Monday, March 10, 2008

War, What is It Good For? Profits

Iraq is a profit center. That's the message that corporate boardrooms are sending us with three stories that came out this weekend.

  1. "Dozens of US troops in Iraq fell sick at bases using 'unmonitored and potentially unsafe' water supplied by the military and [KBR, formerly Kellogg, Brown & Root, a part of Halliburton], a contractor once owned by Vice President Dick Cheney's former company, the Pentagon's internal watchdog says."
  2. "Democrats in Congress criticized the Department of Defense and the Bush administration for allowing Houston-based KBR, a top Iraq war contractor, to avoid paying hundreds of millions of dollars in payroll taxes by hiring American workers through a Cayman Islands-based shell company." The Boston Globe called the scheme "War profiteering by tax dodge."
  3. "For decades, contractors have been asked to report internal fraud or overpayment on government-funded projects. Compliance has been voluntary, and over the past 15 years, the number of company-reported fraud cases has declined steadily. Facing the increased violations, prosecutors sought to force companies to notify the government if they find evidence of contract abuse of more than $5 million. Failure to comply could make a company ineligible for future government work. But a later version of the rule, reviewed by the OMB and published in the Federal Register in November, specifically exempts "contracts to be performed outside the United States."

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