• 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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