Thanks to several recent diaries, including the excellent one by smintheus , we now know that operations at Walter Reed were outsourced to IAP, a company run by Cheney’s former Halliburton crony, Al Neffgen. Neffgen was formerly Chief Operations Officer for Government Operations of KBR. Although KBR is currently an 80%-owned subsidiary of Halliburton (following a 20% initial public stock offering of KBR shares in November, 2006), on February 27, 2007, Halliburton announced its intention to spin off the remainder of KBR through a split-off exchange to existing Halliburton shareholders. Put more simply, when the Democrats gained control of the House and the Senate in the November, 2006 elections, Halliburton decided to move as quickly as possible to distance itself from KBR’s scandal-plagued contracts to provide basic services to the military in Iraq.
Republicans have been flying air cover for KBR ever since Cheney assumed the vice-presidency. At a July 22, 2004 hearing by the House Committee on Government Reform, that included the testimony of three whistleblowers who were former KBR employees, Rep. Henry Waxman (D-CA), accused Cheney’s office of collusion with pentagon procurement agents. The Washington Post reports:
Waxman also raised questions about a March 5, 2003, e-mail by an Army Corps of Engineers official that suggested a larger no-bid contract to Halliburton subsidiary was "coordinated" with Cheney's office. Stephen Browning, a civilian regional director in the Corps, said in an interview last week that he wrote the note after he and retired Lt. Gen. Jay M. Garner met with Feith about plans to declassify the earlier $1.8 million contract with KBR.
According to Browning, Feith said he had already informed Cheney's office. Three days later, KBR got a $7 billion contract to restore Iraq's oil infrastructure. The war began March 20, 2003. At the briefing last week, Browning repeated his story, Waxman's letter said.
"These disclosures mean that your office was informed about the Halliburton contracts at least twice at key moments," Waxman wrote.
Waxman asked Cheney to "clarify the nature of your involvements" in the contract awards.
Waxman requested that the House subpoena correspondence between Cheney and the Pentagon.
Waxman's request to have the committee subpoena communications between Cheney's office and the Pentagon failed on a party-line vote. Link
So much for Waxman’s efforts in the House. In the Senate, Byron Dorgan (D-ND) has also been pressing for accountability on Iraq service contracts. Dorgan’s proposal, S. Amdt. 4292 (co-sponsored by Dick Durbin, Tom Harkin and Hillary Clinton), would have established a Truman-style commission to investigate war profiteering. Voting on the Senate amendment took place on June 20, 2006, and, once again, establishing accountability for Halliburton failed on a straight Republican v. Democrat party line vote. To his credit, as Chairman of the Democratic Policy Committee, Dorgan held numerous hearings on KBR’s shortcomings, regardless of whether Republicans or the MSM wanted to hear about them.
Now we have IAP in the mix. In addition to receiving contracts for services in Iraq and at Walter Reed, IAP has also received a contract to assume certain services from the Internal Revenue Service. A November 30, 2006 article by Stephen Barr of the Washington Post notes that, in unusual circumstances, IAP won the contract over the bid made by the IRS itself:
"Once again the administration's zeal to send the work of the federal government to private-sector contractors is failing America's taxpayers," Colleen M. Kelley, the union president, said in a statement.
In 2003, the IRS began the process of putting the work, which had been deemed a commercial activity, up for a public-private competition. Two years later, the IRS decided that its employees had won the competition and that the work should stay in-house. Grant said the agency "then discovered some discrepancies" in the bidding process and elected to terminate the award.
Does this sound familiar? Isn’t this what happened with the bidding on the Walter Reed contract? Numbers were readjusted to make IAP "the winner"?
So exactly who, monetarily and politically, is behind IAP? Well, IAP is owned by Cerberus Capital Management LP, a New York hedge fund owned by Steven Feinberg. Feinberg is a major Republican political contributor. According to opensecrets.org, in the 2004 election cycle Feinberg made the following contributions:
$15,000 Nat’l Republican Senatorial Committee
$25,000 Nat’l Republican Congressional Committee
$5,000 Defend America PAC (Richard Shelby, R-AL)
$5,000 Americans for a Republican Majority (Tom DeLay PAC)
$5,000 Future Leaders PAC (Jerry Lewis, R-CA)
$2,000 Joe Lieberman
(Sorry. I couldn’t resist the last one. The only so-called Democrat on the list.)
Feinberg doesn’t just stop at outright political contributions, though. It seems that Cerberus is also a major political fundraiser. In what appears to be a major pay-to-play scandal, USA Today reports:
One day after a New York investment group raised $110,000 for Republican Rep. Jerry Lewis, the House passed a defense spending bill that preserved $160 million for a Navy project critical to the firm. The man who protected the Navy money? Lewis.
....
Both Lewis and the investment company, Cerberus Capital Management, benefited from the relationship. Eighteen months after the fundraiser and the House vote, Lewis won the chairmanship of the Appropriations Committee. He acknowledges that the fundraising efforts of Cerberus "played a very significant role" in winning the post. The ties between Cerberus and Lewis, a 14-term congressman from Redlands, Calif., have not been publicly examined before.
In this case, the lucky bidder on the Naval contract was MCI, another company in the Cerberus stable. MCI, as you may recall is the successor corporate name/entity to Bernie Ebbers’ WorldCom.
Cerberus is also joined at the hip to the Republican party through its managers. Former George H.W. Bush VP, Dan Quayle, is Chairman of Cerberus Global Investments, and former U.S. Secretary of the Treasury, John Snow, became Chairman of Cerberus in the fall of 2006. And how does John Snow feel about regulation of hedge funds, such as Cerberus? Well, shortly after joining Cerberus, Mr. Snow made his views known in an interview with Bloomberg News.
John Snow, the former U.S. Treasury secretary named chairman of Cerberus Capital Management this month, said investors, not policy makers, are the best regulators of hedge funds.
Mr. Snow, who left President George W. Bush’s administration in June after 3 1/2 years, told Bloomberg News he came to favor a "lighter" touch for hedge funds because the industry, which oversees $1.3 trillion in assets, was too big for the government to monitor effectively.
That says it all.