KBR’s Cayman Island Scam

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I recommend you read the whole article detailing KBR’s Cayman Island scam. A lot of people have linked to the lede, explaining how KBR created a shell company in Cayman Islands so it didn’t have to pay social security and unemployment benefits for workers hired through the shell company. But there are several details of note that appear further down in the story.

For example, KBR would like you to believe that it set up this shell company to help you, Mr. and Ms. American Taxpayer. It saves you money, it claims, by making these workers pay their own social security and go without unemployment insurance.

It’s bogus on its face. But deep in the article, an anonymous former KBR exec reveals that it’s actually using the shell company so it can compete against its rivals Fluor and Bechtel.

A former Halliburton executive who was in a senior position at the company in the early 1990s said construction companies that avoid taxes by setting up foreign subsidiaries have obvious advantages in bidding for military contracts.

Payroll taxes can be a significant cost, he said, speaking on the condition of anonymity. "If you are bidding against [rival construction firms] Fluor and Bechtel, it might give you a competitive advantage."

So you, Mr. and Ms. American Taxpayer, can pay one fee to Fluor for drivers in Iraq who will will have some safety net when they return to the US. Or you can pay a slightly smaller fee–not enough to make a difference on the cost of the war, but enough such that KBR can beat out Fluor on pricing–and have that same driver return from Iraq with no unemployment benefits.

And KBR nets the difference.

Read more →

A $40 Million “Comedic Gold” Pissing Contest with the Chinese

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Yesterday, Danger Room reported that the Administration’s rationale for shooting down the rogue spy satellite is laughingly bogus.

The Pentagon says it has to shoot down a malfunctioning spy satellite because of the threat of a toxic gas cloud. Space security experts are calling the rationale highly unlikely. "Having the US government spend millions of dollars to destroy a billion-dollar failure to save zero lives is comedic gold," one tells DANGER ROOM.

[snip]

So what could that other reason be?

Our veteran space security specialist believes there are several. To him, the satellite shot is a chance for the military to try out its missile defense capabilities; a way to keep secret material out of the wrong hands; and a warning to the Chinese, after they destroyed a satellite about a year ago. He shared some educated guesses:

My first thought is that MDA [Missile Defense Agency] is always looking for ways to pimp their systems and provide further justification that they work. The upcoming change in Administration is almost guaranteed to result in missile defense losing the top-level advocacy that it has enjoyed for the last several years. Any additional missions and justifications that the missile defense community can provide would increase the likelihood of their systems (and budgetary power) surviving.

An additional reason could be that destroying the satellite would prevent any chance of another nation getting access to any of the potentially sensitive technology on board. However, I have heard from other sources that supposedly the NRO [National Reconnaissance Office – the country’s spy satellite shop] is actually against the "shootdown" (and I hate that term – the satellite is not flying and is coming down regardless of whether or not it gets hit by a missile). Their absence at the press briefing could lend some weight to this rumor, although it could also be explained by the nature of the satellite and its still classified link to the NRO.

My real concern is that this is simply a knee-jerk reaction made by the Administration in response to the purported threat by the Chinese. Since the April 2007 ASAT [anti-satellite] test, there have been rumors and whispers going around that the Administration and like-minded individuals are looking for more sticks (instead of carrots) to use against China. Read more →

Condi Ignores Doubts on the 16 Words

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Given that Henry Waxman has been threatening to subpoena Condi to answer precisely the same question that Robert Wexler asked today yesterday, I would guess that Condi has practiced her answer. And, unfortunately, the ability to filibuster is one of Condi’s greatest skills–Condi frankly got the best of Wexler here (and sadly, Wexler didn’t ask her the doozy question–why she approved the 16 words in the SOTU after Tenet had warned her strongly against the Niger claim in October 2002).

If you look at this whole exchange, Condi gets away with defending her integrity in several ways:

  • By eliding the difference between consensus judgments and challenges to it (in other words, Condi successfully ducked Wexler’s question about burying those challenges)
  • By shifting from the decisions she made about intelligence to the decisions others did
  • By ignoring the whole question of leaks to the press (Scooter Libby testified that Condi was the chief leaker in the A1 Cut-Out strategy, for example, which suggests Condi repeatedly leaked insta-declassified information to people like Judy Miller so it would become the dominant story)

But I’m particularly interested in Condi’s successful efforts to still–almost five years after the Valerie Wilson leak–pawn the blame off on the CIA:

RICE: Congressman, I am sorry, I sat through the briefings for the Congress and for the Senate, done by the intelligence community. We were there to provide policy advice, but either George Tenet or John McLaughlin or others gave those briefings.

And, Congressman, the American people were told what their intelligence community as a whole believed to be the assessment concerning Iraq’s programs.

Condi suggests that if Congress and the American people got bad information, it’s George Tenet’s and John McLaughlin’s fault.

Which is why–in addition to asking Condi why she approved the 16 words in the SOTU–Wexler didn’t bring up this briefing:

On October 2, 2002, the Deputy DCI testified before the SSCI. Senator Jon Kyl asked the Deputy DCI whether he had read the British white paper and whether he disagreed with anything in the report. The Deputy DCI testified that "the one thing where I think they stretched a little bit beyond where we would stretch is on the points about Iraq seeking uranium from various African locations. We’ve looked at those reports and we don’t think they are very credible. Read more →

More Cable News

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We’ve been watching much of the Middle East lose chunks of their telecommunications traffic over the past week–without knowing what to make of it. I wanted to point to this post from John Robb, an expert on asymmetric warfare, with some meta thoughts on the possibilities of such disruptions.

  • Vulnerability. All of the same network vulnerabilities we see other infrastructures are in force with the Internet’s long haul systems (the network analysis of systempunkts applies). If this was a real attack rather than a series of accidents (the geographical concentration is interesting in this regard), then this was likely a capabilities test that yielded data on response times, impact, and duration.
  • Means. Attacks on undersea cables are within the capacity of small groups to accomplish. With precise mapping (these cables take very circuitous routes), a cable could be cut with as little as an anchor. However, nation-states are the most capable in this sphere (including, a growing number of micropowers). Why would a nation-state do this? Deterrence. Disconnection from the global communications grid is very likely become a form of economic/social coercion in the future (for standard national security reasons all the way down to an inability/unwillingness to crack down on rampant Internet crime, which is growing into a HUGE global problem).
  • Precision. It’s very hard to precisely target an attack’s damage. Regional impacts are unavoidable (collective punishment for everyone that connects to the target country?). Here’s a final point to consider: closed systems like China’s that route traffic through firewall choke-points, or other closely held infrastructure, are likely very vulnerable to an attack of this type. [my emphasis]

I’ve highlighted two points: this kind of attack could be feasibly launched by a small group. And the intent of such an attack might be political coercion. 

If you tie the notion of coercion to the two countries that lost the most service–Egypt and Pakistan–it has interesting implications. 

The Next Mujahadeen?

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Walter Pincus reads the 1513 page Defense Appropriations Bill, so you don’t have to. And he finds reason to worry about something that I was already worried about. For over a year, the US has been supporting Pakistan’s Frontier Corps, a paramilitary force in the tribal areas of Pakistan that does in those areas what Pakistan’s regular military cannot do.

The Frontier Corps is a federal paramilitary force stationed in the North-West Frontier Province (NWFP) and Balochistan Province, known as FC NWFP and FC Balochistan, respectively. Both forces are separate entities that operate under the Federal Interior Ministry and are each headed by an Inspector General (IG). Both of these offices are invariably held by army officers (major generals) on deputation from the Pakistani Army.

[snip]

The task of these forces is to help local law enforcement in the maintenance of law and order when called upon to do so. Border patrol and anti-smuggling operations are also delegated to the FC. Lately, these forces have been increasingly used in military operations against insurgents in Balochistan and militants in FATA.

[snip]

The United States has been supporting the Frontier Corps for the last few months with provisions of the latest communication equipment and bullet-proof helmets (Dawn, December 6, 2006; http://www.state.gov). Lately, it has made increased financial commitments toward the Corps capacity building, but without a mechanism to closely monitor implementation of the reforms, progress is not guaranteed.

Pincus confirms that there is a $75 million appropriation for goodies for the Frontier Corps in the Appropriation Bill. And he reports that one purpose of it is to get our Special Forces into the tribal areas.

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How to Establish an Empire without Congressional Approval

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Charlie Savage has a great article summarizing Bush’s threats to establish a security relationship with Iraq without consulting Congress.

President Bush’s plan to forge a long-term agreement with the Iraqi government that could commit the US military to defending Iraq’s security would be the first time such a sweeping mutual defense compact has been enacted without congressional approval, according to legal specialists.

After World War II, for example – when the United States gave security commitments to Japan, South Korea, the Philippines, Australia, New Zealand, and NATO members – Presidents Truman and Eisenhower designated the agreements as treaties requiring Senate ratification. In 1985, when President Ronald Reagan guaranteed that the US military would defend the Marshall Islands and Micronesia if they were attacked, the compacts were put to a vote by both chambers of Congress.

By contrast, Bush and Iraqi Prime Minister Nouri Al-Maliki have already agreed that a coming compact will include the United States providing "security assurances and commitments" to Iraq to deter any foreign invasion or internal terrorism by "outlaw groups." But a top White House official has also said that Bush does not intend to submit the deal to Congress.

Savage shifts the focus from whether Bush is trying to force the hand of his successor to the Constitutional questions behind such an act. And he finds that even wingnut Republicans oppose Bush’s threats to bypass Congress. Read more →

GAO to White House: We Hate to Say We Told You So, But We Told You So

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The NYT had a story yesterday reporting that the Iraqis just can’t seem to spend its reconstruction money as quickly as it’s supposed to be spending it.

Highly promising figures that the administration cited to demonstrate economic progress in Iraq last fall, when Congress was considering whether to continue financing the war, cannot be substantiated by official Iraqi budget records, the Government Accountability Office reported Tuesday.

The Iraqi government had been severely criticized for failing to spend billions of dollars of its oil revenues in 2006 to finance its own reconstruction, but last September the administration said Iraq had greatly accelerated such spending. By July 2007, the administration said, Iraq had spent some 24 percent of $10 billion set aside for reconstruction that year.

As Gen. David H. Petraeus, the top American commander in Iraq, and Ryan C. Crocker, the American ambassador to Iraq, prepared in September to report to Congress on the state of the war, the economic figures were a rare sign of progress within Iraq’s often dysfunctional government.

But in its report on Tuesday, the accountability office said official Iraqi Finance Ministry records showed that Iraq had spent only 4.4 percent of the reconstruction budget by August 2007. It also said that the rate of spending had substantially slowed from the previous year.

What the NYT doesn’t say, though, is that the GAO itself also reported on how much money Iraq had spent, in its report issued just before Petraeus’ dog and pony show. In fact, the benchmark of whether Iraq was spending its money as quickly it was supposed to was one of the ones on which the GAO and the Administration disagreed. Whereas the GAO declared that Iraq had "partially met" its goal to spend $10 billion on reconstruction, the Administration declared Iraq’s progress "satisfactory." So the GAO’s report is really the GAO providing evidence that its more pessimistic measures were correct.

It’s in that context–the knowledge that the Administration was trying to claim full credit for something the GAO had rather generously awarded a gentleman’s C–that you should read the rest of the article, describing how the Administration managed to invent rosy numbers to as declare the Iraq government was making progress.

Read more →

Off the Record on Filipino Monkey

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By now you’ve read the explanation of why the press, like PascalPavlov’s dogs, went nuclear with the story about Borat Filipino Monkey threatening our Navy. After contemplating the event for a day, the Pentagon decided to manufacture it into a press event. So they seeded the story using an off the record briefing.

The encounter between five small and apparently unarmed speedboats, each carrying a crew of two to four men, and the three U.S. warships occurred very early on Saturday Jan. 6, Washington time. But no information was released to the public about the incident for more than 24 hours, indicating that it was not viewed initially as being very urgent.

The reason for that absence of public information on the incident for more than a full day is that it was not that different from many others in the Gulf over more than a decade.

[snip]

With the reports from 5th Fleet commander Vice-Adm. Kevin Cosgriff in hand early that morning, top Pentagon officials had all day Sunday, Jan. 6, to discuss what to do about the encounter in the Strait of Hormuz. The result was a decision to play it up as a major incident.

[snip]

That decision in Washington was followed by a news release by the commander of the 5th Fleet on the incident at about 4:00 a.m. Washington time Jan. 7. It was the first time the 5th Fleet had ever issued a news release on an incident with small Iranian boats.

The release reported that the Iranian "small boats" had "maneuvered aggressively in close proximity of [sic] the Hopper [the lead ship of the three-ship convoy]." But it did not suggest that the Iranian boats had threatened the boats or that it had nearly resulted in firing on the Iranian boats.

On the contrary, the release made the U.S. warships handling of the incident sound almost routine.

[snip]

That press release was ignored by the news media, however, because later that Monday morning, the Pentagon provided correspondents with a very different account of the episode.

At 9 a.m., Barbara Starr of CNN reported that "military officials" had told her that the Iranian boats had not only carried out "threatening maneuvers", but had transmitted a message by radio that "I am coming at you" and "you will explode". She reported the dramatic news that the commander of one boat was "in the process of giving the order to shoot when they moved away".

CBS News broadcast a similar story, adding the detail that the Iranian boats "dropped boxes that could have been filled with explosives into the water". Other news outlets carried almost identical accounts of the incident.

The source of this spate of stories can now be identified as Bryan Whitman, the top Pentagon official in charge of media relations, who gave a press briefing for Pentagon correspondents that morning. Although Whitman did offer a few remarks on the record, most of the Whitman briefing was off the record, meaning that he could not be cited as the source.

The result, as we’ve tracked closely, was so pathetic that even Fox was embarrassed.

I just wanted to add one detail to this. We now know the Pentagon very deliberately seeded this story, but did so in a manner that couldn’t be traced back to them. Which is why I wanted to bring back this denial from the Pentagon. Read more →

Fox Discovers Filipino Monkey

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Think Progress watches Fox so I don’t have to–and so bmaz can have some fun.

Today, a week after his call for war with Iran, Brian Kilmeade was forced to concede that the verbal threats made against the U.S. ships are “a possible hoax from a man called the ‘Filipino Monkey.’” Kilmeade’s co-host Gretchen Carlson claimed that she knew it all along. “I remember sitting in my office thinking, you gotta be kidding me? That voice does not sound to me like an Iranian accent.” She didn’t say that on-air, however, prior to this morning.

Kilmeade’s other co-host, Steve Doocy, piped in with this comment:

DOOCY: But can you imagine, had we blown those little boats out of the water to find out, you know, that they didn’t have bombs and in fact it was the Filipino Monkey who was somewhere on shore pulling a prank?

[snip]

Carlson wrapped up the segment by stating, “Let’s hope it’s not the Filipino Monkey, for our sake. Because I think it’s a humongous embarrassment.” 

Um, Gretchen? The simple fact that neither you–nor the Navy, nor the goofballs in the Administration who tried to turn this into World War III–know whether this is Filipino Monkey or not makes it a humongous embarrassment.

Nice to know that the rest of the world is joining us DFHs laughing and crying that Fox and the Administration had this propaganda blow up in their face. 

Back to War Against Eastasia…

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It seems like just ten days ago that I was reporting that we weren’t at war with Eastasia the Pentagon had announced that Iran had stopped providing Iraq with EFPs (though click through to read the Shachtman update). But ten days is a long time when you’re already two weeks into "Legacy Year," and so it’s time to announce that we are, once again, at war with Eastasia.

Attacks against U.S. troops in Iraq with bombs believed linked to Iran — known as explosively formed penetrators (EFPs) — have risen sharply in January after several months of decline, according to the top U.S. commander in Iraq.

Iraqi and U.S. officials indicated just a month ago that Iran was using its influence to improve security in Iraq by restraining cross-border weapons flow and militia activity. The U.S. military had said in recent months that the number of EFP attacks had gone down.

Gen. David Petraeus disclosed the reversal to reporters after a meeting with President Bush who was visiting troops in Kuwait.

"In this year, EFPs have gone up, actually, over the last 10 days by a factor of two or three, and frankly we’re trying to determine why that might be," Petraeus said. [my emphasis]

Two things to note in this story. First, General Petraeus can count as well as I can: ten days. I wonder if Petraeus is at all embarrassed by his sudden reversal?  Particularly when you look at the timing: General Petraeus makes this announcement directly after meeting with George Bush, just after Bush has visited Israel, and not before. You think maybe Bush ordered Petraeus to ratchet up the propaganda?

Because, after all, there’s no other sign they’re ratcheting up the propaganda. Hammered copper ashtrays and Filipino Monkey, that’s what this great country has  stooped to.