Hey, it is a real story after all

This post is going after three audiences: A) Loyal blog readers: My critique of the Center for Public Integrity’s report has turned into this Slate article. Go check it out!! B) New Slate readers: Stay for a while — check out the site. There’s a lot about politics and foreign policy, but there are also posts about porn, a list of quality book recommendations, posts that discuss the Hilton sisters, and adorable beagle pictures — all the colors of the rainbow!! [You’re shameless!–ed. Hey, I’m just working the room here!] C) Those who want more about the CPI report: The following is tailored for those who are still skeptical about my argument. First, click over to my Friday post on the subject. Second, here are some additional rejoinders:

Q: The CPI report did not just argue that campaign contributions determined the awarding of reconstruction contracts. It also implied that insider connections determined who got the contracts. A: “Implied” is the key word. Windfalls of War has little evidence to back up this assertion. For that, the CPI authors would have to provide a case of a firm being awarded a contract not on the grounds of merit but due to its political connections or campaign contributions. Such a case is not provided. For example, a subsection of the report, “A Family Connection,” looks at the circumstances surrounding the awarding of an Iraq contract to Sullivan Haave Associates, a “a one-man shop run by a government consultant named Terry Sullivan.” Sullivan’s wife is Carol Haave, who has been deputy assistant secretary of defense for security and information operations for the past two years. The clear implication is that Haave wrangled the contract for Sullivan. However, the report provides not one scintilla of evidence to prove this charge beyond the husband-wife relationship.* Both Haave and Sullivan deny the allegation to CPI. Furthermore, the report acknowledges that Sullivan Haave Associates received two contracts worth $178,000 from the Department of Defense in the two years before Haave took office. This suggests, at a minimum, that Sullivan must have been competent enough to win Pentagon bids from a Democratic administration, even without his wife in office. Q: In the Slate piece, you point out that the bivariate correlation between campaign contributions and contract size is pretty much nonexistent. Surely, however, once you take into account other explanatory factors, campaign contributions might be more significant? A: Excellent point — the distinction between bivariate and multivariate tests. As a backup, I ran a mulivariate OLS regression with contract size as the dependent variable and the two independent variables provided in the CPI report — campaign contributions and past contract awards. This variable should act as a good control, since it explicitly measures past success at wrangling contracts from the government and implicitly acts as a proxy for company size [Why would that matter?–ed. One would expect larger firms to win larger contracts in part because they have the administrative capacity to manage them]. The results? Unchanged. [NOTE: the rest of this graf is for stats geeks only.] Campaign contributions take a positive but statistically insignificant coefficient. More importantly, an F-test cannot reject the null hypothesis that the regression is insignificant. The r-squared of .0643 highlights the insignificance of campaign contributions as an explanatory variable. Q: Is there anything in the CPI report that’s worth taking seriously? A: Ironically, the part of the report that suggests disorganization in the procurement process is far more convincing. The reconstruction bids for Afghanistan and Iraq have been scattered among three agencies: from DoD, State, and USAID. The report notes, “Based on the findings, it did not appear that any one government agency knew the total number of contractors or what they were doing.” This anecdote provides an excellent example:

According to information provided by USAID under a Freedom of Information request, Chemonics was contracted to work in Afghanistan for just over $600 million. That total would rank Chemonics third among all U.S. contractors in Iraq and Afghanistan, behind only Halliburton and Bechtel. However, the company disputed that total when contacted, at first insisting it had three contracts with USAID worth just $133.9 million, then changing its figures a day later to say that one multiyear contract it had originally put at nearly $1.2 million actually had a potential worth of $35 million for work in Afghanistan and several other countries. Getting clarification of the numbers from USAID was difficult. “I don’t know where the FOIA office got that information,” said one USAID press officer. Chemonics refused to release copies of its contracts, and a Center FOIA request for the contracts is pending. After several queries, the FOIA office told the Center that the contract it had listed as being worth $600 million was actually worth between $599,000 and $1.2 million, which was still inconsistent with the numbers Chemonics provided. “We don’t dispute it,” Chemonics spokesperson Denise Felix told the Center when asked about the USAID number. “It is not accurate for us.”

[Why is this ironic?–ed. Because the primary thrust of Windfalls of War is that the process is riddled with malfeasance rather than disorganization. The notion that there was a conscious effort to reward Bush cronies with lucrative government contracts would require a lot more centralized coordination than the CPI report uncovers.]

UPDATE: Those who care about the statistical methodologies involved should read these excellent comments by Ethan Ligon here, here, and here(Haynes Goddard has a post that makes a similar point). I respond here and here, to Ethan’s satisfaction, I believe. * For those who believe that the personal relationship between Sullivan and Haave reveal an obvious link, ask yourself the following question — does this mean that the CIA dispatched Joseph Wilson to Niger merely because he was married to Valerie Plame, a NOC who worked on the nonproliferation division of the Central Intelligence Agency? [You saying there’s something to that allegation?–ed. No, I think both of them are absurd.] Why is one allegation different than the other?