Center for American Progress

The Progress Report

by David Sirota, Christy Harvey, Judd Legum and Jonathan Baskin
May 28, 2004

E-mail Kelli Arena
'Nothing But Lip Service'
Corrupt Contract for America
Unlevel Playing Field

E-mail Kelli Arena

Yesterday, CNN Justice Department correspondent Kelli Arena spread the unsubstantiated myth that al Qaeda has a preference in the upcoming U.S. elections. Arena, who is supposed to be an objective journalist, claimed, "there is some speculation that al Qaeda believes it has a better chance of winning in Iraq if John Kerry is in the White House." Arena's comment came on the same day Kerry called for 40,000 more troops in Iraq. E-mail Kelli Arena at and tell her to stick to the facts.

'Nothing But Lip Service'

As the nation prepares to reflect on Memorial Day, the White House is ramping up its effort to politicize national security, while hiding its record of mistreating veterans, and shortchanging troops on the battlefield. In a forum for the Bush Campaign yesterday, Secretary of Veterans Anthony Principi declared "our active military respond better to Republicans" because of "the tremendous support that President Bush [has] provided for our military and our veterans." His declaration came on the same day the White House announced plans for massive cuts to the veterans health care budget in 2006. This is not the first time top administration officials have made claims about veterans on the very same day they tried to slash veterans' funding. Last January, President Bush praised veterans in a visit to Walter Reed Army Medical Center. That same day, 164,000 veterans were told the White House was "immediately cutting off their access to the VA health care system." The next year, the White House offered another proposal to "jack up the amount military retirees and some veterans pay for prescription drugs."

SENDING TROOPS INTO COMBAT WITHOUT PROTECTION: At the same time the president pushed trillions in new tax cuts and sent troops into battle, he failed to provide soldiers with adequate body armor and reinforced Humvees. Even this year, the White House has not requested funding to immediately plug serious funding gaps for armor, helmets and other protective equipment needed by military commanders. And the consequences have been severe: According to Newsweek, a new study circulating in the Army says the lack of equipment may have contributed to one out of every four American casualties in Iraq.

CUTTING TROOP PAY & MISTREATING THEM DURING WAR: In January 2003, as the White House pushed the nation to war, the president visited troops preparing for battle and told them "I want to make sure that our soldiers have the best possible pay." Only months later as troops were fighting in Iraq, the White House announced plans to "roll back recent modest increases in monthly imminent-danger pay (from $225 to $150) and family-separation allowance (from $250 to $100) for troops getting shot at in combat zones." The Army Times quickly ran an editorial entitled "Nothing But Lipservice" calling the White House actions an "indignity" at "a time when Americans continue to die in Iraq." Meanwhile, in Iraq, instead of working to provide the troops with the best possible facilities, the White House continues to give no-bid contracts to Vice President Cheney's former company Halliburton, even as the company has been admonished for feeding troops unsanitary food.

THANKING TROOPS, CUTTING THEIR HEALTH CARE: In October 2003, the President told troops "I want to thank you for your willingness to heed that important call, and I want to thank your families. I want to thank your sons, daughters, husbands and wives who share in your sacrifice, who are willing to sacrifice for our country." Two weeks later, the White House announced it was "formally opposing a proposal to give National Guard and Reserve members access to the Pentagon's health insurance system" even though "a recent General Accounting Office report estimated that one out of every five Guard members has no health insurance at all."

TAX CUTS WHILE CUTTING HOUSING FOR TROOPS: Last year, only a month before the president sent troops into combat in Iraq, the White House proposed cutting $1.5 billion out of funding for military housing. The proposed cut came even as top conservatives on the House Armed Services Committee concluded that thousands of military families were living "in decrepit and dilapidated military housing." In response, progressive lawmakers offered an amendment to restore $1 billion in funding. The amendment would be paid for by slightly reducing the new tax cuts the president was proposing to give to the 200,000 Americans making more than $1 million. Instead of receiving a tax cut of $88,000, these millionaires would receive a tax cut of $83,000. With White House backing, House conservatives voted the legislation down.

BULLYING TROOPS, WHILE REFUSING TO TAKE RESPONSIBILITY: The White House has repeatedly tried to bully and intimidate troops. When Sgt. Felipe Vega and Spc. Clinton Deitz admitted their disappointment in the Pentagon for misleading them about how long they would be in Iraq, they were threatened with a court martial. When Sgt. Georg Andreas Pogany had a panic attack while being shot at in Iraq, he too was court martialed. When Sgt. Samuel Provance acknowledged prisoner abuse in Iraq and admitted the complicity of higher ups in the administration, he was "disciplined by the military and stripped of his security clearance." Meanwhile, the White House has yet to hold any of its political appointees accountable for policies that "opened the door" to the abuse in the first place.

Corrupt Contract for America

CACI International and Titan Corp., two private contractors, are now under investigation for their role in the prison abuse scandal at the infamous Abu Ghraib prison in Iraq. The two companies were given $171 million worth of contracts in Iraq, yet provided translators and interrogators with no experience. With a dangerous cocktail of hubris, negligence and myopia, the White House has refused to learn from the past and continues to entrust sensitive and important jobs to companies with no experience and no oversight.

CACI INVESTIGATED AFTER ABUSE: CACI International is "facing a probe by the General Services Administration that could result in the company being banned from future contracts" over the mistreatment of prisoners in Baghdad. The company, which had no prior experience in interrogation, was paid $66 million for its work in Iraq, and is currently the subject of five separate government investigations over its role in the abuse. One of CACI's interrogators, Steven A. Stefanowicz, "was implicated in an Army report on the abuses against Iraqi detainees at Abu Ghraib prison in Baghdad. Stefanowicz is accused of encouraging soldiers to set conditions for interrogations and says he 'clearly knew his instructions equated to physical abuse.'"

ACCOUNTING TRICKS: In a highly unusual move, the military paid CACI $45 million for translators at Iraqi prisons out of a contract hidden away in the Department of the Interior, not the Pentagon. This means it was able to escape "the notice of Defense Department auditors for several months." According to one Pentagon official, "This evaded all normal forms of oversight." For pay purposes, according to one military official familiar with the contract, CACI listed its hired interrogators as different types of computer specialists; this may actually be forbidden under federal regulations.

CACI REWARDED AFTER ABUSE: In a stunning move this week, with investigations currently underway, CACI International was rewarded with a new $88 million contract to provide computer systems engineering support to the Navy.

FORGET THE TITANS: The Taguba report implicated another contractor group in the abuse at Abu Ghraib, The Titan Corp. saying a Titan employee committed "indecent acts" and "cruelty and maltreatment." The company is racking up quite a resume: another of their employees working at the Guantanamo prison "was arrested last year on espionage charges." And the company is also under a separate investigation "by the Securities and Exchange Commission and the Justice Department relating to possible bribery of foreign officials by Titan consultants or subsidiaries." And payments to the company were docked earlier this year, as the Pentagon suspected the company of overbilling.

LOST IN TRANSLATION: The Titan Corp., which supplies hundreds of interpreters to Iraq, "is hiring people who speak limited English and have no professional experience as interpreters and translators, say soldiers who have worked with them at Abu Ghraib prison and elsewhere." The U.S. gave Titan a $657 million contract to supply "skilled contract linguists" to American forces. "But with the acute shortage of skilled interpreters, Titan is hiring taxi drivers, [and] shopkeepers," many of whom have no experience with professional interpreting and don't speak much English.

WILL THEY EVER LEARN?: This week, the Army announced the new recipient of the $259 million contract to supply guns to the Iraqi army: ANHAM. The new company, however, turns out to actually be the old company; it's just a "reconstituted version" of Nour, a Ahmad Chalabi-connected company whose earlier contract with the Army has been suspended as it undergoes an investigation for giving American military secrets to Iran.

Unlevel Playing Field

Class action legislation being considered in Congress next week would make it harder for the public to make corporations pay for their mistreatment of workers and consumers. According to a Public Citizen report, the White House backed legislation that "would give corporate defendants subtle, but substantial, procedural advantages." Most significantly, "The legislation would transfer most large class action lawsuits from state courts to federal courts, where experts say their chances of success are diminished." Studies show the legislation, which has been touted by President Bush and is endorsed by big business, could endanger consumers by reducing corporate liability and making it harder for the public to hold big business to account.

CONSERVATIVES PUT CLASS ACTION REFORM AHEAD OF TROOPS: Eager to appease their big business allies, conservatives led by Senate Majority Leader Bill Frist (R-TN) are working to delay congressional discussion of a defense appropriations bill which would provide support to our troops and "go straight to class action reform." In an exchange before the president last Friday, Sen. Harry Reid (D-NV) asked Frist "to modify his request to provide that the Senate proceed to the consideration of the class action legislation upon disposition of the defense authorization bill." Frist's response: "I object to the modification."

FACT—FEDERAL COURTS FAVOR BIG BUSINESS: The Class Action Fairness Act would give an unfair advantage to corporate defendants. Public Citizen alleges federal judges will be less likely to certify lawsuits or enforce state consumer protections, and that cases would be subject to a protracted appeals process. In 43 cases involving insurance providers, some of the bill's biggest backers, Public Citizen found that "whereas 11 of the 17 state cases were certified (65 percent)," only "nine of 26 (35 percent) federal cases were certified." Experts also say state judges tend to be familiar with the underpinnings of cases and can dispense justice more efficiently. In federal courts cases will languish, often for years. Currently, there are 34,067 civil cases over three years old languishing in federal courts.

FACT – LAWYERS FEES ARE HIGHER IN FEDERAL COURTS: An oft-repeated justification for class action reform is that attorneys reign in a disproportionate percentage of the profits in settlements. President Bush has said the Class Action Fairness Act would ensure "settlements go to those who are wrongfully injured rather than to a few wealthy trial lawyers." But a comprehensive study of class action case data sets covering 1993-2002 found "Fees as a percent of class recovery were found to be higher in federal than state court," meaning the legislation before Congress would likely increase the percentage of settlements going to attorneys, rather than reduce it.

CORPORATIONS PUSHING FOR LAW: A big clue as to who will benefit from class action reform can be found by looking at who has pushed Congress to pass it. Led by insurance companies and banks, "at least 100 large companies and trade associations have employed 475 different lobbyists who pushed for class action legislation from 2000 through 2002." According to data gathered from the Center for Responsive Politics, Public Citizen alleges "The 29 corporations and business groups that have lobbied most actively for class action legislation – those that have employed seven or more lobbyists to work the issue –gave a combined $49 million in PAC and soft money political contributions over the past three election cycles…82 percent of that money supported Republicans and 18 percent supported Democrats."

Under the Radar

ENVIRO – ARMY TAKING RISKS: The LAT reports this morning that the Army has "rescinded an order, issued earlier this month, for garrison commanders around the globe to stop spending money on many environmental protection activities as part of an effort to conserve funds for fighting in Iraq and Afghanistan." An internal Army email dated May 11 "told Army commanders around the world to 'take additional risk[s]' with environmental programs by canceling contracts and delaying efforts to enforce applicable laws." The email also ordered cutbacks in training programs, equipment maintenance and security. Faced with reporters' questions yesterday, the Pentagon took it all back, saying "they had found the money necessary to keep environmental programs on track."

CORRUPTION – FANNIE MAE DRAWS SCRUTINY: Financial Times reports "Fannie Mae's compensation of top executives is drawing closer scrutiny from both regulators and lawmakers amid concerns that incentives may have encouraged overly aggressive bookkeeping. The Office of Federal Housing Enterprise Oversight is examining the housing finance company's 'earnings per share challenge option grants' as part of a broader investigation of its accounting methods, according to people familiar with the matter." Fannie Mae has ties to Treasury Department inspector general John Snow, who the NYT reports is under review for his ownership of Fannie Mae debt "during a period when he was seeking to toughen regulation" of the company.

OFFENSIVE CONSERVATIVE QUOTE OF THE DAY: "Should -- why would Al Gore associate with a group that is that left wing and that radical? What if he spoke before the Klan? Would that -- would we not hold him in judgment for that?" - Sean Hannity, 5/26/04, comparing political activist group to the KKK.

NATIONAL SECURITY – GET OFF MY TURF: The WSJ reports, there's a turf war simmering between the Justice Department and the Department of Homeland Security over who "should act as the nation's main terrorism warning bell." This week, Attorney General John Ashcroft gave the Homeland Security office little advance notice he would be issuing a terror warning Wednesday. "Moreover, Homeland Security officials believed the information being used by Justice, much of which had been known for some time, was not new or specific enough to merit an announcement or other action." Why it's important to resolve this spat and soon: the confusion and lack of consensus "sends mixed signals that undermine the credibility of the terror-alert system and the government's ability to make people vigilant."

PRIVACY – BIG BROTHER IS WATCHING: The Washington Times reports, "Numerous federal government agencies are collecting and sifting through massive amounts of personal information, including credit reports, credit-card purchases and other financial data, posing new privacy concerns, according to the General Accounting Office (GAO)." Of the 128 federal agencies the GAO surveyed, "52 are using, or planning to implement, 199 data-mining programs, with 131 already operational." Earlier this year, "the most widely reported data-mining project — the Pentagon's Total Information Awareness (TIA) program — was shut down by Congress because of widespread privacy fears. The project sought to use credit-card, medical and travel records to search for terrorists and was dubbed by privacy advocates as a 'supersnoop' system to spy on Americans."