Watchdogs Cite 'Cronyism' in Contracts; Much of Iraq, Afghanistan Work Goes to Politically Connected Firms

The Washington Times (Washington, DC), October 31, 2003 | Go to article overview

Watchdogs Cite 'Cronyism' in Contracts; Much of Iraq, Afghanistan Work Goes to Politically Connected Firms


Byline: Jeffrey Sparshott, THE WASHINGTON TIMES

Politically connected firms have been the biggest beneficiaries of a confused contracting process seeking private-sector help to rebuild Iraq and Afghanistan after U.S.-led invasions, a watchdog group said in a report released yesterday.

"There is a stench of political favoritism and cronyism surrounding the contracting process in both Iraq and Afghanistan," said Charles Lewis, executive director at the Center for Public Integrity. The center is a nonpartisan group funded largely through contributions from foundations and individuals.

More than 70 U.S. companies and individuals won contracts worth up to $8 billion for work in postwar Iraq and Afghanistan, the center estimated. Most, but not all, of the companies are politically connected and have directly or indirectly contributed almost $49 million to national political campaigns since 1990, the center said.

President Bush received more money than any other politician from the companies, about $500,000, the center said. Altogether, Republican Party committees received $12.7 million and Democratic Party committees received $7.1 million from the firms, their political action committees and employees, the center said. The rest went to individual candidates.

Defense firms typically contribute about two-thirds of their donations to Republicans and one-third to Democrats, according to figures from the Center for Responsive Politics, another watchdog group. The ratio is slightly higher toward Republicans with the construction sector.

The Center for Public Integrity report singled out Halliburton and subsidiary Kellogg, Brown & Root as the top recipient of federal contracts, worth $2.3 billion. Vice President Dick Cheney is Halliburton's former chief executive officer, serving from 1995 until 2000.

The No. 2 contractor is San Francisco-based Bechtel Corp., with $1.03 billion in contracts. George Shultz, secretary of state under President Reagan, is a former Bechtel president and serves on the company's board of directors.

"However, dozens of lower-profile, but well-connected companies shared in the reconstruction bounty," Mr. Lewis said. About 60 percent of the companies had employees or board members with close ties to Republican or Democratic administrations, Congress or the military, he said.

Bush administration officials and contractors have denied that political ties or contributions led to the acquisition of government work. …

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