Senate pushes ahead with offshore outsourcing legislation

But the effort has drawn fire from the Information Technology Association of America

Source: ComputerWorld, An IDG Company
News Story by Grant Gross
March 05, 2004

The U.S. Senate voted to approve an amendment restricting federal tax dollars from being used on jobs going overseas, a day after a U.S. representative introduced a bill prohibiting federal grants and loans from going to some companies that send jobs out of the country.

The Senate, by a vote of 70-26, voted to approve an amendment from Sen. Chris Dodd (D-Conn.) that would prohibit taxpayer dollars from being used to outsource or take offshore work formerly done in the U.S. The amendment, added to a bill to restructure corporate taxes, would prohibit outsourcing in three areas of government contracting: privatizing of federal work, federal procurement of goods and services, and state government procurement using federal funds.

"American workers are hurting," Dodd said in a statement. "Our nation's chief export shouldn't be jobs for foreign workers. Thankfully this measure says enough is enough. Taxpayers' hard-earned money shouldn't be used to bankroll the loss of taxpayers' jobs to overseas workers."

The Information Technology Association of America (ITAA), which has opposed limits on offshore outsourcing, criticized Dodd's amendment and a bill introduced by Rep. Bernie Sanders (Ind.-Vt.). Sanders' bill, introduced Wednesday (see story), would bar companies from receiving federal grants, loans and loan guarantees if they lay off a greater percentage of workers in the U.S. than they lay off in other countries.

It's unclear how many U.S. companies could potentially be affected by Sanders' bill, which had the support of 50 co-sponsors when it was introduced. Sanders' office didn't return repeated phone calls for comment.

The Sanders bill takes a "very mistaken" approach, said Bob Cohen, senior vice president of the ITAA. "We entirely disagree with its general direction and its specific language. There's nothing about it we would agree with."

The ITAA and other opponents of restrictions on outsourcing argue that the U.S. economy benefits more from free trade than from attempts to save U.S. worker jobs through limits on outsourcing. The U.S. exports more IT-related products and services than it imports, the ITAA argues, and restrictions on offshore outsourcing could prompt a trade war in which nations cut back on U.S. tech imports.

The Dodd amendment could lead to other countries refusing to allow U.S. IT companies to do government work, the ITAA said. The amendment could also result in higher prices being paid on some U.S. government contracts, with the option of sending work overseas eliminated, said ITAA President Harris Miller.

"The U.S. IT software and services industry has a multibillion-dollar surplus with the rest of the world, in large part because governments around the world buy products from U.S. IT companies," Miller said in a statement. "That means we create more jobs selling to them than they create by selling to us. Trying to protect unclassified government business from overseas competition is a step that is sure to backfire, shrinking markets and harming workers."

Dodd said the U.S. needs to stop job loss. The U.S. has lost 2.7 million manufacturing jobs since 2001, he said.

Sanders, in a statement, also defended his legislation. "In my view, it is an insult to the middle class of this country, that American taxpayer dollars are being used to provide loans, loan guarantees, grants, tax breaks and subsidies to huge and profitable corporations who then say to the American people: 'Thanks for the welfare, chumps. But we're closing your plant and taking your job to China,'" he said.

Where Are The Jobs?

Source: Businessweek
By Bruce Nussbaum
March 22, 2004

Economic growth is very strong, but America isn't generating enough jobs. Many blame outsourcing. The truth is a lot more complicated

Americans live in a faith-based economy. We believe deeply in education, innovation, risk-taking, and plain hard work as the way to a better life. But that faith is being eroded. The link between strong growth and job creation appears to be broken, and we don't know what's wrong with it. Profits are soaring, yet no one is hiring. Angry voices are blaming Benedict Arnold CEOs who send jobs to India and China. If highly educated "knowledge" workers in Silicon Valley are losing their jobs, who is really safe?

The truth is that we are living through a moment of maximum uncertainty. The economy is at an inflection point as new forces act upon it. Yet the shape and impact of these forces remains unknown. Outsourcing looms large as a potential threat because no one knows how many jobs and which industries are vulnerable. And productivity seems problematic because it's hard to see where the rewards for all the cost-cutting and hard work are going. Meanwhile, the Next Big Thing that is supposed to propel the economy and job growth forward after the Internet boom isn't obvious. As a result, CEOs are reluctant to place big bets on the future. Workers hunker down. And those laid off are at a loss trying to retrain. How can they, when they don't know where the new jobs will be and who will be hiring? It's not even clear what college students should major in anymore. No wonder this feels like a new age of uncertainty.

THE REAL CULPRIT. Yet there are things we do know. The real culprit in this jobless recovery is productivity, not offshoring. Unlike most previous business cycles, productivity has continued to grow at a fast pace right through the downturn and into recovery. One percentage point of productivity growth can eliminate up to 1.3 million jobs a year. With productivity growing at an annual rate of 3% to 3 1/2% rather than the expected 2% to 2 1/2%, the reason for the jobs shortfall becomes clear: Companies are using information technology to cut costs -- and that means less labor is needed. Of the 2.7 million jobs lost over the past three years, only 300,000 have been from outsourcing, according to Forrester Research Inc. People rightly fear that jobs in high tech and services will disappear just as manufacturing jobs did. Perhaps so. But odds are it will be productivity rather than outsourcing that does them in.

We know also where the benefits of rising productivity are going: higher profits, lower inflation, rising stocks, and, ultimately, loftier prices for houses. In short, productivity is generating wealth, not employment. Corporate profits as a share of national income are at an all-time high. So is net worth for many individuals. Consumer net worth hit a new peak, at $45 trillion -- up 75% since 1995 -- and consumers have more than recouped their losses from the bust.

We know, too, that outsourcing isn't altogether a bad thing. In the '90s, high-tech companies farmed out the manufacture of memory chips, computers, and telecom equipment to Asia. This lowered the cost of tech gear, raising demand and spreading the IT revolution. The same will probably happen with software. Outsourcing will cut prices and make the next generation of IT cheaper and more available. This will generate greater productivity and growth. In fact, as venture capitalists increasingly insist that all IT startups have an offshore component, the cost of innovation should fall sharply, perhaps by half.

We know something about the kinds of jobs that could migrate to Asia and those that will stay home. In the '90s, the making of customized chips and gear that required close contact with clients remained in the U.S., while production of commodity products was outsourced. Today, the Internet and cheaper telecom permit routine service work to be done in Bangalore. But specialized jobs that require close contact with clients, plus an understanding of U.S. culture, will likely remain.

America has been at economic inflection points many times in the past. These periods of high job anxiety were eventually followed by years of surging job creation. The faith Americans have in innovation, risk-taking, education, and hard work has been sustained again and again by strong economic performance.

There's no question that today's jobless recovery is causing many people real pain. The number of discouraged workers leaving the workforce is unprecedented. Labor-force participation is down among precisely the most vulnerable parts of the workforce -- younger and nonwhite workers. Some are going back to school, but many are simply giving up after fruitless searches for decent jobs. If the participation rate were at its March, 2001, level, there would be 2.7 million more workers in the labor force looking for jobs. This would push the unemployment rate up to 7.4%, not the current 5.6%.

History has shown time and again that jobs follow growth, but not necessarily in a simple, linear fashion. America has a dynamic, fast-changing economy that embodies Joseph A. Schumpeter's ideal of creative destruction. We are now experiencing the maximum pain from the wreckage of outmoded jobs while still awaiting the innovations that will generate the work of the future. While America's faith in its innovation economy has often been tested, it has never been betrayed. Given the chance, the economy will deliver the jobs and prosperity that it has in the past.

One Giant Global Labor Pool?

Source: Businessweek
By Aaron Bernstein
March 22, 2004

Below the boiling political rhetoric, a real threat America's workers face is the potential for U.S. wages to sink to overseas levels

Americans have become increasingly worried over the past year about the lack of job growth in an otherwise strong economy, amid fears that the "offshoring" of white-collar work is a key culprit. This has helped make jobs -- those sent overseas and those not created at home -- one of the hottest issues in the 2004 Presidential campaign.

A number of economists are worried, too -- but, unlike the politicians, not about how many jobs the U.S. will create between now and November. They're concentrating instead on an aspect of international job competition that hasn't yet gotten much notice: The conceivably widespread impact, at some point, on U.S. incomes and living standards.

ROUTINE FLUX? It may sound premature to be concerned about that. For instance, no one has even been able to pinpoint precisely how many white-collar positions have moved overseas of late -- and many economists doubt that the number is high enough to make it a primary cause of sluggish employment gains. Even if a few hundred thousand jobs have departed for low-wage countries such as China and India in recent years, that number pales beside the routine job flux in the U.S., points out Harvard University trade economist Robert Z. Lawrence. In 2002, the latest year for which full data is available, 32.1 million jobs in the U.S. disappeared, while 31.7 million were created, according to the Bureau of Labor Statistics.

Even so, the recent transfer to other countries of so-called knowledge work -- jobs requiring lots of education and creative skills -- could be a signal of what lies ahead. For a precedent, look at what globalization has done to the pay of less-skilled U.S. factory workers over the past three decades or so. As low-wage countries developed the ability to produce things such as apparel, electronics, and textiles, Americans in those industries found themselves competing with people who'll work for a tenth of their pay. This has exerted downward pressure on U.S. factory wages that continues today.

True, the domestic economy usually plays a larger role in wage-setting than does foreign competition. That became clear during the boom of the late 1990s, when red-hot demand for employees who were in short supply more than offset the globalization effect and lifted pay of even the lowest-skilled Americans. Still, in non-boom times the downward tug from abroad is powerful. It's probably one reason average inflation-adjusted wages in the U.S. have slumped by 0.1% in the past year. Without the countervailing force of full employment in America, foreign competition rules.

WORSE OUTLOOK. That's why the spread of global labor competition to the top of the skill ladder could be so significant. The ability of U.S. companies to find architects, engineers, programmers, and financial analysts in places like India for a fraction of what they cost at home almost certainly will create a dampening effect, sooner or later, on the pay of the 80% of U.S. employees who until now have been unaffected by such global job competition. "White-collar offshoring will make the wage outlook worse for high-skilled Americans, no question," says Brookings Institution economist William T. Dickens.

Indeed, trade theory suggests that the impact ultimately could be larger for high-skilled workers than it has been for the lesser-educated. As the world increasingly begins to look like one big labor pool, market forces should tend to move wages everywhere toward the same level for similar work, all else being equal. After all, employers won't pay more for labor in one country if they can easily get the same work done elsewhere for less. They wouldn't remain competitive for long if they did.

Problem is, all else isn't necessarily equal: Wages tend to move toward equilibrium only after productivity is factored into the equation. If American apparel workers earn $10 for making 10 shirts, their pay starts to come under pressure only when a Mexican worker can churn out the same quality shirts for less than $1 each. That has happened with apparel, so the U.S. has lost many clothes-making jobs. But U.S. skill and technology have made many factories at home more productive than their foreign counterparts -- one reason that all American factory jobs haven't shifted abroad.

"DIRECT COMPETITION." The question that white collar offshoring raises is whether American professionals are more productive than their Chinese or Indian rivals. If the answer is no, the result could be sobering. Many of the highest-skilled jobs that are fleeing offshore seem to depend more on brainpower than on capital or technology -- the last lines of defense in manufacturing. After all, a software programmer with sufficient smarts and education needs only an office, a computer, and plenty of caffeine to do a good job. So if an Indian programmer can produce as much high-quality code as an American one, wage equalization for programmers may occur at a faster pace than it has for apparel workers.

One lesson of today's new variety of offshoring is that "U.S. [white-collar] workers are being put in direct competition with similarly skilled workers around world," says economist Gary Burtless, a colleague of Dickens' at Brookings.

This should be the real worry for Americans who are anxious about the departure of white-collar jobs. At the moment, even with unemployment in the U.S. running at 6% or so, most well-educated Americans still can find a job if they want one. Even taking into account discouraged workers who have dropped out of the labor market would add only another percentage point or two to the official jobless rate.

TWO EFFECTS. Yet even a reasonably modest loss of white-collar jobs to other countries could disrupt the income and living standards of many more Americans than the tens or hundreds of thousands who end up out of work. Wages are largely set by supply and demand across entire labor markets. As those become more global, two things could happen: First could come displacement -- a U.S. job goes elsewhere. Then could come the secondary effect of a U.S. labor surplus in a variety of highly skilled professions. For example, if enough programmers lose their jobs, it will swell the pool of those looking for such work in the U.S. -- driving down pay throughout the industry.

How can the U.S. avoid that? It can't entirely because globalization has a life of its own. But striving to keep American workers ahead of the pack would help. To achieve that, federal and state governments as well as Corporate America must put a much stronger focus on education and training. The U.S. has been struggling to improve its kindergarten through 12th-grade schooling for years, with only middling success so far. Plenty more needs to be done, especially for smart kids from lower-income families who still often don't get the educational and social support they need to succeed in school.

The U.S. needs to invest more in higher education, too. As the echo baby-boom generation moves through its college years, its numbers are straining the capacity of universities. Yet most states, which provide the education for 80% of all American college students, are cutting back on college spending because of fiscal crises. Unless a way is found to make college more affordable to those who are getting left behind, the U.S. could find itself on the sidelines in the increasingly intense global competition to turn out the best brains.

LOST IMMUNITY. The full effects of white-collar outsourcing could take a number of years to develop -- and the impact in America could be muted if overseas professionals demand compensation that starts to approach that in the U.S. And given the enduring demand for college-educated employees in the U.S., they're still likely to fare better than less-skilled workers once the economy starts to create more jobs.

Even so, an important lesson of 2004 is this: The immunity from global competition that U.S. white-collar employees have enjoyed for so long has started to vanish.

Bush Administration Resorts To Lies About 9/11

Source: The Daily MisLead

With President Bush's former top counterterrorism expert Richard Clarke issuing well-documented criticisms of the White House's failure to defend America, the Administration has resorted to outright lies and distortions about its record. The president himself once again tried to deflect criticism, saying "had my administration had any information that terrorists were going to attack New York City on September the 11" (1) - a statement designed to deflect attention from the specific warnings that he personally received outlining an imminent Al Qaeda attack (2) that could involve hijacked planes (3) being used as missiles (4).

Here are four other explicit lies that the Administration has told over the last few days:

LIE: National Security Adviser Condoleezza Rice claimed that Clarke "chose not to" (5) voice his concerns about the Administration's counterterrorism policy. But Clarke sent an urgent memo to Rice in January 2001 asking for a Cabinet-level meeting about an imminent Al Qaeda attack (6). The White House itself admits top Bush officials rejected Clarke's request, saying they "did not need to have a formal meeting to discuss the threat." (7)

LIE: White House Press Secretary Scott McClellan yesterday denied Clarke's charge that the president ordered the Pentagon to begin drafting plans to invade Iraq immediately after 9/11. (8) But according to the Washington Post, "six days after the attacks on the World Trade Center and the
Pentagon, President Bush signed a 2-and-a-half-page document" that "directed the Pentagon to begin planning military options for an invasion of Iraq." (9) This was corroborated by a September 2002 CBS News report which reported that, immediately after 9/11, Defense Secretary Donald Rumsfeld told "aides to come up with plans for striking Iraq." (10)

LIE: Deputy National Security Adviser Stephen Hadley denied Clarke's charge that there was an imminent domestic threat against America from Al Qaeda, saying, "All the chatter [before 9/11] was of an attack, a potential Al Qaeda attack overseas." (11) But, according to the bipartisan Congressional report on 9/11, "In May 2001, the intelligence community obtained a report that Bin Laden supporters were planning to infiltrate the United States" to "carry out a terrorist operation using high explosives." The report "was included in an intelligence report for senior government officials in August [2001]." (12)

LIE: Bush National Security spokesman Jim Wilkinson claimed that "it was this president who expedited the deployment of the armed Predator" (the unmanned plane) (13). But, according to Newsweek, it was the Bush Administration who "elected not to relaunch the Predator" and who did not deploy the new armed version of it despite "the military having successfully tested an armed Predator throughout the first half of 2001." (14)

Sources:
1.President Discusses Economy and Terrorism After Cabinet Meeting,
03/23/2004, http://daily.misleader.org/ctt.asp?u=1291765&l=24284.
2."August Memo Focused On Attacks in U.S.", Washington Post, 05/18/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24285.
3."Report Warned Of Suicide Hijackings", CBS News, 05/18/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24286.
4."Italy Tells of Threat at Genoa Summit", Los Angeles Times, 09/27/2001,
http://daily.misleader.org/ctt.asp?u=1291765&l=24287.
5.American Morning Transcript, 03/22/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24288.
6."Clarke's Take On Terror", CBS News, 03/21/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24289.
7."White House Rebuttal to Clarke Interview", Washington Post, 02/23/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24290.
8.Press Briefing by Scott McClellan, 03/23/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24291.
9."U.S. Decision On Iraq Has Puzzling Past", Washington Post, 01/12/2003,
http://daily.misleader.org/ctt.asp?u=1291765&l=24292.
10."Plans For Iraq Attack Began On 9/11", CBS News, 09/04/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24293.
11."Clarke's Take On Terror", CBS News, 03/21/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24289.
12.Joint Inquiry of Intelligence Community Activities Before and After The
Terrorist Attacks of September 11, 2001, 12/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24294.
13.Fox News, 3/22/04
14.Freedom of Information Center, 05/27/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24295.

Public Record: Bush Ignored Terrorism Before 9/11

Source: The Daily MisLead

In the face of Richard Clarke's well-documented testimony to the 9/11 commission yesterday, the White House is continuing to say that it made counterterrorism its top priority upon coming into office in January 2001. White House spokesman Scott McClellan, echoing similar comments from top Administration officials, said that "this Administration made going after Al Qaida a top priority from very early on" in the face of increased terror warnings before 9/11 (1). But, according to the public record, the
Administration made counterterrorism such a "top priority" that it never once convened its task force on counterterrorism before 9/11, attempted to downgrade counterterrorism at the Justice Department, and held only two out of more than one hundred national security meetings on the issue of terrorism. Meanwhile, the White House was cutting key counterterrorism programs -- Bush himself admitted that he "didn't feel the sense of urgency" about terrorism before 9/11 (2).

According to the Washington Post, President Bush and Vice President Cheney never once convened the counterterrorism task force that was established in May 2001 (3) -- despite repeated warnings that Al Qaida could be planning to hijack airplanes and use them as missiles. This negligence came at roughly the same time that the Vice President held at least 10 meetings of his Energy Task Force (4) and attended at least six meetings with Enron executives (5).

Similarly, Newsweek reported that internal government documents show that, before 9/11, the Bush Administration moved to "de-emphasize" counterterrorism (6). When the "FBI officials sought to add hundreds more counterintelligence agents" to deal with the problem, "they got shot down" by the White House.

Additionally, the Associated Press reported in 2002 that "President Bush's national security leadership met formally nearly 100 times in the months prior to the Sept. 11 attacks yet terrorism was the topic during only two of those sessions." This is consistent with evidence Clarke has presented showing that his January 2001 "urgent" memo asking for a meeting of top officials on the imminent Al Qaida threat was rejected for almost eight months (7). At the time, the White House said that they simply "did not need to have a formal meeting to discuss the threat" (8).

Finally, the White House threatened to veto efforts putting more money into counterterrorism (9), tried to cut funding for counterterrorism grants (10), delayed arming the unmanned airplanes (11) that had spotted bin Laden in Afghanistan, and terminated "a highly classified program to monitor Al Qaida suspects in the United States (12).

Sources:
1.Press Briefing Scott McClellan, 03/22/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24516.
2.The George W. Bush Presidency: An Early Assessment, 2003,
http://daily.misleader.org/ctt.asp?u=1291765&l=24517.
3.Statement by the President, 05/08/2001,
http://daily.misleader.org/ctt.asp?u=1291765&l=24518.
4.Process Used to Develop the National Energy Policy, US General Accounting
Office, http://daily.misleader.org/ctt.asp?u=1291765&l=24519.
5."Cheney: We Met With Enron Execs", ABC News, 01/09/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24520.
6.Freedom of Information Center, 05/27/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24521.
7."Clarke's Take On Terror", CBS News, 03/21/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24522.
8."White House Rebuttal to Clarke Interview", Washington Post, 03/22/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24523.
9.Freedom of Information Center, 05/27/2002,
http://daily.misleader.org/ctt.asp?u=1291765&l=24521.
10."FBI Budget Squeezed After 9/11", Washington Post, 03/22/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=24524.
11."Officials: U.S. missed chance to kill bin Laden", Helena Independent
Record, 06/25/2003, http://daily.misleader.org/ctt.asp?u=1291765&l=24525.
12."In the Months Before 9/11, Justice Department Curtailed Highly
Classified Program to Monitor Al Qaeda Suspects in the U.S.", PR Newswire,
03/21/2004, http://daily.misleader.org/ctt.asp?u=1291765&l=24526.

Bush Flip-Flop on Patients' Bill of Rights May Have Been Driven by Campaign Donors. Bush Touted Texas Law Passed While He Was Governor; Now, He Opposes It

Source: Public Citizen

March 25, 2004

WASHINGTON, D.C. - The prominence of health insurance industry executives among Bush campaign bundlers suggests that special interests played a part in President Bush's flip-flop on patients' rights to sue HMOs, Public Citizen charged today.

In a televised presidential debate on Oct. 17, 2000, candidate Bush said, "If I'm the president - people will be able to take their HMO insurance company to court," adding that while he was governor of Texas, "We're one of the first states that said you can sue an HMO for denying you proper coverage."

But on Tuesday, the Bush administration argued before the U.S. Supreme Court that the same Texas law touted by candidate Bush is invalid because it is pre-empted by a federal law. This is the opposite of what then-Gov. Bush's Texas Department of Insurance argued in a lower court in 1997.

Among Bush campaign Pioneers (bundlers of $100,000 or more in contributions) are seven former or current HMO executives: UnitedHealth Group CEO William McGuire; former Health Net Chairman Dr. Malik Hasan; Anthem Inc. Chairman L. Ben Lytle; Blue Cross and Blue Shield of Florida lobbyist Michael R. Hightower; WellCare's CEO Todd S. Farha and finance director David Hart; and AmeriGroup chairman and CEO Jeffrey L. McWaters. (A complete list of Rangers and Pioneers is available at www.WhiteHouseForSale.org.)

The Texas Health Care Liability Act, passed in 1997 when Bush was governor, was the first state law to give patients the right to sue HMOs for denying "appropriate and medically necessary" treatment. Texas chose to prevent HMOs from padding their bottom lines through abusive denials of coverage by holding HMOs to a professional medical standard of ordinary care. Nine states have since followed Texas' lead and enacted similar legislation.

"When the Patients' Bill of Rights was a hot campaign issue in 2000, Bush was only too happy to claim responsibility for the Texas law," said Joan Claybrook, president of Public Citizen. "Now that the issue is not in the news, Bush has done a flip-flop and aligned himself with his big campaign contributors from the HMO industry."

In the current Supreme Court case, the Bush administration joined the insurance industry in arguing that the Texas law is completely pre-empted by federal law. The case involves the rights of patients who suffered severe medical complications when their HMOs decided that treatments recommended by their physicians were not medically necessary.

The Bush administration argues that these claims fall exclusively under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA limits recoveries to the value of the denied insurance benefits and does not consider the injuries suffered by patients as a result of denied care, which can include death or permanent and severe disability. The unfairness of this law was a major factor provoking bipartisan congressional support for a Patients' Bill of Rights until that legislation was derailed by the Sept. 11, 2001, terrorist attacks, among other factors.

Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.

Families of 9/11 Victims Laud Clarke for Apology

Source: Reuters
By Sue Pleming

WASHINGTON (Reuters) - Relatives of the victims of the Sept. 11, 2001 attacks praised former counter-terrorism official Richard Clarke on Thursday for publicly apologizing for not doing enough to prevent the tragedy.

Clarke, whose credibility has been questioned by the Bush administration, began his testimony on Wednesday to a commission probing the attacks by asking for relatives' forgiveness, prompting cheers, gasps and sobs from the packed hearing room on Capitol Hill.

"It's the first time we have had a public apology by any of the officials that were in office on that terrible morning," said Patty Casazza, who lost her husband when a hijacked plane rammed into the World Trade Center in New York.

"An apology goes a long way to healing the wounds and moving forward," Casazza told ABC's "Good Morning America" program.

Nearly 3,000 people were killed in the attacks on the World Trade Center and the Pentagon (news - web sites). Relatives of those killed have been pushing for answers and some have voiced criticism over the Bush administration's cooperation with the commission.

Clarke, who served the last four U.S. presidents, has incensed the White House by saying publicly and in a book published this week that President Bush (news - web sites) did not take the terrorism threat seriously enough and that more could have been done to prevent the attacks.

Clarke, who resigned 13 months ago, said the Clinton administration was active in tracking Osama bin Laden (news - web sites)'s al Qaeda network but the Bush administration, which took office in January 2001, did not consider the issue urgent.

EMOTIONAL MOMENT

In his testimony, Clarke turned around to directly face the relatives and said: "Those entrusted with protecting you, failed you. And I failed you. We tried hard but that doesn't matter because we failed."

He added: "I would ask, once all the facts are out, for your understanding and for your forgiveness."

Beverly Eckert, whose husband died in the World Trade Center, said she "totally broke down" at Clarke's apology.

"It was a very emotional moment. As Patty said, no one has ever apologized. Most of the witnesses who come to these hearings come with, I would categorize them, as rather self-serving statements and everything they tried to do.

"He's the only one who said we tried our best but we failed ... not only did he apologize, he asked for our forgiveness. That meant a lot," said Eckert, who along with Casazza is part of an activist family group demanding answers to how the Sept. 11 attacks occurred.

The commission, which held public hearings for two days in Washington, is billed as a non-partisan body but some relatives said they were upset by how some members had attacked Clarke.

Kristen Breitweiser, who lost her husband in the World Trade Center attack, said some of the commission members had "sunk to a level of partisan politics" by criticizing Clarke and questioning his credibility.

"We want it to be independent, bipartisan. I think it is most unfortunate that it became a character assassination," she told NBC's "Today" show .

Some relatives have also voiced disappointment that White House national security advisor Condoleezza Rice (news - web sites) has refused to appear publicly at a commission hearing. Others feel the president should also take the stand.

"From the president on down, if they have nothing to hide, they should testify," said Eckert.

Breitweiser was more cutting in her criticism and said she believed the White House had done a "cost benefit analysis" and decided it was better for Rice to take the heat rather than testify publicly about what went wrong.

Iraqi Reporters Rebuff Powell, Leave News Conference

Source: Reuters
By Luke Baker
Fri Mar 19, 7:50 AM ET

BAGHDAD (Reuters) - Iraqi journalists walked out of a Baghdad news conference given by Secretary of State Colin Powell (news - web sites) on Friday in protest at lack of security and the killing of two Iraqi journalists by U.S. troops.

"We declare our boycott of the conference because of the martyrs," Najim al-Rubaie of Iraq (news - web sites)'s Distor newspaper said in a statement read at the start of the news conference as Powell and Iraq's U.S. governor Paul Bremer looked on.

"We declare our condemnation of the incident which led to the killing of the two journalists...who were killed at the hands of the American forces."

More than 30 Iraqi journalists then stood up and walked out.

Employees of Dubai-based satellite television channel Al Arabiya say U.S. soldiers opened fire on a car carrying an Arabiya crew on Thursday evening after another car ran through a checkpoint. Cameraman Ali Abdelaziz was killed and correspondent Ali al-Khatib died in hospital on Friday morning.

After the walkout, Powell said he respected the right of the journalists to express their feelings.

"It is something that would never have happened at an earlier time in the history of Iraq, certainly not in the last 30 years," he said.

Powell said he regretted the loss of life of the journalists, and all loss of life in Iraq.

"But let's be clear who is responsible for this," he said. "Those individuals left over from the old regime do not want to see the Iraqi people live in peace. They do not want to see democracy take root."

Powell said he did not have the full details of the Arabiya incident but he was certain that troops would not have deliberately killed journalists. He said that sometimes in the confusion after a guerrilla attack, "mistakes happen, tragedies occur."

Iraqi journalists demanded an investigation into the incident.

"We walked out because we need them to ensure that we are safe under the occupation and yet they have done nothing," Ahmed al-Samraee, an Iraqi producer with the Qatar-based Al Jazeera satellite channel, said after the walkout.

"I saw these people killed. They were shot dead on purpose," he said.

A U.S. military spokesman said troops had shot dead an Iraqi on Thursday after his car ran through a checkpoint and hit a Humvee. He said the Iraqi was the only person in the car and he had no information on whether any journalists were killed or wounded.

Inquiry Set on Bribery Claim in Medicare Vote

Source: The New York Times
By SHERYL GAY STOLBERG (NYT)
March 18, 2004, Thursday
NATIONAL DESK Late Edition - Final , Section A , Page 30 , Column 1

ABSTRACT - House ethics committee votes to start formal investigation into accusations made by Rep Nick Smith, Republican of Michigan, that some lawmakers and groups tried to induce him to change his vote against Medicare prescription drug bill in November 2002 by promising financial support for House candidacy of his son (M)

For more, click here

Clarke’s Book Shows Why Bush Fears Truth

Source: New York Observer
by Joe Conason

Within days after the terrorist attacks of Sept. 11, 2001, the White House public-relations office began to shroud those events behind personality propaganda, heroic mythology and even religious mysticism. Over the years to come—and until now, perhaps—stirring words and images would serve not only to repackage George W. Bush, but also to obscure the plain facts about his administration’s fateful errors.

The President’s chief political strategist and his National Security Advisor claimed falsely that Al Qaeda had targeted Air Force One on that terrible late-summer morning, thus transforming his prudent flight from Florida to Nebraska into a dramatic escape from peril. The President’s supporters suggested that God had chosen George W. Bush to lead America, in anticipation of national crisis.

During the ensuing year, while the air was filled with such mystifying nonsense, the President and the Vice President warned Congress against an independent investigation of the circumstances leading up to the disaster. After public clamor for an investigation finally prevailed over that intimidation, the White House tried every conceivable tactic to hinder the National Commission on Terrorist Attacks Upon the United States, even while claiming to support the commission unreservedly.

Clearly, the President preferred flattering myths to hard facts about 9/11. Now, with the publication of Richard Clarke’s memoir, Against All Enemies, we know why.

Mr. Clarke is a nonpartisan professional who has devoted his life to national security, serving four Presidents of both parties during a distinguished public career that spanned 30 years. Unlike most of those who have rushed to criticize him, he rose to the highest levels of government strictly on merit rather than family or political connections. His devotion to duty and his qualifications in his field may be measured by his role on Sept. 11, 2001. He ran the Situation Room in the hours immediately after the attacks, while the President flew to Offutt Air Force Base and the Vice President sat in a fortified bunker; and when the White House was evacuated in fear of another suicidal crash assault, he stayed there to continue his work.

His book confirms in detail what some of us have long suspected: During the first nine months of 2001, the Bush administration largely ignored loud alarms about Al Qaeda sounded by Mr. Clarke, by C.I.A. director George Tenet and by other former Clinton administration officials. Preoccupied with national missile defense, the scuttling of the Kyoto and anti-ballistic-missile treaties and, above all, with Iraq, the administration had no time for the terrorist threat until too late.

Vice President Dick Cheney, who now prevaricates shamelessly on Rush Limbaugh’s radio program, proclaimed in May 2001 that he would undertake an immediate review of the nation’s preparedness to deal with terrorism. As The Washington Post reported in January 2002, that review was postponed until after Sept. 11. The Vice President was busy meeting with energy lobbyists instead of responding to the urgent findings of the Hart-Rudman commission’s crucial, multi-volume study of homeland insecurity.

After Mr. Clarke’s remarkable interview on CBS’s 60 Minutes, the White House answered his book’s revelations by seeking to discredit him. The administration’s attack squad should try to coordinate their stories more carefully, since their initial salvos contradict each other. Mr. Cheney says that Mr. Clarke "wasn’t in the loop, frankly, on a lot of this stuff," and suggests that he had left his job as the counterterror chief before 9/11. Yet the official White House response to his book states that Mr. Clarke "continued, in the Bush Administration, to be the National Coordinator for Counterterrorism and the President’s principal counterterrorism expert. He was expected to organize and attend all meetings of Principals and Deputies on terrorism. And he did."

With stunning gall, Mr. Cheney and Condoleezza Rice both have tried to blame Mr. Clarke for earlier terrorist attacks, denigrating his tireless efforts as if they had done better. In fact, Mr. Clarke prodded both Republicans and Democrats to take more decisive action against Al Qaeda—and, in his informed estimate, the far-sighted President Clinton performed considerably better than his distracted successor.

"Clinton left office with [Osama] bin Laden alive, but having authorized actions to eliminate him and to step up the attacks on al Qaeda," writes Mr. Clarke. He also notes that the Clinton administration frustrated Al Qaeda’s millennium bomb plot, stopped its attempted takeover of Bosnia, vastly expanded American counterterrorism programs and preparations, and ended Iraqi and Iranian terrorism against the United States.

Today, the White House smears Mr. Clarke because of his friendship with Rand Beers, another career public servant who resigned as Mr. Bush’s senior counterterror adviser last year to join John Kerry’s Presidential campaign. Both are honorable men who believe they are still serving America by breaking with this arrogant and unwise administration. Someday, the partisan assaults on them will be recognized as the highest of compliments.

You may reach Joe Conason via email at: jconason@observer.com

Joe Conason is the author of
The Hunting of the President: The Ten-Year Campaign to Destroy Bill and Hillary Clinton

Thwarting terrorism wasn't `urgent' to Bush before 9/11, Clarke says

Source: Houston Chronicle Washington Bureau
By BENNETT ROTH

WASHINGTON --The testimony of Richard Clarke deteriorated into a political firestorm Wednesday as the former White House counter-terrorism chief told an independent panel that President Bush failed at first to make the fight against terrorism a top priority.

Clarke was the star witness before the National Commission on Terrorist Attacks Upon the United States, which focused two days of hearings on whether the Clinton and Bush administrations did enough to try to thwart the terrorism of Sept. 11.

A veteran of the last four administrations, Clarke said that under President Clinton fighting terrorism was "an extraordinary high priority." During the first eight months of the Bush administration terrorism was considered "an important issue, but not an urgent issue," he said.

White House officials are infuriated at Clarke's assertion that Bush officials did not sufficiently heed his warnings to quickly develop a strategy to track down al-Qaida terrorists. The White House is waging an aggressive campaign to undermine his credibility.

As his testimony was getting under way, White House spokesman Scott McClellan took the unusual step of revealing that Clarke was the anonymous administration official who defended Bush's record on terrorists to reporters in summer 2002.

In that briefing, Clarke said the Bush White House had been developing a plan to fight the terrorists in summer 2001 and that the president was regularly informed of the strategy.

Clarke's statements from the briefing were highlighted by Republican commission member and former Illinois Gov. James Thompson. He accused Clarke of being contradictory.

Clarke, who left the White House in March 2003, said he was asked by the administration then to defend Bush against reports that the White House had not been prepared for the terrorist attack.

"I was asked to highlight the positive aspects of what the administration had done and to minimize the negative aspects." he said. "I've done it for several presidents."

Politics permeated the questioning by the 10-member panel, equally divided between Republicans and Democrats.

The Democrats suggested Clarke was courageous for openly questioning the policies of the administration.

"Everything that you have said and done has not damaged my view of your integrity," said Bob Kerrey, president of the New School University in New York and former senator from Nebraska.

Republican members chastised Clarke, suggesting he was promoting his book on terrorism, which hit the stores this week.

John Lehman, former secretary of the Navy, told Clarke he was "green with envy at the promotions department of your publisher." He said Clarke's previous, private testimony before the commission was far more even-handed and less critical of Bush than the book.

"You've got a real credibility problem," Lehman said.

Clarke responded that his major criticism of Bush in his book was not the subject of the commission inquiry -- that the president had diverted the focus on hunting terrorists to fighting an unnecessary war with Iraq.

Clarke also dismissed suggestions he had political motives. Noting that he was a registered Republican, Clarke pledged he would not accept a position in a John Kerry administration should the Democratic presidential contender beat Bush.

Clarke was the center of attention on a day when the commission heard from other top former and current administration officials, including CIA director George Tenet and Sandy Berger, Clinton's former national security adviser.

Clarke said the Bush White House initially relegated the task of developing an anti-terrorist plan to deputies rather than senior officials. He also said he would not trust the FBI to detect terrorist activity at home.

A report by the commission staff noted that Clarke pressed the Bush administration to take more aggressive action during the spring and summer of 2001. His recommendations included secret aid to a top Afghan group opposed to the Taliban government of Afghanistan, which harbored Osama bin Laden.

Before a Sept. 4, 2001, White House meeting on terrorism, Clarke wrote to National Security Adviser Condoleezza Rice of his frustrations.

Clarke's testimony was complimented by many in the audience who were kin to Sept. 11 victims. Several said they were angered that the commission members chose to politicize the investigation and use the forum to argue his book's accuracy.


The family members also have been angry that Rice has refused to testify publicly. Rice has said that as a presidential aide who is not confirmed by the Senate, she is not legally required to testify because of the separation of powers between the executive and legislative branches of government.

In her place, the White House sent Deputy Secretary of State Richard Armitage. The victims' families walked out of the hearing to protest Rice's absence.

Clarke Smeared by Neocon Slime Machine

Source: JuanCole.com
posted by Juan Cole at 3/25/2004 07:45:59 AM

Dick Clarke's testimony before the 9/11 Commission turned into a political ping pong match, with John Lehman, former secretary of the navy, insisting that Clarke has a "real credibility problem."

I read Clarke's book while traveling the past couple of days, and found it anything but a liberal tract. Clarke comes across as a principled conservative with special expertise. He clearly feels that his expertise was respected by Bill Clinton, who made him a cabinet official and took an intellectual interest in the nature of terrorism. And he clearly feels that George W. Bush lacks that intellectual curiosity, and surrounded himself with anti-Iraq hawks who simply did not understand asymmetrical organizations and the threat they posed. As a result, Bush and the people around him demoted Clarke from the cabinet and paid no attention to his suggestion that the administration go to 'battle stations' as a result of the increased chatter in summer of 2001.

That Clarke, while in office, tried to put a positive face on the Bush administration, in which he was serving, does not detract from the credibility of his memoir, Against all Enemies. Only the most naive observer could fail to be able to distinguish between the discourse of a public servant and that of a private citizen released from such duties, and now able to speak his mind. Washington rhetoric is often so simple-minded that it is insulting to those of us west of the Potomac, as if we are little children who will swallow any tall tale fed us.

Clarke's integrity in standing against the Neocons' and Rumsfeld's outrageous politicization of intelligence and peddling of false charges that Saddam was behind 9/11 or in cahoots with al-Qaeda more generally, is extremely admirable. But, clearly, he was reduced to a second or third tier player, and could not counteract the enormous influence of Feith, Hannah, Libby, and others, who worked through Cheney to get up a phoney case against Iraq.

Clarke was rumored to have been personally targeted for assassination by al-Qaeda before 9/11, and served honorably in the fight against that organization at a time when most high US government officials had no idea what al-Qaeda was. To have his "credibility" now challenged on partisan political grounds, when his book is anything but partisan, is shameful.

John Lehman, by the way, is the one with credibility problems. He tried to blame the bombing of the USS Cole in 2000 at Aden on a failure of the CIA and the State Department, and alleged that an anti-US and anti-Israel state was behind it (read: Iraq). In fact, the USS Cole bombing was a purely al-Qaeda affair in which Iraq was in no way involved. And, as Clarke explains, it happened in part because the Navy decided to start refueling at Aden without passing the plan by any of the civilian counter-terrorism officials, including himself. Lehman's brother, Chris, served in Douglas Feith's Office of Special Programs, which cherry-picked intelligence so as to manufacture huge Iraqi Weapons of Mass Destruction Programs and extensive collaboration with al-Qaeda, both of them fantasies.

Lehmann and his brother Chris have been wrong all along the way in downplaying al-Qaeda and foregrounding Saddam. That is why he has to now smear Clarke, who has simply told it like it was.

If you read the preface to Clarke's book carefully, you'll see that he predicted the smear campaign against him. Indeed, the word "enemies" in the title of his book refers to the way the Bushies treat anyone who doesn't get with their program.

For more on the anti-Clarke campaign see the always sharp and canny commentary of Josh Marshall at Talking Points Memo.

DOJ Asked FBI Translator to Change Pre 9-11 Intercepts

by Tom Flocco

"FBI translator, Sibel Edmonds, was offered a substantial raise and a full time job in order to not go public that she had been asked by the Department of Justice (DOJ) to retranslate and adjust the translations of [terrorist] subject intercepts that had been received before September 11, 2001 by the FBI and CIA. Edmonds, a ten year U.S. citizen who has passed a polygraph examination, speaks fluent Farsi and Turkish and had been working part time with the FBI for six months-- commencing in December, 2001. In a 50 reporter scrum in front of some 12 news cameras, Edmonds said 'Attorney General John Ashcroft told me 'he was invoking State Secret Privilege and National Security' when I told the FBI I wanted to go public with what I had translated from the pre 9-11 intercepts'. 'I appeared once on CBS 60 Minutes but I have been silenced by Mr. Ashcroft, the FBI follows me, and I was threatened with jail in 2002 if I went public,' Edmonds told tomflocco.com."

Bush Allows Gays To Be Fired For Being Gay

Source: Daily Mis-Lead
March 23, 2004

Despite President Bush's pledge that homosexuals "ought to have the same rights" (1) as all other people, his Administration this week ruled that homosexuals can now be fired from the federal workforce because of their sexual orientation.

According to the Federal Times, the president's appointee at the Office of Special Counsel ruled that federal employees will now "have no recourse if they are fired or demoted simply for being gay." (2) While the Bush Administration says it is legally prohibited from firing a person for their conduct, they have the legal right to fire or demote someone based on their
sexual orientation. To carry out the directive, the White House has begun removing information from government websites about sexual orientation discrimination in the workplace. (3)

Not only does the new directive contradict the president's own promise to treat homosexuals as equals under the law, but it also contradicts what the Administration told Congress. As noted in a bipartisan letter from four Senators to the Administration, "During the confirmation process [of the president's appointee], you assured us that you were committed to protecting federal employees against unlawful discrimination related to their sexual orientation." (4)

Sources:
1.Debates, 10/11/2000.
2."OSC to study whether bias law covers gays", Federal Times, 03/15/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=23802.
3."Gay Rights Information Taken Off Site", Washington Post, 02/18/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=23803.
4."Special Counsel Under Scrutiny", Washington Post, 02/23/2004,
http://daily.misleader.org/ctt.asp?u=1291765&l=23804.

The Real Reason Hubble Is Being Killed: The Wrath of the Religious Right

Now here's one that astounded even us, jaded as we have become by the excesses and outrages of the religious rightwingnuts. Working on a tip, we discovered that the Hubble Telescope has been at the center of a controversy involving the age of the universe and nature of star formation (overnight God trick or long-term process). The HST funding was declared withdrawn as the scope began to provide increasingly strong evidence of the Big Bang, and vast age of the Universe, thereby refuting assertions of creationist astronomers (yes, Virginia, there are such beings).

http://www.space.com/scienceastronomy/age_universe_030103.html. The creationists want to prove the universe is young enough to conform to Genesis. When Hubble said otherwise, the Bush Admin said "Off with its head! " This page shows how much HST figured into the creationists' ruminations.

http://www.answersingenesis.org/search/default.asp?qu=Hubble+Space+Telescope


Age of Universe Revised, Again

Source: Space.com
By Robert Roy Britt, Senior Science Writer
posted: 11:22 am ET, 03 January 2003

We speculated just last week in our Top 10 Space Mysteries [See #8] that the ongoing effort to figure out how hold the universe is would yield at least one more estimate during 2003.

We had no idea it would come so soon.

In a study published today in the journal Science, a team of researchers says the universe is between 11.2 billion and 20 billion years old.

Most estimates in recent years have ranged between 10 billion and 15 billion years. Last year, data supplied by the Hubble Space Telescope led to an apparently refined estimate of 13 billion to 14 billion years.

The new calculations, by Lawrence Krauss of Case Western Reserve University and Brian Chaboyer at Dartmouth College, involved new information about old star clusters in our galaxy and a better understanding of how stars evolve. It was based on when stars are thought to end the main sequence of their lives, a point at which they've used up the hydrogen that fuels thermonuclear fusion and therefore begin to dim.


The new appraisal comes with a 95 percent level of confidence, which means the door is still open for further revision and that last year's tighter Hubble estimate might prove on track.

The new estimates were made as part of a larger effort to understand how the universe is structured, and they agree with an increasingly solid case suggesting that 95 percent of the universe is controlled by so-called dark energy. Scientists don't know what this mysterious force is, or how it works, but they see evidence of it in the fact that the universe is expanding at an ever-increasing rate.

Dark energy is sometimes described as applying a negative pressure to the universe. While gravity holds individual galaxies together, dark energy works to pull galaxies from each other at faster and faster rates.

Cosmologists, who speculate about the origin and operation of the universe as a whole, know they have their work cut out for them even as their understanding grows.

"We are living in a golden age of observational cosmology, where our fundamental picture of the universe has been revolutionized in the last decade," Krauss said. "At the same time, we are establishing the essential features of the cosmos that will serve as the datum at the basis for fundamental physics in the 21st century and beyond."

The Budget

Source: by California State Senator Sheila Kuehl
Sheila.Kuehl@sen.ca.gov

This is the first in a series of essays and information pieces. For those of you who received this by forwarding, it is written by California State Senator Sheila Kuehl. If you wish to subscribe to receive future essays (no charge), please send an e-mail to Sheila.Kuehl@sen.ca.gov, titled “subscribe”.

First of all, a caveat. These informational pieces are not designed to advocate. Rather than argue for a point of view, I wanted to create a place to provide information generally not accessible by most people. Every day in the Capitol, there are conversations, presentations, votes, and endless discussions, all of which shed light on topics people ask me about every day.

The number one topic I’m asked about: the budget.

I will try, in the first few pieces, to simplify how we got into what most people are calling “the budget mess”, how big the problem really is, several proposed solutions and the consequences, intended and unintended, of those proposed solutions, including the big bond (prop 57) and balanced budget requirement (prop 58) that were just adopted by the electorate.

Further essays will address workers’ comp-proposed legislation, how it will be amended, current discussions and issues; the fallout of vehicle license fee decisions, up and down; gay marriage-what’s the real law about this issue, here and in other states; a few essays on healthcare in California-the problem, proposed solutions, buying drugs from Canada or not; at least one essay on the new Medicare drug benefit and its impact on seniors-what they have now and what to expect. Haven’t thought much beyond that but there’s a lot going on.

So: the topic of this first piece:

The Ghosts of Budgets Past
Or, How We Got Here

As you read this, in March of 2004, the Legislature and the Governor are attempting to deal, not only with the current budget, but also with: (1) the leftover results of prior budgets, brought forward as obligations, (2) changes to the current year’s budget (July 2003-June 2004), (3) the adoption of the next year’s budget (July 2004-June 2005) and, often, with predictions about what decisions in the next budget will mean to future budgets.

The 2003-2004 budget totaled about 97.4 billion dollars, including expenditures from bond funds, federal funds, special funds (those dedicated to a particular purpose, like fees), and the general fund, which is the aggregate, mostly, of our taxes. The 2004-5 budget is projected at about 97.2 billion.

If you count bond funds, however, and some costs required to be absorbed because some one-time savings we used in 2003-4 have expired, the new budget is more like 100.2 billion. 76.1 billion of that is general fund revenues and that amount has been seriously dropping since the tech “bubble” burst. This creates a problem for the state because we have a serious over-reliance on personal income taxes for state revenue.

History and Taxes
In 1977-78, about 5/12 of the general fund revenue came from property taxes, about 1/4 from sales and use taxes, about 1/6 from personal income taxes and 1/6 from all other taxes. By 2004-2005, after prop 13, tax reductions, tax credit legislation and other limitations, more than 1/4 of the revenue had to come from personal income, somewhat less than 1/4 from property taxes, a bit over 1/4 from sales and use taxes and almost 1/4 from all other. So, when personal income tanked in the state, so did the revenue side of the budget, and fairly suddenly.

History and Expenditures
In 1962-3 almost 40% of the budget went to K-12, about 1/8 to higher ed, less than 1/4 to health and human services, a tiny slice to corrections, almost 1/5 to transportation and a little less than 1/4 to “other”. By 2002-3, corrections was twice as big a slice of the pie, K-12 was about the same, higher ed was about the same, transportation had shrunk to more or less equal corrections and health and human services had grown to more than 1/4 of the budget. The growth in this latter category was due primarily to an unprecedented shrinkage in middle class jobs and more reliance by the working poor, whose numbers were growing significantly, on services. (I’m sure you read that Wal-Mart, for instance, pays so little, almost half of their employees qualify for MediCal benefits, a state program to provide minimal healthcare for the working, indigent and disabled poor).

In the Good Times….
In 1998-99 through 2002-3, we gave back 3.7 billion in tax relief, spent 4.7 on K-12 education, 2.4 billion on higher ed, 4.8 billion on health, 2.3 billion on social services and 2 billion on all other (resources, transportation, corrections, etc.). Expansions in programs were almost exclusively in education and healthcare for the poor but these were minimal as to each individual, primarily accomplished by allowing more children to be eligible for medical services and childcare. The population needing these services had also grown, including our senior population, which is poorer and more medically vulnerable.

In the Bad Times….
Recently employment plummeted in the higher paying job sectors by more than 20%, and, in the case of manufacturing jobs, by 25%. Suddenly, the revenues to the state from personal income taxes and capital gains were far less than expected. Since my colleagues in the Republican party took an oath not to raise any taxes and, indeed, were threatened with a primary challenge if they even indicated they might consider it, the only way to balance this year’s (2003-04, passed last July) budget was through cutting programs.

The problem was made worse by the fact that the cuts in the vehicle license fees, which we had made during the good times, were supposed to be restored when the general revenues sank. Actually, the vehicle license fee, which funds local police and fire services, had never actually gone down. These fees were still set, as they had been for decades, at 2% of the value of your car. Since these fees go to local governments to fund police and fire services, we had simply voted to pay a portion of your vehicle license fee out of the general fund. This is called a “backfill”. Gov. Davis did not, therefore, “triple” the fee, his director of finance simply declared that there was nothing but borrowed money in the state coffers and that declaration, by law, triggered an end to the backfill. Result: you had to start paying your full vehicle license fee yourself.

Cuts
The 2003-4 budget contained over 14 billion dollars in cuts and, when you consider the allocation of expenditures in the budget, you can see that most of them came from healthcare for the poor and higher education. We can’t cut the debt service, that pays for past borrowing and bonds. We can’t cut the amount we’re supposed to put into certain healthcare and education programs because we would lose a far greater amount in federal funds. So it was bone and muscle, not fat, that got cut. Nevertheless, we cut.

Waste and Fraud
Interestingly enough, there wasn’t much. We had cut a great deal in the last three years. So, when the current Governor brought Donna Arduin from Florida to dig out “waste and fraud” in the state budget and, therefore, bring the current budget into balance, she huffed and puffed but couldn’t find any. Indeed, even in her last highly touted job in Florida, her suggestions for cuts had been almost exclusively in the area of schools and healthcare.

So???
Restoration of the vehicle license fee backfill from the general fund (you think of it as a cut in your fee) (we think of it as unbudgeted additional money out of the general fund for police and fire) meant that we were called upon to cut more than 2 billion extra dollars out of this year’s budget (2003-2004). You’ve seen the results in school budgets, you may not have seen the local clinics closing, or cuts in healthcare for the poor, but they’re also there. And, in bad economic times, the need for services for those affected by job loss, aging, etc., just grows.

Next time: what lies ahead: the 2004-5 budget now under consideration and how we consider it...

THE REAL MCCOY! The real McCoy—John McCain—is doing the press corps’ work for them

Source: The Daily Howler
FRIDAY, MARCH 19, 2004

FOLLOW-UP—SPINNING SPAIN: In this morning’s papers, E. J. Dionne and Paul Krugman respond to one of the week’s major spins—the spin which says that Spanish voters appeased al Qaeda is last Sunday’s election. We tend to agree with the points these scribes make. But neither scribe mentions the fact we cited yesterday; neither man notes that there is no sign that last week’s bombing produced a vast swing in the Spanish vote. Indeed, it may not have produced any swing at all. Did Spaniards reject the Popular Party because of the bombing? The evidence just isn’t there; see THE DAILY HOWLER, 3/18/04.

In some ways, Dionne and Krugman do what libs often do, understandably enough, in the current climate. In rejecting a bit of conservative spin, they go along with a bogus conservative premise. We agree with the general views they express. But what are the actual facts on the ground? Spanish polling was close before the bombing, and the election was narrowly decided when Spaniards actually went to the polls. The debate has been built on a bogus premise—the notion that Spaniards flipped because of the bombing. Liberals and centrists need to say it every time: There the pseudo-cons go again, inventing another preferred tale.

FOLLOW-UP—SOCIAL PROMOTION: In this morning’s Times, Bob Herbert discusses social promotion in New York City schools. In the process, he provides a fact that helps illuminate a point we made this week. “There are 1.1 million children…in the [New York] system,” he writes. That means there are roughly 100,000 third graders. And you can take it to the bank: If New York adopted a “strict new promotion standard,” many more than 15,000 kids would have to repeat third grade next year. But that was the number the New York Times used in Wednesday’s editorial (see THE DAILY HOWLER, 3/17/04).

In this morning’s column, Herbert reflects the relative cluelessness which press elites bring to these questions. (This is true even of sympathetic, caring scribes like Herbert.) Herbert says that widespread retention is “a lousy approach to school reform.” But he paints an unrealistic picture of our urban schools. “Listen up,” he writes. “It is not a good idea to allow children who are not learning to simply walk out of one grade and into another without any kind of an intervention.” But if “not learning” means “not performing on grade level,” this would mean that we need to perform an “intervention” on the vast majority of urban students. Herbert’s formulation reinforces a picture which dominates our public discourse, even though it is vastly misleading. What is the truth about urban schools? In these schools, substantial majorities of the students don’t perform at or near traditional “grade level.” Sadly, few journalists seem to grasp this fact. And neither do urban systems themselves. That’s why a string of systems have announced that they’re banning social promotion, then have had to abandon the plan when vast numbers of their students can’t meet the “strict new standards” they need in order to pass.

Citizens need to understand the facts on the ground in our urban schools. One reader describes his own experience:

E-MAIL: Your description of the situation in urban schools vis-a-vis materials/reading levels/expectations was so absolutely correct it was scary.

I used to teach middle school at [a well-known institute] and worked as a reading specialist in the [major city] elementary schools…

Matching reading materials with students’ reading level is a huge problem. If the kids are special ed, everybody pretends the teacher and special educator can make “accommodations” and everything will be okay. Then there’s that huge percentage of kids that aren’t identified as special ed, but are reading nowhere near their grade level. As you said—high expectations as the solution for these kids’ educational problems is a fairy tale.

Key statement? Everybody pretends! As we have said, urban systems—and urban newspapers—love to “pretend” about urban schools. They like to pretend that the students are doing better than they actually are. They like to pretend that success will be achieved if we just put in some new testing program, or if we make a few kids attend a few weeks of summer school. And they pretend that if teachers would work a bit harder—or show their students that they care—then our urban kids, in their current state, will do just as well as everyone else. To use the reader’s language, these are “fairy tales”—pleasing tales which keep us from seeing what we must do to improve our urban schools. But these pleasing tales pervade our discourse, and have done so for the past forty years. This morning, even Herbert fails to convey the tragic depth of our situation. But then, few journalists really know much about urban schools, not even caring scribes like Bob Herbert.

Final point: Be sure to note what our e-mailer said. It is very hard to find textbooks and instructional programs designed for kids who are far below traditional “grade level.” As a result, these delightful and deserving kids may not get any textbooks at all, and, of course, they then “fail to thrive.” Such textbooks and program could be produced. But before we will do so, we must stop pretending. We have to stop telling fairy tales about our urban schools.

THE REAL MCCOY: It took a Republican pol who endorses George Bush to state the obvious about this campaign. Yesterday morning, John McCain went on TV—and he said the recent attacks on John Kerry have been a load of bullroar. Charles Babington reports in the Post:

BABINGTON: Republican Sen. John McCain yesterday defended Sen. John F. Kerry’s record on national security, undercutting the Bush-Cheney campaign’s latest attacks on the Democratic presidential challenger…
“I do not believe that he is, quote, ‘weak on defense,’” McCain (Ariz.) said on NBC’s Today show.

Asked on the CBS Early Show whether he agreed with Vice President Cheney’s assertion that Kerry is a threat to national security, McCain said: “I don’t think that. I think that John Kerry is a good and decent man. . . . I think he has different points of view on different issues, and he will have to explain his voting record. But this kind of rhetoric, I think, is not helpful in educating and helping the American people make a choice.”

Isn’t it sad that John McCain—a supporter of Bush—seems to care about this matter more than your hapless “press corps?” In the past few weeks, the press has been stampeded into a silly debate about Kerry’s honesty, based on a somewhat ambiguous statement he made (or may have made) about the views of foreign leaders. As usual, the “press corps” mistranscribed what Kerry said—it seems to be Hard Press Corps Law—then engaged in a scripted debate about his troubling comments.

But why has the press focused on Kerry’s comment? Duh! Because the White House told them to! Meanwhile, does the press really care about candidates’ truthfulness? Last week, Bush launched an absurd attack on Kerry. Richard Stevenson described his charge in the March 9 New York Times:

STEVENSON: President Bush accused Senator John Kerry on Monday of having tried to “gut” the nation’s intelligence services in 1995 when Mr. Kerry introduced legislation that would have cut intelligence spending by $1.5 billion over five years.

“His bill was so deeply irresponsible that he didn’t have a single co-sponsor in the United States Senate,” Bush had said, misleading a group of campaign contributors. “Once again, Senator Kerry is trying to have it both ways. He’s for good intelligence; yet he was willing to gut the intelligence services.”
The inanity of Bush’s charge is obvious. On March 12, Walter Pincus and Dana Milbank laid out the basic facts in the Post. Would Kerry’s bill have “gutted the intelligence services?” Which part of there he goes—Bush is dissembling again doesn’t our “press corps” understand?

PINCUS/MILBANK: Bush appears to be wrong when he said the proposed Kerry cut—about 1 percent of the overall intelligence budget for those years—would have “gutted” intelligence. In fact, the Republican-led Congress that year approved legislation that resulted in $3.8 billion being cut over five years from the budget of the National Reconnaissance Office—the same program Kerry said he was targeting.
There’s more, but you get the picture. To state the obvious, this is the kind of rank flim-flam which seemed to have John McCain’s goat.
But if McCain is upset, your “press corps” is not. The Bush campaign has sent out a string of gonzo claims, but the “press corps” simply couldn’t care less. Indeed, though Pincus and Milbank did their jobs, the New York Times refuses. To this day, the Times has presented no analysis of Bush’s laughable claim about “gutting intelligence.” Instead, Elisabeth Bumiller analyzes Bush’s impressive bedtime habits, and David Halbfinger keeps spinning “flip-flop” (see below). This president can lie in your face all he likes. At the sad-sack New York Times, your “journalists” simply couldn’t care less.

John McCain supports George Bush! But he is more concerned with the Bush campaign’s lies than your hapless “press corps” is! Meanwhile, the “press corps” continues to pound away at their mis-transcribed Kerry “quotation.” And why are they so upset with this statement? Because the White House has told them they should!

Scandals swirl around the Republican establishment. Bush’s groaning misstatements never end. But your “press corps” is concerned with that mis-transcribed “quote”—and it’s eager to praise Bush’s bedtime habits. Let’s say it again, just because it’s so perfect: John McCain—a Bush supporter—is more concerned by the Bush campaign’s lies.

THE MOVING HALBFINGER WRITES: David Halbfinger is “Kit” Seelye! Watch as he crams the Requisite Spin-Point—Kerry’s a flipper—into this morning’s lead:

HALBFINGER (pgh 1): John Kerry was in the air, approaching the Continental Divide, and the candidate often ridiculed as straddling both sides of political divides was wrestling with the big matter at hand.
(2) Should he ski, or snowboard? Or maybe both? He gave no clue where he stood. But that was Wednesday night.

Readers, it’s almost impossible to get that stupid—unless you write for the New York Times. But trust us: The Halbfingers actually think that they’re clever. Vacuous people always think that. But it’s amazing to think that such empty vessels steward our discourse for the Times. Will the meek inherit the earth? The vacuous have beaten them to it.

Annals of scripting
RIP-N-REID: If it weren’t for their scripts, would they know how to speak? In this morning’s Washington Post, T. R. Reid reports on C-SPAN’s 25th anniversary. And yes, to prove he’s one of the gang, he starts with a Requisite Spin-Point:

REID: Suppose you’re the producer of a new TV series, and you’re looking for a boffo opening scene to grip the attention of viewers and critics. What's the chance you would choose to start with a characteristically wooden oration by Al Gore on communication between American voters and their elected representatives?
In fact, that very scene, of a young Rep. Gore (D-Tenn.) flickering across a few million TV screens 25 years ago today, launched one of the most innovative and successful ideas in television history: the Cable-Satellite Public Affairs Network, or C-SPAN.

Tara Reid would have more to say! By happenstance, we saw Gore’s statement played on C-SPAN this morning, and no, it wasn’t especially “wooden.” But people like Reid know their Requisite Spin-Points—and they seem to know nothing else. Despite this, they steward your national discourse. Your democracy will be deeply challenged as long as this gang stays in charge.

Deal on 9/11 Briefings Lets White House Edit Papers

Source: The New York Times
by Philip Shenon
Published on Friday, November 14, 2003

WASHINGTON, Nov. 13 — The commission investigating the Sept. 11 terror attacks said on Thursday that its deal with the White House for access to highly classified Oval Office intelligence reports would let the White House edit the documents before they were released to the commission's representatives.

The agreement, announced on Wednesday, has led to the first public split on the commission. Two Democrats on the 10-member panel say that the commission should have demanded full access to the intelligence summaries, known as the President's Daily Brief, and that the White House should not be allowed to determine what is relevant to the investigation.

An umbrella group of victims' families joined the criticism, saying the terms of the accord should be public.

While spokesmen for panel refused again to provide the terms, citing the sensitivity of the talks with the White House, its executive director acknowledged that the White House would be able to remove information from the reports unrelated to Al Qaeda and to the attacks on Sept. 11, 2001.

"An entire P.D.B. will have articles about China, South Africa, Venezuela," the executive director, Philip D. Zelikow, said in an interview. "The notion that the commission should want to read P.D.B. articles that have nothing to do with Al Qaeda would be a novel suggestion. The commission has not asked to see the country's most sensitive intelligence information on China or North Korea."

A Democrat on the panel who has criticized the accord, former Representative Timothy J. Roemer of Indiana, said in an interview that he believed that the panel had agreed to terms that would let the White House edit the reports to remove the contexts in which the intelligence was presented and to hide any "smoking guns."

"The President's Daily Brief can run 9 to 12 pages long," Mr. Roemer said. "But under this agreement, the commission will be allowed to see only specific articles or paragraphs within the P.D.B.'s. Our members may see only two or three paragraphs out of a nine-page report."

He said the commission should have insisted on access to the full reports, because "you need the context of how the P.D.B. was presented to the president in order to determine whether or not there were smoking guns."

The other Democratic critic on the panel, former Senator Max Cleland of Georgia, has described the agreement as unconscionable.

Administration officials have acknowledged that they are concerned that intelligence reports received by Mr. Bush in the weeks before 9/11 might be construed to suggest that the White House failed to respond to evidence suggesting that Al Qaeda was planning a catastrophic attack. The White House acknowledged last year in response to news reports that a copy of the Daily Brief in August 2001 noted that Al Qaeda might use hijacked planes in an attack.

Commission officials have said that under the agreement the panel will be able to designate four members to read the reports. They will be allowed to take notes on the documents, and the White House will be allowed to review and edit the notes to remove especially sensitive information.

In its statement, the victims' family group, the Family Steering Committee, said the agreement would "prevent a full uncovering of the truth and is unacceptable." The group is led by many advocates who were most responsible for pressuring Congress to create the commission last year over the initial objections of the White House.

"As it now stands, a limited number of commissioners will have restricted access to a limited number of P.D.B. documents," the group said. "The commission should issue a statement to the American public fully explaining why this agreement was chosen in lieu of issuing subpoenas to the C.I.A. and executive branch."

The group said, "All 10 commissioners should have full, unfettered and unrestricted access to all evidence, including but not limited to all Presidential Daily Briefings."

A spokesman for the group, Kristen Breitweiser, whose husband, Ronald, was killed at the World Trade Center, said the families were alarmed that the terms of the accord were kept secret.

`'I think this entire deal needs to be explained to the public," Ms. Breitweiser said. "This is an independent commission that is supposed to be transparent, that is supposed to be open."

9/11 panel hits new roadblock - White House withholding notes on briefing papers

Source: DailyCamera.com
By Dan Eggen, The Washington Post
January 31, 2004

WASHINGTON — The White House, already embroiled in a public fight over the deadline for an independent commission's investigation of the Sept. 11, 2001, attacks, is refusing to give the panel notes on presidential briefing papers taken by some of its own members, officials said this week.

The standoff has prompted the 10-member commission to consider issuing subpoenas for the notes and has further soured relations between the Bush administration and the bipartisan panel, according to sources familiar with the issue. Lack of access to the materials would mean that the information they contain could not be included in a final report about the attacks, several officials said.

"We retain all of our rights to gain the access we need. ... This is a priority item for us to resolve, and we are working to resolve it," said the commission's vice chairman Lee Hamilton, a former Democratic congressman from Indiana.

The disagreement is the latest obstacle to face the National Commission on Terrorist Attacks Upon the United States, which is racing to complete its work by a May 27 deadline after months of fighting over access to government documents. The commission has asked that the deadline be pushed back at least two months, but the White House and leading congressional Republicans oppose that idea.

Such a postponement would mean releasing the potentially damaging commission report on July 26, in the middle of the presidential campaign. Legislation to be introduced next week in the Senate would extend the commission's deadline until next January, avoiding the election altogether.

The latest dispute stems from an agreement reached in November that allowed a four-member team from the commission to examine highly classified documents known as the President's Daily Brief (PDB), including a controversial August 2001 memo that discusses the possibility of airline hijackings by al-Qaida terrorists.

The team completed its work several weeks ago but has been unable to reach an agreement with the White House on how to share its summaries with the seven commission members who were not privy to the material, officials said.

White House officials declined to comment on the details of the negotiations, or to say why administration lawyers have objected to releasing the review team's notes.

"The administration has worked closely with the commission, providing unprecedented access to information and documents," said White House spokeswoman Erin Healy.

But Kristen Breitweiser, widow of World Trade Center victim Ronald Breitweiser and a member of a group of victims' families who monitor the commission's work, called the White House position "unacceptable." She said the panel should subpoena the documents it needs.

"The White House needs to stop being all talk and no action," Breitweiser said. "They say they're cooperating. It's time to show that."

After months of delays last fall, the commission issued subpoenas for documents from the Pentagon, the Federal Aviation Administration and the city of New York, eventually working out agreements in all three cases. The panel also threatened to subpoena the White House over the PDB issue, but settled on the compromise because officials said they did not want to get bogged down in a court battle.

9-11 Commission

Source: Official Site: http://www.9-11commission.gov/

The National Commission on Terrorist Attacks Upon the United States (also known as the 9-11 Commission), an independent, bipartisan commission created by congressional legislation and the signature of President George W. Bush in late 2002, is chartered to prepare a full and complete account of the circumstances surrounding the September 11, 2001 terrorist attacks, including preparedness for and the immediate response to the attacks. The Commission is also mandated to provide recommendations designed to guard against future attacks.

The Commission is holding its eighth public hearing today and tomorrow, March 23-24, 2004, in Washington, DC. Staff Statement No. 5 from the eighth hearing is available online in PDF format.

The Commission released its 2004 hearing schedule.

Click to view the Commission's menu options below:

About the Commission | Hearings | Press | Archive | For Families | Contact Us

What did the Vice-President do for Halliburton?

Source: The New Yorker
by JANE MAYER
Issue of 2004-02-16 and 23

Vice-President Dick Cheney is well known for his discretion, but his official White House biography, as posted on his Web site, may exceed even his own stringent standards. It traces the sixty-three years from his birth, in Lincoln, Nebraska, in 1941, through college and graduate school, and describes his increasingly powerful jobs in Washington. Yet one chapter of Cheney’s life is missing. The record notes that he has been a “businessman” but fails to mention the five extraordinarily lucrative years that he spent, immediately before becoming Vice-President, as chief executive of Halliburton, the world’s largest oil-and-gas-services company. The conglomerate, which is based in Houston, is now the biggest private contractor for American forces in Iraq; it has received contracts worth some eleven billion dollars for its work there.

Cheney earned forty-four million dollars during his tenure at Halliburton. Although he has said that he “severed all my ties with the company,” he continues to collect deferred compensation worth approximately a hundred and fifty thousand dollars a year, and he retains stock options worth more than eighteen million dollars. He has announced that he will donate proceeds from the stock options to charity.

Such actions have not quelled criticism. Halliburton has become a favorite target for Democrats, who use it as shorthand for a host of doubts about conflicts of interest, undue corporate influence, and hidden motives behind Bush Administration policy—in particular, its reasons for going to war in Iraq. Like Dow Chemical during the Vietnam War, or Enron three years ago, Halliburton has evolved into a symbol useful in rallying the opposition. On the night that John Kerry won the Iowa caucuses, he took a ritual swipe at the Administration’s “open hand” for Halliburton.

For months, Cheney and Halliburton have insisted that he had no part in the government’s decision about the Iraq contracts. Cheney has stuck by a statement he made last September on “Meet the Press”: “I have absolutely no influence of, involvement of, knowledge of in any way, shape, or form of contracts led by the Corps of Engineers or anybody else in the federal government.” He has declined to discuss Halliburton in depth, and, despite a number of recent media appearances meant to soften his public image, he turned down several requests for an interview on the subject. Cheney’s spokesman, Kevin Kellems, responded to questions by e-mail.

Representative Henry Waxman, a liberal Democrat from California and the ranking minority member of the House Committee on Government Reform, has argued aggressively that the Bush Administration has left many questions about Halliburton unanswered. Last year, for example, a secret task force in the Bush Administration picked Halliburton to receive a noncompetitive contract for up to seven billion dollars to rebuild Iraq’s oil operations. According to the Times, the decision was authorized at the “highest levels of the Administration.” In an interview, Waxman asked, “Whose decision was it? Was it made outside the regular channels of the procurement process? We know that Halliburton got very special treatment. What we don’t know is why.”

Halliburton has been accused of exploiting its privileged status. Last year, a division of the company overcharged the government by as much as sixty-one million dollars in the course of buying and transporting fuel from Kuwait into Iraq. Halliburton charged the United States as much as $2.38 per gallon, an amount that a Pentagon audit determined to be about a dollar per gallon too high. Although Halliburton has denied any criminal wrongdoing, the inspector general for the Department of Defense is considering an investigation.

Halliburton blamed the high costs on an obscure Kuwaiti firm, Altanmia Commercial Marketing, which it subcontracted to deliver the fuel. In Kuwait, the oil business is controlled by the state, and Halliburton has claimed that government officials there pressured it into hiring Altanmia, which had no experience in fuel transport. Yet a previously undisclosed letter, dated May 4, 2003, and sent from an American contracting officer to Kuwait’s oil minister, plainly describes the decision to use Altanmia as Halliburton’s own “recommendation.” The letter also shows that the Army Corps of Engineers, the federal agency that oversees such transactions, supported Halliburton’s decision to use the expensive subcontractor—which may explain why it has been reluctant to criticize the deal.

Scott Saunders, a spokesman for the Army Corps of Engineers, confirmed the authenticity of the letter, and acknowledged that Halliburton had picked Altanmia. “Halliburton told us that only Altanmia could meet our requirements,” he said.

Experts in the Persian Gulf oil business say that the Altanmia deal looks suspicious. “There is not a reason on earth to sell gasoline at the price they did,” Youssef Ibrahim, the managing director of the Strategic Energy Investment Group, a consulting firm in Dubai, said. “Halliburton and their Kuwaiti partners made out like bandits.” A well-informed Kuwaiti source called the prices charged by Altanmia “absurd,” and said that Halliburton’s arrangement to buy Kuwaiti oil through a middleman, rather than directly from the government, was “highly irregular.” He added, “There is no way that this could have transpired without the knowledge and direction” of Kuwait’s oil minister, Sheikh Ahmad Al-Fahad Al-Sabah. Two sources told me that the oil minister’s brother, Talal Al-Fahad Al-Sabah, may have secret financial ties to Altanmia. (The brothers are also nephews of the Emir and the Prime Minister of Kuwait.) “There are calls in parliament to open an investigation,” the Kuwaiti source said. “It could shake the government.”

Halliburton, meanwhile, is contending with two new scandals. Last week, the Wall Street Journal reported that the company had overcharged the government by sixteen million dollars on a bill for the cost of feeding troops at a military base in Kuwait. And last month the company made an astonishing confession: two of its employees, it said, had taken kickbacks resulting in overcharges of $6.3 million, in return for hiring a different Kuwaiti subcontractor in Iraq. Halliburton said that the employees, whose names it declined to reveal, had been fired and the funds returned. The day after this disclosure, the Pentagon awarded yet another contract to Halliburton, worth $1.2 billion, to rebuild the oil industry in southern Iraq.

Defenders of Halliburton deny that it has been politically favored, arguing that very few other companies could have handled these complex jobs. As Cheney said last September on “Meet the Press,”“Halliburton is a unique kind of company. There are very few companies out there that have the combination of very large engineering construction capability and significant oil-field services.” Dan Guttman, a fellow at Johns Hopkins University, agrees with Cheney’s assessment, but sees Halliburton’s dominance as part of a wider problem—one that has reached a crisis point in Iraq. After years of cutting government jobs in favor of hiring private firms, he said, “contractors have become so big and entrenched that it’s a fiction that the government maintains any control.” He wasn’t surprised that Halliburton’s admission of wrongdoing in Kuwait had failed to harm its position in Washington. “What can the government say—‘Stop right there’?” Guttman said of Halliburton. “They’re half done rebuilding Iraq.”

The Vice-President has not been connected directly to any of Halliburton’s current legal problems. Cheney’s spokesman said that the Vice-President “does not have knowledge of the contracting disputes beyond what has appeared in newspapers.” Yet, in a broader sense, Cheney does bear some responsibility. He has been both an architect and a beneficiary of the increasingly close relationship between the Department of Defense and an élite group of private military contractors—a relationship that has allowed companies such as Halliburton to profit enormously. As a government official and as Halliburton’s C.E.O., he has long argued that the commercial marketplace can provide better and cheaper services than a government bureaucracy. He has also been an advocate of limiting government regulation of the private sector. His vision has been fully realized: in 2002, more than a hundred and fifty billion dollars of public money was transferred from the Pentagon to private contractors.

According to Peter W. Singer, a fellow at the Brookings Institution and the author of “Corporate Warriors,” published last year, “We’re turning the lifeblood of our defense over to the marketplace.” Advocates of privatization, who have included fiscally minded Democrats as well as Republicans, have argued that competition in the marketplace is the best way to control costs. But Steven Kelman, a professor of public management at Harvard, notes that the competition for Iraq contracts is unusually low. “On battlefield support, there are only a few companies that are willing and able to do the work,” he said. Moreover, critics such as Waxman point out that public accountability is being sacrificed. “We can’t even find out how much Halliburton charges to do the laundry,” Waxman said. “It’s inexcusable that they should keep this information from the Congress, and the people.”

Unlike government agencies, private contractors can resist Freedom of Information Act requests and are insulated from direct congressional oversight. Jan Schakowsky, a Democratic representative from Illinois, told me, “It’s almost as if these private military contractors are involved in a secret war.” Private companies, she noted, can conceal details of their missions from public scrutiny in the name of protecting trade secrets. They are also largely exempt from salary caps and government ethics rules designed to protect policy from being polluted by politics. The Hatch Act, for example, forbids most government employees from giving money to political campaigns.

Halliburton has no such constraints. The company made political contributions of more than seven hundred thousand dollars between 1999 and 2002, almost always to Republican candidates or causes. In 2000, it donated $17,677 to the Bush-Cheney campaign. Indeed, the seventy or so companies that have Iraq contracts have contributed more money to President Bush than they did to any other candidate during the past twelve years.

Sam Gardiner, a retired Air Force colonel who has taught at the National War College, told me that so many of the contracts in Iraq are going to companies with personal connections with the Bush Administration that the procurement process has essentially become a “patronage system.” Major Joseph Yoswa, a Department of Defense spokesman, denied this. He told me that multiple safeguards exist to insure that the department’s procurement process for Iraq contracts is free of favoritism. Most important, he said, career civil servants, not political appointees, make final decisions on contracts.

Gardiner remains unconvinced. “The system is sick,” he told me. Cheney, he added, can’t see the problem. “He doesn’t see the difference between public and private interest,” he said.

George Sigalos, a Halliburton executive, recently gave a speech at a conference in Washington for businesspeople who hoped to obtain government contracts in Iraq. Many in the crowd had paid nearly four hundred dollars to attend, drawn by descriptions of Iraq as “the next Klondike,” as James Clad, an official with the U.S. Overseas Private Investment Corporation, a federal agency, put it. Sigalos began by pointing out that private contractors supplied the bullets that the Continental Army used in the American Revolution. “This didn’t begin with Halliburton,” he said.

Halliburton’s construction-and-engineering subsidiary, Brown & Root Services, started working with the U.S. military decades before Cheney joined the firm. Founded in Texas, in 1919, by two brothers, George and Herman Brown, and their brother-in-law, Dan Root, the firm grew from supervising small road-paving projects to building enormously complex oil platforms, dams, and Navy warships. The company’s engineering feats were nearly matched by its talent for political patronage. As Robert A. Caro noted in his biography of Lyndon Johnson, Brown & Root had a symbiotic relationship with L.B.J.: the company served as a munificent sponsor of his political campaigns, and in return was rewarded with big government contracts. In 1962, Brown & Root sold out to Halliburton, a booming oil-well construction-and-services firm, and in the following years the conglomerate grew spectacularly. According to Dan Briody, who has written a book on the subject, Brown & Root was part of a consortium of four companies that built about eighty-five per cent of the infrastructure needed by the Army during the Vietnam War. At the height of the resistance to the war, Brown & Root became a target of protesters, and soldiers in Vietnam derided it as Burn & Loot.

Around this time, in 1968, Dick Cheney arrived in Washington. He was a political-science graduate student who had won a congressional fellowship with Bill Steiger, a Republican from his home state of Wyoming. One of Cheney’s first assignments was to visit college campuses where antiwar protests were disrupting classes, and quietly assess the scene. Steiger was part of a group of congressmen who were considering ways to cut off federal funding to campuses where violent protests had broken out. It was an early lesson in the strategic use of government cutbacks.

Instead of returning to graduate school, Cheney got a job as the deputy for a brash congressional colleague of Steiger’s, Donald Rumsfeld, whom Richard Nixon had appointed to head the Office of Economic Opportunity. The O.E.O., which had played a prominent role in Johnson’s War on Poverty, was not favored by Nixon. According to Dan Guttman, who co-wrote “The Shadow Government” (1976), Rumsfeld and Cheney diminished the power of the office by outsourcing many of its jobs. Their tactics were not subtle. At nine o’clock on the morning of September 17, 1969, Rumsfeld distributed a new agency phone directory; without explanation, a hundred and eight employee names had been dropped. The vast majority were senior career civil servants who had been appointed by Democrats.

The purging of the office was a mixed success. Bureaucratic resistance stymied Cheney and Rumsfeld on several fronts. But by the time Ronald Reagan became President the overriding principle that had guided their actions at the O.E.O.—privatization—had become a central precept of the conservative movement.

For most of the eighties, Cheney served in the House of Representatives. In 1988, after the election of George H. W. Bush, he was named Secretary of Defense. The end of the Cold War brought with it expectations of a “peace dividend,” and Cheney’s mandate was to reduce forces, cut weapons systems, and close military bases. Predictably, this plan met with opposition from every member of Congress whose district had a base in peril.

Cheney was widely admired for his judicious handling of the matter. By the time he was done, the armed forces were at their lowest level since the Korean War. However, a Democratic aide on the House Armed Services Committee during those years told me that “contrary to his public image, which was as a reasonable, quiet, soft-spoken, and inclusive personality, Cheney was a rank partisan.” The aide said that Cheney practiced downsizing as political jujitsu. He once compiled a list of military bases to be closed; all were in Democratic districts. Cheney’s approach to cutting weapons systems was similar: he proposed breathtaking cuts in the districts of Thomas Downey, David Bonior, and Jim Wright, all high-profile Democrats. The aide told me that Congress, which was then dominated by the Democrats, beat back most of Cheney’s plans, because many of the cuts made no strategic sense. “This was about getting even,” he said of Cheney. Cheney’s spokesman disputed this account, saying that the armed services had specified which bases should be cut, and “Congress approved it without changes.”

As Defense Secretary, Cheney developed a contempt for Congress, which, a friend said, he came to regard as “a bunch of annoying gnats.” Meanwhile, his affinity for business deepened. “The meetings with businessmen were the ones that really got him pumped,” a former aide said. One company that did exceedingly well was Halliburton. Toward the end of Cheney’s tenure, the Pentagon decided to turn over to a single company the bulk of the business of planning and providing support for military operations abroad—tasks such as preparing food, doing the laundry, and cleaning the latrines. As Singer writes in “Corporate Warriors,” the Pentagon commissioned Halliburton to do a classified study of how this might work. In effect, the company was being asked to create its own market.

Halliburton was paid $3.9 million to write its initial report, which offered a strategy for providing support to twenty thousand troops. The Pentagon then paid Halliburton five million dollars more to do a follow-up study. In August, 1992, Halliburton was selected by the U.S. Army Corps of Engineers to do all the work needed to support the military during the next five years, in accordance with the plan it had itself drawn up. The Pentagon had never relied so heavily on a single company before. Although the profit margins for this omnibus government contract were narrower than they were for private-sector jobs, there was a guaranteed profit of one per cent, with the possibility of as much as nine per cent—making it a rare bit of business with no risk.

In December, 1992, working under its new contract, Halliburton began providing assistance to the United States troops overseeing the humanitarian crisis in Somalia. Few other companies in the world could have mobilized as fast or as well. Halliburton employees were on the ground within twenty-four hours of the first U.S. landing in Mogadishu. By the time Halliburton left, in 1995, it had become the largest employer in the country, having subcontracted out most of the menial work, while importing experts for more specialized needs. (A mortician was hired, for example, to clean up the bodies of the slain soldiers.) For its services in Somalia, Halliburton was paid a hundred and nine million dollars. Over the next five years, the company billed the government $2.2 billion for similar work in the Balkans.

Halliburton’s efforts in the field were considered highly effective. Yet Sam Gardiner, the retired Air Force colonel, told me that the success of private contractors in the battlefield has had an unforeseen consequence at the Pentagon. “It makes it too easy to go to war,” he said. “When you can hire people to go to war, there’s none of the grumbling and the political friction.” He noted that much of the scut work now being contracted out to firms like Halliburton was traditionally performed by reserve soldiers, who often complain the loudest.

There are some hundred and thirty-five thousand American troops in Iraq, but Gardiner estimated that there would be as many as three hundred thousand if not for private contractors. He said, “Think how much harder it would have been to get Congress, or the American public, to support those numbers.”

After Cheney’s tenure at the Pentagon ended, in 1993, with the arrival of the Clinton Administration, he spent much of the next two years deciding whether to run for President. He formed a political-action committee, and crossed the country making speeches and raising money. He also became affiliated with the American Enterprise Institute, the conservative think tank. Records from the Federal Election Commission show that Cheney’s pac contributors included executives at several of the companies that have since won the largest government contracts in Iraq. Among them were Thomas Cruikshank, Halliburton’s C.E.O. at the time; Stephen Bechtel, whose family’s construction-and-engineering firm now has a contract in Iraq worth as much as $2.8 billion; and Duane Andrews, then senior vice-president of Science Applications International Corporation, which has won seven contracts in Iraq.

When Newt Gingrich helped bring the House of Representatives into Republican hands, in 1994, Cheney felt reassured that the country was back on the right track, alleviating his need to run. His pac hadn’t raised enough money, in any case. Equally important, colleagues said, Cheney had found that he didn’t enjoy being the center of attention. He preferred to work behind the scenes.

Cheney was hired by Halliburton in 1995, not long after he went on a fly-fishing trip in New Brunswick, Canada, with several corporate moguls. After Cheney had said good night, the others began talking about Halliburton’s need for a new C.E.O. Why not Dick? He had virtually no business experience, but he had valuable relationships with very powerful people. Lawrence Eagleburger, the Secretary of State in the first Bush Administration, became a Halliburton board member after Cheney joined the company. He told me that Cheney was the firm’s “outside man,” the person who could best help the company expand its business around the globe. Cheney was close to many world leaders, particularly in the Persian Gulf, a region central to Halliburton’s oil-services business. Cheney and his wife, Lynne, were so friendly with Prince Bandar, the Saudi Ambassador to the U.S., that the Prince had invited the Cheney family to his daughter’s wedding. (Cheney did not attend.) “Dick was good at opening doors,” Eagleburger said. “I don’t mean that pejoratively. He had contacts from his former life, and he used them effectively.”

Under Cheney’s direction, Halliburton thrived. In 1998, the company acquired its main rival, Dresser Industries. Cheney negotiated the $7.7-billion deal, reportedly during a weekend of quail-hunting. The combined conglomerate, which retained the Halliburton name, instantly became the largest company of its kind in the world. But, in its eagerness to merge, Halliburton had failed to detect the size of the legal liability that Dresser faced from long-dormant lawsuits dealing with asbestos poisoning. The claims proved so ruinous that several Halliburton divisions later filed for bankruptcy protection. The asbestos settlements devastated the company’s stock price, which fell by eighty per cent in just over a year.

Cheney’s defenders have argued that no one could have anticipated the extent of the asbestos problem. Yet the incident presaged a current criticism of Cheney: that he can be blindsided by insular decision-making. Eagleburger, who was on Dresser’s board of directors before it merged with Halliburton, told me, “I can’t fault Cheney as such on asbestos, but somebody slipped up somewhere in the due diligence. Somebody should have caught it.”

The Dresser merger also raised ethical questions. The United States had concluded that Iraq, Libya, and Iran supported terrorism and had imposed strict sanctions on them. Yet during Cheney’s tenure at Halliburton the company did business in all three countries. In the case of Iraq, Halliburton legally evaded U.S. sanctions by conducting its oil-service business through foreign subsidiaries that had once been owned by Dresser. With Iran and Libya, Halliburton used its own subsidiaries. The use of foreign subsidiaries may have helped the company to avoid paying U.S. taxes.

In some ways, the Libya and Iran transactions were consistent with Cheney’s views. He had long opposed economic sanctions as a political tool, even against South Africa’s apartheid regime. During the 2000 campaign, however, Cheney said he viewed Iraq differently. “I had a firm policy that we wouldn’t do anything in Iraq, even arrangements that were supposedly legal,” he told ABC News. But, under Cheney’s watch, two foreign subsidiaries of Dresser sold millions of dollars’ worth of oil services and parts to Saddam’s regime. The transactions were not illegal, but they were politically suspect. The deals occurred under the United Nations Oil-for-Food program, at a time when Saddam Hussein chose which companies his government would work with. Corruption was rampant. It may be that it was simply Halliburton’s expertise that attracted Saddam’s regime, but a United Nations diplomat with the Oil-for-Food program has doubts. “Most American companies were blacklisted,” he said. “It’s rather surprising to find Halliburton doing business with Saddam. It would have been very much a senior-level decision, made by the regime at the top.” Cheney has said that he personally directed the company to stop doing business with Saddam. Halliburton’s presence in Iraq ended in February, 2000.

During the 2000 Vice-Presidential debate, Senator Joseph Lieberman teased Cheney about the fortune he had amassed at Halliburton. “I’m pleased to see, Dick, that you’re better off than you were eight years ago,” he said.

“I can tell you that the government had absolutely nothing to do with it,” Cheney shot back. In fact, despite having spent years championing the private sector and disparaging big government, Cheney devoted himself at Halliburton to securing government funds. In the five years before Cheney joined Halliburton, the company received a hundred million dollars in government credit guarantees. During Cheney’s tenure, this amount jumped to $1.5 billion. One alliance that Cheney worked hard to make was with the Export-Import Bank, in Washington; he won the support of James Harmon, a Clinton appointee and the bank’s chairman. Harmon agreed to make a four-hundred-and-ninety-million-dollar loan guarantee to a Russian company that was drilling a huge oil field in Siberia. It was the largest loan guarantee to a Russian company in the bank’s history, and a big chunk of it would facilitate the Russian company’s purchase of Halliburton’s services. There was a hitch, however: the Russian company, Tyumen Oil, was caught in a messy dispute with several competitors, all of whom accused the others of being corrupt.

Cheney was undeterred by these charges. But he almost lost the Export-Import loan when the State Department attempted to block it, on the ground that Tyumen was involved in illegal activity. According to a source who worked at the State Department at the time, Cheney personally lobbied the government in an effort to keep the deal alive. He was particularly incensed by the involvement of the Central Intelligence Agency, which sided with the State Department. According to a friend of Cheney’s, he was convinced that the C.I.A. had been duped by opposition research spread by Tyumen’s rivals. Eventually, the deal went through. By then, though, Cheney’s frustration with government had become profound. As he said in a speech in 1998, “The average Halliburton hand knows more about the world than the average member of Congress.”

In the spring of 2000, Cheney’s two worlds—commerce and politics— merged. Halliburton allowed its C.E.O. to serve simultaneously as the head of George W. Bush’s Vice-Presidential search committee. At the time, Bush said that his main criterion for a running mate was “somebody who’s not going to hurt you.” Cheney demanded reams of documents from the candidates he considered. In the end, he picked himself—a move that his longtime friend Stuart Spencer recently described, with admiration, as “the most Machiavellian fucking thing I’ve ever seen.”

One man who was especially pleased by Cheney’s candidacy was Ahmed Chalabi, the Iraqi dissident who was the leading proponent of overthrowing Saddam Hussein. Cheney had come to know Chalabi through conservative circles in Washington. “I think he is good for us,” Chalabi told a U.P.I. reporter in June, 2000.

For months there has been a debate in Washington about when the Bush Administration decided to go to war against Saddam. In Ron Suskind’s recent book “The Price of Loyalty,” former Treasury Secretary Paul O’Neill charges that Cheney agitated for U.S. intervention well before the terrorist attacks of September 11, 2001. Additional evidence that Cheney played an early planning role is contained in a previously undisclosed National Security Council document, dated February 3, 2001. The top-secret document, written by a high-level N.S.C. official, concerned Cheney’s newly formed Energy Task Force. It directed the N.S.C. staff to coöperate fully with the Energy Task Force as it considered the “melding” of two seemingly unrelated areas of policy: “the review of operational policies towards rogue states,” such as Iraq, and “actions regarding the capture of new and existing oil and gas fields.”

A source who worked at the N.S.C. at the time doubted that there were links between Cheney’s Energy Task Force and the overthrow of Saddam. But Mark Medish, who served as senior director for Russian, Ukrainian, and Eurasian affairs at the N.S.C. during the Clinton Administration, told me that he regards the document as potentially “huge.” He said, “People think Cheney’s Energy Task Force has been secretive about domestic issues,” referring to the fact that the Vice-President has been unwilling to reveal information about private task-force meetings that took place in 2001, when information was being gathered to help develop President Bush’s energy policy. “But if this little group was discussing geostrategic plans for oil, it puts the issue of war in the context of the captains of the oil industry sitting down with Cheney and laying grand, global plans.”

The Bush Administration’s war on terror has became a source of substantial profit for Halliburton. The company’s commercial ties to terrorist states did not prevent it from assuming a prominent role. The Navy, for instance, paid Halliburton thirty-seven million dollars to build prison camps in Cuba’s Guantánamo Bay for suspected terrorists. The State Department gave the company a hundred-million-dollar contract to construct a new embassy in Kabul. And in December, 2001, a few years after having lost its omnibus military-support contract to a lower bidder, Halliburton won it back; before long, the company was supporting U.S. troops in Afghanistan, Kuwait, Jordan, Uzbekistan, Djibouti, the Republic of Georgia, and Iraq. Halliburton’s 2002 annual report describes counterterrorism as offering “growth opportunities.”

The Department of Defense’s decision to award Halliburton the seven-billion-dollar contract to restore Iraq’s oil industry was made under “emergency” conditions. The company was secretly hired to draw up plans for how it would deal with putting out oil-well fires, should they occur during the war. This planning began in the fall of 2002, around the time that Congress was debating whether to grant President Bush the authority to use force, and before the United Nations had fully debated the issue. In early March, 2003, the Army quietly awarded Halliburton a contract to execute those plans.

As it turned out, oil-well fires were not a problem. An Army War College study shows that of the fifteen hundred oil wells in Iraq’s two major oil fields, only nine were damaged during the war. Colonel Gardiner said he was puzzled by the Pentagon’s inability to predict this outcome. “Our intelligence before the war was good enough to know that,” he said.

After months spent trying to obtain more information about the classified Halliburton deals, Representative Waxman’s staff discovered that the original oil-well-fire contract entrusted Halliburton with a full restoration of the Iraqi oil industry. “We thought it was supposed to be a short-term, small contract, but now it turns out Halliburton is restoring the entire oil infrastructure in Iraq,” Waxman said. The Defense Department’s only public acknowledgments of this wide-ranging deal had been two press releases announcing that it had asked Halliburton to prepare to help put out oil-well fires.

The most recent budget request provided by the Coalition Provisional Authority in Iraq mentions the building of a new oil refinery and the drilling of new wells. “They said originally they were just going to bring it up to prewar levels. Now they’re getting money to dramatically improve it,” Waxman complained. Who is going to own these upgrades, after the United States government has finished paying Halliburton to build them? “Who knows?” Waxman said. “Nobody is saying.”

It is so complicated to secure an Iraq contract from the United States government that several big Washington law firms have gone into the business of shepherding applicants through the process. More than twenty billion dollars has been set aside for Iraqi relief and reconstruction projects, with work contracts being awarded by the Defense, State, and Commerce Departments, and by the U.S. Agency for International Development, in coördination with L. Paul Bremer, the head of the Coalition Provisional Authority. There’s an additional five billion dollars sitting in the Development Fund for Iraq, also administered by the C.P.A. Officials at the C.P.A. say that contracts are awarded on the basis of competitive bidding, but rumors proliferate about political influence. When asked if connections helped, an executive whose firm has received several contracts replied, “Of course.” One businessman with close ties to the Bush Administration told me, “Anything that has to do with Iraq policy, Cheney’s the man to see. He’s running it, the way that L.B.J. ran the space program.”

Cheney’s spokesman confirmed that the Vice-President speaks “on occasion” with officials at the C.P.A., and refers inquiries to the authority from third parties “expressing interest in getting involved in Iraq.” The businessman offered an example of Cheney’s backstage role. He said that Jack Kemp, the former Republican congressman and Secretary of Housing and Urban Development, got help from Cheney with a venture involving Iraq. Last summer, the businessman said, Kemp had Cheney over for dinner, along with two sons of the President of the United Arab Emirates. In an interview, Kemp confirmed the event, and his business plans, but denied receiving any special assistance from Cheney. “It was just social,” Kemp said. “We’re old friends. We didn’t talk about business.” He acknowledged, however, that Cesar Conda, who until last fall was Cheney’s domestic-policy adviser, was helping him with a study on how to fashion a public-private partnership plan to develop the Iraqi economy.

Kemp said that he is working on two business ventures in Iraq. He described the first project, a company called Free Market Global, as “an international company that trades in gas, petroleum, and other resources.” Although Kemp provided only vague details about the project, he said, “I can tell you that General Tommy Franks has joined the advisory board of Free Market Global.” Last year, General Franks commanded the invasion of Iraq.

Franks’s lawyer, Marty Edelman, confirmed his client’s participation: “That is correct. But it is my understanding that he won’t be dealing with Iraq or the military for a year” (to comply with government ethics rules). Asked how Kemp and Franks had joined forces, Edelman said, “It seems like everyone on that level knows each other.” Edelman himself is now on the advisory board of Free Market Global.

Kemp’s second project, in which he said he would play an advisory role, is something called al-Ruba’yia. He describes it as a two-hundred-million-dollar fund to be invested in various ventures in Iraq, from energy to education. He is trying to attract American investors. Kemp is well positioned for this task: his political organization, Empower America, counts among its supporters some of the current Bush Administration’s top figures. Donald Rumsfeld, for example, is a former board member. “It’s like Russia,” the businessman said. “This is how corruption is done these days. It’s not about bribes. You just help your friends to get access. Cheney doesn’t call the Defense Department and tell them, ‘Pick Halliburton.’ It’s just having dinner with the right people.”

So far, other than the irregularities at Halliburton, there has been no evidence of large-scale corruption in the rebuilding of Iraq. But a number of friends of the Administration have landed important positions, and others have obtained large contracts. For instance, Peter McPherson, who took a leave from his job as president of Michigan State University to serve as Paul Bremer’s economic deputy in Iraq, has been friends with Cheney since they both served in Gerald Ford’s White House. The head of private-sector development at the C.P.A., one of the most powerful posts in Iraq, is Thomas Foley, a Connecticut-based business-school classmate of President Bush, who later became finance chairman for Bush’s Presidential campaign in Connecticut. Foley was a “pioneer,” meaning that he raised more than a hundred thousand dollars for Bush.

Last month, an inspector general was appointed for the C.P.A., as required by Congress when it approved the President’s eighty-seven-billion-dollar supplemental budget for Iraq last year. Rather than choosing a nonpartisan outsider for this watchdog role, as most government agencies do, the Administration selected Stuart Bowen, Jr., who spent two years as White House counsel in the Bush Administration. According to The Hill, a Washington newspaper, L. Marc Zell, a former law partner of Douglas Feith, the Under-Secretary of Defense for Policy, is helping with international marketing for a concern called the Iraqi International Law Group. Billing itself as a group of lawyers and businessmen interested in helping investors in Iraq, the venture is run by Ahmed Chalabi’s nephew Salem, who doubles as a legal adviser to Iraq’s governing council, of which his uncle is a member.

Tom Korologos, a well-connected Republican lobbyist in Washington, recently took a temporary assignment as a senior counsellor to Bremer. Korologos acknowledged that Washington lobbyists are scrambling to solicit business in Iraq. “By definition, it’s going to boom, because of the numbers,” he said. “The question is who’s going to get the contracts. There’s a lot of money. Somebody’s got to build the bridges and roads.” He added that talk of political influence over the process was “bullshit.”

Yet a look at one prominent defense contractor, Science Applications International Corporation, based in San Diego, suggests the importance of connections. One of its board members is Army General Wayne Downing, who commanded the Special Forces in the first Gulf War and ran counterterrorism in the Bush White House for the better part of a year after September 11th. During that time, he accompanied Cheney on visits to the C.I.A. to discuss U.S. intelligence on Iraq. For years, Downing has been an unpaid adviser to Ahmed Chalabi and the Iraqi National Congress, and he was an early advocate of armed insurrection against the old Iraqi regime. S.A.I.C.’s seven Iraq contracts are worth fifty million dollars.

It is unclear what special expertise S.A.I.C. brings to several of its contracts. One company executive, who asked not to be named, said that its chief credential for setting up what was supposed to be an independent media for Iraq, modelled on the BBC, was military work in “informational warfare”—signal jamming, “perception management,” and the like. Some of S.A.I.C.’s government contracts require that specific individuals—referred to as “executive management consultants”—be paid more than two hundred dollars an hour. One contract cites a man named Owen Kirby as someone who will advise Iraqis on the process of building democracy. Kirby is a program director of the International Republican Institute, an organization devoted to promoting democracy abroad. In October, 2001, the group gave its Freedom Award to Dick Cheney. Before that, it gave the award to Lynne Cheney.

It is not surprising that Cheney, after five years of running Halliburton, a company that considers war as providing “growth opportunities,” regards winning the peace in Iraq as a challenge for private enterprise as well as for government. Yet it is reasonable to ask if Cheney’s faith in companies like Halliburton contributed to his conviction that the occupation of Iraq would be a tidy, easily managed affair. Now that Cheney’s vision has been shown to be overly optimistic, and Iraqis and American soldiers are still getting killed ten months after Saddam’s overthrow, critics are questioning the propriety of a reconstruction effort that is fuelled by the profit motive. “I’m appalled that the war is being used by people close to the Bush Administration to make money for themselves,” Waxman said. “At a time when we’re asking young men and women to make perhaps the ultimate sacrifice, it’s just unseemly.” Many of those involved, however, see themselves as part of a democratic vanguard. Jack Kemp’s spokesman, P. J. Johnson, told me, “We’re doing good by doing well.” Joe Allbaugh, Bush’s former campaign manager, who has established New Bridge Strategies, a firm aimed specifically at setting up for-profit ventures in Iraq, makes no apologies. “We are proud of the leadership the American private sector is taking in the reconstruction of Iraq,” he said.

Another top Republican lobbyist in Washington, Charlie Black, told me that his firm, BKSH & Associates, has plans to help Iraqis set up their own affiliated public-relations and government-relations firm; the company would become perhaps the first lobbying shop in Baghdad. Black is excited by the opportunities in Iraq, but he, too, has complaints. “The problem in Iraq so far is it’s slow, and very confusing for people to figure out how to do business there,” he said. “One week you go to Baghdad, and they say the decisions are being made at the Pentagon. Then you go to the Pentagon, and they say the decisions are being made in Baghdad. Only Halliburton is making money now!” He laughed. “Is there too much cronyism? I just wish I could find the cronies.”