Army Overseer Tells of Ouster Over KBR Stir


Shawn Baldwin/Reflex News, for The New York Times

An employee of KBR serving dinner to an American soldier at a base in Baghdad. In 2004, a civilian official questioned KBR’s request for about $200 million in payments for food services.

WASHINGTON – The Army official who managed the Pentagon’s largest contract in Iraq says he was ousted from his job when he refused to approve paying more than $1 billion in questionable charges to KBR, the Houston-based company that has provided food, housing and other services to American troops.

The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Mr. Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Mr. Smith refused to sign off on the payments to the company. “They had a gigantic amount of costs they couldn’t justify,” he said in an interview. “Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that.”

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BBC uncovers lost Iraq billions

Henry Waxman
Waxman: “It may well turn out to be the largest war profiteering in history.”

A BBC investigation estimates that around $23bn (£11.75bn) may have been lost, stolen or just not properly accounted for in Iraq.

For the first time, the extent to which some private contractors have profited from the conflict and rebuilding has been researched by the BBC’s Panorama using US and Iraqi government sources.

A US gagging order is preventing discussion of the allegations.

The order applies to 70 court cases against some of the top US companies.

War profiteering

While George Bush remains in the White House, it is unlikely the gagging orders will be lifted.

To date, no major US contractor faces trial for fraud or mismanagement in Iraq.

The president’s Democrat opponents are keeping up the pressure over war profiteering in Iraq.

Henry Waxman who chairs the House Committee on Oversight and Government Reform said: “The money that’s gone into waste, fraud and abuse under these contracts is just so outrageous, its egregious.

“It may well turn out to be the largest war profiteering in history.”

In the run-up to the invasion one of the most senior officials in charge of procurement in the Pentagon objected to a contract potentially worth seven billion that was given to Halliburton, a Texan company, which used to be run by Dick Cheney before he became vice-president.

Unusually only Halliburton got to bid – and won.

Missing billions

The search for the missing billions also led the programme to a house in Acton in West London where Hazem Shalaan lived until he was appointed to the new Iraqi government as minister of defence in 2004.

Judge Radhi Hamza al-Radhi
Judge Radhi al Radhi: “I believe these people are criminals.”

He and his associates siphoned an estimated $1.2 billion out of the ministry.

They bought old military equipment from Poland but claimed for top class weapons.

Meanwhile they diverted money into their own accounts.

Judge Radhi al-Radhi of Iraq’s Commission for Public Integrity investigated.

He said: “I believe these people are criminals.

“They failed to rebuild the Ministry of Defence , and as a result the violence and the bloodshed went on and on – the murder of Iraqis and foreigners continues and they bear responsibility.”

Mr Shalaan was sentenced to two jail terms but he fled the country.

He said he was innocent and that it was all a plot against him by pro-Iranian MPs in the government.

There is an Interpol arrest out for him but he is on the run – using a private jet to move around the globe.

He stills owns commercial properties in the Marble Arch area of London.

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Pentagon Cannot Account for For $15 Billion

The inspector general for the Defense Department said yesterday that the Pentagon cannot account for almost $15 billion worth of goods and services ranging from trucks, bottled water and mattresses to rocket-propelled grenades and machine guns that were bought from contractors in the Iraq reconstruction effort.

The Pentagon did not have the proper documentation, including receipts, vouchers, signatures, invoices or other paperwork, for $7.8 billion that American and Iraqi contractors were paid for phones, folders, paint, blankets, Nissan trucks, laundry services and other items, according to a 69-page audit released to the House Committee on Oversight and Government Reform.

An earlier audit by the inspector general found deficiencies in accounting for $5.2 billion of U.S. payments to buy weapons, trucks, generators and other equipment for Iraq’s security forces. In addition, the Defense Department spent $1.8 billion of seized Iraqi assets with “absolutely no accountability,” according to Rep. Henry A. Waxman (D-Calif.), who chairs the oversight committee. The Pentagon also kept poor records on $135 million that it paid to its partners in the multinational military force in Iraq, auditors said.

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NYC Freedom Tower plans found in trash

The government agency building a 102-story skyscraper at the World Trade Center site is investigating the discovery of two sets of blueprints for the building that a homeless man says he found in the trash.

The schematic documents for the Freedom Tower, under construction at ground zero, were marked “Secure Document – Confidential,” the New York Post reported Friday.

The documents, dated Oct. 5, 2007, contain plans for each floor, the thickness of the concrete-core wall, and the location of air ducts, elevators, electrical systems and support columns, the Post reported.

Michael Fleming told the newspaper he found the documents on top of a public trash can in downtown Manhattan, with written warnings on it to “properly destroy if discarded.”

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