U.S. Military Loses Control Of Subcontractor Spending, Warlords Benefit
Nick Schwellenbach and Lagan Sebert
Huffington Post
August 30, 2010
This piece is a collaboration between the Huffington Post Investigative Fund and the Center for Public Integrity.
When federal investigators discovered that the manager of a Saudi Arabian company paid bribes to win two lucrative subcontracts supplying food to American troops in Iraq, they naturally wanted to know more. Did he act on his own? Had U.S. taxpayers been cheated?
Five years later, investigators are still largely in the dark. They suspect similar activities by other subcontractors may have tainted contracts worth up to $300 million. But the investigators are unable to uncover even basic information, such as how the manager of the Saudi company had come up with $133,000 in bribe money.
The investigators likely could have compelled a U.S.-based contractor to turn over financial records. But the Saudi firm still hasn’t shared its books with Pentagon auditors or KBR, the big U.S. company through which it operated as a subcontractor.Nor does it have to. The long arm of the U.S. law doesn’t extend to foreign businesses on which the military increasingly depends — and spends huge sums.
Even now, as the U.S. military anticipates withdrawal from Iraq and transferring of vital functions to civilian businesses, foreign subcontractors are playing an enormous role in war zones. Often operating through larger big-name U.S. contractors, they ferry supplies such as ammo and weapons through dangerous terrain. They provide translators and food for troops, help build military outposts, and keep soldiers and civilians safe. Without such local and regional subcontractors, the modern military says it could not operate in two war zones halfway around the globe.
Nick Schwellenbach and Lagan Sebert
Huffington Post
August 30, 2010
This piece is a collaboration between the Huffington Post Investigative Fund and the Center for Public Integrity.
When federal investigators discovered that the manager of a Saudi Arabian company paid bribes to win two lucrative subcontracts supplying food to American troops in Iraq, they naturally wanted to know more. Did he act on his own? Had U.S. taxpayers been cheated?
Five years later, investigators are still largely in the dark. They suspect similar activities by other subcontractors may have tainted contracts worth up to $300 million. But the investigators are unable to uncover even basic information, such as how the manager of the Saudi company had come up with $133,000 in bribe money.
The investigators likely could have compelled a U.S.-based contractor to turn over financial records. But the Saudi firm still hasn’t shared its books with Pentagon auditors or KBR, the big U.S. company through which it operated as a subcontractor.Nor does it have to. The long arm of the U.S. law doesn’t extend to foreign businesses on which the military increasingly depends — and spends huge sums.
Even now, as the U.S. military anticipates withdrawal from Iraq and transferring of vital functions to civilian businesses, foreign subcontractors are playing an enormous role in war zones. Often operating through larger big-name U.S. contractors, they ferry supplies such as ammo and weapons through dangerous terrain. They provide translators and food for troops, help build military outposts, and keep soldiers and civilians safe. Without such local and regional subcontractors, the modern military says it could not operate in two war zones halfway around the globe.
