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Iraq: US military contractor burns recyclables, violating contract

KBR was contracted to recycle cafeteria waste at Forward Operating Base Warhorse. Such spotty accountability is coming under new scrutiny; an Oct. 30 report reveals that transactions worth $10.7 billion are being audited.

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With contractors providing almost all basic services for US forces, their numbers have already reached unprecedented levels: Contractors now outnumber uniformed US military personnel in Afghanistan, according to a recent Congressional Research Service report.

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"The fundamental problem is that the government has no capacity to do things itself," says Pratap Chatterjee, author of "Halliburton's Army." "As a result, they're willing to overlook little things like recycling and even big things like fraud so long as their mission is met."

Although the US has used military contractors as far back as the Revolutionary War, they didn't begin to proliferate until the early 1990s. Former President George H. W. Bush began relying more heavily on contractors to reduce the government's footprint. In the Balkans conflict, the first billion-dollar contract was awarded to KBR.

As the role of contractors increased, the Clinton administration passed a ruling in December 2000 to weed out firms with felony charges in their pasts and "blacklist" contractors that had past environmental, labor, or federal-trade violations lodged against them. Former President George W. Bush, who took office a month later, repealed the law in 2001.

Obama administration may take harder line

Today, if a contractor fails to fulfill its obligations, a DCMA spokesperson says that the normal protocol is that the firm will be issued a "corrective action request" to tell the government how it will address the cause of the compliance issue. He refused to discuss KBR's recycling case, and declined to be named, in accordance with the agency's policy.

Allegations of misconduct in Iraq targeting companies including KBR, its former parent company, Halliburton, and Blackwater – renamed Xe Services – have periodically drawn the wrath of US lawmakers. But government-contractor experts say that the focus on providing for troops in the field often may trump such concerns.

"All of these negative things that are happening are not seemingly making an impact at a significant level where policymakers are paying attention. Instead, it's quite the opposite; policymakers are still seeing them as cost-effective," says Dawn Rothe, a criminology professor at Old Dominion University in Norfolk, Va., citing an August 2008 Congressional Budget Office report as evidence.

Before the government reconsiders its use of contractors, Dr. Rothe says she thinks there will have to be "more revelations of some serious harm, legal discrepancies, and criminal behavior."

But while allegations and investigations of corruption have so far done little to crimp contractors' style in Iraq and Afghanistan, there are signs that the Obama administration is looking to effect systemic change. SIGIR, which reports to the secretaries of State and Defense, is auditing a further 22,000 transactions involving $10.7 billion – a substantial chunk of the $50 billion the US has spent to date on reconstruction efforts in Iraq.

"We're at a point now with tightening budgets and the economic crisis ... that we're also not going to put up with waste, fraud, and abuse in government spending," says Scott Amey, general consul at the nonprofit Project on Government Oversight in Washington, who adds that there's a push to increase the government's ability to defer, detect, and prosecute fraud."At that point we're going to place an emphasis on contractor accountability as well as getting the most value out of the dollars that we're awarding these contractors."