Tell me again why KBR still gets paid?

I really wish we could find out who--if anyone--realizes that when we unravel all of these things and figure out what was done, they're going to go to prison. Just kidding! Of course none of these people are going to go to prison. They're going to go to Disneyworld! And you, the taxpayer, are gonna pay for it.

Army auditors had determined that [Kellogg, Brown & Root--the Halliburton subsidiary] KBR lacked credible data or records for more than $1 billion in spending, so Mr. [Charles M.] Smith refused to sign off on the payments to the company. “They had a gigantic amount of costs they couldn’t justify,” he said in an interview. “Ultimately, the money that was going to KBR was money being taken away from the troops, and I wasn’t going to do that.”

But he was suddenly replaced, he said, and his successors — after taking the unusual step of hiring an outside contractor to consider KBR’s claims — approved most of the payments he had tried to block.

Army officials denied that Mr. Smith had been removed because of the dispute, but confirmed that they had reversed his decision, arguing that blocking the payments to KBR would have eroded basic services to troops. They said that KBR had warned that if it was not paid, it would reduce payments to subcontractors, which in turn would cut back on services.

“You have to understand the circumstances at the time,” said Jeffrey P. Parsons, executive director of the Army Contracting Command. “We could not let operational support suffer because of some other things.”

Mr. Smith’s account fills in important gaps about the Pentagon’s handling of the KBR contract, which has cost more than $20 billion so far and has come under fierce criticism from lawmakers.

While it was previously reported that the Army had held up large payments to the company and then switched course, Mr. Smith has provided a glimpse of what happened inside the Army during the biggest showdown between the government and KBR. He is giving his account just as the Pentagon has recently awarded KBR part of a 10-year, $150 billion contract in Iraq.

No, Mr. Parsons--I don't "gotta understand" anything. When your flimsy excuse for incompetence is to try to say that "things were really, really bad back then" you really should just come out and tell everyone the truth: "wow, we screwed the pooch and that money is gone, baby gone."

I sure wish we had known this story in 2004. It might have helped a significant number of Americans make a more informed decision as to who to vote for in the Presidential election held that year.

Anyway, the whole article is an eye-opener and I just can't understand--where's the perp walk? Why did KBR get another massive contract? If I'm outraged, and if you're outraged, when do we see some justice?

--WS

Procurement: 300 Million Dollars for Club-Hopping Trash

You can't make this stuff up. You just can't. It's sad, it's pathetic, and it's just another outrage. And this is just another post about it. But there's no way we're ever going to stop talking about this stuff and there's no way we're ever going to give up fighting against it.

Since 2006, when the insurgency in Afghanistan sharply intensified, the Afghan government has been dependent on American logistics and military support in the war against Al Qaeda and the Taliban.

But to arm the Afghan forces that it hopes will lead this fight, the American military has relied since early last year on a fledgling company led by a 22-year-old man whose vice president was a licensed masseur.

With the award last January of a federal contract worth as much as nearly $300 million, the company, AEY Inc., which operates out of an unmarked office in Miami Beach, became the main supplier of munitions to Afghanistan’s army and police forces.

Here's an original posting about the award from 2007 in Defense Industry Daily:

Small business qualifier AEY Inc. in Miami Beach, FL received a delivery order amount of $48.7 million as part of a $298 million firm-fixed-price contract for various ammunition for the Afghanistan Security Forces. AEY, Inc. was established in 1999; unsurprisingly, Craigslist says they’re hiring.

Work will be performed in Miami, FL and is expected to be complete by Dec. 30, 2008. Bids were solicited via the World Wide Web on July 28, 2007, and 10 bids were received by the U.S. Army Sustainment Command in Rock Island, IL (W52P1J-07-D-0004).

Ammunition and weapon shortages been an reported issue in Afghanistan, where police and other security forces trainees have been forced to use fake wooden rifles at times.

So they got the contract by lowballing it, obviously. I mean, who were the other 9 people that bid?

Since then, the company has provided ammunition that is more than 40 years old and in decomposing packaging, according to an examination of the munitions by The New York Times and interviews with American and Afghan officials. Much of the ammunition comes from the aging stockpiles of the old Communist bloc, including stockpiles that the State Department and NATO have determined to be unreliable and obsolete, and have spent millions of dollars to have destroyed.

In purchasing munitions, the contractor has also worked with middlemen and a shell company on a federal list of entities suspected of illegal arms trafficking.

Moreover, tens of millions of the rifle and machine-gun cartridges were manufactured in China, making their procurement a possible violation of American law. The company’s president, Efraim E. Diveroli, was also secretly recorded in a conversation that suggested corruption in his company’s purchase of more than 100 million aging rounds in Albania, according to audio files of the conversation.

China? As in, manufactured in China recently? No.

But problems with the ammunition were evident last fall in places like Nawa, Afghanistan, an outpost near the Pakistani border, where an Afghan lieutenant colonel surveyed the rifle cartridges on his police station’s dirty floor. Soon after arriving there, the cardboard boxes had split open and their contents spilled out, revealing ammunition manufactured in China in 1966.

Yes--that's cultural revolution era China, right there. What happened when people tried to backtrack and figure this out?

In January, American officers in Kabul, concerned about munitions from AEY, had contacted the Army’s Rock Island Arsenal, in Illinois, and raised the possibility of terminating the contract. And officials at the Army Sustainment Command, the contracting authority at the arsenal, after meeting with AEY in late February, said they were tightening the packaging standards for munitions shipped to the war.

And yet after that meeting, AEY sent another shipment of nearly one million cartridges to Afghanistan that the Combined Security Transition Command-Afghanistan regarded as substandard. Lt. Col. David G. Johnson, the command spokesman, said that while there were no reports of ammunition misfiring, some of it was in such poor condition that the military had decided not to issue it. “Our honest answer is that the ammunition is of a quality that is less than desirable; the munitions do not appear to meet the standards that many of us are used to,” Colonel Johnson said. “We are not pleased with the way it was delivered.”

Several officials said the problems would have been avoided if the Army had written contracts and examined bidders more carefully.

In the rush to throw billions of taxpayer dollars at people who weren't interested in doing a good job, an extremely young and inexperienced Diveroli suddenly found himself doing business well above his paygrade. As in, well above his educational level and his experience level.

By 2005, when Mr. Diveroli became AEY’s president at age 19, the company was bidding across a spectrum of government agencies and providing paramilitary equipment — weapons, helmets, ballistic vests, bomb suits, batteries and chargers for X-ray machines — for American aid to Pakistan, Bolivia and elsewhere.

It was also providing supplies to the American military in Iraq, where its business included a $5.7 million contract for rifles for Iraqi forces.

Two federal officials involved in contracting in Baghdad said AEY quickly developed a bad reputation. “They weren’t reliable, or if they did come through, they did after many excuses,” said one of them, who asked that his name be withheld because he was not authorized to speak with reporters.

Seeing as how most of those armaments probably went to the insurgents anyway, it's probably a good thing that this guy was selling them weapons that were probably outdated and procured from the old Eastern bloc.

What kind of person is Diveroli? Is he the sort of person who should be getting millions of dollars from the US Government?

As AEY’s bid for its largest government contract was being considered, Mr. Diveroli’s personal difficulties continued. On Nov. 26, 2006, the Miami Beach police were called to his condominium during an argument between him and another girlfriend. According to the police report, he had thrown her “clothes out in the hallway and told her to get out.”

A witness told the police Mr. Diveroli had dragged her back into the apartment. The police found the woman crying; she said she had not been dragged. Mr. Diveroli was not charged.

On Dec. 21, 2006, the police were called back to the condominium. Mr. Diveroli and AEY’s vice president, David M. Packouz, had just been in a fight with the valet parking attendant.

The fight began, the police said, after the attendant refused to give Mr. Diveroli his keys and Mr. Diveroli entered the garage to get them himself. A witness said Mr. Diveroli and Mr. Packouz both beat the man; police photographs showed bruises and scrapes on his face and back.

When the police searched Mr. Diveroli, they found he had a forged driver’s license that added four years to his age and made him appear old enough to buy alcohol as a minor. His birthday had been the day before.

“I don’t even need that any more,” he told the police, the report said. “I’m 21 years old.”

Mr. Diveroli was charged with simple battery, a misdemeanor, and felony possession of a stolen or forged document.

The second charge placed his business in jeopardy. Mr. Diveroli had a federal firearms license, which was required for his work. With a felony conviction, the license would be nullified.

Here's the kicker--someone inside of the DoD reviewed Diveroli's company and looked at everything that had gone on. And what decision did they make? They simple threw more money at the guy:

To be accepted, the company had to be, in Army parlance, “a responsible contractor,” which required an examination of its financial soundness, transport capabilities, past performance and compliance with the law and government contracting regulations.

The week after a relative paid his bail, the Banc of America Investment Services in Miami provided Mr. Diveroli a letter certifying that his company had cash on hand to begin buying munitions on a large scale. It said AEY had $5,469,668.95 in an account.

AEY was awarded the contract in January 2007. Asked why it chose AEY, the Army Sustainment Command answered in writing: “AEY’s proposal represented the best value to the government.”

Club-hopping trash that can't stop beating and threatening women now gets millions from our government to buy up outdated ammunition and resell it? How does that keep America safe from anyone or anything?

War Profiteering Kills

At least a dozen Soldiers and Marines in Iraq have died as a result of electrocution, and the likely culprit? Shoddy construction work by KBR. The Houston-based war-profiteering enterprise received no-bid contracts to build bases and housing facilities for American troops in Iraq, but in multiple cases the electrical work is substandard, lines have been improperly grounded, and the results have been tragic - death by electrocution of at least ten Soldiers and two Marines.

On the fifth anniversary of the U.S.-led invasion of Iraq, California Democrat Henry Waxman, chairman of the House Oversight and Government Reform Committee, sent a letter today to Defense Secretary Robert Gates seeking details about electrocutions of military and contract workers in Iraq and about KBR's role in making electrical repairs.

Defense Department spokesman Chris Isleib said the Pentagon "considers this matter to be serious, and we have referred it to the (Department of Defense) Inspector General for a full investigation."

KBR officials pledged to cooperate fully with agencies involved in the probe.

Waxman has asked the Pentagon to respond to his inquiry by April 4.

The probe was sparked by the death of SSG Ryan Maseth who was electrocuted when he stepped into a shower in his living quarters. The military originally told his mother that he had a small electrical appliance in the shower with him, but that was a cover story; a lie. He was electrocuted because a water pump was improperly installed, and bypassed the circuit breaker.

At first, Maseth's mother tried to get answers on her own, but was unable to. So she contacted her congressman, Jason Altmire, a Democrat. Altmire started digging, and referred what he found to Representative Waxman, who chairs the Oversight Committee.

Those deaths, said Altmire, were "[e]asily preventable. You wonder how it even could happen one time. But if a tragedy does occur once — because of a mistake — how could it possibly occur 12 times?" he asked.

Congressman, don't be coy. Money. That's how it can happen.