Cheney Takes Another Spin Around the Washington Revolving Door

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AMERICA’S
PRIVATE ARMY IN BOSNIA

Pentagon
efforts to keep the number of U.S. troops in Bosnia below 20,000
are raising eyebrows on Capitol Hill. Lawmakers are discovering
that an army of civilians, contracted privately, has been deployed
to augment the G.I.s. Brown & Root Inc., a Houston engineering
firm, will supervise Balkan workers on projects like building
pipelines and sewerage systems and is prepared to undertake the
solemn task of readying the bodies of U.S. fatalities for shipment
home. The Army’s increasing dependence on civilian help is leading
penny pinchers to wonder whether it is still necessary to budget
$7 billion annually for the 300,000 reservists already trained
and paid to do those jobs. It’s all good for Brown & Root,
which has pocketed around $250 million from the Pentagon for work
in places like Somalia and Haiti. The firm is owned by the Dallas-based
Halliburton Co. The
man who runs Halliburton: Dick Cheney, who was Secretary of Defense
when Brown & Root won the support-staff contract.

(emphasis added)

~
Hidden away on the back pages of the Feb.
12, 1996, issue of Time Magazine

This
wonderful example of the “Washington Revolving Door” will be the
focal point of this essay with the intention of illustrating the
problem in general.

Mr.
Cheney Goes Around Again

Dick
Cheney’s swing around the door is classic “Revolving Door” strategy.

  • You
    get a high level position in the government
  • You
    put the wheels in motion for the awarding of huge contract or
    contracts for some service or products and/or you build friendships
    with those who can influence contract awards to you in the future

  • You
    take a high position in the company that is a potential recipient
    of these lucrative contracts
  • You
    remain a good friend to those in the government that were your
    associates to insure future contracts. You reward these friends
    with “political contributions”, to the extent possible

Let’s
look at the first step.

Dick
Cheney was born in Nebraska and grew up in Wyoming. After graduating
with a political science degree in 1965, he started his career –
essentially a political career – in the late 60s-early 70s
with a series of low level jobs in the Nixon administration. At
age 34, he became Chief of Staff for President Ford. He then managed
to get elected to the position of Congressman from Wyoming and served
for 6 terms (1978-1989). At that point, he became President Bush’s
Secretary of Defense where he stayed until 1993 (March 21, 1989-January
20, 1993 – a detailed bio is here.
After doing his required one year in “Revolving-Door Purgatory”[Note
1]
at the American
Enterprise Institute
for Public Policy Research
(where he was a “Senior Fellow” and is wife is still a “Distinguished
Fellow”
), he became the CEO and Chairman of Halliburton Co.
in 1995.[Note 2]

Now
let us look at the second step.

How
do you go about making sure your future employer who is waiting
for you on the other side of the “revolving door” will receive large
and lucrative contracts to compensate him for paying you an overblown
salary? Of course, we cannot know the internal details but we can 
look at the external facts.

While
Cheney was Secretary of Defense, we had a few occasions wherein
the USA felt compelled to go bomb or otherwise harass other countries.
They were:

  • Invasion
    of Panama, “Operation Just Cause,” December 19-20, 1989
  • War
    in The Balkans (Bosnia, Kosovo, etc.) 1990 to the present
  • Gulf
    War January 16 1990 – February 27, 1991
  • Somalia
    – in “Operation Restore Hope” December 9, 1992-March 26, 1993

While
you may think that in these dust-ups the “bombees” may suffer some
inconveniences, the exercises do provide a more entertaining evening
news show for those of us in the USofA. Still, there is another
rather important third feature of these modern “police actions”
a lot of money can be made. But to reap these
large financial rewards, a close relationship between the defense
contractor and the politicians (what Eisenhower called the “military/industrial
complex”) is required. Typically, modern wars are followed by occupation
and the repairing of the damage from the “contingency” (military/government
code word for military intervention, usually not an emergency).
Companies like Brown & Root Inc. (B&R) are hired to go in
and build and/or repair bases, bridges, utilities, roads, airports,
etc. Now in a rational world, you would think that the country that
just got whupped would be the one to pay for all this. Not so, the
good old American Taxpayer voluntarily (income tax is voluntary,
didn’t you know) contributes the funds to pay these contractors.

The
most successful application of this technique is in the Balkans.
These people have been at war forever and are very likely to continue
that way, no matter what anyone does. A perfect setup! We can bomb,
we can invade, and then we can patch and build with the generous
contribution of the American Taxpayers. And so it is.

“Former
Secretary of Defense Dick Cheney’s Brown and Root and other megaconstruction
outfits that will be cashing in for years rebuilding what NATO bombs
and Serbian ethnic cleansing blew down,” from “Peace
is Blowing in the Wind
,” May 12, 1999, by Colonel David Hackworth.

So,
now Cheney goes to step #3, and takes a job with a contractor who
used to make a nice income building oil field installations but
now sees where much more can be made “rebuilding war-torn countries.”
In no time at all, B&R is the number one contractor in this
business and it appears that their services will be needed indefinitely.

As
far as step #4, his selection as Bush’s VP Candidate confirms that
his ties to the existing political power elite is very strong. In
fact, he may just be headed for yet another swing
around the revolving door. He, Bush and others are spreading the
propaganda that we have a “decimated military” and they promise
to build it up (we spend more on our military than all the rest
of the countries in the world combined!), if elected. More military
equals more opportunities for “police actions” around the world
which means even more opportunity for “charitable” reconstruction
of any areas we destroy.

Well,
how well has this bit of staged profiteering paid off for Cheney
and Halliburton? Let us look at the record (what we can find –
the government is a little shy about making such information easily
accessible).

A clean, comfortable dining
facility is just one of many quality of life improvements
for U.S. soldiers serving in Bosnia.
SOURCE

Apparently
B&R has had contracts in support of the various “contingency”
areas (i.e., Somalia, Panama, Rwanda, Haiti, Bosnia, Kosovo)[Note
3]
the US has gotten involved in since at least as early
as 1992. A GAO report, “Contingency Operations: Opportunities
to Improve the Logistics Civil Augmentation Program (Letter Report,
02/11/97, GAO/NSIAD-97-63)”, listing the usual but tiresome overruns,
is available
online
. The costs of this program, called “Logistics Civil
Augmentation Program” (LOGCAP), have, of course, increased substantially
(due to such unforeseen things as having to pay Hungary a Value
Added Tax (VAT) of $18 million and having to fly the needed plywood
over from the USA at a cost of “$85.98 per sheet”). A quote about
Bosnia will give you the drift: “LOGCAP
cost estimates for the Bosnian mission have increased substantially.
The Army’s latest revised estimate of $461.5 million exceeds its
original estimate of $350.2 million by $111.3 million, or 32 percent.”
(as of late 1996)

The way it used to be – Korea,
Jan., 1952. SOURCE

B&R
is almost exclusively the recipient of these contracts. They are
with the troops from initial landing to departing, doing the work
that troops used to do themselves. I
quote
:

“When
troops deployed into the theater in December 1995, little infrastructure
remained in the war-ravaged region. Tent camps were quickly set
up, using military and contractor resources, with
a simple focus of just getting the troops out of the mud.” (my emphasis
– in the old days, troops had to put up their on tents!)

Or
course, this is not without cost. Now the troops have to protect
the civilians in addition to looking after their own butts! Which
can be a real pain due to the usual undisciplined nature of civilians.

In
an article
by Lieutenant Colonel Darrel A. Williamson, USAR
, it is reported
that Brown & Root is so well entrenched with the government
that in 1997 they were awarded a follow-on contract over DynCorp,
even though DynCorp was the lowest bidder. Highly unusual.

Support
Contract in the Balkans

“The Operation Joint Forge logistics support services contract
(DACA78-99-D-0003) was awarded Feb. 19 to the firm, Brown &
Root Services of Houston, Texas. The one-year contract, with four
one-year option periods that can be awarded at the government’s
discretion, will become effective on May 28, 1999,” according
to the US Army Corps of Engineers
. Initial award amount
is $10,000,000 with ceiling amounts of $180,000,000 per year (a
“cost-plus-award-fee” contract).

Impact
of these large American operations on the Native Culture

Space
does not allow a digression into this issue which is very interesting
in its own right. The American contractors, i.e., B&R, do
employ local laborers and therefore do provide jobs. However,
the other side is that they are sometimes a little overbearing.
For an interesting take on this from the Bosnian side, see
this article about B&R’s dumping of septic waste in their
rivers and moraines
.

What
the heck – Everybody does it

The
“Revolving Door” problem has been around a long time – possibly
from the beginning of the country – but has grown enormously
with the growth of the “military-industrial” complex, during and
after WWII. It has grown at an even far greater rate in recent years
with the large increase in federal control and statism. It operates
at all levels of the government. From the President and Congress
on down to the military officers and the civil servants. Some examples:

Executive
Branch
Of
course employees of the Executive Branch are not shy about taking
lucrative jobs in industry when their services are no longer needed
by the White House. Some notable examples:

Spiro
Agnew, forced to resign Vice President, later worked as a consultant
to South Korean firms (“Korean
Scandal, or American Scandal?
).
Richard Holbrooke (then Under-Secretary of State for East Asia),
also participated in that scandal.

According
to Martin L. Gross in his book, The
Political Racket
, both Michael Deaver and Lynn Nofziger
got into some ethics difficulties when they became lobbyists.
He further mentions that Susan Thomases, Hillary Clinton’s personal
lawyer, lobbies for Puerto Rican companies and Morgan and
Company
.

The
Feb. 22, 2000 edition of the Washington Post reports
:
“Shortly
before his December 1996 retirement, then-CIA Director John M.
Deutch negotiated for himself a no-fee consultant contract that
enabled him to keep at his homes three agency computers on which
he had stored highly classified information, according to officials
familiar with a report by the CIA’s inspector general.”

According
to Martin Gross, William Colby also became a registered “Foreign
Agent” after his retirement from the CIA. Obviously, their unlimited
access to the secrets of the world, make their services extremely
valuable!

Congress
(and their aides)
A
large percentage of the members of Congress and their aides become
lobbyists or “consultants” when they are removed from office.
In fact, even if the removal is because of unethical activity
or even a criminal conviction, they still take a lucrative position
with the “K Street” crowd. Some examples follow:

Ex-Congressman
(and Ex-Con) Dan Rostenkowski
Rostenkowski
is president of Danross Associates, consultants in “legislative
and governmental affairs.” According to the Beloit
Daily News
, Dan, “. . . once one of the most powerful men
in Washington, is out of prison, hanging out his consultant’s shingle
and looking for work.” He is doing well.  

A
Congressional Aide

Consider the well known case of Ann Eppard, formerly an aide to
Bud Shuster of Pennsylvania, the chairman of the powerful House
Transportation and Infrastructure Committee. I quote the following
from page 53 of the book, The
Buying of Congress
by Charles Lewis:

“Ann
Eppard, an aide to Shuster for more than two decades, has been
indicted by a federal grand jury for allegedly receiving $230,000
in illegal payments and with embezzling $27,500 from Shuster’s
campaign committee. She resigned as his chief of staff in late
1994. Within weeks, she became a lobbyist for several interests
with business before the Transportation Committee. In so doing,
she hit the jackpot: Ann Eppard Associates took in more than $1
million in its first year, including more than $600,000 from transportation
clients. As The Washington Monthly and others reported,
thanks to Eppard and Shuster, such companies as Federal Express
Corporation and Frito-Lay, Inc., were exempted from regulations
on mid-weight delivery trucks, over the objections of truck-safety
advocates. Carnival Cruise Lines, also thanks to Eppard and Shuster,
got a “technical amendment” added to a Coast Guard reauthorization
bill that would shield cruise companies from lawsuits by women
raped aboard their ships unless the women had also incurred ‘substantial
physical injury’.”

Finally,
for a nice summary of the transit from Congresscritter to Lobbyist,
see
the 60 Minutes transcript
. There, Morley Safer
interviews and/or talks about the likes of Thomas Hale Boggs Jr.,
Barney Frank, George Mitchell, Bob Packwood, Bob Dole [Note
4]
– a small but representative sampling of their
colleagues (128 at that time) who are now lobbyists!

Military
and NASA

While
there are thousands who move back and forth between the Military/NASA
branches of the government and industry every year, one example
will have to suffice here due to limitations of space and the
reader’s tolerance.

Before
he was Secretary of Defense, Caspar Weinberger was a top executive
at Bechtel, which
does massive engineering projects for the Pentagon and foreign clients
like Saudi Arabia
.

Final Thoughts

Cheney’s
“Revolving Door” exercise illustrates a phenomenon of our society
that, while lacking somewhat in ethics, is more or less accepted
as part of the status quo of the form of government we have. It
is no better or no worse than the rest of the lobbyist driven government.
Modern political philosophy has grudgingly come around to the concept
that the “Public Choice” scholars have promoted that politicians
and government employees are selfishly motivated. Given that apparent
fact, it is a rather straightforward conclusion that the operators
in this sphere of government/industry interaction would set themselves
up for the most lucrative rewards they can get. This will often
require moving back and forth from one side to the other for maximum
rewards.

But
is that necessarily bad and even if it is, would we want to change
it?
Addressing the first issue, we have to look at the minuses and pluses.

On
the minus side, we reasonably believe that when the “revolving door”
option is exercised by someone, we taxpayers may end up paying for
government purchased services and materials that we probably don’t
need. We may even pay more money for this stuff we don’t need than
could have been paid with a more honest environment.

This
cost is not trivial – those that exercise the privileges of
the “Revolving Door” are often doing very well financially –
at the expense of the taxpayers. Lobbyists can make nearly a million
dollars a year or more. Of course, CEO’s do even better. This is
part of the cost of doing business in the USA and is paid for by
the consumers/taxpayers.

Finally,
there is the disturbing possibility that this intimacy between the
government and industry, with the occasional swapping of positions,
may be injurious to the health and welfare of citizens of these
“contingency” areas. What I am saying is, I think there may be some
profiteering going on.

On
the plus side, there is surely some merit in making use of the talent
and experience gained by an individual while working the other side
of the fence. Cheney’s experience in Congress has legitimate value
to any large company in these times for they all must deal with
the government. And it goes the other way too.

As
far as “would we want to change it?” – well, yes. For even
if we of the libertarian persuasion are reluctant to interfere with
personal choices, the situation is clouded when the government is
involved. For example, I strongly believe in the free market, but
I recognize that when the government subsidizes some industries
and responds lovingly to “rent-seeking” companies, the market is
no longer fair and it may be necessary to impose some controls.

And
so it is with the “Revolving Door”. It needs to have a little sand
poured in the bearings.

Notes:

Note
1
: I’m referring to the timid legal requirement that a
government employee is forbidden to work in a company for one
year (or two, whatever) that he/she has had direct contractual
relationships with while working for the government. Attempts
to tighten up the law and to remove its vagueness have failed
miserably simply because the legislator’s hearts are just not
in it! The subject is complicated and voluminous which precludes
its discussion here.

Note 2: One has to wonder what are
the qualifications for becoming a CEO? You would think that the
position of CEO in a large multinational organization such as
Halliburton, would require a great deal of demonstrated capability
in managing large profit making operations. Cheney had
been in politics his entire career. He has never managed any profit
making enterprise. Puzzling. Unless you consider that his connections
in Washington were so valuable that all other factors were insignificant
or could be handled in some other way.

Note
3
: Hungary
is also a site of extensive operations by B&R as it is the
designated staging site for the Balkans
.

According to the February
20, 2000 issue of the Washington Post
even
Iraq may be involved in Halliburton’s operations and Cheney’s
interests. A quote from this “must read” article:

“As
secretary of defense during the Persian Gulf War, Richard B. Cheney
played a key role in the U.S.-led military coalition that forced
Iraq to retreat from Kuwait. But as chief executive officer of
Halliburton Co., a Dallas-based maker of oil equipment, Cheney
recently held a major stake in Dresser-Rand and Ingersoll-Dresser
Pump Co., two American players in the reconstruction of Iraq’s
oil industry.”
(Space
does not permit exploring the issue here, but this Post
article mentions another prime example of a sleazy “revolving-door”
execution – former CIA director, John M. Deutch’s move to
Schlumberger Ltd., a company actively soliciting business from
Iraqi’s President Saddam Hussein to service his oil rigs.)

Note 4: An amusing anecdote from the
book, Washington
on $10 Million a Day
, by Ken Silverstein: “Just
as illuminating of Washington’s bipartisan nature is the case
of Bob Dole. During the 1996 presidential campaign, he told voters
he would “go home” if he was defeated in his bid for the presidency.
Most people thought Dole was referring.g to Russell, Kansas, but
it turned out that the senator-who did after all serve for more
than three decades in the capital and resided for a great deal
of that time at the Watergate Hotel had Washington in mind. After
his defeat, Dole took up residence at Verner, Liipfert, Bernhard,
McPherson and Hand, one of the most staunchly Democratic firms
in the beltway. His colleagues there include George Mitchell,
the one-time Democratic senate majority leader, and Lloyd Bentsen,
the former Texas senator and treasury secretary under Bill Clinton.”

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