Sen. Dorgan takes on the war profiteers

Ammendment 4230, introduced by Sen. Byron Dorgan (D-ND) to establish a "Truman Committee" to oversee military contracts was defeated yesterday. But Sen. Dorgan gave an impassioned speech from the Senate floor about the squandering of billions of taxpayer dollars for military waste and fraud:

The Senator from North Dakota.

Mr. DORGAN. Mr. President, I thank the Senator from Virginia for his courtesy.

This is a vote that we had before in the Senate. It is a vote on the establishment of a type of committee called a Truman Committee. The Truman Committee was established in the early 1940s to try to root out waste, fraud, and abuse in military contracting. That was done when there was a Democrat in the White House, a Democratically controlled Senate, and a Democratic Senator named Harry Truman. He decided there ought to be a special investigation of waste, fraud, and abuse with respect to military contracting. They established a bipartisan committee to do that. They found a massive amount of waste, fraud, and abuse.

I think it is clear that perhaps the most significant amount of waste, fraud, and abuse that has ever occurred in this country is occurring right now. I think the American taxpayers are being fleeced. I don't think the Congress is doing nearly enough about it.

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Let me go through a couple of charts that I have shown before on the floor of the Senate. This is from the highest ranking procurement official in the Corps of Engineers, which does all the procurement for the Department of Defense. She lost her job. She was demoted for being honest.

She said:

I can unequivocally state that the abuse related to the contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career.

This from the top civilian contracting official in our Government at the Corps of Engineers. She is being demoted for being honest. She was always given the best recommendations, the highest performance evaluations, and when they saw that the ``old boy'' network decided to give big sole-source contracts, no-bid contracts and do it in a way that violated procurement rules, she spoke out. ``The most blatant and improper contract abuse'' she has ever seen.

Let me describe one contract--the Custer Battles contract. Two guys--Custer Battles--show up in Iraq. They know there is a lot of money. The American taxpayers are funding not only reconstruction of Iraq but also funding Army contracts. Two guys show up in Iraq with nothing. And $100 million later, they got $100 million of the taxpayers' money for contracts. The first contract was to provide security at the Baghdad Airport. There is a criminal inquiry as a result of that.

Here is what Bagdad Airport security said about this company, Custer Battles--Mr. Custer and Mr. Battles.

Custer Battles have shown themselves to be unresponsive, uncooperative, incompetent, deceitful, manipulative war profiteers. Other than that, they are swell fellows.

They received 100 million in American taxpayer dollars.

By the way, they took the forklift trucks off the Baghdad Airport and put them in a warehouse. They painted them blue and then sold them back to the Coalition Provisional Authority--forklift trucks which didn't belong to them. There are now criminal proceedings about this contract. But this is the tip of the iceberg.

Mr. President, I ask unanimous consent to show an item on the floor of the Senate.

The PRESIDING OFFICER. Without objection, it is so


Mr. DORGAN. Mr. President, a man named Henry Bunting worked for KBR, a subsidiary of Halliburton Corporation, in the area of Kuwait where Henry Bunting was in charge of procurement. He had to buy things.

Let me show the Senate what he bought. He brought this to a hearing we held. This is a hand towel. He was charged, on behalf of Halliburton's KBR subsidiary, to buy hand towels. He would order a hand towel for the American troops at a certain price, but his company said: Don't do that. We want you to have a hand towel that has the embroidered logo on it, the name of our company. So double the price to the American taxpayer for hand towels for the troops. So you have KBR embroidered on the hand towel.

He says: Why should we do that? It doesn't matter. It is cost-plus. The American taxpayer is paying the bill. Don't worry about the cost.

Same guy, $7,500 a month for an SUV; $45, $43 for a case of Coca Cola. He said: Don't worry, be happy. The taxpayer is going to pay for all of this. Don't worry about the cost.

Yes, I know this towel is one small issue. But when you buy thousands and thousands and tens of thousands of towels and double the price so you can put the logo of the contractor on it because it is a cost-plus contract, that relates to $100 million contracts, and it relates, in my judgment, to billions of waste, fraud, and abuse.

Regrettably, the Congress doesn't care enough.

I suggest we remedy this by creating a Truman-type committee. It worked, it was bipartisan, and it began to root out the waste, fraud, and abuse that is so prevalent.

I am not going to go through the whole list again. But let me describe it. If you are in the right place of the country of Iraq, you can stumble onto 50,000 pounds of nails, 25 tons of nails, lying in the sand. Why? Because somebody ordered the wrong size nails. So you throw them out in the sand. Doesn't matter, the American taxpayer is going to pay for that.

Or you can see a brandnew $75,000 truck that was set on fire because it had a flat tire, and they run it off the road. They didn't have the capability to fix it and just left the truck. Doesn't matter, the American taxpayer is going to pay the bill.

I think this is unbelievable. We have spent hundreds of billions of dollars at this point.

I understand that our responsibility is to do everything we should do, and must do, to support the troops who are fighting in Iraq.

We cannot send American men and women abroad wearing our country's uniform and not do everything that is humanly possible to provide all of their needs, equipment needs, weapons needs, and so on. I understand that. That is a responsibility we have. I believe the chairman of this committee and the ranking member of this committee have done a great job. I am impressed with that.

The one area where all of us have failed in this Congress, however, is oversight. We have not done the oversight. I think part of it is because we have one-party rule in this town--the White House and the House and Senate. Nobody wants to embarrass anybody. But the fact is there is such massive amount of money that is going out the door in support of these contracts--sole-source, no-bid contracts that have promoted waste. And nobody wants to take a second look at it. Nobody wants to see what is going on.

There are whistleblowers coming forward saying this money is being spent. It is being spent in an unbelievable way.

This is a slightly different picture. By the way, this is $2 million in $100 bills wrapped in Saran Wrap. This money actually belongs to the Iraqi people that was spent by us in something called the Coalition Provisional Authority. That was our responsibility to spend this appropriately. This money went to Custer Battles and is the subject of a criminal inquiry. This $2 million wrapped in Saran Wrap in $100 bills was a part of a substantial stash of cash in the basement of a building where they were standing.

This particular fellow came and testified. He said: We used to throw these around as footballs. We wrapped up $100 bills in Saran Wrap and threw them as footballs in the office because the message in this office was this:

You bring a bag because we pay in cash. Bring a sack. If you want some money, bring a sack, we pay in cash.

The stories are unbelievable.

The American taxpayer is going to pay to air condition a building. It went to a subcontractor, to another subcontractor, and then to another subcontractor, and pretty soon we pay the bill. The American taxpayer paid the bill, and that building now has a ceiling fan--not an air conditioner.

What is going on is unbelievable. Yet nobody seems to care very much. Nobody seems to be willing to do anything. I suggest, given the unprecedented amount of waste, fraud, and abuse, that now is the time for us to decide we are going to take action. We will create a Truman Committee, bipartisan, and sink our teeth into this and investigate on behalf of the American taxpayer--investigate and expose the waste, fraud, and abuse.

The fact is we turned down, regrettably, a bill which I offered previously that would have prevented the no-bid, sole-source, huge contracts going to just a couple of companies. That is one way to solve this problem. We should have accepted that. But notwithstanding the decision by the Senate to turn down that amendment, this amendment stands on its own.

Are we going to decide that when the highest civilian procurement official in the Corps of Engineers responsible for all these contracts says that she can unequivocally state that the abuse related to contracts awarded represents the most blatant and improper contract abuse she has witnessed during the course of her professional career, are we going to decide that is serious? We are going to do something about it?

I know people will say we have done this or that. The fact is we haven't scratched the surface--not a bit.

It is time for the Senate to ask itself whether it is serious about oversight and doing the job.

I am not standing here trying to pull the ground out from under this committee--or any committee. I am saying we have never spent this much money so quickly, never given the kind of sole-source, no-bid contracts that we have offered. We have never shoved money out the door as quickly as we have for procurement and in support of contracts for the troops.

Again, let me show this towel as a small hand-towel symbol of a massive amount of waste, fraud, and abuse that I believe we ought to correct, and we ought to begin today by approving my amendment.