Senator McCain Ignoring Pleas from Veterans, Says PAL Exposed

Military Veteran, Minority-Owned Businesses Forced to Close Down

WASHINGTON — For well over a year, American owned businesses have been asking members of Congress to look into the Privatization of Army Lodging (PAL) program, and the long term negative impacts it is having on local communities across the United States. Senator John McCain, and his staff, has been approached by a handful of Veteran business owners in Arizona on several different occasions about PAL, and neither he, nor his office, has responded to these requests for assistance.

Steve Howard, one of the co-founders of palexposed.com and a Veteran business owner impacted by PAL, does not understand why this federal contract is not receiving the scrutiny it deserves from our political leaders. The PAL contract was a sole source, no-bid, contract that gives a 50 year lease of government property to a foreign corporation.

“There have been many attempts, and even a Freedom of Information Act (FOIA) request, to obtain a copy of the PAL contract between the U.S. Army and Actus Lend Lease, the Australian based corporation that is implementing the PAL contract” says Howard. He added that “they are flat out refusing to let us see a copy of the original contract signed between the Army and Lend Lease, and it makes me feel like something is being hidden.”

Before the PAL contract was given to Lend Lease, the Army made it clear that the PAL program “provides no guarantees to the private investors with regard to the loan or occupancy.” A Government Accountability Office (GAO) report to Congress in July 2010 stated that “after lodging is privatized, it will no longer be considered government lodging…

As a result, if no other government lodging is available on the installation, travelers can choose to stay either in the privatized lodging on-base…or in a commercial hotel in the community.” (GAO 10-771) Due to receiving a “below investment grade” rating for the bonds Lend Lease issued to raise capital for this project, an “In-License” agreement was created to guarantee occupancy in the privatized hotel. The choice was taken away from the Soldiers, and a de facto monopoly for Army Lodging was created.

Howard notes that “we need our political leaders to step in, because many people have lost, or are losing their businesses.” He goes on to state that “there are 21 army bases that have privatized thus far, and I am sure when the remaining 21 bases privatize, the lodging providers in these communities will become another group of victims from this lodging monopoly that is spitting in the face of free enterprise.

“Many of the lodging providers in the local communities charge less than the now privatized hotel on these army bases. Ironically, it would cost the government less in most cases if the Soldiers chose to stay off-base given the opportunity.

Senator McCain is the Ranking Member of the Senate Armed Services Committee.

Palexposed.com sent him, along with other members of the committee, a letter back in August, 2012, regarding the devastating consequences of PAL. Senator McCain has been approached directly at town hall meetings on several occasions about this issue in addition to the aforementioned letter. “This is happening in his state at the Fort Huachuca army base” adds Howard. “It is shocking that he is allowing small businesses, including Veteran and minority owned, to go out of business while foreign corporations profit immensely.”