Report Cites Fraud and Abuse by Post-9/11 Military Contractors

by Judith Evans

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The post-9/11 era has seen a dramatic increase in Pentagon spending, with up to half of those funds going to private military contractors such as Halliburton and Blackwater. According to a September 2021 report by William D. Hartung of the Center for International Policy,

The Pentagon’s increasing reliance on private contractors in the post-9/11 period raises multiple questions of accountability, transparency, and effectiveness. This is problematic because privatizing key functions can reduce the U.S. military’s control of activities that occur in war zones while increasing risks of waste, fraud and abuse.

The report, titled “Profits of War: Corporate Beneficiaries of the Post-9/11 Pentagon Spending Surge,” describes fraud and abuse in three areas:

• Logistics and reconstruction

• Private security contractors

• Weapons suppliers

The author concludes with recommendations for improved accountability and reduced corruption.

Logistics and Reconstruction

Fraud, waste, abuse, and revolving door politics were rampant during reconstruction efforts in Iraq and Afghanistan, according to the report:

The chaos of war, the lack of adequate government oversight, and the sheer volume of funds poured into the reconstruction effort in a short time frame all contributed to an environment that enabled massive waste, fraud and abuse in the reconstruction efforts in Iraq and Afghanistan.

For example, Halliburton profited from its open-ended contract with the Pentagon’s Logistics Civil Augmentation Program (LOGCAP). Halliburton was responsible for coordinating equipment maintenance, food and laundry services, and other logistics for the military in Iraq.

In an example of the revolving door, the report notes that Dick Cheney had introduced the idea of privatizing wartime logistics when he was secretary of defense in 1992. Cheney later served as CEO for Halliburton until he became vice president in 2001.

The report states that, beginning in 2004, congressional watch dogs such as the Special Inspector General for Iraq Reconstruction (SIGIR) and Representative Henry Waxman (D-CA) found instances of fraud and abuse, including the following:

• Routine overcharges for fuel by Halliburton subsidiary Kellogg, Brown and Root

• The chairman of the Florida Republican Party pocketing overcharges by his company, the International Oil Trading Company

• Faulty plumbing work at a police college in Baghdad, resulting in burst pipes that spilled urine and feces

• Electrocution of 18 military personnel at bases in Iraq due to improper electrical installations by untrained, poorly paid subcontractors

The report cites similar instances of fraud, abuse, and waste that took place during Afghanistan’s reconstruction. Transportation contracts were a major avenue of corruption. A particularly disturbing example was the payment of protection money to the Taliban from U.S. transportation contracts.

Private Security Contractors

Private armed security contractors were a second source of corruption in Iraq and Afghanistan, according to the report. These contractors were a minority of the total number of contractors deployed,

But the impact of private security contractors was far greater than what those numbers might suggest. The use of private contractors reduces transparency and accountability for what happens in war zones, on occasion with disastrous results.

Those disastrous results included the following:

• The massacre of 17 civilians in Baghdad by employees of Blackwater, some of whom were pardoned by President Trump

• Recruitment of mercenaries by Blackwater’s founder to fight on behalf of the United Arab Emirates in Libya’s civil war, a violation of a United Nations arms embargo

• Interrogation of prisoners at Abu Ghraib prison in Iraq, where prisoners were tortured

• Overcharging and kickback schemes by Dyncorp, during its police training in Iraq

The report notes that the majority of contractor employees were from countries other than the United States. Employees from Nepal, the Philippines, and other countries worked for low pay and suffered from false imprisonments, wage theft, injury, and death.

The abuses continue today, according to the report:

An additional cause for concern is the post-war drive of U.S. contractors to seek more foreign clients. Although less lucrative than the flood of U.S. funding for private contractors tied to the Iraq and Afghan wars, the foreign market is growing, and the activities of contractors employed in this fashion has been deeply disturbing.

As an example, the report cites the involvement of Tier 1 Group, a U.S. firm, in the 2018 murder of Saudi journalist Jamal Khashoggi. Some of the Saudi operatives who carried out the killing were trained by Tier 1 Group.

Weapons Suppliers

Weapons suppliers, according to the report, received the greatest benefits from the conflicts in Iraq and Afghanistan. Lamenting “a lack of transparency on the part of the Pentagon,” the author states that

it is not possible to fully distinguish between arms purchases tied directly to the post-9/11 wars versus those bought for other military purposes. But there are a number of indicators that give a sense of the revenues these arms-supplying companies have reaped from the wars.

The report notes that the U.S. has had the largest share of the global arms market for 18 of the past 20 years. Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics received most of the contracts for weapons, including

• combat aircraft,

• Apache helicopters,

• bombs and missiles, and

• missile defense systems.

Much of this weaponry has been used in ongoing conflicts in the Middle East, including the tragic war in Yemen. Also cited in the report is the sale of decades-old, unreliable ammunition, some of it made in China, by the corporation AEY.

Revolving Door of Influence

The revolving door, according to the report, is a powerful source of influence for weapons makers. Most of the hundreds of lobbyists for military contractors are former employees of Congress, the Pentagon, and other decision-making agencies. They then draw on relationships with former congressional colleagues to influence decisions on the defense budget. The report also notes that “four of the past five U.S. Secretaries of Defense came from one of the top five arms contractors.”

Where Do We Go from Here?

The problem of fraud, abuse, and waste continues among military contractors. The report expresses concern over the increasing dependency of large companies, such as Lockheed Martin, on foreign arms sales. Also noted is how the exaggerated claim of a military threat from China is used as justification for increased Pentagon spending.

The author of the report includes the following recommendations:

• Reduce spending on war and preparations for war in favor of a “modern, realistic defense strategy”

• Conduct rigorous monitoring and regulation, with the goal of eliminating corruption and negotiating fair prices with military suppliers

• Reduce the influence of military contractors through election finance reform and revolving door reforms

• Develop a less militarized foreign policy

These recommendations shift the emphasis from war and money-making to diplomacy and fairness. Such a shift within U.S. foreign policy would also reflect a recognition of the value of human life. After decades of destruction, death, and corruption in Iraq and Afghanistan, let’s hope that the powers that be are paying attention.