Wednesday, June 18, 2008

Mr. Smith Went To Washington

... And got fired for questioning KBR’s accounting:
WASHINGTON — The Army official who managed the Pentagon’s largest contract in Iraq says he was ousted from his job when he refused to approve paying more than $1 billion in questionable charges to KBR, the Houston-based company that has provided food, housing and other services to American troops.

The official, Charles M. Smith, was the senior civilian overseeing the multibillion-dollar contract with KBR during the first two years of the war. Speaking out for the first time, Mr. Smith said that he was forced from his job in 2004 after informing KBR officials that the Army would impose escalating financial penalties if they failed to improve their chaotic Iraqi operations.

Army auditors had determined that KBR lacked credible data or records for more than $1 billion in spending, so Mr. 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.

Wow. So the Pentagon official in charge of oversight was fired for .... oversight!

According to a story in yesterday’s Houston Chronicle, Mr. Smith was right to question KBR’s charges:

KBR overcharged the U.S. Navy for providing meals to workers and service personnel in the aftermath of Hurricane Katrina, according to a Pentagon audit.


"The Navy paid approximately $4.1 million for meals and services we calculate should have cost $1.7 million, more than a $2.3 million difference," said the audit, signed by Assistant Inspector General for Acquisition Management Richard Jolliffe.

KBR paid for 227,500 meals over a 34-day period, yet the subcontractors served only 113,654, fewer than half, and the remaining meals were discarded, the audit said. It recommended the Navy demand a refund from KBR of at least $1.4 million.

The overcharges were one element of mismanagement by Houston-based KBR, of three Navy contracts valued at $229 million for cleanup and restoration of Navy facilities damaged after Hurricane Ivan in 2004 and Katrina in 2005, the audit said.

Altogether, the audit requested that the Navy seek refunds of at least $8.5 million for "inappropriate" payments to KBR.

But wait, I thought the private sector did everything so much cheaper/faster/better/shinier/happier than the government! Oh no, there goes another piece of conservative wisdom down the toilet.

KBR’s performance has been stormy, to say the least. There’s the unsafe electrical wiring they provided troops. They failed to take action when female employees were gang-raped, and covered up the story later. They even dodged social security and medicare taxes. Of course they did! Taxes are for the little people!

In any real world, KBR would have been put out of business long ago for these and a hundred other misdeeds. But because of their strong connections to Vice President Cheney, they keep racking up the government contracts and profits have tripled.

It’s wingnut welfare at its finest. Your tax dollars at work: going straight into KBR’s pockets. Mission accomplished!