The Bush Bust-Out, Cont’d
March 7, 2008
Thanks to John Cole, I see that while the Republicans try to gin up outrage over whether Barack Obama wears a flag pin on his lapel, one of their favorite politically connected firms, Kellogg Brown & Root, is hard at work patriotically vampirizing the U.S. economy:
More than 21,000 people working for KBR in Iraq – including about 10,500 Americans – are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands.
The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.
But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. And the creation of shell companies in places such as the Cayman Islands to avoid taxes has long been attacked by members of Congress.
A Globe survey found that the practice is unusual enough that only one other ma jor contractor in Iraq said it does something similar.
“Failing to contribute to Social Security and Medicare thousands of times over isn’t shielding the taxpayers they claim to protect, it’s costing our citizens in the name of short-term corporate greed,” said Senator John F. Kerry, a Massachusetts Democrat on the Senate Finance Committee who has introduced legislation to close loopholes for companies registering overseas.
With an estimated $16 billion in contracts, KBR is by far the largest contractor in Iraq, with eight times the work of its nearest competitor.
The no-bid contract it received in 2002 to rebuild Iraq’s oil infrastructure and a multibillion-dollar contract to provide support services to troops have long drawn scrutiny because Vice President Dick Cheney was Halliburton’s chief executive from 1995 until he joined the Republican ticket with President Bush in 2000.
I’ve said it before and I’ll keep saying it: the actions of the Bush administration make no sense except when viewed in terms of a “bust-out” — that venerable con in which crooks flim-flam their way into getting access to a company’s name and credit lines, then max out the credit lines with bulk purchases of easily disposable items that can be sold at a fraction of their value. The con-men then walk away, leaving the creditors to get what they can from the hollowed-out shell of what was once a functioning, productive business.
Virtually everything Bush and his cronies have done reinforces the view that the past seven years have been a colossal bust-out. The Iraq invasion was never once conducted in a manner that would suggest Bush believed his own guff about weapons of mass destruction; the “War on Terror” has never been conducted in a way that would suggest it was anything but a means to cow critics and expand presidential power in ways that would make it easier to bust open the cash registers, clear the shelves and empty the bank vault. Five years after its formation the Department of Homeland Security is simply an enormous ATM for contractors, with none of its ostensible goals accomplished.
What makes this bust-out even more disgusting than its low-level sewer rat incarnations is its ideologically self-reinforcing nature. Bush conservatives get to “prove” government doesn’t work by filling government jobes with Bush cronies uninterested in anything except suckling at the federal sugar tit. Bush contractors get to cheat the government out of Social Security payments, while Bush himself delivers speeches about how financially untenable the Social Security program has become. Of course government doesn’t work — conservatives are too busy working the government.
You can’t call it an example of one hand washing the other. It’s more like dung beetles helping each other roll their paydays.