Wednesday, March 19, 2008

Who is Parsons?

Parsons Corp. is one of two firms hired by the Louisiana Dept. of Education to develop the ten year facilities master plan for the Recovery School District of New Orleans.

This is a big deal master plan because it will essentially determine the capacity of the city's public schools to educate children in the immediate future.

So, who is Parsons?

It has already been pointed out, here and elsewhere on NOLA blogs, that Parsons has been in the news after coming under investigation for jobs not done in Iraq.

A California company, Parsons, had its contract terminated this year after it was found to have finished only six of more than 140 primary healthcare centres it was supposed to build, after two years work and $500m spent. However, the contract was ended "for convenience", meaning Parsons was paid in full.

It wasn't just healthcare 'centres,' but also the police academy:

Even in a $21 billion reconstruction effort that has been marred by cases of corruption and fraud, failures in training and housing Iraq's security forces are particularly significant because of their effect on what the U.S. military has called its primary mission here: to prepare Iraqi police and soldiers so that Americans can depart.

Federal investigators said the inspector general's findings raise serious questions about whether the U.S. Army Corps of Engineers has failed to exercise effective oversight over the Baghdad Police College or reconstruction programs across Iraq, despite charging taxpayers management fees of at least 4.5 percent of total project costs. The Corps of Engineers said Wednesday that it has initiated a wide-ranging investigation of the police academy project.

The report serves as the latest indictment of Parsons Corp., the U.S. construction giant that was awarded about $1 billion for a variety of reconstruction projects across Iraq. After chronicling previous Parsons failures to properly build health clinics, prisons and hospitals, Bowen said he now plans to conduct an audit of every Parsons project.

"The truth needs to be told about what we didn't get for our dollar from Parsons," Bowen said.

A spokeswoman for Parsons said the company had not seen the inspector general's report.

Oops. Special Inspector General Bowen ticked off somebody. As news of his investigations undermined the Bush Administration, Bowen soon faced a series of challenges:

And tucked away in a huge military authorization bill that President Bush signed two weeks ago is what some of Mr. Bowen’s supporters believe is his reward for repeatedly embarrassing the administration: a pink slip.

The order comes in the form of an obscure provision that terminates his federal oversight agency, the Office of the Special Inspector General for Iraq Reconstruction, on Oct. 1, 2007. The clause was inserted by the Republican side of the House Armed Services Committee over the objections of Democratic counterparts during a closed-door conference, and it has generated surprise and some outrage among lawmakers who say they had no idea it was in the final legislation.


Susan Collins, a Maine Republican who followed the bill closely as chairwoman of the Senate Committee on Homeland Security and Government Affairs, says that she still does not know how the provision made its way into what is called the conference report, which reconciles differences between House and Senate versions of a bill.

Neither the House nor the Senate version contained such a termination clause before the conference, all involved agree.

“It’s truly a mystery to me,” Ms. Collins said. “I looked at what I thought was the final version of the conference report and that provision was not in at that time.”

“The one thing I can confirm is that this was a last-minute insertion,” she said.


“It appears to me that the administration wants to silence the messenger that is giving us information about waste and fraud in Iraq,” said Representative Henry A. Waxman, a California Democrat who is the ranking minority member of the House Committee on Government Reform.

“I just can’t see how one can look at this change without believing it’s political,” he said.

Well that strategy, attempted in November of 2006, didn't work. Whichever Bush administration ally in Congress slyly inserted Mr. Bowen's walking papers obviously didn't do so slyly enough. Both Democrats and Republicans were upset and suspicious.

Bowen still represented a problem, however.

He had been a loyal Bushie for so long. He was a special council to Mr. Bush when he was governor of Texas. He worked under Alberto Gonzalez during the Florida recount. Was he straying from the flock? Was he more interested in exercising the powers of the office that the President had bestowed upon him than he was in using those powers to prove his loyalty?

Well, problem solved.

Enter the perfectly named integrity committee of the President's Council on Integrity and Efficiency.

They opened an investigation in May of 2007 after former employees of Mr. Bowen's office complained of the Inspector's work habits.

Boom, mission accomplished.

Bowen's office was ripped apart from top to bottom. By December of 2007, there were at least three separate investigations into Mr. Bowen's conduct. The Special Inspector General's office was, according to an official there, "gripped by paranoia."

Mr. Bowen clearly felt he was being undermined. One of the more serious allegations was that he and an aide had illegally read employee emails in order "to find out who was loyal and who was not."

It is currently unclear to me whether or not those investigations are ongoing or if they have been shelved. Stewart Bowen still holds his job as Special Inspector General. Nonetheless, the job was done. Mr. Bowen's audits into Iraqi reconstruction contracts were interrupted and the inspector's reputation had been sufficiently sullied as to ensure that future reports by his office were more easily discreditable.

Back to Parsons.

It's amazing what a little old nobody can find out using the google.

They weren't just in Iraq to build shoddy health clinics and police academies. The breadth of their contracts there also extended to the restoration of...

...wait for it...

...oil fields, pipelines, and refineries - oh my!

The joint venture between Parsons and sister company Parsons E&C was one of two charged with restoring the flow of Iraqi oil. The other was Kellogg, Brown and Root, a Halliburton subsidiary.

Interestingly enough, Mr. Bowen's office has been able to audit some aspects of the oil flow restoration efforts. According to CorpWatch, a main concern is the inability of Halliburton and Parsons to provide simple repairs to the meters that measure the amount of oil flowing. Suspicions related to distribution of Iraqi oil revenues, a crucial political obstacle, hinge on Parsons and Halliburton's failure on this front. According to that site, Mr. Bowen is due to issue a report on this matter sometime this spring.

CorpWatch also reports that Halliburton was actually stripped of its oil work and their former responsibilities in Southern Iraq were given to Parsons.

Now, Parsons Corp. is a huge multinational corporation with lots of different offices and lots of different projects.

What could their stunning failures to complete the objectives laid out in the contracts they received from the Bush administration in Iraq possibly have to do with the new contract they received in New Orleans?


Vance Jochim said...

I was in Iraq when Parsons was giving "status" reports on their projects to the Sr. Advisors of the Iraq Reconstruction Management Office. They and their project manager (either from the Corps of Engineers or USAID) allowed them to "re-scope" projects without penalty. That means that the original contract might ask for rebuilding 140 schools, and they then came back and said it is more costly (partly due to increased security costs) and planned to fix 70 schools, etc. but there was NO re-negotiation of the contract. Imagine if you owned a company and contracted to have a 50,000 sq ft building built, and the contractor, after starting, said they could only build 25,000 sq ft for the money. Wouldn't you fire them and rebid the contract? Well, the US didn't.

I once was an auditor at Atlantic Richfield Oil and audited a $400-million Parsons procurement contract to supply parts for the Alaska Pipeline in the 70's. Parsons screwed up everything, and we found out their "managers" were all retired Air Force officers who were not used to managing project to meet a budget, and their internal systems lacked any details to track yardsticks, benchmarks, deadline dates, etc. - ARCO did not renew the contract and wouldn't do business again with them for years due to their complete lack of management. They relied on contacts to get out of trouble, not business systems. After seeing them do the same thing in Iraq, I would not give them any contracts at all.
See my blog at on Iraq and Corruption.
Vance Jochim

Anonymous said...

wow. so are there investigations pending in washington?

E said...

Bowen is supposed to issue some report on the oil meters this spring but you have to wonder whether or not it'll have any teeth after his office was threatened by investigations.

It's unclear to me whether or not investigations of Bowen are ongoing or not. I haven't found a news story from this year that gives an impression one way or another.

Anonymous said...

You have clearly done some good research on Parsons and brought up some good points. However, what does any of this Iraq constuction work have to do with master planning of the New Orleans school systems? Parsons is definitely a large corporation with many different divisions, much like in the federal government. The divisions really should be looked at independently. For example, how could you evaluate and predict how the IRS would perform based on what the Army or US Dept. of Transportation is doing or had done in the past. Apples and oranges my friend.

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