[Congressional Record (Bound Edition), Volume 153 (2007), Part 3]
[Senate]
[Pages 3643-3645]
[From the U.S. Government Publishing Office, www.gpo.gov]




                ACCOUNTABILITY IN GOVERNMENT CONTRACTING

  Mr. DORGAN. Mr. President, I also rise to talk about a piece of 
legislation dealing with contracting. The Federal Government is the 
largest contractor in the world. The U.S. Federal Government contracts 
for a lot of things. I am going to be introducing a piece of 
legislation that is entitled the Honest Leadership and Accountability 
in Contracting Act. There are some 23 Senators who have joined me as 
cosponsors on that bill, and I will return to the floor to speak about 
this later in the week. But I wish to talk a little today about what 
this means and why we are introducing it.
  I held 10 oversight hearings in the Democratic policy committee, as 
chairman of that committee, on the issue of contracting abuses in Iraq. 
I held two oversight hearings on the issue of contracting abuses with 
respect to the response to Hurricane Katrina. We have put together, as 
a result of the abuses we have seen with this contracting, a piece of 
legislation which will do the following: It will punish those who are 
war profiteers. And there are some. It will crack down on contract 
cheaters. No more of this slap on the wrist, pat on the back, have 
another contract. It will force real contract competition for those who 
want to do contract work for the Federal Government. And it will end 
cronyism in key Government positions--having unqualified political 
appointees put in positions that require people who know what they are 
doing.
  Let me talk about some of the things we have found. I do this 
knowing, last week, there were some oversight hearings on the House 
side chaired by Congressman Waxman. I commend him. There has been a 
dearth of oversight hearings, almost none in the last couple of years--
I guess the last 5 or 6 years, actually--because a majority of the same 
party as the President do not want to hold hearings that embarrass 
anyone. So there have been very few oversight hearings. But the hearing 
held this past week in the House that caught my eye is one that 
followed a hearing I held in the Senate with the policy committee. They 
talked about the fact that $12 billion in cash--most of it in stacks of 
one-hundred-dollar bills--had been sent to Iraq; 363 tons of U.S. cash 
currency flown in on wooden pallets on C-130 airplanes. That would be, 
by the way, 19 planeloads of one-hundred-dollar bills; 363 tons.
  Nearly half of that cash was sent in the final 6 weeks before control 
of the Iraqi funds were turned over to the Iraqi Government. These were 
Iraqi oil funds, funds with frozen Iraqi assets here in the United 
States. The last shipment of $2.4 billion was the largest shipment. It 
was the largest shipment ever in the Federal Reserve Board's history. 
And that was 1 week before the government was turned over to the 
Government of Iraq.
  Cash payments were made from the back of a pickup truck. One official 
was given $6.75 million in cash and told to spend it in 1 week, before 
the interim Iraqi Government took control of the funds.
  I had a person testify at my hearing who said it was similar to the 
Wild West. Our refrain was bring a bag because we pay in cash. That is 
the way we do business.
  In fact, I have a photograph of a fellow who testified at the hearing 
I held. These are one-hundred-dollar bills wrapped in Saran Wrap in 
brick form. This was in a building in Iraq. This is the fellow who 
testified. He said people used to play catch with them like football. 
He said it was the Wild West. Bring a bag, we pay in cash.
  We know a substantial amount of cash disappeared--some American 
taxpayer money, some belonging to the people of Iraq--with almost no 
accountability.
  I wish to talk about accountability. If there was a lack of 
accountability--and there certainly was, with respect to what happened 
in Iraq and also here at home with Katrina--what will be the 
accountability going forward? How do we ensure accountability? How do 
we ensure that someone is in charge going forward?
  Let me talk about Halliburton and Kellogg, Brown and Root, its 
subsidiary. I know the minute you mention Halliburton, someone says you 
are criticizing the Vice President. No. He used to be president of that 
company. He has been gone a long while. This has been Halliburton that 
gets big contracts from the Defense Department and then doesn't 
perform.
  Bunnatine Greenhouse is a woman who rose to become the highest 
ranking civilian official in the Corps of Engineers in charge of all 
the contracting, the highest ranking civilian official who always got 
great reviews on her performance evaluations, until the point when the 
Pentagon decided to award a massive no-bid, sole-source contract to 
Halliburton's subsidiary called RIO, Restore Iraqi Oil. She protested 
that this was done in violation of proper contracting procedures. She 
was appalled when Halliburton was found by auditors to have overcharged 
nearly double for fuel purchases. And then the Defense Department, the 
folks in charge of that, instead of being concerned about it, rushed to 
provide the company with a waiver. This waiver was provided without the 
approval of the contracting officer who was responsible, Ms. 
Greenhouse. She was kept in the dark about that decision. She learned 
about the waiver when she read it in the newspaper.
  When she did speak up, she was bypassed, ignored, and ultimately 
forced to resign or face demotion. Here is what she has said publicly, 
the highest ranking civilian official in the Corps of Engineers who 
blew the whistle on the good old boys network for contracts awarded, 
she felt, improperly:

       I can unequivocally state that the abuse related to 
     contracts awarded to KBR represents the most blatant and 
     improper contract abuse I have witnessed during the course of 
     my professional career.

  For saying this, this woman was demoted. She lost the job she had for 
being honest. And she, by all accounts, was a top-notch contracting 
official. So this 20-year contracting official, responsible for all 
this, was ignored and then demoted when she was critical of people whom 
she felt were violating the rules. What happened then to fill her job? 
The Corps of Engineers decided to replace her with a Pentagon official 
who had 40 years of Government experience but none of it in Government 
contracting. At a hearing of the Senate Energy Committee, General 
Strock admitted the person who replaced Ms. Greenhouse was not 
certified as an acquisition professional. He stated that Ms. Riley 
required a waiver in order to apply for her new position. Ms. Riley has 
now ``gone to school'' and has been brought up to speed about what she 
needs to know as a contract official. Sound familiar? It does to me. It 
is happening all too often.
  Let's take a look at what I found in some of the hearings. Yes, it is 
about Halliburton because they are the biggest contractor, but it is 
about other companies as well. An $85,000 brand new truck abandoned 
beside the road because they had a flat tire in an area where there 
were no hostilities at all,

[[Page 3644]]

but they didn't have the right wrench to fix it; $85,000 brand new 
truck abandoned because they had a plugged fuel pump. It didn't matter. 
With a cost-plus contract, the American taxpayers pick up the tab. A 
case of Coca-Cola, $45. Gasoline was delivered by Halliburton for twice 
the cost that the internal part of the Defense Department said they 
could have provided it for. Halliburton charged 42,000 meals a day, 
when they were delivering 14,000 meals, overcharging by 28,000 soldiers 
a day. They leased SUVs for $7,500 a month.
  Halliburton supplied troops with hand towels and the person who 
ordered the hand towels was in Kuwait. He came to a hearing I held. He 
said he was ordered to purchase towels that were nearly three times 
more expensive than regular towels. Why? Because the company, KBR, 
wanted their name embroidered on the towels used by the troops. Their 
attitude was, the American taxpayer pays for it; it doesn't matter, 
it's cost plus, don't worry about cost.
  It is unbelievable when you see what has happened with some of this 
contracting. We heard from Rory Mayberry, former food production 
manager. He also was at KBR. He said:

       Food items were being brought into the base that were 
     stamped expired or outdated by as much as a year. We were 
     told by KBR food service managers, use the items anyway. The 
     food was fed to the troops. For trucks that were hit by 
     convoy fire and bombings, we were told to go into the trucks, 
     remove the food items, and use them after removing the 
     bullets and any shrapnel from the bad food that was hit. We 
     were told, by the way, to turn the removed bullets over to 
     the managers for souvenirs.

  How about water? Contaminated water, more contaminated than raw water 
taken from the Euphrates River, delivered as non-potable water to our 
troops to shower, shave, and so on, more contaminated than raw water 
from the Euphrates River. Halliburton says it never happened. I have an 
internal Halliburton report that says it did happen, and they nearly 
missed having a catastrophe of mass sickness or death. I also have an 
e-mail sent to my by a captain, a young physician serving in Iraq. She 
said: I read in the newspaper about your hearing. What you alleged is 
exactly what is happening at our base.
  Let me describe a couple of those. This is an internal Halliburton 
report written by the top water quality manager Wil Granger, May 13, 
2005:

       No disinfection of non-potable water was occurring [at camp 
     Ar Ramadi] for water designated for showering purposes. This 
     caused an unknown population to be exposed to potentially 
     harmful water for an undetermined amount of time.

  It didn't just happen at Ar Ramadi. It happened at every base in 
Iraq.

       The deficiencies of the camp where the event occurred is 
     not exclusive to that camp; meaning that countrywide all 
     camps suffered to some extent for all or some of the same 
     deficiencies noted.

  This is from an internal Halliburton report written by the top water 
quality person at Halliburton. These are contracts we pay for. We pay a 
company to provide water to the military installations that now exist 
in Iraq. Who is accountable for having water sent to our troops, non-
potable water that is more contaminated than water in the Euphrates 
River?
  CPT Michelle Callahan, who is currently serving in Iraq--at least she 
was when she sent me an e-mail--found exactly the same cases of 
bacterial infections among the troops, traced the problem back to 
contaminated water that KBR was not treating properly. She had one of 
her officers follow the lines to find out where that water came from 
and why. So water to the troops, that is a health issue. Food to the 
troops, that is a health issue.
  Two guys show up in Iraq--one's name is Custer, and the other is 
Battles--with not much experience and no money. But they understand you 
can make a lot of money in Iraq, American money. So they started a 
company. Within 2\1/2\ years, my understanding is, they have had 
contracts of over $100 million. They got into trouble. It has been in 
the courts. Among other things alleged, they took forklift trucks from 
the Baghdad airport, moved them to a warehouse, repainted them blue and 
sold them back to the Coalition Provisional Authority, which was us. 
This company got a contract for security at the Baghdad airport. Let me 
show you what the director of security at the airport said about Custer 
Battles:

       Custer Battles have shown themselves to be unresponsive, 
     uncooperative, incompetent, deceitful, manipulative and war 
     profiteers. Other than that, they are swell fellows.

  Once again, who is accountable for the amount of money we are 
spending for these kind of contractors?
  How about the Iraqi physician, a doctor from Iraq who came to testify 
at my policy committee hearing. We spent a couple hundred million 
dollars on the Parsons Corporation to rehabilitate 142 health clinics 
in Iraq. This Iraqi doctor went to the Iraqi Health Minister and said: 
I want to see these rehabilitated health clinics. Because he knew the 
money had all been spent. An American contractor got the money to do 
it, and it was gone.
  He said: I want to see these 142 rehabilitated health clinics for the 
people of Iraq. The Iraqi Health Minister said: You don't understand. 
Most of these are imaginary clinics. The money is gone, but apparently 
the clinics don't exist.
  Does that bother anybody? Is there any accountability for that? Seems 
to me there ought to be accountability for something like that.
  I held hearings not just on contracting in Iraq, which I found to be 
a cesspool of unbelievable problems, but hearings with respect to 
contracting to deal with the problems of Hurricane Katrina. I wish to 
show you a picture of a man named Paul Mullinax. I sat in a grocery 
store parking lot one Sunday morning talking to Paul on the phone, 
asking if he would come to testify at a hearing. He wasn't anxious to 
do it, but he finally did. This is Paul Mullinax. This is his truck, an 
18-wheel truck. Let me tell you the story Paul told.
  Hurricane Katrina hit. And one of the things that was necessary to be 
provided to the victims of the hurricane was ice. So Paul was 
contracted by FEMA to pick up ice. He drove his truck from Florida to 
New York to pick up a load of ice. Then he was told he should take that 
ice to Carthage, MO. He went to Carthage with his truck and his 
refrigerated container full of ice. When he got to Carthage, he was 
told he should proceed to Maxwell Air Force Base in Montgomery, AL. 
When he got to Montgomery, he discovered there were over 100 trucks 
sitting there, refrigerated trucks there with ice. So for the next 12 
days, this was Paul's life. There were victims of the hurricane waiting 
for relief, waiting for the cargo in his truck. For 12 days, he sat in 
front of this truck waiting. He finally said to them: If you are not 
going to tell me where to go or let me do this, I am going to go on my 
own and drop off the ice to some people who need it. They said: You 
can't do that. He said: I had no idea when I parked the truck I would 
be there for the next 12 days, my refrigerator unit running the entire 
time. Each truck cost the American taxpayer $6 to $900 a day.
  You can see him sitting here with a cooler and a little girl for 
nearly 2 weeks waiting. Finally, he was told: You should take your ice 
to Massachusetts. So this man from Florida, who to New York to pick up 
ice, went to Missouri and then went to Alabama and then waited, then 
was told to take the truck to Massachusetts. Unbelievable. What was the 
American taxpayers' role in this, $15,000. It cost $15,000 for this 
incompetence.
  Why does all of this happen? It happens because in this case with 
FEMA, a bunch of cronies were put in place to run the place. Were they 
qualified people? No. Most of them had political connections. They 
didn't have any emergency or disaster preparedness experience. That is 
what happens.
  Who is accountable for that? Who ultimately is going to be 
accountable? How can we restore accountability? I have described a few 
of the problems. I have described a very few of the problems. The 
problems are unbelievable. I think it is the most significant waste, 
fraud, and abuse, perhaps, in the history of this country, billions and 
billions of dollars with no one accountable. At the hearings last week, 
the answer was: It is wartime. So we distribute cash from the back of a 
pickup

[[Page 3645]]

truck. We say it is the Wild West, bring a bag. We pay in cash.
  And it is wartime. I don't understand that. I have tried to find out 
who was responsible for having a Florida trucker pick up ice from New 
York to take to the victims of Katrina in the Gulf of Mexico and have 
the ice dropped off in Massachusetts, and we get stuck with $15,000, 
and the victims of the hurricane get nothing. But there is no 
accountability for anything.
  So we will be introducing legislation, with 23 cosponsors later, this 
week. It is going to punish war profiteers--and, yes, there has been 
rampant profiteering going on. There will be substantial punishments 
for war profiteers. This antiprofiteering provision is based on a piece 
of legislation that Senator Leahy introduced, and that was included in 
our contract and reform bill.
  Our bill will also restore a Clinton administration rule on 
suspension and disbarment, which prohibits awarding Federal contracts 
to companies that exhibited a pattern of failing to comply with the 
law. That provision, by the way, was done away with by the current 
administration.
  It seems to me it is time to say that you only get one chance, and if 
you cheat us, no more contracts. This notion of a slap on the wrist and 
a pat on the back is over. There was a time when exactly the same 
company had been in Federal court in Alexandria, VA, with allegations 
of fraud against the American taxpayer against that company; and on the 
same day, they were signing a new acquisition contract with the 
Department of Defense. That ought to never happen again.
  We ought to crack down on contract cheaters. We ought to force real 
contract competition. When somebody such as Bunnatine Greenhouse speaks 
up and says ``this is the most blatant abuse in contracting I have seen 
in my career,'' that ought not to be a cause for penalty. This woman 
risked her career and we are still trying to get to the bottom of who 
is accountable for her demotion. She was given a choice of being fired 
or demoted because she spoke out against contract fraud and abuse.
  We think we need to strengthen whistleblower protection. We think it 
is important to have full disclosure of contract abuses and to restore 
the provision that says if there is a pattern of abuse, you don't get 
to engage in contracting anymore with the Federal Government.
  This is very simple. I come from a small town, a town of slightly 
less than 300 people. There is a very simple code in towns such as 
that. If you are a business man or woman on Main Street and someone 
cheats you, you don't do business with them again. That is simple. That 
is a lesson apparently lost on a behemoth Federal Government.
  The contracting provisions we will introduce are common sense, and 
this Congress ought to adopt them quickly. There will be a substantial 
number of cosponsors in support of the legislation that is filled with 
common sense, at the very time that we have witnessed the most 
significant waste, fraud, and abuse in this country's history. 
Accountability? What about accountability for what happened? What about 
accountability for what is about to happen? We are still spending a lot 
of money. We will have $100 billion requested of us and another $150 
billion to replenish accounts, much of it through contracts. We say 
with this piece of legislation that it is long past the time for this 
Government to be accountable to the taxpayer and accountable to the 
citizens of the United States.
  The PRESIDING OFFICER (Mr. Pryor). The Senator from Tennessee is 
recognized.
  Mr. ALEXANDER. Mr. President, I ask unanimous consent to speak for up 
to 15 minutes in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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