As attacks escalated in Baghdad this week, so did accusations in Washington, DC, about fuel-price gouging by US contractors.
Rep. Henry Waxman (D-Calif.) has been carping about costs of oil products brought into Iraq by KBR under contract with the US Army Corps of Engineers (USACE).
On Oct. 29, Waxman and Rep. John Dingell (D-Ohio) wrote Condoleezza Rice, the national security advisor, to complain, "US taxpayers are not getting their money's worth." The lawmakers calculated KBR's cost of importing and delivering gasoline at $2.65/gal.
They said gasoline costs 71¢/gal in countries around Iraq. Analysts told them transportation under normal circumstances costs no more than 25¢/gal.
Waxman and Dingell further noted that Iraq's State Oil Marketing Organization (SOMO) pays 97¢/gal to import gasoline.
The natural question: If SOMO can procure fuel that cheaply, why can't KBR?
Part of the answer is that, while SOMO might import some gasoline at 97¢/gal, it can't yet—for organizational, logistical, and economic reasons—handle volumes needed to meet current needs and prepare for winter. Until that changes, USACE needs its contractor to import what SOMO cannot—and to do so under short-term parameters that inevitably raise costs.
Furthermore, it's ludicrous to analyze transport costs on the basis of normal conditions. Iraq isn't normal. Foreign workers risk their lives to perform tasks that would routine anywhere else. Hazard lifts costs, too. Distinctions like these mean little to politicians sensing prey.
The target is Vice-Pres. Dick Cheney, who spent 5 years as chief executive and chairman of Halliburton Co., KBR's parent. To the extent Waxman and Dingell get anyone to believe KBR is price-gouging in Iraq, they discredit the Republican administration.
That's politics. Under normal conditions, opportunistic second-guessing would be expected.
But the altogether abnormal conditions of the moment reflect an historic and dangerous reconstruction effort nearly as important to the US as it is to Iraq.
The workers and companies in harm's way as part of that effort deserve decent treatment from the nation they're serving.
Waxman and Dingell should back away from their price-gouging silliness. Or is decency in politics too much to ask?
(Online Oct. 31, 2003; author's e-mail: [email protected])
