Another day, another middle finger to the American taxpayer and American soldier from the Bush Administration and friends at Kellogg Brown & Root.

The New York Times has an article up detailing how back in the early stages of the Iraq War, the Army's own auditor found lack of support for $ 1 billion in fees and charges sought by KBR for their "services," and that the senior civilian overseeing the KBR contract was "reassigned" for demanding KBR provide information:

The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Mr. Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

More below...

Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Mr. Smith refused to sign off on the payments to the company. "They had a gigantic amount of costs they couldn’t justify," he said in an interview. "Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that."

According to the NYT, the official, Charles M. Smith, now speaking out several years after the fact, says he was reassigned because of, you know, actually doing his job:

Army officials denied that Mr. Smith had been removed because of the dispute, but confirmed that they had reversed his decision, arguing that blocking the payments to KBR would have eroded basic services to 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.

So, to put it in simple terms, KBR basically told the Army,

"Hey, We're KBR, Cheney's boys, and you best forget your pesky little audits, procedures and whatever you call this accountability thing -- or the troops will suffer."

But don't trust me, listen to Mr. Smith himself:

"[KBR] had a gigantic amount of costs they couldn’t justify," he said in an interview. "Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that."

Well, Mr. Smith, just because you're not going to do that doesn't mean someone else won't be too proud to pick up the slack, especially for a fee:

Soon after Mr. Smith was replaced, the Army hired a contractor, RCI Holding Corporation, to review KBR’s costs. "They came up with estimates, using very weak data from KBR," Mr. Smith said. "They ignored D.C.A.A.’s auditors," he said, referring to the Defense Contract Audit Agency.

Is there any fragment of the Pentagon's oversight mechanisms of major contractors (esp. those particularly friendly to the administration) in Iraq that hasn't been  privatized?  I wrote a diary a couple of weeks ago on another article from the NYT that suggested the Pentagon had no effective oversight over the contracting process generally.

But here, KBR's tentacles reach so high up into and throughout the Pentagon that they can literally dictate to the Pentagon to hire a different auditor to scrub their account.  This scrubbing helps not just for present indelicacies, but helps to maintain the right to get yet MORE contracts:

High grades on its work in Iraq also allowed KBR to win more work from the Pentagon, and this spring, KBR was awarded a share in [a] new 10-year [$ 150 billion] contract [and other juicy performance bonuses]. The Army also announced that Serco, RCI’s parent [the new, improved auditor for you kids at home], will help oversee the Army’s new contract with KBR.

Course, why should it be a surprise that our friends in the Pentagon have now actually gone and privatized the [KBR part] of the auditing apparatus of our privatized for-profit war machine?  From commondreams.org:

As Secretary of Defense under Bush I, Cheney paid Brown and Root services (now Kellogg Brown and Root) $3.9 million to report on how private companies could help the U.S. Army as Cheney cut hundreds of thousands of Army jobs.

(And though most Kossacks know this story all too well, for some more general background on KBR's shenanigans in Iraq, see a Frontline documentary from a few years ago called "Private Warriors.")

At least there's now one less day until Jan. 20, 2009.  It cannot come soon enough.

Originally posted to gatorbot on Mon Jun 16, 2008 at 10:25 PM PDT.

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