by Tom Price

The scandal over poor health care for wounded veterans at Walter Reed Army Medical Center has spilled over into a debate on the perils of privatized medicine. At the center of the debate is criticism of the Bush administration’s plans to privatize nearly everything from government services to Social Security, and turn unionized government jobs over to non-union private companies.

The furor erupted earlier this year when reporters from the Washington Post investigated scores of complaints from wounded soldiers. They charged the Washington D.C. facility was infested with rodents, cockroaches and toxic black mold. The troops complained of endless bureaucracy that prevented them from getting care and an unresponsive hospital administration. Photos and news stories of the facility prompted resignations from top Army brass, including Secretary of the Army Francis Harvey.

The Dept. of Defense under former secretary Donald Rumsfeld had signed a one-bid contract to privatize much of the Walter Reed’s services in Jan. 2006. That $120 million deal with IAP Worldwide Services, a firm headed by former Halliburton executive Al Neffgen, gave IAP the right to replace government workers at the hospital with its own employees.

The connection to Halliburton raised eyebrows. Vice President Dick Cheney served as CEO for Halliburton before becoming vice president, while Neffgen had defended Halliburton before Congress in 2004 and again in 2006 against charges of price gouging in war contracts and serving contaminated water to the troops in Iraq. IAP last made news when it failed to deliver ice to New Orleans after Hurricane Katrina. A hedge fund chaired by former Treasury Secretary John Snow owns IAP.

The House of Representatives Committee on Oversight and Govern-ment Reform, under Democratic leadership, called former Walter Reed commander Maj. General George Weightman to testify March 5 on the crisis.

On March 2 the committee sent him a letter asking him to review a memo he received from a subordinate describing “how the Army’s decision to privatize support services at Walter Reed was causing an exodus of ‘highly skilled and experienced personnel.’”

“According to multiple sources, the decision to privatize support services at Walter Reed led to a precipitous drop in support personnel,” the letter continued. “Prior to the award of the contract, there were 300 federal employees at Walter Reed. By Feb. 3, 2007, the day before IAP took over management, the number had dropped to under 60. Yet instead of hiring additional personnel, IAP replaced the remaining 60 federal employees with only 50 IAP personnel.”

The committee’s letter to Weightman explained some of the issues behind the scandal.

“Part of our mission on the Oversight Committee is to investigate what led to the breakdown in services,” the letter continued. “It would be reprehensible if the deplorable conditions were caused or aggravated by an ideological commitment to privatize government services regardless of the costs to taxpayers and the consequences for wounded soldiers.”

Rumsfeld moved to privatize Walter Reed under President Bush’s “competitive sourcing” initiative, launched in 2002.

“According to the Office of Management and Budget, the goal of President Bush’s ‘competitive sourcing’ initiative was to allow the private sector to compete for nearly half of all federal jobs,” the letter read. The new jobs would be nonunion.

Workers at Walter Reed appealed the privatization decision to the government, but they were found to have “no standing” to appeal under the new privatization rules.

After that, according to the committee’s letter, employees left the hospital “in droves.”

The democratic leadership of the House Armed Services Committee moved March 20 to include an amendment to the Wounded Warrior Assistance Act that would impose a moratorium on further privatization of military hospitals.

John Gage, the President of the American Federation of Government Employees, representing the former workers at Walter Reed, praised the committee’s move in a March 21 press release:

“The Office of Management and Budget’s (OMB) obsession with privatizing federal employees cannot be allowed to undermine the health of military personnel,” Gage said. “The Walter Reed privatization fiasco could have been prevented.”