What Ted Stevens, Bolivian cocaine and Halliburton have in common
Or, how the Alaskan Inupiat Eskimos got a no-bid contract in South America from the U.S. government.
By Michael Scherer
Photo: AP/Chris Miller/Galdieri
Photo composite of Ted Stevens addressing the Alaska State Legislature in Juneau, Alaska, Monday, March 19, 2007 and a background image of a Bolivian military officer looking on while a cocaine pit is burned in the middle of the rainforest region of Chapare in Bolivia on Tuesday, May 16, 2006.
June 19, 2007 | WASHINGTON -- Deep in the jungles of the upper Amazon, in a land rife with coca plantations and drug runners, roughly 1,500 Bolivian soldiers and police camp out each night at U.S. taxpayer expense. They are offered three meals and a snack each day as part of a $31 million State Department effort to stop the cocaine trade at its source.
Until this spring, the troops were fed by a local Bolivian company, contracted to the United States through a competitive process for $3.34 per soldier per day. But in March, the same contract was awarded -- without competition -- to an Alaskan Inupiat Eskimo firm, Olgoonik Management Services, which is headquartered 180 miles north of the Arctic Circle. The new cost is $5.16 per soldier per day, an increase of 54 percent, or about $1 million more each year.
Given the State Department's $32 billion budget, an additional $1 million for food hardly ranks as a major scandal. But this tangled tale of how an Alaskan tribal company ended up in a South American tropical forest sheds an illuminating spotlight on the often-secretive world of federal contracting, an area of government rife with abuse and poor oversight. It is a story that involves Bolivian police, Balkan nationals, a no-bid contract, a senator whose office has been contacted by the FBI, emergency military rations and a helping hand from the biggest private contractor in Iraq -- a recently spun-off division of Halliburton, the Fortune 200 company once run by Vice President Dick Cheney. It is also a story that squarely addresses one of the principal concerns of lawmakers looking to reform federal contracting: the ability of Alaska native companies to get no-bid government contracts of any value. During the Bush administration those contracts have grown fivefold and now probably top $1 billion.
The so-called Alaska Native Corporation privilege came into effect in 1986 at the urging of Republican Sen. Ted Stevens of Alaska, the powerful former chairman of the Appropriations Committee, who recently announced that he has been asked for documents in a widening FBI investigation of political corruption in his home state. Stevens pushed through a law that exempted Alaska native companies from many of the limitations that apply to other federal minority-preference programs. Unlike other small minority businesses, Alaskan firms can get "small business" preferences even if they are owned by multibillion-dollar parent companies and employ no native Alaskans. One government contracting official recently told congressional investigators that the program amounted to an "open checkbook" given that there are no limits on the size of the awards.
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