Wednesday, October 12, 2005

Sleeping with the devil in the struggle against AIDS

In his 2003 State of the Union address, President George W. Bush unexpectedly announced a vast increase in support for the struggle against HIV/AIDS in the developing world: “I ask the Congress to commit $15 billion over the next five years, to turn the tide against AIDS in the most afflicted nations of Africa and the Caribbean.” By May, the United States Leadership Against HIV/AIDS, tuberculosis and malaria Act of 2003 was signed into law. The President’s Emergency Plan for AIDS Relief, or PEPFAR, was born.

The next step was implementation: how can antiretroviral treatment for AIDS, drugs for opportunistic infections (such as tuberculosis), testing kits, gloves, injection supplies, sterilization equipment and other medical resources be delivered in a sustainable and reliable way in countries marked by varying levels of poverty, poor transport infrastructure, weak communication systems and corruption? What is needed is a supply chain management system, or SCMS as it is called in the business.

And it is a business. In October 2004, the US government started soliciting proposals for probably the largest contract for international health service delivery in the history of humanity. Two weeks ago, the contract was awarded to a consortium of fifteen institutions, referred to somewhat ominously as ‘the Partnership’. The consortium is a mix of private sector, non-profit and faith-based organizations. But the eye is naturally drawn to one particular member of ‘the Partnership’: Northrop Grumman.

Northrop Grumman is the third largest military contractor in the United States. This is the company that brought us the B-2 stealth bomber (at a cool $2 billion per unit), the unmanned Global Hawk ($10 million each), and a $10 billion contract with the Pentagon to build a missile defense system. The company is also exceedingly well connected, with at least seven former Northrop Grumman officials, consultants or shareholders now holding posts in the Bush administration, including Deputy Secretary of Defense Paul Wolfowitz, Vice Presidential Chief of Staff I. Lewis Libby, Pentagon Comptroller Dov Zakheim, and Sean O’Keefe, director of NASA. Even the President himself finds himself visiting Northop Grumman facilities from time to time.

Perhaps it is unusual that a multinational corporation that makes much of its money from instruments of death would now be involved in the struggle against HIV/AIDS in developing countries. On the other hand, Northrop Grumman has some prior experience with supply chain management issues, considering its support of the US State Department’s ‘war against drugs’ in Columbia, though this is another sort of drugs, and another sort of management.

Relatively speaking, the other 14 members of ‘the Partnership’ are small fry compared to Northrop Grumman. The company will probably be playing a central role. So what are the arguments in support of this defense contractor, with its ethical baggage, being crucially involved in PEPFAR? The main one is baldly pragmatic: the logistics of setting up, administering and monitoring a supply chain on this scale is simply beyond the means of any non-governmental or non-profit organization, and certainly beyond the present capacities of the governments of PEPFAR countries. In short, Northrop Grumman may be ugly, but they are big, and powerful, and they arguably could get the job done where the alternative agencies cannot.

On the other hand, the fiscal mismanagement of US defense contractors is legendary. In 2003, Northrop Grumman itself paid $112 million out of court to settle a suit that its subsidiary, TRW, overcharged the US government’s space program. The question of efficiency is also open: Grumman’s $48 million contract to train the Iraqi National Army produced such dismal results that the Jordanian army has taken over the job. And already ‘the Partnership’ has taken on one regrettable feature of defense contractors: lack of transparency. The consortium members are not to divulge the total amount of the contract (rumored to be $7 billion), and have been given strict instructions on what they can say to the media.


Blogger Vaughn said...

Corruption Gone Wild
Friday, June 8th, 2007
Private contracts are handed out by the federal government in droves these days. The industrial company Northrop Grumman, which manufactures the stealth bomber, has been granted a number of lucrative contracts despite past lawsuits filed against the company.
Named the company of the year by Forbes in 2002, and ranked number 67 on Forbes 2006 Fortune 500 list, the Los Angeles based Northrop is the third largest defense contractor in the U.S.
Bruenn v. Northrop
Vaughn Bruenn worked as a cost analyst for Northrop until being fired after he sought treatment for Hepatitis C. Bruenn filed an unsuccessful lawsuit against the company. “Bruenn’s due process rights were violated when the trial judge failed to remove an incompetent juror,” states a petition to the U.S. Supreme Court.
The judge also refused to admit evidence of discriminatory remarks made by one of Bruenn’s supervisors. The supervisor mistakenly accused Bruenn of being a homosexual with AIDS. The Supreme Court refused to re-hear the case.
Bruenn remarked, “Can you image the torment I’ve endured, reading 45 days after my appeal to US Supreme Court for unlawful termination from Northrop after treatment for Hep C and Depression, the implication I was a homosexual and had AIDS by a manager and co-worker.”
Northrop Awarded USAID/PEPFAR Contracts
The President’s Emergency Plan for AIDS Relief (PEPFAR) established the Partnership for Supply Chain Management (the Partnership) in 2005, a multi-billion dollar contract with 15 private sector institutions, including Northrop. The Partnership strengthens “the lifeline of essential drugs and supplies for people living with or affected by HIV/AIDS and other infectious diseases in developing countries,” according to PEPFAR. President Bush created PEPFAR in 2003, through the U.S. Agency for International Development.
The United States Agency for International Development (USAID) awarded Northrop a $4 billion dollar grant in May 2006, shared with four other companies, to provide services in the information technology platform and infrastructure services. Months later, in August 2006, USAID picked Northrop, along with three other companies, to compete for awards totaling $300 billion.
Political Connections and Contributions
According to the website, Northrop maintains connections in the federal government. Several former Bush administration officials had ties to the company. Disgraced former Chief to the President, Lewis Libby served as a consultant to Northrop. Douglas J. Feith, former Under-Secretary for Policy, is the managing partner of a law firm whose clients include Northrop. Paul Wolfowitz, former World Bank president, also served as a consultant to Northrop. The current Under Secretary for the Comptroller Dov Zakheim is on Northrop’s paid advisory board.
Lobbying in Washington, D.C. is a multi-billion dollar industry. In 2000 Northrop gave lobbyists a total of $6,882,720, and $1,181,280 in 2001 and 2002. Northrop gave contributions to several members of Congress including $20,000 to Senator Trent Lott (R) and $17,000 to Rep. Ike Shelton (D).
Current Northrop CEO Ron Sugar makes political contributions to both sides of the aisle. California Senator Dianne Feinstein (D) received a $900 campaign contribution in June 2006. George Allen (R) of Virginia, the incumbent senator defeated by Senator Jim Webb, received $1,000.

Freshly restructured and more-or-less on the mend, USAID’s PEPFAR is yet growing at the optimal time.

For 1 year, whistleblower Vaughn Bruenn said the time is at hand for a full investigation. That request has yet to materialize.

"I think USAID needs to be very careful about allocating further funds until they can prove they can reduce the number of prior lucrative fraudulent PEPFAR contract awards," said Bruenn, who openly complained about a $10.7M HIV/Hepatitis PEPFAR grant award going to Northrop Grumman 45 days after the US Supreme Court Denied Appeal Rehearing of his unlawful termination suit (Bruenn v, Northrop) after contracting, treatment of Hepatitis C.

In May, USAID lost Randall Tobias to a well published DC madam sex scandal. The president announced a week ago, that he was appropriating an additional $30B for PEPFAR. The prior $15B is no longer there nor was misuses mentioned.

Other also have shown to question logic of giant defense contractors like Northrop into the compassion care arena, especially as Northrop’s recover from years-long slump, openly stated desire to diversify, triggered by numerous DOD investigations concerns and fierce military contract competition.

During that period of Tobias reign at USAID -- when Northrop went from zero to $300B – now they’re the single largest USAID contractor.

Congress became acutely aware of the crisis. But their own campaign funding sources were in many cases were often too rickety and resorted to Northrop for contributions (see Corruption Gone Wild)


The lack of control puzzles Bruenn. He noted, that he wrote every member of congress, all turned their back on him and the ensuing USAID crisis. Tobias remained at his post for 1 year,

" Bruenn said some members of congress may be delaying action in hopes of catching the impeachment wave that is rumored for this fall”..

"I think there's a lot of reluctance on the part of congress to go out on a limb when impeachment proceedings are looming," he said.


Officials generally agree that while the USAID needs to increase funding, the cost of mammoth fraud at the hands of Tobias/Northrop does not necessarily outweigh or lower the need for a full investigation

Dear Senator Shellby,
I am deeply troubled that the USAID investigation involving Randall Tobias and Northrop Grumman et al went nowhere.

I urge you to support a full investigation. I hope you will also work to address several key issues that will strengthen the agency and more effectively prevent future corruption and punishment for abusers

Thank you for your consideration of this important issue and await your early reply.

Sincerely yours,

Vaughn Bruenn
16317 E Lemongrass Ct
Valinda, CA 91744

Tel. 626-622-6597
Lisa Goldfluss Esq.:

Ref. USAID letter dated May 29, 2007

A little confused as the referenced letter arrived 2 days ago. This letter doesn't match 3 conversations we've had, beginning May 2007. Very annoyed with the USAID, your office first began the torment June 2006 (see Corruption Gone Wild) and today June 21, 2007, 1 year later, the torment continues and continues.

Conversation we had just last week indicated -- that the USAID OIG was conducting an investigation involving Tobias/Northrop Grumman -- "that process could take possibly years for the OIG to conclude and possibly be criminal prosecution later" etc. etc..

To better assist you, I've included some reference material, hopefully to assist the USAID OIG and your legal counsel

Vaughn Bruenn

10:08 AM  

Post a Comment

<< Home