Hearing of the Democratic Policy Committee - Contracting Abuses in Iraq

Statement

Hearing of the Democratic Policy Committee - Contracting Abuses in Iraq

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SEN. SHELDON WHITEHOUSE (D-RI): Thank you, Chairman.

I'd like to thank the witnesses for being here with us today and I would like to thank Chairman Dorgan for having called this hearing. I have on many occasions had the occasion to hear him speak about this issue with the passion and the outrage that it deserves. Most recently -- just last week, I was presiding when Senator Dorgan came to try to, once again, bring the attention of the country to the appalling waste and abuse that we are seeing. I join with Senator Klobuchar in dismay that the Commission on Wartime Contracting, which we passed -- it was sort of a freshman class project to a certain degree, with Senator McCaskill coordinating our efforts. And it was passed into law and the president has simply refused to establish it by virtue of appending a signing statement, which is a highly constitutionally suspect way to dodge the requirements of the law, but just another way that the Bush administration is seeking to avoid any accountability for this extraordinary extravagance -- this carnival of waste and fraud.

And my particular interest as a former United States Attorney is the enforcement of the federal False Claims Act, which is quite a powerful vehicle. It's a civil proceeding only, but it allows the government to recover tribble damages. It's a very strong provision of law and goes back to the days when companies were selling shoddy blankets and muskets to Civil War soldiers -- the military back then -- and it has a long and distinguished history. And so I asked my staff to look into it and although several False Claims Act cases related to work in Iraq are pending, none -- none -- has resulted in a contractor having to pay money back to the United States.

The cases that have been brought have been brought by, effectively, whistleblowers. They're called qui tam actions. The government has the authority to step in and look at those and take them over. The government has done so with none. Now they're supposed to make that decision within 60 days. They don't bother to do so. And -- you know, at this point, it's a very powerful tool that the administration seems to be deliberately refusing to pick up. And it's hard not to be concerned that when you see this kind of waste going on -- when you see tools that are so valuable to protect the taxpayer not being used and when you see this incredible contractor array that's been sent over there, and the political overlay between this administration and those contractors, it's hard not to suspect that people are begin given a free pass because of their political loyalties to the administration, notwithstanding the multibillion- dollar cost to taxpayers of this exercise.

So once again, I really salute Senator Dorgan for holding this hearing and I thank the witnesses.

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SEN. WHITEHOUSE: I thank the chairman.

I wanted to follow up on exactly this point that astonishes me, as somebody who's spent a good part of his career in law enforcement, where rights are so scrupulously protected, to hear these stories about American citizens. Both of you are American citizens, Mr. Cassaday, Mr. Halley, correct? I mean, you've served your country with distinction.

And in your case, Mr. Cassaday, you say you were placed in a jail tent by KBR security. What did KBR security look like? They weren't uniformed military, were they?

MR. CASSADAY: No, sir. KBR has its own security force. They're not armed. They don't have mace or anything. They just have flashlights and they go around checking on the people, and they just try to do whatever it was necessary to escort people around. And in my case, we were put into the jail tent that was on KBR compound in Fallujah.

SEN. WHITEHOUSE: What do you mean by jail tent?

MR. CASSADAY: They had a tent that was set up for anybody that was caught fighting or anybody that was being escorted out of the camp and down to al Asad to be flown out of the country.

They had a tent that just had different racks inside to sleep in. And the security would usually sleep outside or in their car or sometimes they'd come in a sleep in a bunk too.

SEN. WHITEHOUSE: Were you under guard when you were in this jail tent?

MR. CASSADAY: Yes, we were under guard.

SEN. WHITEHOUSE: Were the guards armed when you were in the jail tent.

MR. CASSADAY: No they weren't armed. KBR doesn't have any arms. They're not allowed to have any weapons.

SEN. WHITEHOUSE: Placed in protective custody for four days. What was that that all about?

MR. CASSADAY: When we were brought in to the camp manager's office, and everybody was asked if they had anything to do with stealing ammunition and the explosives in the refrigerators, they declined to comment on it. And they asked -- the camp manager asked me if I wanted to comment on it and I said, "Yes, I did." And the camp manager already knew that I was the one that turned them in. So he had me go to the next room to sign a statement.

SEN. WHITEHOUSE: But when you were -- I mean, when you were placed in protective custody, what did that entail? What did they do to you?

MR CASSADAY: Well, after I was taken to the next room, the camp manager told the four men that I was the one that turned them in, and he then told one of the security men, "Take Mr. Cassaday to the spot that we arranged to take him to." And so that -- I was taken to what we call a hooch, it was a living quarters, a small trailer, and I was placed inside. It has a bed and it has a lavatory in there. And I spent for days in there. I was served two meals a day, and I was not allowed to come out of it. And they said it was for my own good to keep these guys from getting at me.

SEN. WHITEHOUSE: And Mr. Halley, you had a similar experience, although in your case, the guard outside your door was armed, I understand it. Four armed security personnel came into your room and told you that you were under guard, and then you -- what did they do with you at that point?

MR. HALLEY: They kept me inside the compound until Monday morning.

SEN. WHITEHOUSE: Under armed guard?

MR. HALLEY: Yes sir.

SEN. WHITEHOUSE: Do either of you have any idea under what authority a corporation holds an American citizen captive -- in one case, at gunpoint? Was this written into your contract that they had the authority to do this? What -- why is this not kidnapping?

MR. CASSADAY: Well, that's kind of what I'm thinking of too. They actually told us that if we did something wrong, that we would be escorted out of the country. But they never told us that we would be punished for telling the truth. What they did in all of our cases in Houston at the training camp that I was at for two weeks before we went over to Iraq, they told us that our door is always open. If you have a problem, just come on in. But what they don't tell you is there's a back door to that office. If you come in and you complain about something, you're going to be going out that back door. You're going to be transferred someplace you don't want to be or you're going to be fired. And --

SEN. WHITEHOUSE: Was that pretty well understood among contractor personnel? That is was a very good idea to keep your mouth shut and not let on to what was going on all around you?

MR. CASSADAY: Yes it was, even though they told us that, "If you see something illegal going on and you don't report it, you're just as guilty as that other person is and you'll be fired too." As an example, if somebody get into a fight -- if somebody would come up to somebody and start a fight and punch somebody out, if you defend yourself, you're fired too. And if you don't defend yourself, you're still going to be fired because you were involved in the fight. That the way KBR kind of looks at it.

SEN. WHITEHOUSE: I know nobody's going to be able to give me an authoritative number, but in the few seconds I have left, if each of you could just give me your estimate, based on your own personal experience, not trying to make a conclusion for the whole operation over there. But based on your own personal experience, what proportion of what you saw being spent over there would you saw was legitimate and properly billed for, and what proportion and a percentage would you say as fraud, abuse -- what's our sort of target here? How bad is it over there? Give me a rough number based on your own experience.

MR. CASSADAY: Well, I really have no figured to go on, Senator. But I -- just from what I'm seeing and for what every man -- that I experienced, what I'd say there's at least 40 percent fraud, at least that.

SEN. WHITEHOUSE: Ms. Warren?

MS. WARREN: I'd say 80 percent fraud.

SEN. WHITEHOUSE: Eighty --

MS. WARREN: I did hold positions for MWR and at Camp Victory for the manager. I say 80 percent was fraud.

SEN. WHITEHOUSE: Mr. Halley?

MR. HALLEY: While I don't have an exact figure, my estimate would be -- it would be at least 30 (percent) to 40 percent in the area of fraud in fraudulent billing.

SEN. WHITEHOUSE: Thank you, Chairman.

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SEN. WHITEHOUSE: I think -- if I might add, Mr. Chairman, I think it is worth mentioning that what the public heard watching this proceeding is just a small portion of the written testimony that is now part of the record, in order to enable us to have this discussion. But the full written statements are very powerful, and I hope people who are interested and have the chance to review the full written statements in addition to what you said, which was powerful enough. But I appreciate that and I wanted to make sure that that was clear.

And Chairman, thank you for doing --

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