HOW CORRUPT IS THE US?

By Lotta Suter

[This article published in the Swiss weekly WoZ Die Wochenzeitung, 6/5/2008 is translated from the German on the World Wide Web, www.woz.ch/artikel/print_16441.html. In connection with the presidency of George Bush and the war in Iraq, corruption has become a cancerous disease of US-American society. The following is a preprint from Lotta Suter’s new book “No Peace Anymore. The US in the state of war.]

Some mainstream journalists in the US celebrated the end of the inglorious Enron/Tyco/WorldCom era when the two Enron chiefs Kenneth Lay and Jeffrey Skilling were sentenced to long prison terms in May 2006 after their corrupt firm collapsed. They hoped the fraudulent excesses of the 1990’s deregulation would be overcome with the imprisonment of a half-dozen prominent corporate executives.

On this occasion, media people point to the abrupt retirement of the lobbyist Jack Abramoff who went on trial in March 2006 for bribing politicians. A dozen of his henchmen, assistants and beneficiaries in the White House and Congress were sentenced in the same purging for unlawful enrichment. Corruption in America was under control, it was said. A new social ethic was just around the corner.

However no end or even weakening of the lies and deception is in sight. Corruption still dominates the rescuing actions and reconstruction after Hurricane Katrina today. For years the US Emergency Management Authority FEMA confined hundreds of people made homeless in the 2005 storm to their state emergency trailers contaminated with formaldehyde. Corruption grows rampantly in the real estate market and in the US consumer credit industry. For example, corruption characterizes the relation of many US universities to the financial institutions offering loans to students. The high tuitions (around $40,000 a year) are a good business for the education credit industry that they want to safeguard with generous “gifts” to the universities. Corruption scandals incriminate US baseball and US letters or poetry and fiction.

360 TONS OF DOLLARS TO BAGHDAD

In the politics of the nation, the corruption scandals have long reached the center of power. The sudden resignations of important members of government in George Bush’s second term are signs of this. In September 2007 Attorney General Alberto Gonzales resigned. He left his office under the reproach of repeated abuse of authority: dismissal of politically-refractory public prosecutors, perjury before a House committee, and collaboration in the notorious torture memo annulling the Geneva Convention and sanctioning electronic eavesdropping on the population.

Then there is the corruption in Iraq that numerically is hard to believe. Around $500 billion flowed into Iraq for the occupation and $44 billion for reconstruction in the first four-and-a-half years. More than half of the money went to private contractors. At least one of sic “reconstruction dollars” was devoured by corruption. That is all that can be said with certainty.

Isolated information comes to light here and there. Who doesn’t remember the 360 tons of cash flown into Baghdad right after the invasion for the US regent in Iraq, Paul Bremen. Of the $12 billion to pay for all kinds of services, $8.8 billion disappeared in unknown pockets. In July 2007, no one knew what happened with around 190,000 weapons intended for the Iraqi security forces. A third of the rifles delivered to Iraq by the US were “lost” in the combat zone. In November 2007, the US Secretary of State admitted that $1.2 billion paid to the private security firm DynCorp International for training the Iraqi police could not be accounted. “Bills were paid but no one knew why they were paid and what the return favor was,” said Glenn Furbish, employee of the oversight monitoring board for Iraqi reconstruction temporarily established by the US Congress in October 2004, StGR (Special Inspector General for Iraqi Reconstruction).

Furious eyewitnesses, frustrated members of the army, private soldiers and a handful of brave journalists prove the corruption of the occupying power in Iraq with further examples. Simple accounting tricks were common. KBR – former subsidiary of Halliburton and master of frauds among many – gained double profits in supplying mineral water to members of the army, padded bills for fuel 600 percent and charging $110 million for services at military bases that were closed long ago. Often the KBR team simply did nothing. The inaction of the contractor often cost the army more than the service itself. In one case, KBR calculated $50.7 million in “indirect” costs and $13.4 million for the actual job.

“The conditions in Iraq favor fraud, waste and abuse,” the independent US Government Accountability Office declared to Congress in April 2007. This group of experts already provided Congress with over a hundred reports on the theme war and reconstruction. They are all documents that describe chaos in a dry accounting language. In relation to the private mercenary troops, the GAO summarizes: the Department of Defense does not know how many contractors are working in Iraq for the US. No one knows why these men are employed and what their elation is to the regular armed forces. There are no obligatory guidelines of conduct for these private employees, no performance tests and no personnel for monitoring functions. In other words, fraud, waste and misuse are encouraged through the total deregulation, the opportunity that makes thieves.

Obviously nothing has essentially changed in this situation. At the end of June 2007, the monitoring authority SIGIR published a scathing report on the KBR firm that is a powerful partner of the US army with its $22.5 billion contracts. KBR obviously deceived its state patron in supplying the US embassy in the Green Zone of Baghdad with gas, food, lodging and recreation facilities. Only five days after the disclosure of this corruption case, the Pentagon rewarded its important supplier with another lucrative business contract.

IS CORRUPTION ONLY THE PROBLEM OF OTHERS?

Every war favors corruption, one can argue. The war with Iraq engineered with lies by the US government has never been anything but fraud, waste and misuse of human life and material. Do you think every war profiteer has a truthful accounts department? What difference does it make to the civilian population expelled from their homes and quarters that the occupation army trips over its own personnel? If a million civilians were violently killed within a few years in Iraq and if cholera breaks out in the country, then other problems arise than the clean execution of the dirty war business.

In the war-making US itself, the theme corruption in Iraq is not in the center of the political discussion. The theme is important for America because the massive corruption in Iraq is not an unfortunate exception. It also is not simple, as the US media increasingly shows, to project the problem on others as the result of the unstable unreliable puppet government in Baghdad. The government resides in the same fenced-in security zone as the US embassy. The US diplomats must know the corruption of their Green Zone neighbor is so massive it makes the country dysfunctional.

SYSTEMATIC DISMANTLING

In October 2007, the top Iraqi corruption fighter judge Radhi al-Radith told a monitoring committee of the US Congress the al-Maliki government has fulfilled two to five percent of its reconstruction obligation. The rest is waste and fraud. His US colleague, the head of the anti-corruption agency Stuart Bower repeated that criticism: the corruption of the Iraqi government is “a second uprising.” As a confirmation of his statement in the US, al-Rhadi two days later was himself put under suspicion of corruption by the Iraqi prime minister. In the US, the State Department restrains the congressional monitoring committee. Condoleezza Rice declared all information on corruption in Iraq was subject to the secrecy duty since that information could endanger American-Iraqi relations.

This lax attitude of the US toward corruption did not begin as an opportunist political gesture toward vassals under suspicion of corruption. A systematic dismantling of Iraqi institutions and laws by the US preceded this. By means of privatization of state assets and abrupt liberalization of trade, capital flows and price formation, the occupying power tried to restructure the Iraqi economy and simultaneously assure a profitable advantage in the most important industries.

“The chances for building a stable democracy and a constitutional state are terrible in most shock therapy countries,” the economist Joseph Stiglitz wrote in the spring of 2004. “The balance in the former Soviet Union shows one should reflect twice before reaching for the means of shock therapy. But the Bush administration presses Iraq to an even more radical reform variant. Shock therapy proponents argue the past failure of shock failure is evidence of deficiency in shock, not of excessive speed – too much shock, too little therapy. Thus the Iraqis should prepare for an even more brutal dose of the same “medicine.”

Thus the corruption in Iraq is a continuation of neoliberal economic policy. It makes use of the same radical remedy already applied by Enron and similar aggressive firms in the name of the New Economy.