the phrase "military industrial complex" during president Dwight David Eisenhower's January 17, 1961, farewell address. As he left public office, our last general-turned-president warned that the "conjunction of an immense military establishment and a large arms industry is new in the American experience" and its influence - "economic, political, even spiritual - is felt in every city, every Statehouse, every office of the Federal government ...

    "In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist."

    If, in many ways, Ike's comment is still applicable, in the last 47 years the Military Industrial Complex (MIC) he described has evolved in startling ways - and massively. Today, it does more than wield influence; it has created unparalleled dependence and unrivaled profit.

    What this means in practice can be illustrated by KBR, a privately-held company that does not publish quarterly reports. Nonetheless, its recent history provides an object lesson in what the MIC 2.0 can do for the profitability of a private contractor.

    KBR has shadowed the US military every step of the way through the invasion and occupation of Iraq: first as Kellogg Brown and Root, a subsidiary of Halliburton (for which Dick Cheney was once CEO), and then as KBR, an independent company. It has, in fact, made its corporate fortune on the Pentagon's now infamous "no-bid," "cost-plus contracts". Since December 2001, KBR has been working for the Pentagon under the Logistics Civil Augmentation Program (LOGCAP) - a multi-billion dollar agreement that guarantees the company those cost-plus profits for fulfilling contracted tasks.

    This huge and sweeping contract was awarded without the rigors of the competitive marketplace. Its "no-bid" nature was a sign that KBR was anything but a run-of-the-mill Pentagon contractor. A second sign lay in the Pentagon's acceptance of that cost-plus arrangement. A rarity in the business world, "cost plus" means that the more a job costs, the more profit the company pockets. Professor Steve Schooner, a contract expert at George Washington University Law School, commented, "Nobody in their right mind would enter into a contract that basically says, 'come up with creative ways to spend my money and the more you spend the happier I'll be.'" Under this contract, the Pentagon has doled out $20 billion to KBR to build and staff facilities for military personnel in Iraq and provide food and other necessities to US troops there.

    Ironically, the Pentagon isn't even getting what it paid for ... not by a long shot. KBR's fraudulent activities have, according to the Government Accountability Office, included the failure to adequately account for more than a billion dollars in contracted funds; the leasing of vehicles to be used by company personnel for up to $125,000 a year (despite the fact that these vehicles could have been purchased outright for $40,000 or less); the purchase of unnecessary luxuries such as monogrammed towels for use in company-run recreation facilities for military personnel; the overcharging for fuel brought into Iraq from Kuwait for military use; the charging to the Pentagon's tab three to four times as many meals as were actually consumed by US military personnel; and the provision of unclean water for US troops.

    All of these abuses came to light thanks to investigations by Representative Henry Waxman, the Pentagon's own Office of the Inspector General, and others, but Halliburton and its former subsidiary got off with little more than such wrist slaps as the revocation of the fuel supply contract and of KBR'S exclusive LOGCAP contract for Iraq. That was recently divided into three parts and put out to bid. KBR was, however, allowed to join the bidding, and is now sharing the contract with DynCorp and Fluor Corporation. Each company has received a $5 billion contract that includes nine one-year options for renewal that could be worth, in total, up to $150 billion, according to Dana Hedgpeth of the Washington Post.

    The most recent of many black marks against KBR came when members of Congress and investigators charged that substandard electrical work by company employees in showers at military bases in Iraq had resulted in the electrocution deaths of 16 American soldiers.

    To understand what privatization means in action at the Pentagon, consider just one modest example of the corruption that infects KBR and how it was addressed. In 2004, the company submitted requests for reimbursement on more than one billion dollars in charges that Army auditors deemed "questionable," in part because they weren't backed up by reliable records. Charles Smith, the Army official managing Pentagon contracts, refused to approve the payments and threatened to levy fines against the company if it did not get a better handle on its spending. Later, he told James Risen of the New York Times that KBR had "a gigantic amount of costs they couldn't justify. Ultimately, the money that was going to KBR was money being taken away from the troops."

    Despite his 31 years with the army, and without notice, Smith was transferred from his post, while the requested payments were subsequently sent to KBR. According to the New York Times, the Army argued that "blocking the payments to KBR would have eroded basic services to the troops. They said that KBR had warned that if it was not paid, it would reduce payments to subcontractors, which in turn would cut back on services."

    In other words, the Pentagon - in charge of hundreds of billions of dollars and more than a million personnel in and out of uniform - was essentially held hostage by a company which threatened to withhold services that (just to be clear) had been pretty shoddy to begin with.

    Senator Robert Byrd saw the problem: "We have found ourselves dependent on profit-oriented companies for even the day-to-day basics of feeding and housing our troops, [and] for carrying out a myriad of other functions of the mission, including security. These kinds of contracts opened the door for every manager to game the system in order to maximize profits."

    And game the system they do. For example, the sort of corruption that seems endemic to KBR has created a profitable new market for another kind of private military corporation - one specializing in oversight and accountability.

    After the army replaced Smith, it hired RCI Holding Corporation to review KBR's records. Smith says the private company "came up with estimates, using very weak data from KBR", while ignoring audit information gathered within the Pentagon. While KBR was subsequently awarded high performance bonuses and a portion of that new 10-year contract with the Army, Serco (RCI Holding's parent company) also received a new contract - to continue to oversee KBR's contracts.

    And so dependency begets deeper dependency, while corruption, incompetence, and callous indifference become ever more ingrained in the military way of life.

    During his first presidential campaign, George W Bush identified Christ as his favorite political philosopher. But as the first American president with a Masters of Business Administration (and from Harvard, no less), he has done a much better job of applying the profit-first principles of Donald Trump and Jack Welch than exemplifying the man from Galilee who promised the rich young man "treasure in heaven" once he sold all he owned and gave it to the poor. As president, Bush has brought a corporations-can-do-no-wrong perspective to the Oval Office and quickly sought to give the private sector an ever freer rein over a smorgasbord of public works and services. Today, the military sector leans remarkably heavily on private corporations to perform what used to be their basic functions, from war to disaster relief to washing the dishes. KBR is just one multi-billion dollar example of the MBA presidency's legacy.

    Beyond Blackwater: The Pentagon's cubicle mercenaries
    The new Complex 2.0 regularly employs companies whose job it is to send armed mercenaries into action beside US soldiers or to guard US diplomats and high-ranking military officers. Fighting wars for hire has become an essential part of the Pentagon's modus operendi since 2001, and the Blackwater employee gunning through Baghdad in a Kevlar vest, a kafiyah, and wrap-around shades is the ultimate symbol of the new moment.

    But there's another dimension of the Bush era's privatization surge at the Pentagon that has gotten far less coverage: private military firms are also doing the paperwork of war. According to a March 2008 GAO report, Additional Personal Conflict of Interest Safeguards Needed for Certain DoD Contractor Employees, in offices throughout the Department of Defense, cubicle mercenaries in startling numbers are working shoulder-to-shoulder with uniformed military staff and federal employees.

    The Government Accountability Office (GAO) looked at 21 different Pentagon offices and found that private contractors outnumbered Department of Defense employees in more than half of them. In the engineering department of the Missile Defense Agency, for example, employees from private contractors made up more than 80% of the work force. The GAO found that contractors were responsible for carrying out a wide range of tasks and were not subject to federal laws and regulations designed to prevent conflicts of interest - including the rules that concern personnel who want to take positions with companies they had awarded contracts to as federal employees.

    Another March 2008 GAO report assessed the Army's Contracting Center of Excellence where private contractors made up less than 20% of the workforce. The average hourly cost of an employee from a private contractor, however, was more than 26% higher than that of a government employee. Similar disparities in pay can be seen even more starkly in Iraq, where a soldier is paid little more than minimum wage, while a private military contractor can earn well above $100,000 a year tax-free.

    For perhaps the ultimate contrast in military privatization, consider this: testifying at a Congressional hearing in July, Blackwater CEO Erik Prince offered a ballpark estimate for his annual salary - "more than a million". He assured Representative Peter Welch that he would "get back" to him with a more exact figure. Welch noted at the time that General David Petraeus - then responsible for more than 160,000 US military personnel in Iraq - earned $180,000 a year.

    Privatization at the bottom
    Once private companies take on military and war-making tasks, where does the buck stop? It is not uncommon, for example, for a company hired to perform a service for the Pentagon to subcontract part of the job to another company, which may then subcontract part of its task to a third. Who, then, is in charge? When something goes wrong, who is culpable?

    A recent investigation by Craig and Marc Kielburger, Canadian co-founders of the NGO Free the Children, and Toronto-based journalist Chris Mallinos found that KBR has subcontracted to more than 200 different firms - many based in Kuwait - to transport materials into Iraq.

    One result of this: the United States has ended up paying companies that are essentially enslaving Filipinos, Sri Lankans, and other "third country nationals" who drive supplies into Iraq. In a recent article in Epoch Times, the trio recount a series of fact-finding trips to Kuwait to meet with dozens of South Asian and Filipino men "recruited to the Middle East with the promise of good jobs, only to be hired by Kuwaiti transport companies driving into Iraq".

    A Filipino described how Jassin Transport and Stevedoring Company - one of KBR's sub-subcontractors - took his passport, nullified the contract he had signed in the Philippines, and issued him a new contract written in Arabic. Employees were "given an ultimatum: sign or be abandoned". Then they were handed the keys to unarmored tractor-trailer trucks and told to drive fast along roads known to be dangerous. The authors concluded that these companies "openly flout US labor laws by using cheap imported labor, withholding employee passports and housing workers in decrepit conditions".

    Officially, nothing like this is supposed to happen. The Philippines, Nepal, and other countries bar their citizens from taking work in Iraq. In 2006, the Defense Department actually issued stricter regulations forbidding such labor trafficking, and KBR and other companies pledged that they and their subcontractors would follow local labor laws. But regulations or no, the truth is that the Pentagon is no longer really in control of the process, and sub-sub-subcontracting is how you make the big money in places like Iraq.

    Oh ... and despite hearings, investigations, and legislation, Congress isn't in control either. In an attempt to address the privatization of the military, for example, the Senate's Democratic Policy Committee has held a total of seventeen hearings on waste, fraud, and corruption in Iraq. Representative Waxman's Oversight and Government Reform Committee has made the role of congressional gadfly respectable. Hearings in both the House and Senate have offered riveting, sometimes shocking, inside-the-Beltway theater, but subsequent legislation created to make decent Pentagon reporting and oversight a reality, close gaping loopholes in accountability, criminalize fraud, and curb some of the worst abuses of private contractors has proven well-meaning but hopelessly weak and ineffective in practice.

    Is MIC 3.0 in our Future?
    President Bush will leave office boasting that the US has the most powerful and professional military machine in the world. We have paid dearly for this machine in the past seven-plus years. The bill for all that might and muscle comes to more than $3.8 trillion since 2001 - plus another $900 billion or more for actually flexing it in Iraq, Afghanistan, and elsewhere.

    And if the US military machine is now both oversized and staggeringly expensive, it is also more prone to breakdown in a more dangerous and unstable world. So think of Bush's legacy to us as a Pentagon bloated almost beyond recognition and crippled by its dependence on private military corporations.

    As for Bush's legacy to the Lockheed Martins, the KBRs and the Pentagon's whole "Top 100" crew, it's been money beyond measure, enough to leave them all hard at work on Military Industrial Complex 3.0. They naturally want to make sure that the money continues to pour into their ever-upgrading war machine, no matter who takes over the White House in 2009.

    (Copyright 2008 Frida Berrigan.)
  • left
    [ category: ]

    Comment viewing options

    Select your preferred way to display the comments and click "Save settings" to activate your changes.

    How much can we tolerate

    Ian, a relevant question is whether a cost-plus system is being systemically and collusively rorted. If we accept that there is a risk of over-pricing then an auditor without ties to the client or the contractor is needed.

    It may appear to be naive to expect a system that is not abused, but as a general rule, we, the taxpayers, expect not to be ripped-off and rightly so. Let's apply the yardstick and call it as we see it.

    The law courts can decide, but zero tolerance to graft and corruption must be where we start.

    All true, Roger

    G'day Roger.  Like the power bestowed on the President of the US, it is all about money.

    We certainly are entitled to expect not to be ripped-off, but that is surely the name of the game?

    A business certificate these days is virtually a licence to rip people off.

    The entire Howard "New Order" would tell you that being successful in business is all that is required to be a politician on the conservative side. A case in point is the election of Malcolm Turnbull to leader of the conservatives after only being in the game for 4 years! 

    But, he is rich.  He is a lawyer/barrister (as though that would endear him to our hearts). He is considered a megalomaniac by most of the commentators.

    The various crime gangs around the world consider themselves to be business people.  Nothing personal - just business.

    So why does the media think that we the ordinary people of Australia would want a Prime Minister with a history of individualism and ruthlessness?

    And as far as not being a silvertail, gee he was all of eight years old when he went to an expensive private school.  Now that is rough!

    Both megalomaniacs

    Ern, case in point is the election of Malcolm Turnbull to leader of the conservatives after only being in the game for 4 years!"

    Well, Bob Hawke was elected to parliament in 1980 and became leader of the labor party only 3 years later.

    Ern: "But he is rich. He is a lawyer/barrister (as though that would endear him to our hearts). He is considered a megalomaniac by most of the commentators."

    Not sure who most of the commentators are Ern, but I do agree that Turnbull is a rich megalomaniac. So is Rudd. They actually have a lot in common.

    Like I said before, most politicians ARE megalomaniacs!

    Here's what Paul Sheehan said yesterday.

    Even the growing impression, after 10 months of the Rudd Government, that the Labor Party is being led by a disingenuous megalomaniac has suddenly been offset by the arrival of Malcolm Turnbull and the general certainty that he is a disingenuous megalomaniac

    Peter Costello: IMF Corruption Consultant! WTF?

    Sorry to ejaculate, but I just heard the news from Pete's lips on Lateline.  How do these blokes sleep at night?

    KBR's Adelaide defence team - finally, a sighting

    This comes from the Advertiser's employment liftout of a few weeksago:

    [AdelaideNow extract]

    In 2006, Miss Chalk joined the project management group in the Adelaide office of global engineering firm KBR, working on local defence projects.

    She has also worked on pre-feasibility studies for the BHP Billiton's Olympic Dam expansion. ......

    In three weeks, Miss Chalk will move back to Britain, lured by what she calls "mega-projects" that KBR is involved with, including upstream oil and gas and offshore wind farms

    2006? When Fletcher was transferring from his KBR position to the warship job? Thank you. I was wondering how and where confirmation would f finally come.

    For more on Fletcher, here's a piece from this time last year:

    [SAGovt website extract]

    “This board, under General Cosgrove’s strong leadership will ensure we reap the benefits of the defence projects we have already won, and that we aggressively and effectively pursue additional new projects,” Mr Rann said. “The board will work closely with the new Defence SA unit, led by Andrew Fletcher - former KBR Senior Vice President and Chief Executive of Port Adelaide Maritime Corporation.

    “Defence SA will take our State’s defence-industry plans and goals up to the next level, combining the best elements of the Government’s existing Defence Unit and the Port Adelaide Maritime Corporation, Defence SA will focus on infrastructure and skills.

    “Its existence will implicitly recognise that our industry has moved into a new phase one in which we’re not just seeking new projects, but also delivering on the contracts we’ve already won

    Before the warship job Fletcher, you'll recall, was global KBR Vice President for both Infrastructure and the Asia-Pacific Region.

    Tell me now that that Cheney's Adelaide team had no connection to the KBR contractors working in the Pentagon.

    Now all that's needed is Stanley's plea-bargained proof of middle-eastern bribery to facilitate the Iraq planning passed through the Adelaide office, and the picture will be reasonably complete.

    If Stanley reveals infrastructure bribes, and Adelaide was running infrastructure, then the Adelaide office will be assumed complicit. And if the head of that team, now running our defence project, isn't considered worthy of investigation, it would be quite surprising.

    Malcolm B. proves something

    A nice history lesson from our esteemed barrister that proves that war is a highly profitable endeveour and always has been!

    Incidently, whilst our attention has been rivetted by some corporate collapses in the US, George Bush has slipped a paragraph into a bill (yet to be voted on) that will proclaim his war on "terra" a never-ending war, in that as long as there exists any organisation anywhere no matter how big or small seeking similar aims to Al Qaeda (whatever they are and whoever they are or if they even exist). The Benbrika affair would come under this umbrella.

    It's worded in such a way to say this war will never be won until the last "terrorist" is captured. What does it mean? That the US president is a law unto himself completely and as a "war president" is excused from the normal niceties such as obtaining warrants for  wiretaps etc. It legalises anything he/she does. It makes the president immune from the law at all times. You ain't seen nothing yet!

    Step forward Sarah Palin - ruler of the world!

    Sound logic

    G'day Michael.  Until George W. Bush stole the presidency of the US, I was sceptical of the statement that "anyone can be President", but that procedure by the supposed leader of world democracy confirms it however - in the reverse of what they have claimed for years.

    This success of an ex-drunk, ex-druggy, abject failure in business, aided and abetted by his brother in Florida, a cousin in the electoral process, and of course, the help of the Surpreme Court, most of whom were appointed by George W's father, was surely an eye-opener.

    The choice of "anyone" should be qualified by the wealth of the candidate and that of the people who would make him/her the all-powerful.

    I note your mention of Sarah Palin, and I too am fascinated by the little known governor of the smallest State being elevated to stardom by the US media - and in less than a week!

    So it confirms to me that anyone at all can be President of the US as long as they conform to the dictates of the Military/Corporate.

    This happpy little arrangement has become par for the course since WW2, but taking this elderly man classed as a radical by his own party and a gun-toting ex-Governor to the very brink of running that nation is beyond the pale.

    We can surmise what happens to US Presidents when they try to buck the powers that be - but what a mess they can cause in the meantime.

    Well might we say, "Step forward Sarah Palin - ruler of the world".  Fair dinkum!

    Ho hum

    It is rather difficult to see the point of this article.

    Just off the top of my head, during the recent late unpleasantness, otherwise known as the Seven Years War, private English enterprises were making huge profits out of selling cannon balls to the Dutch to be fired back at British troops.

    During the somewhat later unpleasantness known as the Napoleonic wars, there were constant problems with supplies, particularly preserved food and shipyard fraud.

    During the civil war between the Rebel Colonies in the 1860s, profiteering amongst clothing suppliers (just to name one example) was rife on both sides.

    During WWI, corporations made huge fortunes supplying dodgy ordnance leading to massive casualties on all sides.

    Ships sink, tanks don't work, the blind rate amongst munitions is astronomical (and would be tolerated neither in ordinary commerce nor under the Trade Practices Act or ordinary Australian Standards were they to apply).  Toilet paper is inadequate.  Often, still, combat rations are sub-standard.  And so it goes.  Plus ca change.

    Where there is a quid to be made and there is a bureaucrat either taking a backhander or just shuffling paper without having either to eat the crap he's dealing with or face the prospect of being killed as a result either of incompetence, peculation or sheer bad workmanship (look at the state of the Royal Navy between, say, 1730 and 1835), you are going to get the conditions that this article complains about.

    After all, things are not much different on the roads, railways or in any government enterprise.  That is why, in NSW, our Independent Commission Against Corruption (and equivalent bodies throughout the Commonwealth) are so busy.  Greed attracts.

    Try to minimise it if you will but you will never get rid of it.  Nothing changes but the dollar figure.  After all, where did the Nobel prize come from?  Were Mercedes-Benz, the  Bavarian Motor Works, Lockheed, Rolls Royce, BHP or a million and one other corporations propped up by war profiteering over the centuries, Government enterprises?  Not on your nelly, nor could they have been, nor would we want it so.

    The East India Company wasn't a Government enterprise either, but it managed to operate like one for the enormous profit of its shareholders and the benefit generally of the Empire it served at the same time as it, arguably, repressed the local populace it exploited.  In turn, in the Raj, a number of princelings made a nice quid out of the whole thing.

    Laudable though it may be to want things to be as accountable as possible, one is never going to overcome human nature and the author of this piece ought just to get used to it.  It is another example of the detachment of Rebel Colonists from reality in favour of navel-gazing.  This sort of divorce from the world as it is actually contributes to the problem by its attempts at denial of human nature rather than doing anything useful about ameliorating its effects.  We all feel so good having a whinge but it doesn't alter the fact that our troops at the front are buying their own equipment to keep themselves alive rather than putting up with life-threatening sub-standard issue manufactured by contractors (the recent cases of boots and body armour come to mind).

    As for Roger Fedyk's high-minded pontification about corruption, it was Caesar’s wife who was beyond suspicion.  She's been dead a long time.

    I thought that was corruption

    Malcolm, surely you don't mean that military corruption should continue just because it always has?

    The suggestion that terror, crimes, and all sorts of human rights abuses have always existed means nothing unless we are always prepared to stop it without fear or favour.  And not selective, as is the practice of the US.

    What offends me is that the murders, massacres and air attacks reportedly exercised by the Nazis and condemned by the west is really hypocritical when the US and its puppets now believe that they can invade wherever and however they like on the basis that they are suspicious of what that targetted country might be doing.

    I am still inclined to think that if Australia had nuclear weapons for defence and our military was a real Defence Force, as Gough Whitlam wanted, we may be able to stand on our own two feet without the servile attitude of the Howard government to the largest power in the world.

    Stewed in corruption

    I'm not sure where this comes from, Ernest William. I was commenting on the distinction between law and morality.

    There is no moral imperative about any form of corruption. There is just corruption. As some non-existent person is alleged once to have said, "The poor will always be with us." Likewise the corrupt. What you do about it in legal philosophical terms is simply a matter of regulation.

    Remember please that Gough was a navigator on a bomber. All sides drop bombs. I'd rather be doing research or training people but that's my moral personal choice not an instrument of policy.

    Off with you

    Laudability is not the objective, Malcolm, something that your keen legal mind seems to have forgotten.

    Acknowleding the human propensity to cheat and lie is is not equivalent to encouraging it. Perhaps the real solution here is to get rid of lawyers. If we have no laws we don't have a problem.

    Your supposed indifference to that which you have sworn to uphold (words mean nothing?) does you no credit. Thankfully, there are plenty of officers of the court who don't agree with you.

    Oh no you don't

    Roger Fedyk, I have sworn to uphold nothing. I am an instrument of governance and bound to argue to the best of my ability. While I have often thought the best way of abolishing crime would be to repeal the Crimes Act, people will still behave like people. It is no part of my duty to uphold the law - I am not a judge, nor do I have a duty to do right to all manner of people without fear or favour.

    I have a firm belief, however, in the idea that if people want to make us obey rules they impose, those rules should be strictly limited to no more than the least liberty they are capable of removing from us (one of the reasons I love doing traffic matters). That is how one gets legislation knocked over.

    Cheating and lying needs no encouragement from me. It will happen anyway.

    On one point you are correct: there are plenty of officers of the Court who don't agree with me, bless their little hearts. If we all agreed, we would not have an adversarial system and I would be out of a job (such as it might be). It is, however, a fairly effective way of resolving disputes without open bloodshed.

    So jam your morality. Morality has nothing to do with the law nor should it.

    Not so

    Malcolm, what disingenuous claptrap. The whole legal profession by hundreds of years of accepted tradition and even by law (in Queensland you would definitely be required to take an oath) is required to uphold the rule of law.

    In the US, particularly, and elsewhere, lawyers are officers of the court. If your argument is that because of the human condition you just go along with corruption with a shrug of the shoulders then hand in your metaphorical lawman's badge and take up some other activity. We need practitioners who want to make a difference. 

    Claptrap is it?

    Heavens save me from the ill-meaning public.

    I am entitled to practise in Qld, despite the Qld profession's almost century long rearguard action to stop me (it's called National Competition Policy which entitles me, as of last year, to practice anywhere in the Commonwealth - lucky country). I have appeared in Qld, although only in the Federal Court and I have NEVER taken an oath anywhere in the country, nor would I, nor am I required to. Have a look at the Schedule to any of the State or Federal Constitutions or any of the Legal Profession Acts (however described). An oath is not required.

    When I was first admitted as a Solicitor, Attorney and Proctor of the Supreme Court of NSW, I became an officer of that Court. When I signed the roll of practitioners for the High Court, I did not. When I was first called to the Bar, I was no longer an officer of the Supreme, or any other, Court. That was an innovation of an amendment to the Legal Profession Act in about 1993 from memory.

    I am admitted in NSW, SA and the ACT. Never took oaths there either.

    What the "law" in the Rebel Colonies has to do with the Commonwealth is beyond me and why you and other equally informed members of the populace keep comparing totally different systems is equally beyond me.

    As far as making a difference goes, I do. Would you like a list of my reported decisions? Perhaps you could just google.

    Unless you know what you are talking about, could you give us all a rest?

    Try this

    Malcolm, I'll take your word that you do not need to swear any oath.

    However, that does not change anything I said. If you or others in the legal profession any where in the world don't want to make a difference then go do something else.

    I gather from part of your reply that you have no problem with a "that's over there and I'm over here" attitude. Unfortunately, money has no national boundaries and if corruption happens somewhere else it eventually affects us all.

    As to separating morality and law, that is hogwash. The Marriage Act farce of a couple of years ago was all about morality. Our politicians, who are your acknowledged masters, you being being in "governance", keep ringing the morality bell whenever it suits them.

    Now it's hogwash

    I gather your last post means you don't agree with me Roger Fedyk. As I always say, other people are entitled to be wrong.

    Far from being hogwash, my view that the law and morality are and should be entirely separate is a deeply considered, well respected, jurisprudential theory. It is opposed by the former Vinerian Professor of Jurisprudence at Oxford, Dawkins (see e.g. Taking Rights Seriously). The reason the law and morality need to be separate is that your morality is no better than mine and is a personal choice. I have no "right" (in Dawkins terms, or otherwise) to impose my morality on you.

    There is, for example nothing wrong with killing people - we do it all the time and there are various well established exceptions to murder (which, no doubt, you would regard as a moral enactment). Murder has nothing to do with morality. If it did, there would be an absolute prohibition on the cessation of one person's life by the intervention of another. Instead we have myriad exceptions: killing enemies of the realm in time of war, self defence (including the killing of persons threatening innocent life or property), insanity etc. Further, we have various types of unlawful killing: murder, manslaughter, culpable driving causing death, industrial negligence causing death etc.

    One area where this is getting interesting and exercising the practical consciences of lawyers rather then just the theoretical proclivities of jurisprudes is the area of strict liability particularly as it applies to the nonsensical terorism laws where, overthrowing hundreds of years of legal tradition and hard-won principle, thinking now but makes it so. Mens rea seems to be slipping into top gear without the intervention of the actus reus. Not being the Federal Attorney, I do not want to comment further or more specifically on that since there is still a jury deliberating and the time for appeal has not yet expired. When the time comes, however, you will get my opinion with both barrels.

    While I do rather miss the old section of the NSW Crimes Act which made the "abominable crime of buggery" an offence (repealed by Neville Wran in about 1985) that is pure nostalgia for one of the more elegantly worded criminal sanctions than an expression of my moral view. Don't see why it is morally turpitudinous - just a bit icky.

    As to your furphy about the Marriage Act, I assume you are referring to the definition of marriage and the refusal to extend it to same-sex relationships. Why not go the whole hog and legally sanctify bestiality? Bring a whole new meaning to piggy-in-the-middle. One could include polygamy as well.

    Well, no one couldn't because the marriage debate in this context is constrained by one simple set of principles. The Constitution gives the Federal Parliament exclusive legislative power over "marriage" [s51 (xxi)] and "divorce and matrimonial causes; and in relation thereto, parental rights, and the custody and guardianship of infants" [s51 (xxii)]. There is a preponderance of High Court authority which means that "marriage" is to be interpreted as it was understood at the time the Constitution was framed and enacted (that's why we can't have majority verdicts in Commonwealth trials). That means "marriage" is the union of a man and a woman intended to be for life to the exclusion of others. Nothing to do with morality - just a plain and simple application of legal principle.

    That happens to be the real reason that both sides of politics (excluding the loony Greens whose leader no doubt has a vested interest, although, you will note, not a vested interest under the Constitution) have a policy that marriage is the joinder of a man and a woman. Nobody ever explains it as simply as I have but it is still the reason. No legislative entity in the country has the power to legalise, as marriage, unions between persons other than males and females above the age of consent as defined in the Marriage Act short of a Constitutional referendum.

    If you want to roger the system, Roger Fedyck, get it up in a referendum. Best of luck because it is your referendum where the morality will come in and if you don't have a majority of votes and a majority of States, s 128 ain't going to help you.

    Personally, I have been married, think it is a great idea but am no longer married and don't much care. 17 years of SWMBO seems to have worked tolerably well without a bit of paper.

    Morality explained

    Malcolm, I didn't intend to let this slide into a discussion on morality but you have taken a viewpoint that I am driven by some need to see law as a way of enforcing "morality".

    Of course I do because that is what is expected by society and a society's expectations is the actual source of law. All law is based on true morality that is it "a code of conduct put forward by a society .. that, given specified conditions, would be put forward by all rational persons" (Stanford Encyclopedia of Philosophy). 

    Society's expectations are that laws address aspects of behaviour or actions that are inimical to the good order of that society. We know that the legal system tries to draw a balance between competing views on some incident before it; however, no matter how rarified you may think the deliberations are they do not live outside the expectation that the good order of our society is to be maintained.

    If you want a clear proof of that you can see it in Canberra or any other legislature where what you believe to be an aspect of the law can be changed in a heartbeat by the government of the day based on what it understands to be the people's expectations.

    The law clearly serves society, not the other way around. Corruption is against the good order of society and every one's duty is to act against it.

    PS. Since when did the perjorative 'loony' become de riguer for references to the Greens. Far from being "loony" the Greens seem to be the only political party that are not held hostage to some power interest group. As such they provide one of the few genuine voices against the excesses of the two majors.

    The scorn heaped on them suggests that what they say is hits close to home.

    As for the definition of marriage, it seems that religious morality has trumped the day and that is a topic of its own. A referendum may show that Australians, at least, don't really care too much for that definition anyway if living in de facto relationships and the high divorce rate are any indicator. It was after all a beat up by Howard and Ruddock to win the Hillsong vote and something that Roxon me-too-ed after deciding that votes were infinitely preferable to Labor's earlier principled position

    Professional ethics and morality of another nature

    Roger and Malcolm, I've been watching from the sidelines in admiration at the depth of thought that you've put into your arguments.

    By way of segue, a Reuters extract:

    Stanley's guilty plea is a big development in an investigation that Halliburton revealed in 2004. The wide-ranging probe involves companies or individuals in at least six countries and court documents show the probe goes beyond the Nigerian Bonny Island deal.

    "This is a big break in the case," said Dan Newcomb, a partner at Shearman & Sterling in New York who advises clients on compliance with anti-bribery law. "Now they have a guy who is going to explain what is going on."

    According to his plea agreement, Stanley must "fully cooperate" with the government in its probe to find if others violated the Foreign Corrupt Practices Act, where it is illegal for U.S. companies or their agents to use bribes to win business in foreign countries.

    I have a hopeful feeling that the United Water Adelaide contract is finally going to rear its ugly head.

    What first made this piece catch my eye (it's since been published on alJazeera) was the amazingly high number of KBR workers in the missile defence program, to KBR people becoming the dominant percentage on the SA Major Projects Facilitation Board (this knowledge has been suppressed by a minister), to the former head of KBR running the "small business" component of the construction of the floating missile shield launch pads.   What sheer bloody luck.  Oh yes, and don't forget the KBR water contract was won at enough time beyond the deadline for their people to have read their competitors' submissions.

    But such things never happen, do they? That's why the CEO of the company is in jail spilling his guts for a plea bargain.

    The points of the esoterically benign conversation of you two gentleman is far removed from the code of ethics that has been running the shop of late.

    No Hostages To Human Nature Accepted

    Richard, as Malcolm has alluded to, corruption is society's smelly handmaiden and at a previous point in time, where slow communcations were the order of the day, corrupt practice was the preserve of the monied elite who had little fear of being found out.

    However, this is the 21st century where instant communication and snooping eyes rule. The white-collar criminals of Wall Street, the MIC and elsewhere nevertheless keep trying on "business as usual". In this they aided and abetted by the dominant political parties. So in fighting corruption we have to take on our whole system of governance which Malcolm has indirectly stated "ain't  gunna happen".

    Still let's keep calling it as we see it. My grandchildren deserve better.

    Trails and tribulations

    It's amazing, Roger, how much less of a resource for acquiring political information the net has become of late. All the old links disappearing, all the paperless information lost.

    Many of the trails I've been following have gone cold over the last year, but they're still detectable in new ones. Unfortunately a lot of the information supply has been well enough secured that from here on in (on many issues) nothing less than a whistleblower will do the trick.

    It was fun while it lasted. I still love the idea of the US's D.O.J. investigating possible Australian "foreign corrupt practices".

    Humanity's ability to communicate quickly up to a global level has indeed exposed quite a lot, but there's been, IMHO, a very quick covering of tracks.

    It's difficult to say whether the current windows of opportunity will always be open. Carpe Diem.

    Cost plus

    From the threadstarter:

    Consider the following: In fiscal year 2005 (the last year for which full data is available), the Pentagon spent more contracting for services with private companies than on supplies and equipment - including major weapons systems. This figure has been steadily rising over the past 10 years. According to a recent Government Accountability Office report, in the last decade the amount the Pentagon has paid out to private companies for services has increased by 78% in real terms. In fiscal year 2006, those services contracts totaled more than $151 billion.

    $151 billion is a hell of a lot of money. But the US population is around 300 million. The above therefore translates to a tax of about US $500 per head of population per year. Even if it were all totally blown or siphoned off into the Swiss bank accounts of a corrupt few, it would be a huge scandal, but not a great or crippling disaster. It is a significant amount, but no more than that.

    This is not to justify it, or say that there is no way round it. It is just to put it in perspective.

    Cost-plus was an issue in Australia during WW2, as it meant that the more public money they spent, the more profit the businesses making war materiel took to the bank. My father, who spent the war designing and building direction-finding equipment at AWA (in the pre-Panasonic era Amalgamated Wireless Australia mass-produced a huge range of domestic and industrial gear), used to fulminate about the rorting, as did an enormous number of other people.

    But no economist, engineer or politician was able to think up a better system. Part of the problem was that manufacturers were having to tool up all the time in new ways and make things they had never made before.

    The most important thing was that despite its significant but non-crippling internal corruption, that industrial system made a massive contribution to the Allied victory in WW2, without which the world today would without a single doubt be in a vastly worse state.

    So the choice comes down to: (1) have an army of private contractors, each out to make as much from the game as possible or (2) have as much as possible done by the government itself.

    A highway engineer I once met put it very well. "If you want a road 25% underbuilt, give the job to private enterprise. If you want it 25% overbuilt, give it to a government department."

    The US government is finding that its global interventionist role is unaffordable, and its recent and reluctant bail out of the financial system, at enormous cost to the US taxpayers, has given it little alternative but to slash costs elsewhere or else face rampant inflation. This cannot be carried by basic services like health and education, because they have been reduced to skin and bones already.

    So an appropriate assumption for an outfit like Halliburton would be that of a turkey on the eve of Thanksgiving: most of its future is behind it.

    Local boy makes good

    Below is how not to appear in your hometown rag. Bear in mind as you read it, though, that KBR's activities weren't just in oil.

    Anyway, to the Salisbury Post:

    Jack Stanley, who has ties to Rowan County, faces up to seven years in prison and has been ordered to pay restitution of $10.8 million after he pleaded guilty Sept. 3 to federal bribery charges.

    A 1960 graduate of East Rowan High School, Stanley is the former chief executive and chairman of Kellogg Brown and Root (KBR), a construction firm subsidiary of Halliburton Co. in Houston, Texas.

    Vice President Dick Cheney headed Halliburton between 1995 and 2000.

    Stanley and his wife are building a house in the Forest Glen subdivision of Salisbury. They have lived in Houston.

    According to federal charges, Stanley — whose full name is Albert Jackson Stanley — played a lead role in establishing a $180 million slush fund used to pay bribes to Nigerian officials so that KBR and three other companies would win engineering and construction contracts connected to the Bonny Island liquefied natural gas facilities.

    Stanley also pleaded guilty to receiving some $10.8 million in kickbacks from a consultant KBR hired at his behest. The money kicked back to him in various deals was wired to three Swiss bank accounts, according to documents filed in U.S. District Court's Houston division.

    Stanley, 65, has agreed to cooperate with federal authorities in exchange for his prison sentence's possibly being reduced. The government has requested that his sentence be deferred until his cooperation is complete.

    In the federal criminal proceeding, Stanley pleaded guilty to two conspiracy charges. The first count charged him with conspiracy to violate the Foreign Practices Corruption Act.

    The second count charged him with conspiracy to commit wire and mail fraud.

    The seven-year term against Stanley would be the longest sentence to date against someone in a case involving the Foreign Corrupt Practices Act.

    As part of the criminal plea agreement, he will "fully cooperate" by agreeing to testify before a grand jury or in any administrative proceedings. He must voluntarily attend any interviews and conferences the government might request. He also must provide the government all documents in his possession related to the investigation.


    That last post should have referred to Prof Dworkin not Dawkins. About as bright as one another but different people. My apologies.

    upside down worlds are soon to topple

    True enough Roger, this was a pretty short emperor time.

    I am gobsmacked that Petraus earns only 180 grand!!! For a man with such responsibility and power. No wonder they soon ditch it and go to the MIC . And to think the head of AIG is still expecting his 22 million salary. Too upside down to survive.


    Distant echoes of the Roman Empire

    History lessons are harshly learned and not to be forgotten (except they are).

    This story is frightening in its expose of endemic corruption. This parallels the demise of the Roman Empire for exactly the same reasons, corruption and mercenaries running the military.

    Corruption saps a nation's treasure and ultimately its vitality. The US will not survive in its current form. 

    Comment viewing options

    Select your preferred way to display the comments and click "Save settings" to activate your changes.
    © 2005-2011, Webdiary Pty Ltd
    Disclaimer: This site is home to many debates, and the views expressed on this site are not necessarily those of the site editors.
    Contributors submit comments on their own responsibility: if you believe that a comment is incorrect or offensive in any way,
    please submit a comment to that effect and we will make corrections or deletions as necessary.
    Margo Kingston Photo © Elaine Campaner

    Recent Comments

    David Roffey: {whimper} in Not with a bang ... 12 weeks 5 days ago
    Jenny Hume: So long mate in Not with a bang ... 12 weeks 6 days ago
    Fiona Reynolds: Reds (under beds?) in Not with a bang ... 13 weeks 1 day ago
    Justin Obodie: Why not, with a bang? in Not with a bang ... 13 weeks 1 day ago
    Fiona Reynolds: Dear Albatross in Not with a bang ... 13 weeks 1 day ago
    Michael Talbot-Wilson: Good luck in Not with a bang ... 13 weeks 1 day ago
    Fiona Reynolds: Goodnight and good luck in Not with a bang ... 13 weeks 2 days ago
    Margo Kingston: bye, babe in Not with a bang ... 13 weeks 6 days ago