Companies awarded $8 billion in contracts to rebuild Iraq and Afghanistan have been major campaign donors to President Bush, and their executives have had important political and military connections, according to a study released Thursday.
The study of more than 70 U.S. companies and individual contractors turned up more than $500,000 in donations to the president's 2000 campaign, more than they gave collectively to any other politician over the past dozen years.
The report was released by the Center for Public Integrity, a Washington-based research organization that produces investigative articles on special interests and ethics in government. Its staff includes journalists and researchers.
The Center concluded that most of the 10 largest contracts went to companies that employed former high-ranking government officials, or executives with close ties to members of Congress and even the agencies awarding their contracts.
Major contracts for Iraq and Afghanistan were awarded by the Bush administration without competitive bids, because agencies said competition would have taken too much time to meet urgent needs in both countries.
"No single agency supervised the contracting process for the government," Center executive director Charles Lewis said. "This situation alone shows how susceptible the contracting system is to waste, fraud and cronyism."
J. Edward Fox, an assistant administrator at the U.S. Agency for International Development, took issue with Lewis' statement and aspects of the report.
"It would…be incorrect to suggest that there is no overall oversight of this process," he wrote the Center. "The USAID inspector general's review of all Iraq contracts which was requested by USAID Administrator Andrew S. Natsios on April 14th has shown that all Iraq contracts to date have been done in compliance" with federal regulations.
The top contract recipient was the Halliburton subsidiary KBR, with more than $2.3 billion awarded to support the U.S. military and restore Iraq's oil industry.
Halliburton was headed by Vice President Dick Cheney before he resigned to run with Mr. Bush in 2000.
According to The Washington Post, while Cheney was defense secretary the Pentagon chose Halliburton subsidiary Brown & Root to study the cost effectiveness of outsourcing some military operations to private contractors. Based on the results of the study, the Pentagon hired Brown & Root to implement an outsourcing plan. Cheney became Halliburton CEO in 1995.
The U.S. Army Corps of Engineers announced this week that Halliburton's contract to fix Iraq's oil infrastructure, worth $1.59 billion so far, will be extended until December or January while the government receives and evaluates revised bids for replacement work that could total $2 billion.
Halliburton's top executive, Dave Lesar, said Wednesday he was offended by criticism of the company's Iraq work but believed it was "less about Halliburton and more about external political issues."
"As a company uniquely qualified to take on this difficult assignment, we will continue to bring all of our global resources to bear at this critical time in the Middle East. We have served the military for over 50 years and have no intention of backing down at this point," he said.
Bechtel was second with a $1 billion capital construction contract involving Iraq's utilities, telecommunications, railroads, ports, schools, health care facilities, bridges, roads and airports.
The company's Internet site says, "We do engage in the political process, as do most companies in the United States. We have legitimate policy interests and positions on matters before Congress, and we express them in many ways, including support for elected officials who support those positions.
"We do not expect or receive political favors or government contracts as a result of those contributions."
The Center's analysis of contractor political donations showed:
The Center's findings are based, in part, on 73 Freedom of Information Act requests and an analysis of a federal contractor database.