As Peter Lorre once said to Vincent Price in one of their famous Roger Corman collaborations, “Is there no end to your horrors?”
I’d ask that of the executives of Kellogg Brown & Root, but hey, that’s supposed to be the US government’s job. But apparently there is nothing this former Halliburton subsidiary can do that would shake their (dare I say blood) covenant — worth billions and billions at this point — forged back when Dick Cheney was Secretary of Defense during the first Bush era.
The Boston Globe reported last month that KBR has eluded payment of some $100 million in federal Medicare and Social Security taxes – because it hired some 21,000 of its employees, most of them American, through its Cayman Island tax shelter.
The Department of Defense apparently knew all about it, too:
From the Globe:
The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.
But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. And the creation of shell companies in places such as the Cayman Islands to avoid taxes has long been attacked by members of Congress.
Now, we have had mounting evidence throughout this war that Halliburton/KBR has conspired to rip the US government off — mainly through overcharging on things like fuel and food and equipment for our troops, providing unclean water at the forward operating bases and other examples of honorable corporate behavior ( check out Betraying Our Troops: The Destructive Results of Privatizing War for a practical compedium) – yet since the first Bush era, it remains the largest and most influential war vendor on the planet and on the government payroll. In good standing. In fact, the administration has become increasingly reliant on KBR to augment much of the support, reconstruction and private security roles that have been privatized during this war. Its been argued effectively that we need it as much as it needs us.
So it shouldn’t have been a surprise that KBR was selected one of three contractors for the new massive, $150 billion LOGCAP IV contract last month, allowing it to stay in the war business for at least another decade.
Sens. John Kerry and Barack Obama are pushing for an investigation into the KBR/Cayman Island loophole scheme, but the usefulness of this is doubtful. As Kara pointed out weeks ago, our elected officials have so much to gain by keeping companies like KBR on the dole and accountability is such an afterthought that I’m not sure why there is even an IG’s office for Iraq Reconstruction other than to set taxpayers like me on “boil” everytime a new report comes out.