The Struggle to Police Foreign Subcontractors in Iraq/Afghanistan & Stem the Haemorrhage of $$$$$$$

[Turborama]

Billions at Stake, but U.S. Investigators Stymied by Murky Rules, Enforcement Obstacles

By Nick Schwellenbach | August 29, 2010

To win hearts and minds in Afghanistan and Iraq, military experts want U.S. companies to contract with local firms for a variety of tasks like trucking, feeding troops, and providing security. The U.S. government’s “Afghan First” and “Iraqi First” initiatives increasingly seek to rely on local contractors, often through subcontracts, in part to stimulate their local economies.

But a host of investigations underscore the perils in the murky world of subcontracting with foreign firms, and the difficulties in making sure taxpayer dollars are well spent. Among the current and recent probes by the Pentagon, congressional panels, and federal investigators:

• Up to $300 million in subcontracts in Iraq and Kuwait were http://www.sigir.mil/files/testimony/SIGIR_Testimony_10-004T.pdf">allegedly tainted by a Saudi-based subcontractor employee’s kickback scheme;
  
  
• Subcontracted security forces in Afghanistan are http://www.wartimecontracting.gov/docs/hearing2010-07-26_transcript.pdf">suspected of bribing both Taliban and Afghan government officials;
  
  
• U.S. money for a trash collection program in Iraq, administered by a bewildering array of subcontractors, has http://www.oversight.house.gov/images/stories/subcommittees/NS_Subcommittee/Exec_Summary.pdf">allegedly ended up in the pockets of insurgents;
  
  
• A former contractor employee http://www.usaid.gov/oig/public/fy08rpts/e-267-08-001-p.pdf">alleged that Middle Eastern subcontractors, trying to sway the award of more subcontracts, were sneaking prostitutes into Baghdad’s Green Zone by abusing their security access cards.
  

Subcontracting is among the most challenging parts of the U.S. government’s widespread outsourcing of war-related tasks. It works like this: A government agency — most likely the Defense Department, State Department, or U.S. Agency for International Development — will award work to a “prime” contractor. That prime contractor, usually a large American company like Kellogg, Brown and Root (KBR) or DynCorp International, will often subcontract some or even a majority of its work to other companies, including foreign-owned firms. Those subcontractors sometimes then turn around and subcontract part of the work, and so on.

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PROSECUTING SUBCONTRACTORS DIFFICULT
The problem isn’t new. Three years ago, Democratic Rep. Henry Waxman of California http://oversight.house.gov/images/stories/documents/20070207112222-87567.pdf">said the subcontracting world “is so murky that we can’t even get to the bottom of this, let alone calculate how many millions of dollars taxpayers lose in each step of the subcontracting process.”


Full and very insightful article here: http://www.publicintegrity.org/articles/entry/2368/

Edited to add this documentary I posted in the videos forum a while ago: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x394128">"Iraq's Missing Billions" - Starring Alan Grayson & 363 Tons Of Dollar Bills

(I've recently found a good quality torrent of it, if anyone wants a copy, please feel free to PM me)