"War is a racket," wrote retired US Marine Major General Smedley D Butler, in 1935. That statement, which is also the title of his short book on war profiteering, rings true today.

One courageous civil servant just won a battle to hold war profiteers accountable. Her name is Bunnatine "Bunny" Greenhouse. She blew the whistle when her employer, the US Army Corps of Engineers, gave a no-bid $7bn contract to the Halliburton subsidiary Kellogg, Brown and Root (KBR) as the US was about to invade Iraq. She was doing her job, trying to ensure a competitive bidding process would save the US government money. For that, she was forced out of her senior position, demoted and harassed.

Just this week, after waging a legal battle for more than half a decade, Bunny Greenhouse won. The US Army Corps of Engineers settled with Greenhouse for $970,000, representing full restitution for lost wages, compensatory damages and attorneys' fees.

Her "offence" was to challenge the KBR contract. It was weeks before the expected invasion of Iraq, in 2003, and Bush military planners predicted Saddam Hussein would blow up Iraqi oilfields, as happened with the US invasion in 1991. The project, dubbed "Restore Iraqi Oil", or RIO, was created so that oilfield fires would be extinguished. KBR was owned then by Halliburton, whose CEO until 2000 was none other than then Vice President Dick Cheney. KBR was the only company invited to bid.

Bunny Greenhouse told her superiors that the process was illegal. She was overridden. She said the decision to grant the contract to KBR came from the office of the secretary of defence, run by VP Cheney's close friend, Donald Rumsfeld. As Bunny Greenhouse told a congressional committee:

"I can unequivocally state that the abuse related to contracts awarded to KBR represents the most blatant and improper contract abuse I have witnessed during the course of my professional career."

The oilfields were not set ablaze. Nevertheless, KBR was allowed to retool its $7bn no-bid contract, to provide gasoline and other logistical support to the occupation forces. The contract was so-called "cost-plus", which means KBR was not on the hook to provide services at a set price. Rather, it could charge its cost, plus a fixed percentage as profit. The more KBR charged, the more profit it made.

As the chief procurement officer, Greenhouse's signature was required on all contracts valued at more than $10m. Soon after testifying about the egregious RIO contract, she was demoted, stripped of her top secret clearance and began receiving the lowest performance ratings. Before blowing the whistle, she had received the highest ratings. Ultimately, she left work, facing an unbearably hostile workplace.

After years of litigation, attorney Michael Kohn, president of the National Whistleblowers Centre, brought the case to a settlement. He said:

"Bunny Greenhouse risked her job and career when she objected to the gross waste of federal taxpayer dollars and illegal contracting practices at the Army Corps of Engineers. She had the courage to stand alone and challenge powerful special interests. She exposed a corrupt contracting environment where casual and clubby contracting practices were the norm. Her courage led to sweeping legal reforms that will forever halt the gross abuse she had the courage to expose."

The National Whistleblowers Centre's executive director, Stephen Kohn (brother of Michael Kohn), told me:

"Federal employees have a very, very hard time blowing the whistle … I hope it's a turning point. The case was hard-fought. It should never have had to been filed. Bunny did the right thing."

According to Nobel Prize-winning economist Joe Stiglitz, the cost of the wars in Iraq and Afghanistan alone will exceed $5tn. With a cost like this, why isn't war central to the debate over the national debt?

Two-time congressional medal of honour winner Maj Gen Smedley Butler had it right, 75 years ago, when he said of war:

"It is possibly the oldest, easily the most profitable, surely the most vicious [racket] … It is the only one in which the profits are reckoned in dollars and the losses in lives … It is conducted for the benefit of the very few, at the expense of the very many."

As President Barack Obama and Congress claim it is Medicare, Medicaid and social security that are breaking the budget, people should demand that they stop paying for war.

• Denis Moynihan contributed research to this column

© 2011 Amy Goodman; distributed by King Features Syndicate