The Gaming Den

Okay, I admit, I was extremely pleased myself when I completed the research and figured it out, so I'm reposting this in a seperate thread.

In a nut shell, it describes how Cheney profitted off the current wars with his relationship to Halliburton. I removed the other arguments currently filling the other thread, and instead focused on the answer to this question

Right here, you've said that some members of the government are profiteering from the war. Which members of the government do you think are doing this? In what ways? I'm asking for where and how you think the skullduggery is occuring

Here's the thing. Many people think that Cheney makes money by taking control of the oil wealth of other countries. However, that's not exactly true based on the evidence that has come out.

See, Cheney's corporate ally is Halliburton. He was CEO of Haliburton for a while. This is a well known fact, and it's safe to say he gets a lot of campaign contributions from them. It is also well known that Haliburton is an "oil company".

Here's the thing though: Haliburton does not actually get most of its money by selling oil. It gets money by building and maintaining the infrastructure needed to extract and transport oil. Halliburton, in fact, is more of a construction company.

Repeat after me if it's getting complicated. Halliburton does NOT sell oil (for the most part). It sells the EQUIPMENT that makes oil production possible.

See here: http://en.wikipedia.org/wiki/Halliburton . Money quote:

Products: Products and services to the energy industry [3]

By comparison, here is Exxon Mobile:

http://en.wikipedia.org/wiki/Exxon_Mobile

Which actually DOES sell oil. And note that this company is worth 300 BILLION in revenue as opposed to 18 billion for Haliburton.

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So how does Haliburton (and its subsidiary, KBR) actually profit off the war?

Step 1: They are awarded contracts from the government. Which are NOT bidded out to their competitors. And these are often "plus X" contracts, which means you are given an X% margin regardless of your cost.

(Note: Many suspect Cheney influenced this process to ensure that there was no competitive bidding, and GAO is investigating this).

Step 2: Screw the government over by doing little to no work stipulated in the contract, but getting paid anyway.

From the wiki article again:

From 1995–2002, Halliburton Brown & Root Services Corp was awarded at least $2.5 billion but has spent considerably less to construct and run military bases, some in secret locations, as part of the Army's Logistics Civil Augmentation Program. This contract was a cost plus 13% contract and BRS employees were trained on how to pass GAO audits to ensure maximum profits were attained. It was also grounds for termination in the Balkans if any BRS employee spoke of Dick Cheney being CEO. BRS was awarded and re-awarded contracts termed "non-competitive" due to BRS being the only company capable to pull off the missions.

Bold areas were marked for emphasis.

And yes, Halliburton - a fucking oil refinery builder - was asked to build military bases for the government under no-bid contracts. KBR also built stuff like military bases and detention camps for the military, and they were so bad that people got electrocuted by faulty wiring:

http://en.wikipedia.org/wiki/Kellogg,_Brown_and_Root

Professional negligence
KBR's maintenance work in Iraq has been criticized after reports of soldiers electrocuted from faulty wiring.[28] Specifically, KBR has been charged by the Army for improper installation of electrical units in bathrooms throughout U.S. bases

On top of all that, there is this:

Halliburton’s $2.5 billion "Restore Iraqi Oil" (RIO) contract[38] was supposed to pay for itself as well as reconstruction of the entire country. Had the contract been fulfilled correctly, Iraq would be able to export much more oil from its northern oil fields. Instead, the oil fields are barely usable and access to international markets is severely limited. Halliburton’s work on the pipeline crossing the Tigris river at Al Fatah was a critical failure. Against the advice of its own experts, Halliburton tried to dig a tunnel through a geological fault zone. The underground terrain was a jumble of boulders, voids, cobblestones and gravel impossible for the kind of drilling Halliburton planned. "No driller in his right mind would have gone ahead," said Army geologist Robert Sanders when the military finally sent people to inspect the work.

Note: the 2.5 billion dollars was supposed to have been paid REGARDLESS if the oil pipeline was restored (no-bid thing). And since they are supposedly the ONLY contractor who can repair pipelines... they were probably expecting another no-bid contract to fix the pipelines they screwed up in the first place.

*whew*

So there, in a nutshell, is how Cheney and Haliburton screwed the American taxpayer of a couple of billion dollars. And note: Many of these cases are already being investigated by the GAO. These aren't Internet accusations. These are actual fucking cases filed with the Government Accounting Office.


[Edit] Finally, forgot to mention one last thing about this entire setup:

You don't need to do this in an oil country for Cheney and Halliburton to get their money.

KBR for instance had built no-bid military bases in the Balkans, which have zero significant oil wealth, and are far from the Russian pipelines.

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Any comments/loopholes you see in the argument, please feel free to comment. And please don't go off on other unproven tangents (i.e. "But he probably gets bribes from Exxon too anyway!)

If you support the troops then you should hate seeing this:

http://www.youtube.com/watch?v=dhbISTJsi2M

Juton wrote:If you support the troops then you should hate seeing this:

http://www.youtube.com/watch?v=dhbISTJsi2M

Dunno if those are KBR-contracted huts, but given that they fucked up even the wiring of the toilets I wouldn't be surprised if they were.

Funnily, the caption says "How the army takes care of us with the lowest bidder", when in fact it's more likely that they took care of them with a "no-bid contractor who took home a huge paycheck."

Well, the no-bid contractor then got the lowest bidder. See, they even privatized the bidding system!

-Crissa

I have absolutely no doubt that Cheney is a crook. With that said, I do know quite a bit about government no-bid contracting. Such contracting can and does regularly occur if something needs to be done now and no viable stable of candidate companies are on hand to do the job *or* if the bidding process would cost more (and believe me it costs a huge amount of money to bid government contracts on both the supplier as well as the government side of things) than the expected savings the bidding would bring in.

This in no way defends Cheney, the US government or any other thing, so save your vitriol. I am posting this only because the way "no bid contracts" are talked about, it sometimes sounds like the government and the selected business are in collusion. While this certainly may be the case (as any contracting or bidding system may be rigged between customer and supplier), it is not always the case.

Edit: I should add that not only is no-bid contracting not always rigged, no-bid contracting is a very widely accepted form of government contracting (as is cost-plus contracting, which is another thing to talk about) that is done every day above board and completely without issue in the government. My earlier post made it seem like no-bid contracting was something irregular or fishy most of the time, when it very much is not.

No-bids are not always fishy. But in Cheney's case they are because there were actual competing bids from other companies (I believe one that was mentioned was Dynacorp), Halliburton wasn't doing stuff it's supposed to be doing (building military bases), and there were actual people who were whistleblowing that Cheney had influenced the process.

Zinegata wrote:No-bids are not always fishy. But in Cheney's case they are because there were actual competing bids from other companies (I believe one that was mentioned was Dynacorp)

Well this does not make it fishy. Just because more than one company bids a job and the contract is awarded sole-source, does not mean there is an issue. I have personally seen this happen where company A and B both learn of a government contract. Company A is the only company really qualified for the work, but because serious money is at stake (and it takes months to years to make a bid) another company goes for the contract as well, maybe even before the announcement (if any) is made that the job will be handled sole-source. Given all the effort they took, company B submits anyway on the outside chance that the government changes their mind or the prime/ideal contractor falls through for some reason.

If the purchaser can show, via the writing of a sole-source justification letter (an actual, auditable document that must be written to award sole-source contracts) that only one bid should be considered AND this letter is accepted by the financial oversight people on the project, then the contract is awarded sole-source without considering the other bid. The thing is, as an auditable document, if the justification does not really exist, then the GAO can smack some ass.

I am not disagreeing with any of your points, just providing clarity relative to the process.