Loopholes Gone Wild

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.


The SEIU has put out a new report on Wackenhut, a private security firm that won a contract to guard Army bases in Alaska, noting that the new guards have performed dismally at their job. Guards are using old and rusted weapons and often receive insufficient training; felons gain access to the bases without security clearances; no one has any radio equipment. It’s a disaster. The slightly glossed-over story here, though, is how Wackenhut got the contract. Michael Scherer did some reporting on this for Mother Jones earlier this year: Wackenhut—like Halliburton, Vance International and other large multinational corporations—took advantage of a loophole to “team up” with a local tribal company, Alutiiq, that received a no-bid contracts; a common phenomenon whereby tribal companies take advantage of minority set-aside programs in Alaska, and then fork over the profits to large corporations:

A Mother Jones analysis of federal contracting records shows that no-bid, or “sole-source,” awards to native companies have risen dramatically since the late 1990s (see chart). Back in 1999, the largest tribal firms received just $195.5 million worth of no-bid work, or roughly 3 percent of the awards under the federal government’s program to assist small and minority-owned companies. By 2003, however, large tribal companies were getting $1.3 billion worth of contracts without any competition, accounting for nearly 15 percent of the minority program. …

[I]n many cases, the biggest winners from the contracting exemptions are non-native companies. Under the federal rules, between 15 and 50 percent of the work must be done by employees of the tribal company. But tribes can also form joint ventures with other firms, allowing them to classify many of the non-native companies’ employees as their own. In some of the largest contracts, native corporations have simply taken over services the federal government wanted to privatize. In one $2.2 billion project to run part of the military’s mapmaking division, two Alaska tribes brought in their own managers to rehire and oversee hundreds of federal employees, a process in which many workers lost their civil service benefits. “Very little changes,” says Peter Fagan, a contracting consultant who has worked with tribal companies. “You just get new hats and business cards.”

This isn’t affirmative action so much as a spigot that runs from Congress directly to business coffers. And at the head of this entire scam sits Sen. Ted Stevens (R-AK), the president pro tempore of the Senate, who has extensive ties to several native companies in the state, as well as a number of defense and security contractors. Last month, Benjamin Wallace-Wells of the Washington Monthly did some additional reporting on the ways in which Stevens has used “sole-source” Eskimo contracts to funnel money to the defense industry. The GAO and other Senate and House Committees have begun investigating, so it’s entirely possible that this could turn into a major scandal of some sort or other. For the moment, though, GOP welfare—along with Wackenhut’s poor performance—has put Army bases at risk. Anecdotes like these are exactly why it’s worth getting jittery over the billions of dollars now being shoveled down south for post-Katrina reconstruction—with, as far as anyone can tell, little to no oversight.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate