Krugman's In

On the Cheney/Halliburton/War Profiteering story.

Patriots and Profits

By PAUL KRUGMAN

Last week there were major news stories about possible profiteering by Halliburton and other American contractors in Iraq. These stories have, inevitably and appropriately, been pushed temporarily into the background by the news of Saddam's capture. But the questions remain. In fact, the more you look into this issue, the more you worry that we have entered a new era of excess for the military-industrial complex.

The story about Halliburton's strangely expensive gasoline imports into Iraq gets curiouser and curiouser. High-priced gasoline was purchased from a supplier whose name is unfamiliar to industry experts, but that appears to be run by a prominent Kuwaiti family (no doubt still grateful for the 1991 liberation). U.S. Army Corps of Engineers documents seen by The Wall Street Journal refer to "political pressures" from Kuwait's government and the U.S. embassy in Kuwait to deal only with that firm. I wonder where that trail leads.

Meanwhile, NBC News has obtained Pentagon inspection reports of unsanitary conditions at mess halls run by Halliburton in Iraq: "Blood all over the floors of refrigerators, dirty pans, dirty grills, dirty salad bars, rotting meat and vegetables." An October report complains that Halliburton had promised to fix the problem but didn't.

And more detail has been emerging about Bechtel's much-touted school repairs. Again, a Pentagon report found "horrible" work: dangerous debris left in playground areas, sloppy paint jobs and broken toilets.

Are these isolated bad examples, or part of a pattern? It's impossible to be sure without a broad, scrupulously independent investigation. Yet such an inquiry is hard to imagine in the current political environment — which is precisely why one can't help suspecting the worst.

Let's be clear: worries about profiteering aren't a left-right issue. Conservatives have long warned that regulatory agencies tend to be "captured" by the industries they regulate; the same must be true of agencies that hand out contracts. Halliburton, Bechtel and other major contractors in Iraq have invested heavily in political influence, not just through campaign contributions, but by enriching people they believe might be helpful. Dick Cheney is part of a long if not exactly proud tradition: Brown & Root, which later became the Halliburton subsidiary doing those dubious deals in Iraq, profited handsomely from its early support of a young politician named Lyndon Johnson.

So is there any reason to think that things are worse now? Yes.

The biggest curb on profiteering in government contracts is the threat of exposure: sunshine is the best disinfectant. Yet it's hard to think of a time when U.S. government dealings have been less subject to scrutiny.

First of all, we have one-party rule — and it's a highly disciplined, follow-your-orders party. There are members of Congress eager and willing to take on the profiteers, but they don't have the power to issue subpoenas.

And getting information without subpoena power has become much harder because, as a new report in U.S. News & World Report puts it, the Bush administration has "dropped a shroud of secrecy across many critical operations of the federal government." Since 9/11, the administration has invoked national security to justify this secrecy, but it actually began the day President Bush took office.

To top it all off, after 9/11 the U.S. media — which eagerly played up the merest hint of scandal during the Clinton years — became highly protective of the majesty of the office. As the stories I've cited indicate, they have become more searching lately. But even now, compare British and U.S. coverage of the Neil Bush saga.

The point is that we've had an environment in which officials inclined to do favors for their business friends, and contractors inclined to pad their bills or do shoddy work, didn't have to worry much about being exposed. Human nature being what it is, then, the odds are that the troubling stories that have come to light aren't isolated examples.

Some Americans still seem to feel that even suggesting the possibility of profiteering is somehow unpatriotic. They should learn the story of Harry Truman, a congressman who rose to prominence during World War II by leading a campaign against profiteering. Truman believed, correctly, that he was serving his country.

On the strength of that record, Franklin Roosevelt chose Truman as his vice president. George Bush, of course, chose Dick Cheney. NYT Link.

In a hopefully unrelated but certain-to-be-embarrassing-note, the Supremes are going to hear Cheney's appeal regarding his failure to disclose his energy policy task force documents. Remember, this thing has been going on for a couple of years now, and three lower courts have ruled that Cheney must turn over the documents. Will we find the truth? The answer is expected in June.