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War Is a Racket

Posted on Jul 26, 2011
U.S. Marine Corps / Lance Cpl. Adam J. Root

KBR subcontractors work on a project at Camp Fallujah in Iraq in 2008.

By Amy Goodman

“War is a racket,” wrote retired U.S. Marine Maj. Gen. Smedley D. Butler, in 1935. That statement, which is also the title of his short book on war profiteering, rings true today. One courageous civil servant just won a battle to hold war profiteers accountable. Her name is Bunnatine “Bunny” Greenhouse. She blew the whistle when her employer, the U.S. Army Corps of Engineers, gave a no-bid $7 billion contract to the Halliburton subsidiary Kellogg Brown and Root (KBR) as the invasion of Iraq was about to commence. She was doing her job, trying to ensure a competitive bidding process would save the U.S. government money. For that, she was forced out of her senior position, demoted and harassed.

Just this week, after waging a legal battle for more than half a decade, Bunny Greenhouse won. The U.S. Army Corps of Engineers settled with Greenhouse for $970,000, representing full restitution for lost wages, compensatory damages and attorneys’ fees.

Her “offense” was to challenge a no-bid, $7 billion-plus contract to KBR. It was weeks before the expected invasion of Iraq, in 2003, and Bush military planners predicted Saddam Hussein would blow up Iraqi oilfields, as happened with the U.S. invasion in 1991. The project, dubbed “Restore Iraqi Oil,” or RIO, was created so that oilfield fires would be extinguished. KBR was owned then by Halliburton, whose CEO until 2000 was none other than then-Vice President Dick Cheney. KBR was the only company invited to bid.

Bunny Greenhouse told her superiors that the process was illegal. She was overridden. She said the decision to grant the contract to KBR came from the Office of the Secretary of Defense, run by VP Cheney’s close friend, Donald Rumsfeld.

As Bunny Greenhouse told a congressional committee, “I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career.”


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The oilfields were not set ablaze. Nevertheless, KBR was allowed to retool its $7 billion no-bid contract, to provide gasoline and other logistical support to the occupation forces. The contract was so-called cost-plus, which means KBR was not on the hook to provide services at a set price. Rather, it could charge its cost, plus a fixed percentage as profit. The more KBR charged, the more profit it made.

As the chief procurement officer, Greenhouse’s signature was required on all contracts valued at more than $10 million. Soon after testifying about the egregious RIO contract, she was demoted, stripped of her top-secret clearance and began receiving the lowest performance ratings. Before blowing the whistle, she had received the highest ratings. Ultimately, she left work, facing an unbearably hostile workplace.

After years of litigation, attorney Michael Kohn, president of the National Whistleblowers Center, brought the case to a settlement. He said: “Bunny Greenhouse risked her job and career when she objected to the gross waste of federal taxpayer dollars and illegal contracting practices at the Army Corps of Engineers. She had the courage to stand alone and challenge powerful special interests. She exposed a corrupt contracting environment where casual and clubby contracting practices were the norm. Her courage led to sweeping legal reforms that will forever halt the gross abuse she had the courage to expose.”

The National Whistleblowers Center’s executive director, Stephen Kohn (brother of Michael Kohn) told me: “Federal employees have a very, very hard time blowing the whistle. So whenever the government is forced to pay full damages for all back pay, all compensatory damages, all attorneys’ fees, that’s a major victory. I hope it’s a turning point. The case was hard-fought. It should never have had to been filed. Bunny did the right thing.”

According to Nobel Prize-winning economist Joe Stiglitz, the cost of the wars in Iraq and Afghanistan alone will exceed $5 trillion. With a cost like this, why isn’t war central to the debate over the national debt?

Two-time Congressional Medal of Honor winner Maj. Gen. Smedley Butler had it right 75 years ago when he said of war: “It is possibly the oldest, easily the most profitable, surely the most vicious [racket]. ... It is the only one in which the profits are reckoned in dollars and the losses in lives ... It is conducted for the benefit of the very few, at the expense of the very many.”

As President Barack Obama and Congress claim it is Medicare, Medicaid and Social Security that are breaking the budget, people should demand that they stop paying for war.

Denis Moynihan contributed research to this column.

Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 900 stations in North America. She is the author of “Breaking the Sound Barrier,” recently released in paperback and now a New York Times best-seller.

© 2011 Amy Goodman

Distributed by King Features Syndicate

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By Eaglemount, July 31, 2011 at 11:09 am Link to this comment
(Unregistered commenter)

It’s all well and good to comment about an issue that needs the attention of citizens.  It’s even more important to ACTUALLY DO something significant that will allow necessary changes to be made to improve our country. 

*Real Change* will not happen without effective grassroots effort.
Here is a link that will interest many of you.

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By martinchill, July 30, 2011 at 9:14 am Link to this comment



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By Tom Mauel, July 29, 2011 at 9:02 am Link to this comment
(Unregistered commenter)

Once again the supposedly alternative media refuses to print one word about the horrendous level of US combat dead in Afghanistan. Seventy four US soldiers have died in Afghanistan in June and July of 2011 and not a peep from DemocracyNow, or Antiwar.

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By Tom Mauel, July 29, 2011 at 8:11 am Link to this comment
(Unregistered commenter)

Amy Goodman should follow her own advice and publish US combat deaths in Afghanistan. Her site regularly reported US combat deaths in Iraq but now almost completely ignores US combat deaths in Afghanistan. Seventy four US soldiers have died in the last two months in Afghanistan and almost none were reported by US combat deaths are regularly provided by the Department of Defense at their web site and can be found under daily “news releases” or “casualty reports”.

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By DonFromFairfax, July 27, 2011 at 10:54 pm Link to this comment
(Unregistered commenter)

I commend and applaud Bunny, and she deserves every penny.  But isn’t it wonderful that when she succeeds in her suit, it isn’t KBR/Halliburton who pays, or Bush or Cheney who pays, or execs in the Army Corps of Engineers or DoD who pays.  It’s us.  We paid Halliburton $7 billion in fraudulently obtained contracts AND we have to pay Bunny $1 million.  Ain’t capitalism grand?

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By proletariatprincess, July 27, 2011 at 10:41 pm Link to this comment

So the whistleblower, the hero of this story, finally got justice after years of litigation, persecution and financial loss. 
But Cheney and Rummy, the perpetrators of the crime Greenhouse reported, have never even been inconvenienced for their crimes against the USA.
What a travesty.

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By ElkoJohn, July 27, 2011 at 7:09 pm Link to this comment

The leadership of BOTH the Democratic and Republican Parties
BELIEVE in ‘‘Tinkle Down’’ Economics:

1. What’s good for Wall Street is good for the USA.
2. Making the Rich Richer creates jobs.
3. We can’t afford programs for folks in the lower class.
4. War means job security.

Long live the Republic ??

So, I vow to vote 3rd Party—from now on—
until things REALLY CHANGE.

Hold on to your hats sports fans.

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By PatrickHenry, July 27, 2011 at 4:33 pm Link to this comment

“Only the dead have seen the end of war”.

Santayana was right on this and oberving the other great truth in life that history repeats itself regardless of how modern or technologically advanced we think we are.

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By MarthaA, July 27, 2011 at 1:56 pm Link to this comment

And, also, along with departing from the Jesus of Peace, the U.S.
Department of Defense allows its War Contractors to grade
themselves, and of course they overwhelmingly cheat and deceive
the American Populace, with the blessings of the Jesus of War and
the God of the Department of Defense:

It is time for the American Populace, the 70% Majority Common
Population, to be about taking our country back for the American Populace,
while there is still a country to take back from the


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By MarthaA, July 27, 2011 at 1:41 pm Link to this comment

The U.S. Air Force says forget that Jesus of Peace, the only Jesus that
matters is Our Jesus of War that the Nazi’s used:

Forget the Constitution and the separation of Church and State.  The
only thing that matters is Our Jesus of War that the Nazi’s used and
for the same reasons as Hitler used the Nazi Jesus —World Domination.

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MarthaA's avatar

By MarthaA, July 27, 2011 at 1:27 pm Link to this comment

The U.S. Air Force says forget that Jesus of Peace, the only Jesus that
matters is Our Jesus of War that the Nazi’s used:

Forget the Constitution and the separation of Church and State.  The
only thing that matters is Our Jesus of War that the Nazi’s used and
for the same reasons as Hitler used the Nazi Jesus —World Domination.

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By gerard, July 27, 2011 at 12:58 pm Link to this comment

When governments regard whistle-blowers as “enemies of the state,” the end of democracy is just around the corner.  Democracies are founded on the principle of “separation of powers.”  One major power is the status quo.  The other is the ability to change.  The ideal result of this juxtaposition of forces is balance.

Whistleblowers represent democracy’s ability to change.  When the power of the status quo overcomes and penalizes the ability to the result is authoritarian rule.

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By John R., July 27, 2011 at 11:06 am Link to this comment

Bunnatine has confirmed what we already knew about the Rumsfield- Cheney -
Halliburton connection.

That connection was made, and was screamed loud and high while it was

Of course it would not be investigated for years, and Rumsfield - Cheney -
Halliburton knew, (legally) that they had lots of time to get away with U.S.
taxpayer money.

And they did.

The exploitation of the laws is all a part of the game for them at the expense of the poor, lower, and middle classes of America.

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By Hulk2008, July 27, 2011 at 10:48 am Link to this comment

What if they gave a war…... and NObody came?

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By Hulk2008, July 27, 2011 at 10:47 am Link to this comment

The basic problem is that senior officers LOVE new toys and anything that prolongs their ability to use them.  Remember how Patton said how much he loved war - that’s the way generals are wired - they love the conflict and the challenges and the power.

As long as generals love war, there will always be those willing to cash in.  Troops and their families will remain “regrettable collateral damage”. 

We need leaders and senior military types who abhor violence and find innovative ways to avoid or obviate it - without letting enemy generals still having their fun, of course.

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By PRGP, July 27, 2011 at 9:27 am Link to this comment

Butler was also approached by W’s granddaddy, Prentice Bush (a senator) moguls such as DuPont, Ford to overthrow FDR and trash the New Deal.  This is fact largely ignored by media, Dems, Progressives and of course, Republicans.  The far right has always been populated by anti-democratic traitors to the American constitution.

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By lasmog, July 27, 2011 at 9:25 am Link to this comment

I assume the Tea Party will be all over this scandal, right?

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By elkbelly, July 27, 2011 at 8:42 am Link to this comment

First off, she DEFINITELY meant 5 trillion.  And keep in mind that’s ALL BORROWED MONEY.  Which means 1 trillion in interest alone. 

Secondly, this kind of abuse, this kind of THEFT by major American corporations like GE and Boeing (let alone the everyday devils link Haliburton/KBR) is STILL GOING ON!!  And it’s something more than criminal. 

Truman threw war profiteers in jail.  Obama should do the same, but of course never will.  The recent revelation that Boeing over-charged the US govt $1600 for a small airplane engine part that could otherwise be purchased for $10 is a perfect example of a jailable offense.  Proven, on paper, case closed.  Where’s the DOJ?

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By MarthaA, July 27, 2011 at 7:59 am Link to this comment

Excerpt From Harvard Graduate Alan Grayson’s Truthdig Radio
Interview with Peter Scheer:

Alan Grayson: “In the case of the Democrats, you know, the
Democratic plan is pretty clear: We need to rebuild America; we
need to spend money on rebuilding our schools, our bridges, our
highways; all this public infrastructure that we have that’s falling
into decay, literally into decay—so the highway in Minneapolis
literally falling into decay. In the case of people losing their homes,
we instituted a plan here in Orlando that required the banks to go
into mandatory mediation with the homeowners before they could
take the homes away. And we had housing counselors; I used my
earmark money to have housing counselors here locally that
actually would sit down with people, go through their situation,
and find some way to save their homes. We brought in a group
called NACA, which organized to coordinate with all the banks and
have refinancing fairs all over the country. We dropped
foreclosures here in Orlando from 3,000 a month to 1,500 a month
in a very short time.

There are solutions to problems if you actually try to solve these
problems. Even the so-called deficit problem—the so-called deficit
problem could be solved overnight if we simply brought the troops
home, and that’s costing us about $200 billion a year. Right now,
you could not only reduce the deficit, but you could make
everyone’s first $35,000 of income tax-free, if you simply brought
the troops home. Sure, there’s answers to problems; but you have
to actually try.”

“Peter Scheer: You’ve also been great on the corruption in these wars, and the just unbelievable waste of money, and disappearance of money. And we keep hearing that the war in Iraq is over, and yet we have thousands of troops still there. Are you confident that these wars—we have a new timeline for the war in Afghanistan that has us there past 2014; I mean, you know … what is your take on this situation?

Alan Grayson: Well, you know, by the end of President Obama’s first administration, we’ll have twice as many troops in Afghanistan as when it started. That’s not what people expected or wanted, at least among his supporters; I’m not speaking about the other folks. It’s farcical to say that the war in Iraq is somehow over when we still have 50,000 troops there. The one ray of hope is that the Iraqis are starting to put their foot down; they don’t want to be an occupied country any longer, and they’ve told the U.S. troops that they have to get out, and somehow or other we feel like arguing with them about it. So the Iraqis have said all troops have to be gone by the end of the year, and the Defense Department and the State Department are both sort of trying to weasel out of it. We’ll see what happens. We’re still paying the bills; we spent $157 billion last year on the wars in Iraq and Afghanistan, at a time when unemployment was close to 10 percent. In Florida it’s, oh, it’s about 13 percent. We spend $500 for every single man, woman and child in America on the war in Iraq. And that’s just the appropriated funds; the non-appropriated funds are even more than that. They’re more than the appropriated funds. Joe Stiglitz, who’s a Nobel Prize winner, calculated the cost of the war in Iraq already at $4 trillion. That’s $13,000 for every man, woman and child in America; and you know, for my family of seven, that’s almost $100,000. I want my money back.”

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By scott, July 27, 2011 at 7:04 am Link to this comment
(Unregistered commenter)

Absolutely—the Defense Budget is busting us and seldom is that in fiscal reduction conversations…. that is absurd.  Thanks Amy for being a sane voice.

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By TDoff, July 27, 2011 at 6:43 am Link to this comment

Not just war. But US politics, government, business…all have become money-grubbing, life-destroying, hypocritical rackets.

The observation is often made that after a nuclear holocaust, the surviving life form will be the cockroach. Perhaps ‘god’ is giving us a foretaste of a nuclear disaster. That would explain our current crop of lawyers, politicians, bankers and CEO’s.

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By NameRequired, July 27, 2011 at 4:59 am Link to this comment
(Unregistered commenter)

“According to Nobel Prize-winning economist Joe Stiglitz, the cost of the wars in Iraq and Afghanistan alone will exceed $5 billion.”
I think she meant to type “5 trillion.”

As for “war is a racket” that’s hardly news. Wasn’t it Thucydides who first noted the intimate linkage between economics and war?

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By Frosty46, July 27, 2011 at 4:44 am Link to this comment

And the same political party is today holding the nation hostage
over deficit reduction————-nothing to see here, move along!

Republicans and the Industrial/Corporate/Military Syndiacte are
traitors to America—one and ALL!

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By thecrow, July 27, 2011 at 4:29 am Link to this comment

RTN tweets:

@Tripps$rtn gonna make billions off these limited US wars- !!!

@eddyhooks$rtn–US fires 110 Tomahawks–total cost about $63m

@JimK$rTN is the maker of the Tomahawk’s being used on Quack-dafi. Over a $1/2 MM at a pop for those.

@WallStreetBuddhaSell $PCLN, Obama is gonna fire up the war machine. We’re going into Libya. Watching Defense stocks $LMT $BA $NOC $RTN

@sellputs$RTN raises annual Divvy 15% to 1.72…..All the #Tomahawk action must have instilled confidence in the board.

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By Chico, July 27, 2011 at 3:47 am Link to this comment
(Unregistered commenter)

Amy, you mean that Stiglitz said costs will exceed $5 trillion, not billion, right?

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