Emphasis Should Be On Shared Sacrifice, Not Personal Gain

When it comes to war profiteering, it should not matter whether you’re a war supporter or a war resister. It should not matter whether you live in a red or blue state. Or whether you drive a Hummer or a hybrid.

Everyone should be outraged when corporate executives cash in on others’ suffering — particularly when the profits come from fraud, corruption or waste.

That’s how it was in the early 1940s, when Harry Truman, then a senator, crusaded against World War II profiteers. The commander in chief at the time was from his own political party, but Truman didn’t care. He understood that it was the right thing to do for the troops, taxpayers and democracy.

Truman’s efforts earned so much respect that President Franklin Delano Roosevelt rewarded him with the vice presidency, his stepping stone to the Oval Office.

Today, things are different. Despite public outrage over non-competitive contracting and evidence of widespread fraud and waste, Congress has done little to uphold its responsibility to oversee the massive funds it has authorized for the War on Terror.

Defense Department contracts have skyrocketed from $143 billion in 2000 to $269 billion in 2005. And that’s not even counting Iraq reconstruction contracts administered through the U.S. Agency for International Development.

Yet the current Congress has held only a handful of hearings on what companies have done with this money. By contrast, the Senate investigative committee set up by Truman held 432 hearings, with 1,798 witnesses.

Given the scant congressional oversight, taxpayers today have little reason to feel confident that funds are being spent effectively to protect our troops or to make the world safer. We do know that massive sums are going straight into the pockets of corporate executives.

A new study by the Institute for Policy Studies and United for a Fair Economy shows that since 9/11, CEOs of the leading military contractors have enjoyed a doubling of their annual compensation. The top 34 defense executives alone made a total of nearly a billion dollars in the past four years.

Those excessive personal gains create an incentive for powerful, often politically connected corporate leaders to want to continue the war in Iraq — or start new ones. And what message does it send to the troops to see military contractors getting fabulously rich from the comfort of their executive suites?

Unfortunately, petty partisanship has stood in the way of attempts to create a modern-day congressional watchdog on war contractors. Republicans have charged that these efforts are really aimed at embarrassing Vice President Dick Cheney, whose former firm, Halliburton, happens to be the biggest and most scandal-plagued Iraq contractor.

But Halliburton is not the only cause for concern. The special inspector general for Iraq reconstruction has identified billions in missing funds and uncovered outrageous bribery and fraud. But he must rely on Congress or the Justice Department to hold contractors accountable and doesn’t even deal with military contracts unrelated to reconstruction.

This inspector general cannot, for example, look into problems related to body armor. The military has recalled 23,000 bulletproof vests after ballistics experts claimed they contained life-threatening flaws. Two officials of the company that produced the vests, DHB Industries, were arrested recently for fraud. The CEO, after making more than $70 million in war windfalls, was forced to resign and is under criminal investigation. Despite all that, the military continues to award major contracts to the company.

By shining a spotlight on those and other problems, a high-profile congressional committee could provide a real service to the troops and the taxpayers and reinforce the message that times of war call for shared sacrifice, not personal gain.

Truman, in his speech calling for a special Senate committee on war contracts, said, “I have never yet found a contractor who, if not watched, would not leave the government holding the bag.”

Those words are as true today as they were in 1941.

Sarah Anderson is a fellow of the Institute for Policy Studies and a co-author of the report "Executive Excess 2006: Defense and Oil Executives Cash in on Conflict," published by IPS and United for a Fair Economy.