It has been said that no public figure ever reaped greater political reward from chairing a special investigative congressional committee than Harry S. Truman. His personal crusade against waste, fraud and abuse in defense contracting throughout World War II is credited with saving countless lives and more than 15 billion dollars.
When the Truman Committee was first created in 1941 — in response to allegations that $10 billion in defense funds were being widely mismanaged — it wasn’t expected to bear much fruit. After all, an investigative committee with a $15,000 budget and led by a member of the president’s own party is the near definition of political window dressing.
But what resulted from Truman’s initial 10,000-mile tour of military bases across the country changed the landscape of defense contracting forever. Between 1941 and 1948 — three years after victory was declared in the Pacific theater — 1,798 witnesses were called, 432 hearings were held and 51 independent reports were issued. As a result, contractors caught in the crosshairs underwent rampant housecleaning or shut their doors altogether. Complicit military and Defense Department personnel were jailed.
The investigations garnered significant media coverage both during and after the war — sullying the good names of more than a few industry moguls and putting Truman on the fast track to the White House.
Today, with reports of contractor waste, fraud and abuse in Iraq and Afghanistan making for nightly newscast leads and above-the-fold front page stories, members of Congress on both sides of the aisle are looking to resurrect Truman’s legacy and make a few headlines of their own.
When President Bush signed the 2008 National Defense Authorization Act into law in January, he also established the Webb-McCaskill Commission on Wartime Contracting. This bipartisan congressional body is modeled after the Truman Committee, and seeks to “help the taxpayers of this country get their money back,” according to Sen. Jim Webb, D-Va. But like the Truman Committee, the commission is off to inauspicious start.
The provision that created the commission was one of just four out of 2,887 whose constitutional legality was questioned in the accompanying signing statement issued by the president. As of this writing, more than seven months after the commission was established, Senate Republican Leader Mitch McConnell has yet to appoint the commission’s eighth and final member. And there are no indications that he’s eager to do so anytime soon.
The slow start notwithstanding, contactors need only look to the campaign trail or the House and Senate floor for a preview of what’s to come. Rep. Henry Waxman, D-Calif., chairman of the House Committee on Oversight and Government Reform has said, “The money that’s gone into waste, fraud and abuse under these contracts is just so outrageous, it’s egregious. It may well turn out to be the largest war profiteering in history.”
Sen. Hillary Clinton, D-N.Y., who many speculate may be the next attorney general should Barack Obama take the White House, has said, “Waste, fraud, and abuse in Iraq have gone unchecked for too long and it is past time to break this cycle. Billions of taxpayer dollars have been funneled to contractors for shoddy work and incomplete projects ... We need to restore transparency and oversight to the federal contracting process.”
Even Republican presidential nominee Sen. John McCain — one of the president’s staunchest supporters when it come to the war on terror — is highlighting his work to uncover a contracting scandal that landed Boeing’s chief executive officer in jail in 2005 as proof positive of his watchdog credentials.
Whether they’ve padded contracts, stolen, committed illegal wartime acts, pressured employees or their families not to sue, or are guilty of nothing but simple association with household names such as Blackwater and Halliburton, defense contractors must inoculate themselves against attack now, before the spotlight lands on them.
While defense contractors are grizzled veterans when it comes to dealing with the government, the rules of engagement are changing. So too must their approach. The days of settling grievances behind closed doors are likely over. Today, transparency is the name of the game.
If contractors are aware of problems, they must be the first to unearth them and the first to shape and control the debate. They must be first to identify solutions — either in the public or private sectors — that can prevent similar mishaps in the future. They must be willing to sacrifice either profit or high-profile personnel. And they must fully cooperate with the Congress, the inspector general for Iraq reconstruction, or any other investigatory body that comes knocking.
The advice here is simple: The short term pain that results from blowing the whistle on yourself is nothing compared to the long term damage that can be done to brand credibility and trust when someone else tells your story for you.
Contractors must recognize that issuing a “no-comment” to the media is tantamount to saying “we’re guilty” in the age of instant and lasting impressions. Executives should be prepared to handle “ambush interviews” and answer questions with confidence, clarity and candor.
Internal audiences, such as employees and investors, must be made to feel as if the industry crisis playing out before their very eyes is merely a springboard to implement needed reforms that will lead to future success. Effectively selling a message of strength and stability to these crucial audiences requires proactive effort rather than reactive measures. They must be engaged early and often, even if no signs of scandal are lurking on the horizon.
Perhaps most importantly, defense contractors must be willing to actively engage the people and the governments of Iraq and Afghanistan. It won’t be long before oversight of military and reconstruction contracts fall under Iraqi and Afghan control. It will be the companies that have nurtured a relationship with Iraqi leaders that will have a leg up when that time comes. If mistakes were made, acknowledge them in a way that conveys empathy. And ensure that Iraqis are aware of the fact that you’re investing more than just dollars in the future of their country.
The road ahead is fraught with peril, to be certain. But those contractors that emerge from the coming investigatory onslaught intact, even if scandal has reared its ugly head, are the ones that both the U.S. and Iraqi governments will be looking to in the future. The specter of Truman’s ghost need not keep contractors up at night if they are prepared to make their case in the court of public opinion.Christopher Harvin is a vice president at Levick Strategic Communications, a global business and crisis management firm. He served as a former political appointee to the office of the secretary of defense, as a communications advisor in Iraq to the Coalition Provisional Authority, and as a senior congressional staffer.