Rebuilding Iraq:
One Campaign Contribution at a Time

The government has doled out billions of dollars in contracts since 2003 to private companies to rebuild Iraq. These companies are supposed to rebuild the war-torn country by restoring electricity, reconstructing bridges, and building schools. So much of this rebuilding work has been outsourced to private contractors that there are now more civilians working under U.S. defense contracts in Iraq than soldiers or government employees stationed there.[i]

Private firms increasingly receive contracts from the government with little or no competition, and then provide substandard results in return while overcharging their fees. While substandard work is usually cause for dismissal in the private sector, millions of dollars in campaign contributions to the President and members of Congress allow these companies to continue working under government contracts.

By the Numbers

Since the beginning of the current administration, spending on no-bid and limited-competition contracts has increased by 206 percent from $67.5 billion in 2000 to nearly $207 billion in 2006.[ii] A report by the House Committee on Oversight and Government Reform found that 187 contracts in 2007 totaling $1.1 trillion involved significant overspending and negligence.[iii] And while most of us would not even renew a contract for a cabinet installer with that kind of overspending, the Pentagon doesn't seem to mind.

Companies receiving these contracts have given substantial amounts of campaign money over the years. Their contributions have been rewarded with new contracts, even with the overwhelming amount of evidence of malfeasance. Three companies that were recently awarded the major LOGCAP IV contract (worth up to $150 billion)[iv]-former Halliburton subsidiary KBR, DynCorp, and Fluor Intercontinental-have given $2.6 million in campaign contributions between 1999 and 2006,[v] 77 percent of which went to Republicans and President Bush. All three of these companies had problems with previous contracts, including overcharging[vi], wasteful spending[vii], and false claims[viii]. These contracts include tasks related to supply and field operations, engineering and construction.[ix]

The Halliburton Connection

Until late 2006, KBR was a subsidiary of energy giant Halliburton. In 2006, Halliburton is alleged to have overspent $2.7 billion on its contracts in Iraq. Food overcharges alone accounted for $4.5 million of KBR's overspending, although an even bigger problem was found in the work KBR contracted to do with the Iraqi fuel system. The Special Inspector General for Iraq Reconstruction inspected the firm's actions and issued a report in June 2007 which stated, "We found weaknesses in KBR's fuel receiving, distributing, and accountability processes of such magnitude that we were unable to determine an accurate measurement of the fuel services provided.[x]"

In 2006 Halliburton recorded a profit of $2.3 billion, a number strikingly close to the $2.7 billion the company is alleged to have overspent in Iraq during that year. Halliburton CEO David Lesar received a benefits package for 2006 totaling $16.5 million.

Additionally, despite the report by the Inspector General, KBR was awarded another contract for Iraq, the LOGCAP IV, worth up to $150 billion.[xi] Halliburton has given over $1.1 million in campaign donations under the current administration, 93 percent of which went to President Bush and the Republican Party.[xii] Additionally, prior to assuming the Vice Presidency, Dick Cheney was the CEO of Halliburton.

Major corporations like Halliburton and the other defense contractors don't give millions of dollars in campaign cash without expecting a return on their investment. And with Lesar's whopping salary and the renewal of a contract based on poor work, it seems they got the return they were looking for. Clean Elections campaign reform would sever the ties between campaign donors, politicians, and contract awards ensuring that private companies vying for government contracts compete on a level playing field.

What You Can Do

Clean Elections-already law in Maine, Arizona, New Mexico, North Carolina, New Jersey, Vermont, and Connecticut-cuts the ties between special interest money and public policy by allowing candidates to run for office without seeking large contributions from well heeled special interest. Instead, candidates demonstrate broad public support by gathering a set number of small dollar contributions (usually $5). Once qualified, Clean Elections candidates receive a grant to run their campaign after agreeing to abide by strict spending limits and forgo further private fundraising. Once in office, Clean Elections officials are accountable to the voters who elected them, not the special interests who would have financed their campaign.

Help end the waste, abuse, and fraud of the well-connected firms who are given these no-bid contracts by helping us pass Clean Elections which would give our elected officials an option to seek public office without relying on their campaign cash.

[i] Private contractors outnumber U.S. troops in Iraq, Los Angeles Times, July 4, 2007.

[ii] More dollars, less sense: worsening contract trends under the Bush administration, Report by the U.S. House of Representatives Committee on Oversight and Government Reform, June 2007.

[iii] Ibid.

[iv] Army splits award among 3 firms, Washington Post, June 28, 2007.

[v] Analysis by Public Campaign of U.S. Federal Election Commission (FEC) data coded by industry by the Center for Responsive Politics (www.opensecrets.org). Includes contributions from individuals ($200+) and Political Action Committees (PACs) to federal campaigns.

[vi] Federal Contracting and Iraq Reconstruction, Project on Government Oversight, March 11, 2004.

[vii] U.S. Money Squandered in Iraq, BBC News, January 31, 2007

[viii] Fluor settles lawsuit for $12.5 million, Los Angeles Times, November 2, 2005.

[ix] ASC Selects LOGCAP IV Contractors, US Fed News, June 28, 2007.

[x] Logistics Civil Augmentation Program Task Order 130: Requirements Validation, Government Oversight, and Contractor Performance, SIGIR, June 22, 2007.

[xi] Army splits award among 3 firms, Washington Post, June 28, 2007.

[xii] Analysis by Public Campaign of U.S. Federal Election Commission (FEC) data coded by industry by the Center for Responsive Politics (www.opensecrets.org). Includes contributions from individuals ($200+) and Political Action Committees (PACs) to federal campaigns.