International Forecaster Weekly

Uprecendented No-bid contracts

A corrupt president, have we concluded, lawsuits sealed, jurisprudence destroyed elsewhere, Halliburton covers its tracks, did you know that costs of private contractors to the military has risen 90% since 2000? its a long nightmare of jacked-up bids, waste, kickbacks and inflated subcontracts, more on bank bailouts, big declines in CDOs.

Bob Chapman | October 24, 2007

After considerable study we have concluded that the George W. Bush administration is the most corrupt of any American administration in history.

There awarding of no-bid contracts is unprecedented. They do not even bother with a pretense of legality or fairness. The massive fraud committed by KBR, which was spun off by Halliburton, is probably one of the biggest in American history. Dozens of ex-employees are suing and our Justice Department continues to protect this criminal enterprise. In fact, professionals call what KBR has done as the crime of the century. Once George and the neocons are out of office the suits will hit and the investigations will begin, and the scandal will go on for years forever destroying the legacy of George W. Bush and his crime family.

Documented stories regarding food vans being used as mortuaries and trucks breaking down for lack of spares that were burned rather than fixed, and officers looking the other way are legion. No one seemed to care what KBR was up too.

While these kinds of events were transpiring Halliburton’s stock went from $10 to $40 a share. In 2006 KBR’s CEO collected $30 million in compensation.

Lawsuits have been filed regarding these and other events and have been put under permanent seal by the Justice Department. This is a sweeping gag order, preventing anyone from discussing the case in any way. There are now dozens of suits and millions of dollars have been spent filing these suits - some 79 with multiple plaintiffs.

After 9/11 and the declaration of terrorism and the faux war on terrorism that followed, the Bush administration declarations spawned in its wake the greatest frauds ever in America’s history.

What the Bush Department of Justice has done is extend the seal 6 to 12 months while it carries investigations, which is a ruse. Many of these cases have gone back to court time and again. Justice has successfully asked complaint judges for extension after extension and received them. Thus, suits filed in 2003, remain sealed as judges collude with our Justice Department. This is why we have said over and over that America no longer has a jurisprudence system. It reminds us of Germany in 1938. Our judiciary is a disgrace. This is uniform practice that goes across an entire class of cases, which is something that hasn’t happened before and provides dictatorial government. These corruption cases are being buried indefinitely.

In fiscal 2006 the DOJ won damages in 95 separate cases recovering over $3 billion, yet not one dollar came from contracting firms in Iraq. In four years, the total false Claims Act damages from Iraq are just $14 million, the result of four cases that were settled out of court. Only nine other cases have been unsealed. Four of those suits collapsed because of the staggering cost to comply. The government has an endless supply of funds, your funds.

We can promise you this is the work of George and the neocons, covering up for their friends and to hide the staggering contractual costs that have risen 90% since 2000 to $460 billion this year. A virtual gravy train with $297 billion in 2006 alone going to private contractors.

The shift to private contractors was supposed to save the taxpayer money, but it has done nothing of the sort. From 12/01 to 8/07, KBR has received $25 billion in contracts from the D.O.D. and those contracts continue at $400 million a month. Virtually everything is outsourced except fighting. Thus, you have 220,000 military and mercenaries and 220,000 contractors.

All the lawsuits defended by Halliburton have been done so by Vinson & Elkins, a firm close to Dick Cheney and Alberto Gonzales, who recently was forced to resign as head of the DOJ. Halliburton and V&E financed Gonzales’ career.

The DOJ refuses to discuss the cases as they are under seal. This is to obscure the true picture of massive fraud by KBR and others in Iraq and their deep connections to the administration. With this kind of corruption is it any wonder why the war and occupation has gone so badly? The main war beneficiary has been Halliburton. A long nightmare of jacked-up bids, waste, kickbacks and inflated subcontracts means 50% of every contract is done fraudulently. After four years of war all contractors have picked up $100 billion. The contracts are often no bid and most are cost plus, so the more money spent the more profits for the contractors. Since Dick Cheney was connected with Halliburton it has been corrupted and that goes back 15 years.

In 1997, Halliburton lost its Kosovo contract to DynCorp, but still retained its contract as DynCorp fumed on the sidelines. Halliburton collected another $2.2 billion in that rip off. In Bosnia and Kosovo it was found that at least half the crews were composed of 40% of staff doing nothing.

What has happened in government contracting under George and the neocons is that there has been a systematic dismantling of the protection that kept the system honest. In 15 years the staff for managing and auditing Pentagon contracts was cut 50%. There is little oversight. Any military or contractor who complained about the contractor scams was fired, even if at the top of the government food chain. These firms had a license to steal from George Bush and Dick Cheney and no one was going to disrupt their thievery.

In further comments regarding the major bank bailouts, another aspect we failed to mention is if there can be a Fed financed super fund into which they can dump their toxic waste so they won’t have to take their massive losses in mortgage-backed securities. The Treasury is directly involved in this scam that might not involve the Fed. This garbage might be sold to a gullible public. We can hardly believe this. Investors have to be warned not to participate in this scam. These banks are holding hundred of billions of dollar in MBSs, which are worth $0.25 on the dollar. There are no buyers, so they cannot sell them. They have to live with them, or they can dump them either on the Fed or the public via the 'Master Liquidity Enhancement Conduit' or M-LEC. This concept allows the banks to take their toxic waste off the books and put it in an account until some time in the future when someone might want to buy this toxic garbage. This is a game of 3-card Monte and it is very thinly disguised. As they say desperate people do desperate things and the situation is desperate when the Secretary of the Treasury has to get involved to lend validity to the scam.

Again the SEC is nowhere to be found. They should be instructing these banks to immediately come clean and state the true picture of their losses. That never happens, because the SEC is an appendage of Illuminist Wall Street.

Just to show you how popular CDOs are, only about $10 billion have come to market since July, a 95% decline ytd. The entire financial system is in serious trouble and whether you know it or not, this will continue over the next few years until the system collapses. That is why you are heavy in gold and silver related assets. These banks and others are lying. They are buried in bad debt and they are trying to hide how bad the situation really is. We see little transparency and only a disaster waiting to happen. We have an opaque system. We might add that if foreigners think they can prosper by decupling from our market and economy they are sadly mistaken. They are joined at the hip and there can be no separation.

In a democracy government is supposed to protect the people. Our government does not. We are no longer a Republic or a Democracy, but a corporatist fascist state. Thus, government protects corporations, banks, hedge funds, Wall Street and itself. The idea is to perpetually shift wealth from the workers to the idle rich.

If these crooks are not successful in their bailout the banks will be merged. Their losses on MBS, CDOs and ABS could go as high as $1 trillion. That needless to say would cause a stock market collapse.

This horrible situation is the result of not allowing a recession in 2001 and purging the system. The Fed and the banks tried to paper the situation over with a housing bubble. Now the situation is far worse. As you can see Andrew Jackson was right, they are vipers. These banks have not reported 95% of their losses. This is Enron all over again. In time the world will see that “structured finance” was just another Ponzi scheme.

Unfortunately this is only the beginning. ARMs are not being reset and the worst is yet to come. There is no question in our minds that 3 to 4 years from now we’ll be in a worse position than we were in the 1930s. These derivatives are weapons of mass destruction. We are looking fraud straight in the eye and calling it exactly what it is – fraud. The financial cascade has begun.

George and the neocons have asked a federal court to dismiss a lawsuit against Boeing that charges the firm helped fly suspects to secret prisons. The excuse again is the disclosure of classified information concerning the alleged intelligence activities and methods of the CIA. There refuse to be accountable for anything. It is alleged Jeppesen falsified flight and logistical support to at least 15 aircraft on 70 “extraordinary rendition” flights. The ACLU filed in behalf of 5 victims.