April 15, 2003

On cronyism and corruption

For an administration that favors a free market, President Bush?s government seems to have an affinity for cronyism. As reported in The London Daily Telegraph on April 12, Halliburton, Vice President Dick Cheney?s former firm, stands to make over $7 billion on a no-bid contract it was awarded by the Pentagon. Cheney received a $30 million severance package when he retired from the firm in order to take up the office of Vice President of the United States.

The Halliburton incident barely scratches the surface of this problem. What we are witnessing today is nothing less than a historical resurrection (and enhancement) of the ?spoils system? pioneered by the corrupt administrations of over a century ago. Karl Rove, an advisor, even compared his boss, George W. Bush, to Andrew Jackson, the founder of the system under which political agents are given government jobs in exchange for their past loyalty.

As reported in the Los Angeles Times on November 15, 2002, the Bush administration will be opening up 850,000 federal jobs (ranging from road construction to map-making) to competition from private companies. While this proposal seems like a naturally capitalistic one, there is a very political subtext.

The President has a blueprint: his brother. Governor Jeb Bush has implemented a similar system of spoils in his state of Florida. According to The Miami Herald, ?The policy has spawned a network of contractors who have given him, other Republican politicians and the Florida GOP millions of dollars in campaign donations since 1998.?

Back to Halliburton. The company that was given the $7 billion contract is Kellogg, Brown & Root, a subsidiary of Halliburton, a U.S. oil services company. The contract, which is for rebuilding the Iraqi oil fields, is for two years, and was awarded without a public bidding process. Ostensibly, the reason the contract was awarded without competing offers from other companies or a public hearing is because the Pentagon has said that secrecy and speed were necessary. But that seems a hollow response. Surely secrecy could be necessary, but a bidding process that could potentially save the taxpayers hundreds of millions, if not billions of dollars is certainly worth the few weeks? time it would take to assemble a small field of bidding contractors, of which Kellogg, Brown & Root would be a part.

This incident, with its insinuations of cronyism and anti-capitalism could be simply dismissed as an ancillary effect of the war in Iraq if not for a precedent set by Cheney in the opening days of the Administration. The development of an energy plan by the Executive Branch in May of 2001 was completed under a black veil of secrecy, out from under which came a policy heavily in favor of political contributors to the Republican Party. When Mitch Daniels and the Congressional Budget Office attempted to review how this ?Energy Plan? was developed, they were met with fierce resistance from Cheney, who said that the Executive needed secrecy and independence from oversight when assembling policy. Following September 11, Cheney couched his statements in pseudo-patriotic language, and when the Office of Management and Budget took him to court, their petition to see the records of the meetings between the Vice President and oil company executives was denied.

What does it all mean? I don?t know exactly, but we?ve now got a pattern of behavior from the administration, first with the refusal to share information that should be available to the public for the sake of executive oversight, second with the abuse of tax-dollars in order to enrich Republican Party donors. Is that the whole story? Absolutely not: Kellogg, Brown & Root are very qualified to do the work they will be paid for in Iraq, but so are many other companies. Should the Executive Branch have some measure of freedom when making policy? Of course; but when those policies seem to benefit specific companies that routinely and heavily donate to a political party in power, instead of the country as a whole, the public deserves to know whether or not favoritism is occurring to the detriment of the citizens of the United States of America. That is happening now. We need answers, but the only thing we?re getting from Bush is questions.