Last February, I caught the end of a hearing by a congressional appropriations subcommittee on defense in which (then) Secretary of the Army Francis Harvey and Army Chief of Staff Gen. Peter Schoomaker were being interviewed about army funding requests.
The most inquisitive and relevant question came from Rep. Marcy Kaptur [D-OH] who asked Sec. Harvey how many contractors were in Iraq, and what portion of the requested money that the Army was asking for would go to contractors. She qualified her question by asking about the salaries contractors receive, which she had been told were much higher than that of troops for doing the same job. Sec. Harvey was unable to answer for the record, but he gave this explanation as to why so many tax dollars were going to contracts:
“We only pay the contractor for who he has in theater and not who he has at home. You need three soldiers for every contractor…because of the way we manage the force… [soldiers] have one year deployed, two years at home station. It’s a savings in money because it’s not what you pay the contractor per se, it’s the number of soldiers that that contractor [replaces].”
Putting aside the fact that no one has ever had two years in between deployments during this war, his argument makes one point and one assumption: first, it’s cheaper to fight a war this way. Second: the money is well spent.
Money Well Spent
When the chairman of the subcommittee, Rep. Murtha [D-PA] said: “We need to get this thing [Iraq contracts] under control”, Sec. Harvey responded: “Let me just say those contracts are managed very closely with close financial controls, there’s task orders, there’s audits by the defense contract audit agency, audits by the army audit agency.”
At this point, there is universal acceptance that many Iraq contracts were mishandled and US taxpayers have been defrauded several billion dollars. This week, the NY Times reported that “A Pentagon audit of $8.2 billion in American taxpayer money spent by the United States Army on contractors in Iraq has found that almost none of the payments followed federal rules and that in some cases, contracts worth millions of dollars were paid for despite little or no record of what, if anything, was received.”
In some cases, only notes scribbled on pieces of paper were offered as receipt for mysterious services provided or monies dispensed- the lowest denomination being tens of millions of dollars.
Assuming the DoD was actually saving money on logistics contracts, were they getting equivalent or better quality than the military itself could provide? Not always. In March, the Pentagon Inspector General released a report stating that troops had gotten sick from using KBR-provided water on five US military sites in Iraq.
To place this vignette into perspective- in 2003 I did an exercise in the Okinawan jungle, and the engineers set up a purification unit on a nearby swamp to make drinking water. It was about 95 degrees outside and nearly 100% humidity every day. Some colonel walked by and started grilling the Marines on their procedures, explaining that if the water was no good, Marines would be getting really sick. The Marines were squared away and we had no such problems for the month in the field. On the other hand, I know a former Marine engineer who is now working for KBR, making water in Iraq just like we did in Japan that summer.
The takeaway: these three events make it impossible for me to draw causality between who’s making “good” or “bad” water, but I still choose to infer this: no military ownership of military logistics = not military logistics. Therefore, between massive fraud and lower control and quality, is there still a cost savings?
War is Cheaper this Way
In a warfighting military, there are certain things you should save money on and certain things you shouldn’t. Cheap toilet paper at bootcamp? That’s a yes. No vehicle armor? That’s a no. The DoD’s argument, as made by former Sec. Harvey above, is that it costs too much money to fight a war with actual soldiers.
I admit, I’m skeptical about his math. Even if every soldier got the two years home stay claimed above, let’s say the DoD pays one civilian $80,000- a modest estimate- to fix generators at Al Asad. If we assume that a generator mechanic in the military gets paid about $30,000 including the cost of his benefits- a generous estimate- then we could have hired at least another mechanic. Both of these salaries are tax-exempt.
After salary, we come to the main argument for contractors: that the services supplied to each soldier in the combat theater are expensive. Let’s break it down: today troops are living in air-conditioned prefab trailers, eating steak and crab legs on Sundays and drinking soda charged to the DoD at $40 a case. You know how previous generations of American soldiers used to live? In tents, eating rations, and drinking water made by other soldiers, which is ironically, exactly how I trained and lived throughout my time in the military, except when in Iraq. As it is, the cost of supporting these “extra” soldiers is so high only because of the services the contractors themselves are providing. Pizza is not combat service support.
As Mac discussed last week, and I have written about before, the real cost of fighting a war with hired guns and hired hands is not monetary. It’s the cost of losing a counterinsurgency because you’ve let mercenaries shoot at civilians without punishment and interrogators waterboard detainees. It’s the cost of losing demoralized soldiers who leave the service in the hopes of quintupling their salaries as contractors- who see no reason to fight for their country when they could do it for nearly $100,000 tax-free and on their own terms. It’s being known as the country that hires African mercenaries to guard its bases, Nepalese to pump toilets and sell flat screen TVs at the PX, and the country that tried to find a way to fight a war on the cheap, or worse, make it profitable for itself.
Cui Bono
Smedley Butler was one of America’s most heroic warriors. He was the only Marine officer to ever receive two Medals of Honor, and historians agree he should have received a third; at the end of his career he became an ardent pacifist. In 1939, as a retired general, he wrote War Is a Racket, a scathing indictment of the companies that make money off war:
War is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one in which the profits are reckoned in dollars and the losses in lives. For very few this racket…brings fancy profits, but the cost of operations is always transferred to the people- who do not profit. [Pgs. 23, 26]
There are hundreds of companies selling billions of dollars of material and services to the US government in "support" of this war from lithium flashlights to Burger King Whoppers. Make no mistake, this war is a boon for defense contractors, but only because the US government and its citizens allow it to be. Appropriately, Gen. Butler's family republished his book in 2003.
Further Reading & Viewing: Mac (Contractors part 1 of 3) Ben on Mercenaries on 2 Dinar Oct 07 NY Times AP Via Herald Tribune BBC Washington Post 2 Dinar on War Is a Racket C-SPAN Iraq For Sale