From Kurdistan to Kosovo - and from China and North Korea to Cuba and Venezuela - the cluelessness of the neoconartists knows no limits.

http://www.slate.com/id/2185374/

war stories: Military analysis.
Welcome to the QuagmireThe next president may be stuck with more problems in Iraq than Bush ever faced.
By Fred Kaplan
Posted Thursday, Feb. 28, 2008, at 7:22 PM ET

The next president, it now seems likely, will inherit a situation in Iraq that's as dreadful as any time since late 2006, before the troop surge and Gen. David Petraeus' new set of strategies.

Three stories in today's papers forebode grimness.

First, as is widely reported, Iraq's three-man presidential council vetoed a law that called for provincial elections in October. Mike McConnell, President Bush's director of national intelligence, called the veto "somewhat of a setback"—an understatement of staggering proportion.

When the parliament passed that law two months ago, Bush and his supporters—including Republican presidential hopeful Sen. John McCain—heralded the vote as a major sign of reconciliation among Iraq's sectarian factions and thus a vindication of the surge. The point of the surge, as Gen. Petraeus and others have said, was to create enough security in Baghdad that Iraq's political leaders could get their act together. The vote suggested some accommodation might be in the offing. The veto dashes those hopes.

As Richard Oppel and Khalid al-Ansary report in the New York Times, the veto isn't a whim that might be reversed with some suasion. Rather, it reflects a serious power struggle not only between Sunnis and Shiites, but also among the various Shiite parties.

Unless the veto is somehow reversed, its effects may unravel the tenuous alignments that have helped to reduce the mayhem and casualties these last few months. On one level, the veto might spur Muqtada Sadr, the powerful Shiite militia leader, to suspend his six-month moratorium on violence. It is widely believed that Sadr called this moratorium in order to pursue power through political means. Now that this route has been blocked, he may resort to his earlier methods. (The Times reports that the Sadrists "were furious at the veto.") On another level, it is bound to infuriate Sunni groups, who had hoped that provincial elections would boost their political power in Ninevah and Diyala, which are fairly calm today but have been scenes of riotous violence in the recent past.

This development feeds into the day's second unsettling news story, in the Washington Post, which reports that many volunteer forces of the "Sunni Awakening"—the tribal militias in Anbar, Diyala, and other provinces that have formed alliances of convenience with U.S. forces to defeat al-Qaida jihadists—are backing away from the arrangements.

As the Post's Sudarsan Raghavan and Amit Paley report, the Sunnis are increasingly frustrated by the Iraqi government's refusal to recognize their political clout—especially reneging on its promise to let more than a handful of their militias into the national army and police—and by what they see as the U.S. commanders' insufficient advocacy on the Sunnis' behalf. The story notes:

Since Feb. 8, thousands of fighters in restive Diyala province have left their posts in order to pressure the government and its American backers to replace the province's Shiite police chief. On Wednesday, their leaders warned that they would disband completely if their demands were not met. In Babil province, south of Baghdad, fighters have refused to man their checkpoints after U.S. soldiers killed several comrades in mid-February in circumstances that remain in dispute.

Before the U.S.-Sunni alliances were formed in late 2006 (before the American surge, by the way), many of these tribesmen fought alongside al-Qaida. The Post story notes that while a lot of the alliances with America are intact, they are increasingly fraying. One Sunni commander in Diyala is quoted as saying, "Now there is no cooperation with the Americans. … We have stopped fighting [against] al-Qaida."

And so the biggest success of the U.S. operation in Iraq—which was always a gamble, one very much worth taking but not very likely to endure beyond its tactical aims—may be teetering on the verge of collapse before even those tactical aims (the defeat of al-Qaida in Iraq) are achieved.

To sum up, then, two points can be inferred. First, Iraq's sectarian factions are nowhere near reconciliation. The point of the surge was to create enough "breathing space" to allow for such a political goal. If the goal isn't reached by July—that is, within the 15-month span that was always, inexorably, the duration of the surge—then, in strategic terms, the surge will not have succeeded.

Second, there are many reasons for the reduction in violence and casualties these last few months. The surge and, still more, Gen. Petraeus' counterinsurgency tactics are among them. So are Sadr's cease-fire and the Sunni Awakening—neither of which has much to do with the surge, one of which (the Awakening) was initiated by the Sunnis before the surge was even announced. And now, both Sadr's cease-fire and the Awakening are imperiled.

What to do about these trends?

This conundrum takes us to the third news story of (dissonant) note, in the New York Times, which reports that the commander of U.S. forces in the Middle East, Adm. William J. Fallon, thinks there should be a "pause" in troop withdrawals from Iraq after the last of the surge troops depart this July—but that this pause should be brief and that the withdrawals should resume soon after.

The first part of Fallon's idea—the pause—is nothing new. Secretary of Defense Robert Gates called for such a pause in December after returning from a trip to Baghdad. Before the trip, Gates had been talking about continuing the drawdown of troops from today's 20 combat brigades to the 15 that would remain after the surge brigades go back home in July and to 10 by the end of the year. He changed his tune after Gen. Petraeus told him that he might not be able to keep securing the Iraqi people with such a small force. Hence the "pause."

But the second part of Fallon's remark—the idea that the pause should be brief, just long enough to allow "all the dust to settle," after which the drawdown will resume—is a new wrinkle. Perhaps reflecting Petraeus' caution that 10 brigades won't be enough to sustain the U.S. mission in Iraq, Fallon says that the U.S. mission will be scaled back along with the forces. In an interview with the Times' Thom Shanker and Eric Schmitt, Fallon says that he is advocating a strategy that would "transfer more and more responsibility for security in Iraq to Iraqi security forces and, at the same time, withdrawing a substantial amount of our combat forces." The U.S. troops remaining in Iraq, he added, would mostly play the roles of "supporting, sustaining, advising, training, and mentoring"—not so much fighting or providing security.

This is a major distinction. Do Fallon's remarks reflect the views of the Bush administration or of Secretary Gates? Certainly there is, and has long been, a tension between the institutional Army and some of the commanders in the field over this very question. The former has always been skeptical about extending the war in Iraq. Senior officers are concerned that the lengthy and repeated tours of duty, especially the toll it has taken on the retention of junior officers and the recruitment of new enlistees, might break the Army. The latter brush aside those concerns and focus on what they need to accomplish their combat missions. Gates has found himself straddling this tension—very concerned about the health of the Army but also worried about the chances of failure in Iraq.
Click to learn more...

Fallon occupies an in-between position on the bureaucratic chart. He's a sort of warrior-executive—the commander of U.S. Central Command, with headquarters in Tampa, Fla.—but, as such, he's also the senior-most combatant commander, ranking just above Petraeus. (It's unusual that the head of CentCom is a Navy admiral, but that may have reflected a desire to put an officer of broader standing in charge.)

Do Fallon's statements herald a victory for the institutional Army—and a confirmation of Gates' initial instincts? Or do they mark a ratcheting-up of the tension?

In any case, if Fallon's strategy does prevail, the next president—whoever he or she is—may be relieved. A decision will have been made, under George W. Bush's tenure, to scale back America's military mission and to keep drawing down its military forces after the surge.

But two bits of caution should be noted. First, this does not necessarily mean a winding-down of the war—or of America's involvement in it. Gates and others, in fact, have favored significant troop reductions from Iraq precisely in order to build popular support for a long-term U.S. military presence there.

Second, the question remains: What happens if, after the withdrawals, all hell breaks loose—an especially likely prospect if the Sunni Awakening collapses and Sadr calls off his cease-fire? Do we send more troops back in? Do we accelerate the withdrawal? Do we engage in diplomacy to lure neighboring countries to help tamp down the violence? And what do we offer them in exchange for finally helping us out?

John McCain has said he wouldn't mind staying in Iraq for 100 years. Hillary Clinton and Barack Obama want to pull out a brigade or two a month though ultimately keep some of them in Iraq—and still others in the region—to keep fighting al-Qaida, training the Iraqi security forces, and so forth.

The way things are going, the next president, whatever his or her preferences, may be stuck with more severe problems than Bush ever was—and will almost certainly have to make decisions that are harder.

Originally Posted by Pink Splice

http://www.slate.com/id/2185374/

Three stories in today's papers forebode grimness.

First, as is widely reported, Iraq's three-man presidential council vetoed a law that called for provincial elections in October. Mike McConnell, President Bush's director of national intelligence, called the veto "somewhat of a setback"—an understatement of staggering proportion...

Second, there are many reasons for the reduction in violence and casualties these last few months. The surge and, still more, Gen. Petraeus' counterinsurgency tactics are among them. So are Sadr's cease-fire and the Sunni Awakening—neither of which has much to do with the surge, one of which (the Awakening) was initiated by the Sunnis before the surge was even announced. And now, both Sadr's cease-fire and the Awakening are imperiled....

This conundrum takes us to the third news story of (dissonant) note, in the New York Times, which reports that the commander of U.S. forces in the Middle East, Adm. William J. Fallon, thinks there should be a "pause" in troop withdrawals from Iraq after the last of the surge troops depart this July—but that this pause should be brief and that the withdrawals should resume soon after.

This seems a reasonably well thought out overview of where we're at and are about to be. The Surge is supposed to end around the spring somewhere. It is not clear at all that the security gains are secure, while it is clear that the political stresses aren't resolved.

If a Friedman Units last about six months, and you rethink and reevaluate after every six months, we have a FU ending in the spring. It won't be the White House and Pentagon rethinking and reevaluating the following FU in November, it will be the voters.

But it seems to me that things are apt to go sour well before the next president picks it up. The Republicans have to make Iraq smell fairly sweet before November, or McCain is in big trouble. That doesn't look easy.

Originally Posted by Bob Butler 54

But it seems to me that things are apt to go sour well before the next president picks it up. The Republicans have to make Iraq smell fairly sweet before November, or McCain is in big trouble. That doesn't look easy.

Wish I shared this view, but I don't.

By the time the Republican smear machine gets through with Barack Obama, even his own mother will be hard pressed to vote for him.

But if Hillary somehow manages to rise from the dead ...

Originally Posted by Anthony '58 II

By the time the Republican smear machine gets through with Barack Obama, even his own mother will be hard pressed to vote for him.

They will try, but I'm beginning to believe that the compairisons between Reagan and Obama relative to them both becoming symbols in their times for something bigger than themselves is apt. Looking back, there was only a slim chance for Jimmy Carter to keep what was left of the new deal coalition together and be re-elected in 1980. Having to run against Reagan, the one Republican who could persuade Americans that it was time to go figeratively inside and start the unraveling eliminated that chance.
Today we have a situation where McCain is the only Republican who has a chance to keep Reagan's coalition together, but he's gotten the nomination by promising to keep America inside a box that Americans don't want to be in anymore. He will fail if the Democratic nominee can persuade Americas that it's time to go outside again and face the crises. And the great pursuader this year is named Obama.

Originally Posted by Bob Butler 54

The Republicans have to make Iraq smell fairly sweet before November, or McCain is in big trouble. That doesn't look easy.

Hmm. I wrote back in November of 2006 that if the Iraq War were still a hot topic for the 2008 elections, it would not be to the advantage of the Democrats. Given their newly minted majorities, the public would be likely to blame them for the CF as much as the GOP.

Fortunately for the Dems (and unfortunately for all of us) the Iraq War is primarily mentioned in the context of the broader economy: its enormous cost and drag on the economy as a whole. And Dems have far higher credibility with the public (FWIW) on the issue of economic crisis management.

Originally Posted by Anthony '58 II

Wish I shared this view, but I don't.

By the time the Republican smear machine gets through with Barack Obama, even his own mother will be hard pressed to vote for him.

But if Hillary somehow manages to rise from the dead ...

Sadly, Obama's mother would have to rise from the dead to vote for her son.

Originally Posted by Anthony '58 II

Wish I shared this view, but I don't.

By the time the Republican smear machine gets through with Barack Obama, even his own mother will be hard pressed to vote for him.

But if Hillary somehow manages to rise from the dead ...

Question: will the smear campaign work?

We are in a 3T/4T transition, and political practices that proved highly successful in a 3T often fail catastrophically in a 4T. The orthodox conservatism of the 1920s failed as the Great Depression disproved the reliability of doctrinaire plutocracy.

People are getting wiser to the dirty tricks that Karl Rogue and his imitators use. Sure, Karl Rove will play the race card, if only because he runs out of other tactics; it will get that low -- so low that it would offend the likes of Condaleezza Rice and Clarence Thomas. The real estate meltdown is almost certain to cause people to look at the "impoverish yourselves, enrich the right people, and miracles happen" promoters as the cause and not the solution for their economic distress. Given a chance, people run from those who bring misery to them.

Face it -- John McCain is not a powerful speaker. He's adopting a "dance with the ones who brung you" stance that will prove increasingly ineffective. The ones who "brung" us to the international and economic mess that we are in have proved themselves undesirable partners. After eight years of a Presidential disaster, Americans will want someone as different from Dubya as possible.

I don't say that John McCain is in on the pervasive corruption of the current administration, let alone that he would have done it himself. Maybe if Karl Rogue hadn't put the "black baby" canard into the South Carolina Republican primary in 2000, John McCain would now be the lame-duck President; maybe Usama bin Laden would have been vaporized before he had a chance to give the OK to commandeering jetliners to fly into the Twin Towers, the Pentagon, and who knows what else; maybe we wouldn't have had the flagrant degradations of Constitutional rights; we surely wouldn't have had the pitiful spectacle of Jeff Gannon (a gay prostitute with military shtick, of all things!) insinuated into the White House press corps to feed blatant propaganda to us. I can't say that we wouldn't have invaded Iraq, but we would have done it far better and without dividing the world as we did. New Orleans would be a nicer place because the Army Corps of Engineers would have been able to complete the then-needed work on the levees faster, and the National Guard would have been in New Orleans faster and more forcefully after Katrina.

I'm convinced that should he be elected, John McCain will be obliged to undo the mess that Dubya created. He will do fine at issuing executive orders to undo prior executive orders... but I can't see him going fast enough on economic reforms and meeting economic distress. The dirty catbox that Bill Clinton left behind is far less of a morass to clean up than the rattlesnake-infested quicksand that Dubya is about to leave behind.

... FDR was "unelectable" in 1924 and 1928. Lincoln was "unelectable" in 1852 and 1856. 3Ts toward their end are marvelous times for politicians who promise little except to let people concentrate upon material gain and on mindless hedonism. In a 4T, material gain becomes impossible and mindless hedonism becomes little more than a method of bleeding away one's needed assets. I have heard John McCain address Barak Obama's oratory with the warning that attractive words aren't enough to change the world. Sure -- but well-made ideas create their blueprints for change in well-chosen words.

I got it:

Get out of Iraq, and re-deploy the troops to Colombia!

http://www.washingtonpost.com/wp-dyn...030300311.html

Case Is Dropped Against Shiites In Sunni Deaths
Ex-Officials' Trial Seen as Test of System


By Amit R. Paley and Zaid Sabah
Washington Post Foreign Service
Tuesday, March 4, 2008; Page A12

BAGHDAD, March 3 -- Two former high-ranking Shiite government officials charged with kidnapping and killing scores of Sunnis were ordered released Monday after prosecutors dropped the case. The abrupt move renewed concerns about the willingness of Iraq's leaders to act against sectarianism and cast doubts on U.S. efforts to build an independent judiciary.

The collapse of the trial stunned American and Iraqi officials who had spent more than a year assembling the case, which they said included a wide array of evidence.

"This shows that the judicial system in Iraq is horribly broken," said a U.S. legal adviser who spoke on condition of anonymity because he was not authorized to discuss the case publicly. "And it sends a terrible signal: If you are Shia, then no worries; you can do whatever you want and nothing is going to happen to you."

Prime Minister Nouri al-Maliki's decision to allow the case to proceed to trial was considered a significant step toward proving his Shiite-led government could hold Shiite officials accountable for sectarian crimes. The case was heard at the multimillion-dollar Rule of Law Complex, protected and supervised by the United States, which has said that the development of an impartial justice system is essential to Iraq's long-term stability.

On Monday a three-judge panel ordered the former Health Ministry officials released after a prosecutor unexpectedly asked that the charges be dismissed for lack of evidence. The request caught U.S. officials off guard and came on the second day of what was expected to be at least a four-day trial; evidence had been presented completely on only some of the allegations against the defendants.

The trial of Hakim al-Zamili, a former deputy health minister, and Brig. Gen. Hamid Hamza Alwan Abbas al-Shamari, who led the agency's security force, was the most public airing of evidence that Baghdad hospitals had become death zones for Sunnis seeking treatment there. The officials, followers of anti-American Shiite cleric Moqtada al-Sadr, the leader of the feared Mahdi Army militia, were accused of organizing and supporting the murder of Sunni doctors; the use of ambulances to transfer weapons for Shiite militia members; and the torture and kidnapping of Sunni patients.

Zamili and Shamari said they were innocent and unaware of the ministry being used for crimes against Sunnis. Their attorneys accused the government and American officials of trying to lead a campaign against the Sadrist movement. Sadr has been both a key supporter and a critic of Maliki's government; the cleric has recently won praise from U.S. officials for continuing to order his militia to refrain from violence.

Zamili, 43, of Sadr City in Baghdad, and Shamari, 49, of the capital's Baladiyat district, were taken into custody by the U.S. military last February.

"The very fact that the charges were heard and investigated does show modest progress toward the rule of law," said Mirembe Nantongo, a spokeswoman for the U.S. Embassy in Baghdad.

But the case hit roadblocks immediately. The trial court sent it back at least three times to the investigative court, asking for more information, according to American officials, who said the unusual requests were unnecessary and dangerous to carry out.

"The fact that the trial panel would find what we did insufficient was a great disappointment," Michael F. Walther, a Justice Department official who advised the Iraqi legal system, said in December. "I do think that they may have applied a different standard of proof than they would have for an ordinary criminal."

Eventually the panel announced that the trial would begin on Feb. 19, but three hours after it was scheduled to begin, a spokesman for the Iraqi court system, Judge Abdul Satar Ghafur al-Bayrkdar, said the case would be delayed until March 2 because witnesses had failed to appear.

American officials, however, said evidence had emerged that one of the trial judges had promised to find the defendants not guilty and that a senior judge had ordered him to be replaced.

Witness intimidation has been one of the most significant concerns in the trial.

Many of the witnesses agreed to testify only because they believed their names would be kept secret, but their names were leaked and supporters of the former Health Ministry officials threatened to kill them or their families if they didn't recant their testimony, American officials said. Many of the witnesses did not show up at the trial, though Iraqi law allows their testimony to be read if they do not attend.

One witness who did appear on Monday, Nazar Mehdi Abdul Rasul, the Health Ministry's chief legal representative, contradicted his sworn testimony in October that he witnessed an old man begging Zamili to help secure the release of the man's kidnapped brother.

"I heard Hakim Zamili call the kidnappers on his cellphone and ask them to release the brother of this old man," Rasul testified in October. "And after a long pleading I heard Zamili saying, 'Don't kill him, just throw him on Canal Street.' "

But on Monday, Rasul, who trembled and kept glancing at Zamili, said Zamili was a pious man and competent administrator. Rasul said he had misspoken during his earlier testimony because he was weak from fasting for Ramadan. The angered chief judge chastised Rasul and said he could submit his testimony in writing if he feared speaking in the courtroom.

Attorneys for the defendants called a number of witnesses, many Sadrists and current employees of the ministry, who defended Zamili and Shamari and suggested that others were behind the kidnappings and killings. But the judge also read the testimony of witnesses who accused Zamili and Shamari of being sectarian killers.

At the end of a long day Monday, the prosecutor got up and read what Americans described as a long statement. "The evidence against Hakim and Hamid is not enough to convict them. I ask to drop these charges and release them right away unless they are wanted for another case," said the prosecutor, whose name was not released as a security precaution.

"The bottom line is that we're reserving judgment on the Iraqi court's decision today," said Nantongo, the U.S. Embassy spokeswoman. "We remain concerned about this case."

A U.S. official said Zamili and Shamari are likely to be freed within 24 hours. Preparations were being made to tighten security for witnesses who testified against them.

Also Monday, Iranian President Mahmoud Ahmadinejad wrapped up a historic two-day visit to Iraq by calling on U.S. forces to leave the country.

"They should leave this area, and they should hand over the running of affairs to the government and the people of this region," he said. "The people in the region despise them and don't welcome them. None of the people in the region love those forces."

Despite tightened security measures that shut down much of Baghdad, two suicide bombers staged separate attacks that killed at least 18 people and wounded 23 others, Iraqi officials said.

Originally Posted by Anthony '58 II

I got it:

Get out of Iraq, and re-deploy the troops to Colombia!

Plonk. Still getting easier.

http://www.boston.com/news/world/art...ore/?page=full

Top Iraq contractor skirts US taxes offshore
Shell companies in Cayman Islands allow KBR to avoid Medicare, Social Security deductions
By Farah Stockman
Globe Staff / March 6, 2008

CAYMAN ISLANDS - Kellogg Brown & Root, the nation's top Iraq war contractor and until last year a subsidiary of Halliburton Corp., has avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in this tropical tax haven.

When Texas pipe-fitter Danny Langford applied for unemployment compensation after being let go by Service Employers International Inc., he was rejected, he was told, because he worked for a foreign company.

LEFT IN THE LURCH

More than 21,000 people working for KBR in Iraq - including about 10,500 Americans - are listed as employees of two companies that exist in a computer file on the fourth floor of a building on a palm-studded boulevard here in the Caribbean. Neither company has an office or phone number in the Cayman Islands.

The Defense Department has known since at least 2004 that KBR was avoiding taxes by declaring its American workers as employees of Cayman Islands shell companies, and officials said the move allowed KBR to perform the work more cheaply, saving Defense dollars.

But the use of the loophole results in a significantly greater loss of revenue to the government as a whole, particularly to the Social Security and Medicare trust funds. And the creation of shell companies in places such as the Cayman Islands to avoid taxes has long been attacked by members of Congress.

A Globe survey found that the practice is unusual enough that only one other ma jor contractor in Iraq said it does something similar.

"Failing to contribute to Social Security and Medicare thousands of times over isn't shielding the taxpayers they claim to protect, it's costing our citizens in the name of short-term corporate greed," said Senator John F. Kerry, a Massachusetts Democrat on the Senate Finance Committee who has introduced legislation to close loopholes for companies registering overseas.

With an estimated $16 billion in contracts, KBR is by far the largest contractor in Iraq, with eight times the work of its nearest competitor.

The no-bid contract it received in 2002 to rebuild Iraq's oil infrastructure and a multibillion-dollar contract to provide support services to troops have long drawn scrutiny because Vice President Dick Cheney was Halliburton's chief executive from 1995 until he joined the Republican ticket with President Bush in 2000.

The largest of the Cayman Islands shell companies - called Service Employers International Inc., which is now listed as having more than 20,000 workers in Iraq, according to KBR - was created two years before Cheney became Halliburton's chief executive. But a second Cayman Islands company called Overseas Administrative Services, which now is listed as the employer of 1,020 mostly managerial workers in Iraq, was established two months after Cheney's appointment.

Cheney's office at the White House referred questions to his personal lawyer, who did not return phone calls.

Heather Browne, a spokeswoman for KBR, acknowledged via e-mail that the two Cayman Islands companies were set up "in order to allow us to reduce certain tax obligations of the company and its employees."

Social Security and Medicare taxes amount to 15.3 percent of each employees' salary, split evenly between the worker and the employer. While KBR's use of the shell companies saves workers their half of the taxes, it deprives them of future retirement benefits.

In addition, the practice enables KBR to avoid paying unemployment taxes in Texas, where the company is registered, amounting to between $20 and $559 per American employee per year, depending on the company's rate of turnover.

As a result, workers hired through the Cayman Island companies cannot receive unemployment assistance should they lose their jobs.

In interviews with more than a dozen KBR workers registered through the Cayman Islands companies, most said they did not realize that they had been employed by a foreign firm until they arrived in Iraq and were told by their foremen, or until they returned home and applied for unemployment benefits.

"They never explained it to us," said Arthur Faust, 57, who got a job loading convoys in Iraq in 2004 after putting his resume on KBRcareers.com and going to orientation with KBR officials in Houston.

But there is one circumstance in which KBR does claim the workers as its own: when it comes to receiving the legal immunity extended to employers working in Iraq.

In one previously unreported case, a group of Service Employers International workers accused KBR of knowingly exposing them to cancer-causing chemicals at an Iraqi water treatment plant. Under the Defense Base Act of 1941, a federal workers compensation law, employers working with the military have immunity in most cases from such employee lawsuits.

So when KBR lawyers argued that the workers were KBR employees, lawyers for the men objected; the case remains in arbitration.

"When it benefits them, KBR takes the position that these men really are employees," said Michael Doyle, the lawyer for nine American men who were allegedly exposed to the dangerous chemicals. "You don't get to take both positions."

Founded by two brothers in Texas in 1919, the construction firm of Brown & Root quickly became associated with some of the largest public-works projects of the early 20th century, from oil platforms to warships to dams that provided electricity to rural areas.

Its political clout, particularly with fellow Texan Lyndon Johnson, was legendary, and it became a major overseas contractor, building roads and ports during the Vietnam war.

Halliburton, a Houston-based oil conglomerate, acquired Brown & Root in 1962. And after the Vietnam cease-fire agreement in 1973, it all but stopped doing overseas military work for two decades.

But in 1991, during the Gulf War, Halliburton decided to try to revive its military business. The next year, Brown & Root won a $3.9 million contract from the Defense Department under Secretary Dick Cheney to develop contingency plans to support, feed, house, and maintain the US military in 13 hot spots around the world.

That small contract soon grew into a massive logistical-support contract under which the company did everything from building military camps to cooking meals and providing transportation for troops. Under the contract, the military agreed to reimburse Brown & Root for all expenses, and to pay a profit of between 1 and 9 percent, depending on performance.

In Somalia, starting in December 1992, Brown & Root employees helped US soldiers and UN workers dig wells and collect garbage, among many other tasks. The company quickly became the largest civilian employer in the country, with about 2,500 people on its payroll. Its headquarters in Texas had a "war room," where executives would get daily updates about events in Mogadishu.

Later the company would play similar roles supporting US troops in Haiti, Rwanda, Bosnia, Uzbekistan, and Afghanistan.

As its military work increased, Brown & Root sent more American workers overseas. Americans working and living abroad receive significant breaks on their income tax, but still must pay Social Security and Medicare taxes if they work for an American company. The reasoning is that such workers are likely to return to the United States and collect benefits, so they and their employers ought to help pay for them.

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

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

Service Employers International was set up in 1993, as Brown & Root was ramping up its roster of overseas workers. Two years later, the company set up Overseas Administrative Services, which serves more senior workers and provides a pension plan.

The parent company became Kellogg Brown & Root in 1998, when it joined with the oil-pipe manufacturer, M. W. Kellogg.

Around that time, KBR lost its exclusive contract to provide logistical support to the US military. But in 2001 it outbid DynCorp to win it back, by agreeing to a maximum profit of 3 percent of costs.

Then, in 2002, the firm received a secret contract to draw up plans to restore Iraq's oil production after the US-led invasion of Iraq. The Defense Department has said the firm was chosen mainly for its assets and expertise, not its ability to control costs.

Nonetheless, KBR's top competitors in Iraq do not appear to have gone to the same lengths to avoid taxes. Other top Iraq war contractors - including Bechtel, Parsons, Washington Group International, L-3 Communications, Perini, and Fluor - told the Globe that they pay Social Security and Medicare taxes for their American workers.

"It has been Fluor Corporation's policy to compensate our employees who are US citizens the same as if they worked in the geographic United States," said Keith Stephens, Fluor's director of global media relations. "With the exception of hardship and danger pay additives for work performed in Iraq, they receive the same benefits as their US-based colleagues, and Fluor pays or remits all required US taxes and payroll burdens, including FICA payments and unemployment insurance."

Only one other top contractor, the construction and logistics firm IAP Worldwide Services Inc., said it employs a "limited number" of Americans through an offshore subsidiary.

Officials at DynCorp, the company that KBR outbid for the logistics contract, did not return numerous calls.

KBR is now widely believed to be the largest private employer of foreigners in Iraq, and it hires twice as many workers through its Cayman Island subsidiaries as it does by direct hires. Service Employers International alone employs more than 20,000 truck drivers, electricians, accountants, and engineers, roughly half of whom are American, according to Browne, the KBR spokeswoman.

KBR declined to release salary information. But workers interviewed by the Globe who served in a range of jobs said they earned between $48,000 and $85,000 per year. If KBR's American workers averaged even as much as $63,000 per year, they and KBR would have owed more than $100 million per year in Social Security and Medicare taxes, split evenly between them. Over the course of the five-year war, their tax bill would have been more than $500 million.

In 2004, auditors with the Pentagon's Defense Contract Audit Agency questioned KBR about the two Cayman Island companies but ultimately made no complaint. The auditors told the Globe in an email exchange facilitated by Pentagon spokesman Lieutenant Colonel Brian Maka that any tax savings resulting from the offshore subsidiaries "are passed on" to the US military.

Browne, the KBR spokeswoman, said the loss to Social Security could eventually be offset by the fact that the workers will receive less money when they retire, since benefits are generally based on how much workers and their companies have paid into the system.

Medicare, however, does not reduce benefits for workers who don't contribute, and Browne acknowledged that KBR has not calculated the impact of its tax practices on the government as a whole.

She said KBR does not save money from the practice, since its contracts allow for its labor expenses to be reimbursed by the US military. But the practice gives KBR a competitive advantage over other contractors who pay their share of employment taxes.

And critics of tax loopholes note that the use of offshore shell companies to avoid payroll taxes places a greater burden on other taxpayers.

"The argument that by not paying taxes they are saving the government money is just absurd," said Robert McIntyre, director of Citizens for Tax Justice, a Washington advocacy group.

To the people listed as its workers, Service Employers International Inc. - known to them as SEII - remains something of a mystery.

"Does anybody know what or where in the Grand Cayman Islands SEII is located?" a recently returned worker wrote in a complaint about the company on JobVent.com, an employment website. He speculated that the office in the Cayman Islands must be "the size of a jail cell . . . with only a desk and chair."

In fact, the address on file at the Registry of Companies in the Cayman Islands leads to a nondescript building in the Grand Cayman business district that houses Trident Trust, one of the Caymans' largest offshore registered agents. Trident Trust collects $1,000 a year to forward mail and serve as KBR's representative on the island.

The real managers of Service Employers International work out of KBR's office in Dubai. KBR and Halliburton, which also moved to Dubai, severed ties last year.

Both KBR and the US military appear to regard Service Employers International and KBR interchangeably, except for tax purposes. According to the Defense Contract Auditing Agency, KBR bills the Service Employers workers as "direct labor costs," and charges almost the same amount for them as for direct hires.

The contract that workers sign in Houston before traveling to Iraq commits workers to abide by KBR's code of ethics and dispute-resolution mechanisms but states that the agreement is with Service Employers International.

Some workers said they were told that Service Employers International was just KBR's payroll company. Others mistook the name as a reference to the well-known, large union, Service Employees International.

Henry Bunting, a Houston man who served as a procurement officer for a KBR project in Iraq in 2003, said he first found out that he was working for a foreign subsidiary when he looked closely at his paycheck.

"Their whole mindset was deceit," Bunting said. He said that he wrote to KBR several times asking for a W-2 form so he could file his taxes, but that KBR never responded.

David Boiles, a truck driver in Iraq from 2004 to 2006, said that he realized he was working for Service Employers International when he arrived in Iraq and his foreman told him he was not a KBR employee, despite the fact that his military-issued identification card said "KBR."

"At first, I didn't believe him," Boiles said.

Danny Langford, a Texas pipe-fitter who was sent to work in a water treatment plant in southern Iraq in July 2003, said he, too, initially believed that he was an employee of KBR.

But when he allegedly got ill from chemicals at the plant and was terminated that fall, he said, his application for unemployment compensation was rejected because he worked for a foreign company.

"Now, I don't know who I was working for," he said in a telephone interview.

For decades Congress has sought to crack down on corporations that use offshore subsidiaries to lower their taxes, but most of the debates have focused on schemes that reduce corporate income taxes, not payroll taxes. Last year a Senate subcommittee estimated that US corporations avoid paying $30 and $60 billion annually in income taxes by using offshore tax havens.

Senators Carl Levin, a Michigan Democrat; Barack Obama, an Illinois Democrat; and Norm Coleman, a Minnesota Republican, are trying to pass the Stop Tax Haven Abuse Act, which would give the US Treasury Department the authority to take special measures against foreign jurisdictions that impede US tax enforcement.

American companies that evade payroll taxes face fines or other criminal penalties. The use of foreign subsidiaries to avoid payroll taxes, while allowed by the Defense Department, may still be subject to challenge by the Internal Revenue Service, according to Eric Toder, a former director of the office of research for the IRS.

Toder said the IRS could try to take action against a firm if the sole purpose of setting up an offshore subsidiary was to reduce tax liability. The practice could become a more costly problem in the future, Toder said, as an increasing number of American companies register subsidiaries overseas and bring American employees to work abroad.

"It obviously looks unseemly where you have a situation where, if you did it in a straightforward way, they would pay payroll taxes," Toder said. "If this becomes the norm, and other companies do that as well, it could further erode the tax base."

Peter Singer, a specialist in the outsourcing of military functions at the liberal-leaning Brookings Institution, said the practice will probably attract more scrutiny in the future, as the military expands its outsourcing and as workplaces become increasingly global.

"It is fascinating and troubling at the same time," Singer said. "If you are an executive in a company, you are thinking: 'Wow. Cash savings and a potential loophole from certain domestic laws, lawsuits, and taxes. It's win-win.' But if you are a US taxpayer, it is not a positive synergy."

Globe correspondents Stephanie Vallejo and Matt Negrin contributed to this report.

http://www.mysanantonio.com/news/nat...d.38e1e38.html

Documents say contractor shipped home cash in box

Web Posted: 03/05/2008 11:16 PM CST

Guillermo Contreras
Express-News

The FedEx packages shipped to San Antonio contained typical souvenirs from Iraq: jewelry, kites and T-shirts.

They also held at least $150,000 in cash, all undeclared, according to court documents unsealed this week.

The sender, David Ricardo Ramirez, illegally took the money from the billions of dollars that American taxpayers have poured into Iraq since the U.S. invasion in 2003, the records show.

On Wednesday, a federal grand jury in San Antonio indicted Ramirez on charges of smuggling bulk amounts of cash and structuring bank transactions to evade cash-reporting requirements.

He has sat for weeks in a downtown San Antonio jail as agents with U.S. Immigration and Customs Enforcement, the FBI, the Air Force and the Army follow the trail of the cash he allegedly mailed to his sister. Agents suspect Ramirez spent it on a condo on Lake Travis in Austin, property in Val Verde County, a 1989 Lamborghini and a 2007 Ducati motorcycle.

"This is a contracting fraud investigation that is still ongoing," said Erik Vasys, spokesman for the FBI.

Though most details remain closely guarded, a review of his case by the San Antonio Express-News reveals a pattern similar to incidents of corruption that have embarrassed the Pentagon. Fraud and war profiteering in Iraq, Kuwait and Afghanistan have cost taxpayers millions, investigators have found.

Ramirez worked from Nov. 1, 2006, to Nov. 30, 2007, for a U.S.-based contractor, Readiness Management Support, or RMS, at Balad Air Base, Iraq. He was initially detained in December by the FBI in San Antonio on charges of making false statements to get the job, court records show. RMS has a contract with the Air Force to help maintain the military branch's operations overseas.

Ramirez's job title was "installation community planner," and his duties included planning sites for new construction within military bases in Iraq. The unsealed documents allege Ramirez lied on a federal form — required for a security-sensitive position — by claiming to have never been charged with or convicted of a crime.

But agents found he had several arrests on charges including theft by check, robbery, drug possession, drunken driving and unlawfully carrying a weapon, the documents show. As of December, at least, he was on probation for a Dec. 18, 2003, felony drug-possession conviction in Bexar County.

It was not immediately clear how Ramirez was hired for a sensitive job, but it mirrors other missteps. In 2005 and 2006, for instance, U.S. investigators prosecuted a contracting corruption ring that was partly led by Robert Stein, a convicted felon who was inexplicably put in charge of $82 million in contracts for the Coalition Provisional Authority, which oversaw the reconstruction of Iraq until it was phased out in 2004.

Stein exploited a freewheeling system in which $12 billion in cash — mostly shrink-wrapped $100 bills on wooden pallets — was shipped by the Federal Reserve Bank to Iraq. No one knows where most of it went, although Paul Bremer, the former head of the CPA, told Congress in February 2007 that the money was handed to Iraqi ministries.

In Ramirez's case, the documents do not say where he got the cash, but it did not land in his account by direct deposit, like his RMS salary.

Ramirez's lawyer, Jay Norton, described a more innocent scenario.

"He may have done some kind of side jobs for contractors, and they're all friends to a degree," Norton said. "Contractors and the people over there, they deal in cash, no checks. David may have done something that may have been inappropriate doing work on the side that he was not supposed to, but it was not illegal."

The records say Ramirez shipped five packages to his sister, Yolanda Urbano, that contained souvenirs and some cash. Agents intercepted one package in October 2007 and found $14,800 in sequentially numbered $50 and $100 bills concealed inside a wooden humidor, the documents said. The agents took an inventory of the package before allowing it to reach Urbano. They then followed her to Ramirez's bank and found she deposited most of it in smaller amounts over several days to avoid the reporting threshold of $10,000.

Urbano has not been charged.

Norton said Ramirez was not trying to circumvent customs declaration rules.

"He didn't know that there were any kind of reporting requirements," Norton said. "He thought that if you deposit a certain large amount of money, you'd have to pay taxes. He wasn't trying to hide it.

Originally Posted by Pink Splice

Plonk. Still getting easier.

Pretty soon, you'll be talking to yourself.

Originally Posted by Arkham '80

Pretty soon, you'll be talking to yourself.

I'll talk to you, Wally!!!

Originally Posted by Child of Socrates

I'll talk to you, Wally!!!

Here too, bro!

Let us not forget...

http://www.cnn.com/2008/WORLD/meast/...ain/index.html

Originally Posted by Arkham '80

Pretty soon, you'll be talking to yourself.

I'm a GM/DM/Referee; I have a continuous internal dialog going anyway.

Originally Posted by Child of Socrates

I'll talk to you, Wally!!!

Thank you, Kiff.

Originally Posted by playwrite

Here to, bro!

And I thank you as well.

Originally Posted by Child of Socrates

I'll talk to you, Wally!!!

An echo chamber for three, then.

As much as certain folks annoy me, I refuse to block them. It's unhealthy.

Originally Posted by Arkham '80

An echo chamber for three, then.

As much as certain folks annoy me, I refuse to block them. It's unhealthy.

I felt that way. My blood pressue argued otherwise.

Originally Posted by Pink Splice

I felt that way. My blood pressue argued otherwise.

It is the pressure of other perspectives that keeps us sane.

Originally Posted by Arkham '80

It is the pressure of other perspectives that keeps us sane.

There are varying perspectives, and then there are trolls. I'd allow people the freedom to discern the difference and decide what is in their best interest.

http://www.time.com/time/world/artic...te-cnn-partner

Ominous Rise in Baghdad Bombings
Friday, Mar. 07, 2008 By CHARLES CRAIN/BAGHDAD

Thursday's double-bombing in Baghdad, which killed nearly 70 people and left hundreds more wounded, was the worst attack in Iraq since June 2007. It continues a troubling trend: a slow but steady increase in deadly bombings across the country. The troop surge is ending and the U.S. has begun withdrawing soldiers from Baghdad, but these attacks may indicate that a military or political solution to the Sunni insurgency may be as far off as it was a year ago.

The attacks capped off a violent week. Last Sunday more than 20 people died in bombings across the capital. And last month nearly 100 people were killed when two women detonated suicide vests in a crowded Baghdad market. According to statistics released by the U.S. military such attacks declined sharply for most of 2007, bottoming out in December. Since late last year, though, car bombings and suicide vest bombings have increased steadily.

Despite this week's carnage the absolute number of bombings is still far lower than it was one year ago. The problem, however, is not simply lives lost, but also what the slow increase in attacks says about the resiliency of the Sunni insurgency. Battered by Shi'ite militias, the U.S. military and the defection of more moderate insurgents, al-Qaeda in Iraq and other radical insurgent groups are much weaker now than they were just last summer. But, as U.S. officials are quick to acknowledge, they still have the men, the money and the organization to pose a serious threat.

The question now is how that threat will be kept under control. American troop levels in Baghdad and the rest of Iraq will return this year to about the same level as 2006 — the year that saw the worst of the country's sectarian violence. Helping to fill that void, supposedly, will be former members of the Sunni insurgency: thousands have become U.S.-paid counter-insurgents and, in some cases, members of the Iraqi government security forces. Unlike the mostly Shi'ite Iraqi army and police, these Sunnis have credibility in their towns and neighborhoods and have proven effective in fighting their former insurgent allies.

The trouble is that this ground-level military solution may be in conflict with other government efforts to reduce the violence and foster stability in Iraq. The Karrada bombing came on the heels of a state visit by Iranian president Mahmoud Ahmadinejad, and struck a neighborhood that is home to Iraq's largest Shi'ite political party and many Shi'ite government officials. The timing and location of this bombing may have been a coincidence, but Karrada makes a nice target for Sunni militants who frame their fight as a struggle against Iranian domination.

The long-term difficulty for the United States and the Iraqi government is that this suspicion of Iran is not simply a fantasy of radical Sunni insurgents. It is a very real fear of Sunni former insurgents currently cooperating in the fight against al Qaeda. Former insurgent leaders routinely scorn the Iraqi government's intentions, casting it as a pawn of the Iranians. So, as the Iraqi government strives to reduce violence by improving its relationship with Iran, it may be setting the stage for continued conflict with disaffected Sunnis.