War Room

Halliburton’s RIO Grande of overcharges

A Defense Department audit reveals more than $100 million in Halliburton overcharges -- and there are still nine audits to go.

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Congressional Democrats released records Monday from the Defense Contract Audit Agency’s investigation of Halliburton, revealing that the company overcharged $108 million for one of 10 services the company performed as part of its Restore Iraqi Oil contract. U.S. Representatives Henry Waxman, D-Calif., and John Dingell, D-Mich., also submitted an open letter to President Bush, calling for the release of audit reports on the remaining nine contract tasks, and asking the Bush administration how it plans to recover the funds from Halliburton.

The battle for transparency has been going on ever since Vice President Cheney’s former company nabbed its lucrative no-bid contract: As Rep. Waxman told Salon back in Dec. 2003, he’s been asking for an explanation of what appears to be Halliburton’s “government-sanctioned profiteering” in U.S.-occupied Iraq. But more than a year later the White House still hasn’t answered Congressional inquiries, and though President Bush has promised that audit reports on the RIO contract would be made public, neither Congress nor the public has been privy to them so far.

Monday’s letter suggests the reason why: It may be even worse than Waxman thought. The “tens of millions of dollars” in overcharges that the Pentagon mentioned in ’03 mushroomed into $108 million in the one task report that Congress got from the DCAA. (In one particularly egregious instance, the company paid subcontractors $27 million to transport $82,000 worth of propane from Kuwait to Iraq; the Congressmen, apparently at a loss for words, quoted California oil economist Phil Verleger: “It’s as if they’ve put the gasoline on the Queen Mary and taken it around the world before they deliver it.”) Given that the DoD is still sitting on the other nine audit reports, it seems likely that the total overcharges will dramatically exceed the DoD’s ’03 estimate.

But unless Congress can get its hands on the other reports, it’ll be hard to hold Halliburton accountable. And it’s not just American taxpayers who should get a refund — $1.64 billion of Halliburton’s total $2.5 billion tab have come out of Iraqi oil proceeds held in the Development Fund for Iraq. Repayment of overages to the development fund could come in handy for the fledgling democracy, plagued as it is by security problems and a lack of funds to cover basic infrastructure and electricity.

The Pentagon still refuses to freeze Halliburton’s contract while investigations are underway. And for its part, Halliburton contends that its charges were fair. Never mind the no-bid contract and the various options it had for lower fuel prices; in a statement to the Associated Press, company spokesperson Wendy Hall went with the “all’s fair in love and war” defense: “The [DCAA's] report fails to take into account the fact that [Halliburton subcontractor Kellogg Brown & Root] performed an urgent mission at the Army’s request and that the mission took place in a wartime environment.”

Page Rockwell is Salon's editorial project manager.

Rand Paul’s leverage with Mitt

If Romney becomes president, the threat of a 2016 GOP challenge will loom over every decision he makes

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Rand Paul’s leverage with MittRand Paul (Credit: AP/Manuel Balce Cenata)

National Review’s Robert Costa reported last night that Mitt Romney and Rand Paul had met privately for about 30 minutes in Washington. The speculation over what they might have discussed is mostly focused on this summer’s Republican convention, where delegates loyal (but not necessarily pledged) to Ron Paul will probably control a few hundred slots, with the potential to make some real trouble for Romney.

But as James Hohmann of Politico points out, the sit-down could have much broader, longer-term significance: If Romney ends up winning this year, Rand Paul will immediately become his most obvious threat for a 2016 primary challenge.

With 77-year-old Ron Paul heading off into retirement at the end of this year, Rand Paul is set to become the national face of the libertarian message associated with his family’s name. The assumption is that he’ll ultimately run for president, but the question is when. Unlike his father, Rand seems willing to modulate his message and rhetoric in a way that could expand his appeal within the Republican Party and make him a genuine threat to actually win state primaries and caucuses, something Ron still has never done.

This could make Paul very dangerous to a President Romney, whose ideological purity conservative leaders still doubt. From a governing standpoint, this would give Romney little room for maneuvering, particularly if Republicans control both chambers of Congress. He would be under immense pressure from the right to support and implement their agenda, no matter how politically toxic it is. If Romney were to balk at doing so, or seek some major compromise with Democrats, or simply be seen as not pushing hard enough, he’d be inviting a conservative revolt – and Rand Paul would be a logical figure to lead it.

We’ve seen a dynamic somewhat like this before, back when George H.W. Bush was president. As I’ve written before, there are some striking parallels between how Romney and Bush 41 rose to power – and the suspicion with which their late-in-life embraces of conservatism were viewed by the GOP base. So when Bush cut a deal with Democrats in 1990 to reduce the deficit by raising taxes, conservative activists weren’t eager to give him the benefit of the doubt or to invent some rationalization to go along with him. They revolted, setting off an intraparty war that damaged Bush’s presidency and produced a 1992 primary challenge from Pat Buchanan. (Before Buchanan jumped in, there had been talk that Bush would instead be challenged by a then-former Texas congressman named Ron Paul.)

At least Bush had some wiggle room, though. When he was president, the GOP was evolving into the absolutist conservative party it now is, but there were still plenty of genuine Republican moderates and an awful lot of pragmatists on Capitol Hill. Romney wouldn’t have that luxury. The party and its congressional representatives are far more uniformly conservative today, and whatever instinct Republican members of Congress have for compromise is quickly being snuffed out by the threat of primary challenges.

The threat of a ’16 campaign by Rand Paul – or another prominent conservative – is one that would haunt a Romney presidency and is the best reason to doubt that Romney’s old flair for moderation will return if he’s in the White House.

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Steve Kornacki

Steve Kornacki writes about politics for Salon. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki

What Obama has done for gay marriage

A favorite talking point of marriage equality opponents will be dead a few months from now

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What Obama has done for gay marriagePresident Barack Obama(Credit: AP)

President Obama’s public endorsement of gay marriage hasn’t had any discernible effect on his approval rating or his head-to-head standing with Mitt Romney. And with Romney and most top Republicans largely content to leave the subject alone, it seems clear that the marriage issue will play a very minimal role in the national campaign, if any at all.

But a new PPP poll provides evidence that Obama’s announcement will play a major role in killing one of the most persistent talking points for opponents of gay marriage.

Maryland legalized same-sex marriage back in March, when Gov. Martin O’Malley signed a bill passed by a Democratic Legislature. Opponents immediately mobilized to put a repeal referendum on this November’s ballot, and initial polling showed only a slight majority of voters favored upholding the law. But in the new survey, the margin has exploded to 20 points, 57 to 37 percent, a shift that PPP explains this way:

The movement over the last two months can be explained almost entirely by a major shift in opinion about same-sex marriage among black voters. Previously 56% said they would vote against the new law with only 39% planning to uphold it. Those numbers have now almost completely flipped, with 55% of African Americans planning to vote for the law and only 36% now opposed.

This is consistent with an ABC News/Washington Post poll of national voters this week, which showed support for marriage equality among African-Americans jumping from 41 to 59 percent in the wake of Obama’s announcement.

In Maryland, the surge in black support means that gay marriage is very likely to be approved by voters this fall. If that happens, opponents will no longer be able to make a claim they’ve been relying on for years – that everywhere gay marriage has been on the ballot, it’s been rejected by voters. Tony Perkins and Ken Blackwell, for instance, penned a column for Fox News earlier this week that made sure to note that “in the 32 states where voters have been allowed to express their views, all 32 have affirmed traditional marriage and rejected its same-sex redefinition.”

That will no longer be the case a few months from now, unless there’s some kind of major, hard-to-envision shift in public opinion in Maryland.

Nor is Maryland alone. In Maine, marriage equality supporters have placed a referendum on this November’s ballot, and polling suggests it has a good chance of passing. There may also be a vote in Washington, where opponents are collecting signatures in an effort to thwart a marriage law signed by Gov. Christine Gregoire earlier this year; if they reach the signature threshold by June 6, the law won’t go into effect unless voters support it in the November referendum. A February poll showed voters supporting the law by a 49-44 percent spread.

All of this speaks to the rapid pace of change in public opinion on this issue. The “every state has voted against it” talking point sounds compelling, but many of the state referendums that account for it took place years ago, when the idea of gay marriage still had a fringe feel to it. Back in 2004, when it was legalized in Massachusetts by the state’s Supreme Court, just 30 percent of Americans said they favored same-sex marriage. In this week’s ABC/Washington Post survey, the number is 53 percent. In just the past couple of years, the shift has been marked. In 2009, Maine voters actually rejected gay marriage by a 6-point margin; it’s a measure of where things stand now that supporters initiated the push to put it back on the ballot this year.

The idea of state referendums, which violate the principle of not using the ballot box to decide minority rights, is a complicated one for marriage equality proponents. And even as states begin voting for gay marriage, it won’t be a complete solution, since there are plenty of other states where it will take years, maybe decades, for popular support to even approach 50 percent. Still, the anti-gay marriage crowd should probably enjoy their 0-for-32 talking point while they can, because it won’t be valid for much longer.

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Steve Kornacki

Steve Kornacki writes about politics for Salon. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki

Orrin Hatch is not out of the woods yet

He’s exactly the kind of Republican incumbent who should feel extra-nervous in the super PAC era

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Orrin Hatch is not out of the woods yetOrrin Hatch (Credit: Reuters/Fred Prouser)

The good news for Orrin Hatch is that his Republican primary opponent is now resorting to a time-honored tactic of doomed challengers everywhere: He’s making the race about debates. In a new 30-second ad, Dan Liljenquist decries Hatch’s refusal to engage in more than one face-to-face encounter and reminds voters that, long ago, Hatch once challenged a primary opponent to eight of them.

The ad is an effort to portray Hatch as an entrenched and arrogant incumbent and to encourage whatever popular sentiment there is that he’s too old (78) and been in Washington too long (36 years). That Liljenquist is playing up debates and not, say, recent Hatch votes and quotes speaks to the aggressive image makeover that Hatch put himself through in response to then-Sen. Bob Bennett’s defeat at the 2010 GOP state convention in Utah. When Bennett went down, Hatch immediately recognized how hungry the Obama-era GOP base is for compromise-resistant partisan warfare and positioned himself to head off a 2012 challenge.

So far, his efforts have been successful enough. After spending an astonishing $5 million, Hatch secured 59 percent at last month’s state convention, three times what Bennett got in ’10. But he fell a handful of votes shy of the 60 percent threshold that would have handed him the nomination on the spot and was instead forced into a primary with Liljenquist. There’s been no reputable polling on the race, but the assumption is that Hatch is comfortably ahead, and that making noise about debates won’t do much to help Liljenquist.

The bad news for Hatch, as Charlie Mahtesian pointed out earlier, is that there’s a lot of time between now and the June 26 primary. Here the threat to Hatch really isn’t Liljenquist and anything he might say and do; it’s an outside group or individual deciding to target the race and pour big money into the anti-Hatch effort. If this were to happen, it might not matter that Hatch has given his enemies little in the way of ammunition. With enough money, anyone can be made to look bad. And the one thing Hatch can’t run away from is his political longevity, which is a liability to today’s outsider/purity-obsessed GOP base.

Mahtesian notes that the Club for Growth seems unlikely to enter the fray, but in the super PAC era, a billionaire or millionaire could at any moment take a random interest in any race and alter the outcome with a hefty investment. The best illustration of this came Tuesday night in Kentucky, where Tom Massie won a GOP congressional primary after a rich 21-year-old Texas college student spent more than $500,000 on his behalf.  A week before that, another plutocrat fueled the unexpected rise of Deb Fischer in a Nebraska Senate primary.

The pro-Fischer money didn’t come in until the final few days of that race. Which means that even though he’s in good shape now, Hatch still has a month of sweating ahead of him.

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Steve Kornacki

Steve Kornacki writes about politics for Salon. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki

Annals of the super PAC era

Welcome to the age of rich 21-year-old college students dropping big money on random House races – and winning

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Annals of the super PAC eraThomas Massie

Last night provided the second reminder in a week that the real power of super PACs probably isn’t at the presidential level but rather in lower-profile Senate and House races.

Tom Massie, who enjoys strong support from the Ron/Rand Paul crowd, rolled to a 15-point victory in the race for the Republican congressional nomination in Kentucky’s 4th District. The result speaks to a few factors, including divided opposition (one of Massie’s opponents enjoyed establishment support, and the other catered to religious conservatives), the particular strength of the Paul movement in Kentucky, and some help from a pair of familiar outside groups, FreedomWorks and the Club for Growth. But then then there’s this:

He also got more than $500,000 worth of backing from a super PAC called Liberty for All, which was funded almost entirely by a 21-year-old Texas college student with an inheritance. The group ran ads supporting Massie and criticizing Webb-Edgington and Moore.

Marc Wilson, a supporter of Webb-Edgington, criticized the group after the ballots were counted.

“It’s a shame that a Texas libertarian super PAC could come in and invade the Republican Party to buy a congressional seat,” he said.

The rich college student is John Ramsey, a senior economics major at Stephen F. Austin University who also volunteered for Ron Paul’s presidential campaign in Iowa. Mother Jones’s Tim Murphy profiled Ramsey, who inherited a share of his grandfather’s real estate/industrial fortune in 2010, last week and found that, in addition to airing ads and sending out mailers, Ramsey’s super PAC had built an 11-person ground operation in Kentucky.  “I would call us more like a party, frankly,” Preston Bates, who cofounded Liberty for All with Ramsey, told Murphy.

Really, that line says it all. Traditionally, candidates in congressional primaries have needed either the blessing of party leaders or their own financial resources to compete and win in primaries. The same has generally gone for Senate primaries. But with super PACs, random plutocrats such as Ramsey can identify candidates across the country who champion their pet causes and deliver them to parity (at least) with their opponents. In this case, Ramsey’s agenda is the Paul version of liberty, which includes views on civil liberties that run counter to the standard GOP dogma. But it could be anything. Last week, the Ending Spending super PAC, which is bankrolled by Ameritrade founder Joe Ricketts, played a crucial role in Deb Fischer’s out-of-nowhere victory in Nebraska’s GOP Senate primary.

In presidential politics, spending a few hundred thousand – or even a few million – dollars on behalf of a candidate won’t get you very far, especially in the general election phase. But in House and Senate primaries, those same sums can be decisive. It raises the question of how many millionaires and billionaires with political agendas will take note of the Massie and Fischer examples and say to themselves: Gee, wouldn’t it be neat to have my own member of Congress?

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Steve Kornacki

Steve Kornacki writes about politics for Salon. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki

Why deficit hysteria sells

A thoroughly misleading new ad from the Rove-affiliated Crossroads GPS could still resonate

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Why deficit hysteria sells

One of the themes I’ve been emphasizing is the role of context in the presidential race. President Obama’s reelection prospects depend on swing voters considering not just the current state of the economy, but also the factors that led us here and the economic vision that Mitt Romney would bring to the presidency. Romney’s hopes, on the other hand, depend on those same voters either ignoring or rationalizing away the context that Obama tries to introduce and simply voting him out because of their profound economic anxiety.

This often results in maddeningly deceptive messaging from Romney and his allies, something that the newest ad from the Karl Rove-affiliated Crossroads GPS illustrates perfectly:

There’s nothing very complicated going on here, just an attempt to connect an everywoman’s despair about what a weak economy has done to her family with a bunch of scary-seeming statistics about spending and debt under Obama.

The CliffsNotes version of what’s wrong with this: 1) There’s been no spending explosion under Obama; 2) the increase in debt under Obama can be traced to the economic crash (which dramatically reduced federal revenue), the wars, the Bush tax cuts (which, yes, Obama agreed to extend – at the insistence of Republicans), the 2003 Medicare prescription drug law, and only to a very minor extent the 2009 stimulus; and 3) the economy would actually be in better shape now if Obama had spent more.

That’s the context that the Obama campaign needs the public to understand, and you can see why it’s such a struggle. Voters have a demonstrated tendency to express concerns about deficits only when the economy is bad. This is why, for instance, the Democrats during the 1981/82 recession reaped a political windfall while railing against Ronald Reagan’s massive deficits, but gained zero traction on the issue when the economy improved in 1984 – even though deficits were even higher (and still soaring) then.

The lesson is that most voters don’t actually care about the deficit itself, or really understand what it is. But it’s a scary-sounding word that conjures thoughts of government bloat and reckless spending, which makes it an irresistible weapon for a recession-era opposition party.

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Steve Kornacki

Steve Kornacki writes about politics for Salon. Reach him by email at SKornacki@salon.com and follow him on Twitter @SteveKornacki

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