“Let’s Keep War Contractors Honest,” Writes DePauw’s Ken Bode

Originally posted: March 5, 2004

Greencastle, Ind. – The Pentagon has just about hit my last nerve.

This past week we learned that 47 companies with Pentagon defense contracts are big-time tax evaders. These corporations do “outsourced” work, jobs we used to pay soldiers to do.

They do construction, catering, janitorial work, courier messages. Evidently you no longer see an Army jeep roaring up with a message for the general. Today’s messengers are hired out.

And janitorial work? No more KP in today’s army? Can that be?

But the point is, these corporations owe our government $3 billion in unpaid taxes.

Pentagon auditors didn’t even notice. It took the auditing arm of Congress, the Government Accounting Office to investigate.

Among the things these outsourcing entrepreneurs have done is to steal the payroll taxes of their own employees. They collect the taxes from the workers’ paychecks but don’t send it to the IRS, so employees get no credit for paying their taxes. Can you think of anything as crummy as stealing from your own employees?

So, what happened to the money? The owners bought boats, homes, automobiles, even personal airplanes.

This happens to be a felony, but nobody has been prosecuted by the Pentagon.

President Bush says he is a wartime president. When America was fighting World War II, Harry Truman was a wartime senator, a little-known solon from Missouri, a prodigy of the corrupt Pendergast political machine. He was also an Army veteran who slogged through the European trench warfare of World War I.

When Truman asked questions about wartime procurement policies, he was stiffed by the Army brass. So he got his back up and got a watchdog committee of the Senate created with himself as chairman. Truman investigated the private contractors of WWII, and he gained a reputation as a fearless whistle-blower.

His experience as a machine politician helped him recognize corruption when he found it. The Truman Committee saved America $15 billion in 1944 dollars. That would be about $160 billion today. It also gained him the 1944 vice presidential nomination.

Private enterprise has always prospered when America is at war, but perhaps never so handsomely as today.

Before we go further, let us try to agree on one point: Whether you are for the war in Iraq or against it, nobody is for the troops, the Army, the government and the country being ripped off by greedy and corrupt private contractors.

Over the past two years the Pentagon has outsourced more than $150 billion, not counting what may be in the recent $87 billion for rebuilding Iraq. If the U.S. military did everything for itself, we would need 300,000 troops in Iraq today, not 135,000. Imagine how that would strain our forces, reserve and active.

Halliburton alone has overpriced the delivery of oil in Iraq by a dollar a gallon, overcharging the government by $61 million. It has overcharged for feeding the troops to the tune of $16 million. And the bribes and kickbacks to foreign nationals added $6.3 million to our tabs as taxpayers.

Halliburton seems to be using the Enron business ethics book.

This is just what they’ve been caught at. The fines they pay — if ever they do — will come from a burgeoning bottom line fed by no-bid contracts.

New Yorker magazine reporter Jane Mayer found that Halliburton’s 2002 annual report describes counter-terrorism as “a growth opportunity.” No wonder.

These companies seem to have a no-limit drawing account on the U.S. government. No limit and no oversight.

So what do we do about it now? How about we get ourselves another Truman committee? The legitimacy of the war in Iraq rests on a resolution of Congress. That same Congress now owes the American people some serious oversight.

Who could do it? My candidate is Sen John McCain. As was Truman, McCain is a member of the majority party with an unassailable military background. Also, like Truman, McCain has sufficient maverick in his pedigree and a reputation for straight talk that gives him instant credibility. Let’s keep the war contractors honest.

Let’s get going.

McCain is my choice. If you can think of someone better, my e-mail address is below. Let me know.

Bode, a former NBC and CNN correspondent, is Pulliam Professor of Journalism at DePauw University

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