Walter Reed: Victim of Underfunding and Privatization

As the Walter Reed scandal sears the public, more attention is being paid to whose heads should roll than what policies need reform. While both are important, if bad policies don’t change, new people can’t do a better job.

It’s becoming clear that Walter Reed suffers from the hallmarks of conservatism: underfunding our government and privatizing our government.

Retired Army Major General Paul Eaton has a NY Times oped titled, “Casualties of the Budget Wars” which informs us that:

Last year, because of spending in Iraq, the Army had a $530 million shortfall in its budget for posts at home and abroad. This forced the Army’s vice chief of staff, Richard Cody, to tighten belts that were already at the last notch.

And he argues:

The general effort by [former Defense Sec. Donald] Rumsfeld and [recently deposed Army Sec. Francis] Harvey to privatize services at Army bases needs to be reined in. Some of the problems at Walter Reed seem to have been caused by the contracting out of maintenance services and other support jobs.

Rep. John Tierney raised the privatization issue at yesterday’s hearing. From the NY Times:

Mr. Tierney said he wondered whether the problems in treating large numbers of wounded veterans were “just another horrific consequence” of inadequate planning for the wars in Iraq and Afghanistan, or whether contracting work out to private companies was a factor.

He noted that an Army report last September found that government health workers whose jobs were threatened by privatization efforts were quitting in large numbers.

“Highly skilled and experienced personnel at Walter Reed” were leaving, the report said, “and there was a fear that patient care services were at risk of mission failure.”

Monday’s Army Times called attention to that memo:

In a letter from the [House] committee … members said the … memo “describes how the Army’s decision to privatize support services at Walter Reed Army Medical Center 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 at Walter Reed.”

The committee’s letter also noted that Walter Reed awarded a five-year, $120 million contract to IAP Worldwide Services, which is run by Al Neffgen, a former senior Halliburton official.

The committee also noted that more than 300 federal employees providing facilities management services at Walter Reed dropped to fewer than 60 by Feb. 3, the day before IAP took over facilities management. IAP replaced the remaining 60 employees with 50 private workers.

The committee letter said the Defense Department “systemically” tried to replace federal workers at Walter Reed with private companies for facilities management, patient care and guard duty — a process that began in 2000.

“But the push to privatize support services there accelerated under President Bush’s ‘competitive sourcing’ initiative, which was launched in 2002,” the committee letter states.

During the year between awarding the contract to IAP and when the company started, “skilled government workers apparently began leaving Walter Reed in droves,” the letter states.

“The memorandum also indicates that officials at the highest levels of Walter Reed and the U.S. Army Medical Command were informed about the dangers of privatization, but appeared to do little to prevent them.”

Bloggers are weighing in too.

Crooks and Liars finds that Democrats were fighting this privatization back in September.

Huffington Post’s Shelley Lewis writes: “Maybe, just maybe, it’s time to weigh the true costs of outsourcing government responsibilities. Rumsfeld is gone but his impact lives on.”

Alicublog, and Pacific Views all knock down conservative attempts to shift blame to “socialized medicine,” while Seeing the Forest finds the mainstream media picking up the anti-government spin.

UPDATE: More critical context from the Corporate Research Project’s Philip Mattera at, who details the sordid process that led to the privatization of Walter Reed, and how services deteriorated along the way:

The full story behind the scandal involves a misguided program to “reinvent government” through outsourcing, a company that botched the delivery of ice to victims of Hurricane Katrina and a giant hedge fund led by a former member of President Bush’s cabinet. The private sector has indirectly had a hand in converting the once legendary Walter Reed into a symbol of the shameful treatment of people who have been maimed in the service of their country.


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