BY ROHAN PEARCE
The scramble for a quick buck by US corporations in the aftermath of Washington's invasion of Iraq came as no surprise to all but the most naive — US policy in the Middle East has always been guided by seizing and controlling the economic bounty of the region. What has astounded many, however, is just how blatant US President George Bush's administration has been in its cronyism as it has begun to dish out up to US$200 billion worth of contracts to undo the devastation it wrought in Iraq.
The Bush gang's corporate cronyism is of such a scale, and is so thinly veiled, that it has caused disquiet even among sections of the US capitalist class. The "war on terrorism" is a nice little money spinner for some. As New York Times columnist Bob Herbert noted on April 21, these contracts are "a licence to make money".
The billion-dollar contracts that have created the most controversy are those which have been given to the Halliburton and Bechtel corporations, firms with a long history of ties to the figures who dominate the Bush administration, many of whom were also part of US President Ronald Reagan's regime in the 1980s.
According to the Washington-based Center for Responsive Politics, between 1999 and 2002, the Bechtel Group made total political contributions of $1,297,465 — 59% of which went to Bush's Republican Party. During the same period, Halliburton made donations of $709,320, 85% to the Republicans.
Halliburton, the giant energy-services corporation formerly managed by US Vice-President Dick Cheney, and its subsidiary Kellogg, Brown and Root (KBR), have a history of close links to the US military machine and its overseas adventures. It wasn't until Cheney became Bush's running mate in the 2000 presidential election that he resigned as Halliburton's CEO.
Cheney, who was defence secretary in George Bush senior's administration, quickly cashed in on his connections when he joined Halliburton. According to Corp Watch, when Cheney became the corporation's CEO in 1995, Halliburton suddenly jumped from 73rd to 18th on the Pentagon's list of top contractors.
KBR
Since his "retirement" as CEO, Cheney has continued to receive $1 million a year from Halliburton as part of his "golden handshake".
Since Bush junior and Cheney took over the White House, KBR has been given contracts to provide logistical support and construction services for the Pentagon in Afghanistan, Turkey, Kuwait and Djibouti. The July 13 New York Times reported that KBR "had recently taken over a wide range of tasks at [the US] Khanabad Air Base in Uzbekistan, from running the dining operation to handling fuel and generating power for the airfield".
The cages at US prison camp at Guantanamo Bay, in Cuba, were constructed by KBR (a contract worth at least $9.7 million, and possibly as much as $300 million).
According to the NYT, KBR's first military contract was in 1940, when it constructed a naval air base in Texas. "In the 1960s, it built bases in Vietnam. By the 1990s, KBR was providing logistical support in Haiti, Somalia and the Balkans."
On May 2, there were new revelations about the Iraq contract awarded to Halliburton. Originally, the contract, handed to KBR without competitive tendering, was thought to be limited to extinguishing oil-well fires and the repair of damage to oil-related infrastructure. However, according to a US Army letter sent to Henry Waxman, a Democrat member of US Congress, a contract awarded to KBR on March 8 has a potential value of $7 billion, and includes the "operation of [oil] facilities" and the "distribution of products".
In response, Waxman stated that the "new disclosures are significant and seem at odds with the administration's repeated assurances that Iraqi oil belongs to the Iraqi people". On May 9, Democrat senator Frank Lautenberg called for an investigation of Halliburton's Iraq contract, stating that he was "concerned about the lack of transparency"
The Halliburton corporation's board of directors includes Lawrence Eagleburger, who was George Bush senior's secretary of state from 1992-1993. A former consultant for Halliburton, Richard Armitage, is now deputy secretary of state. Halliburton's director for government relations is Katherine Hoehn, who was Cheney's executive assistant when he was the company's CEO.
Before her current position, Hoehn worked for the leading "neo-conservative" think-tank, the American Enterprise Institute. The AEI had pushed for "regime change" in Iraq for many years. By Bush's own admission, his administration employs at least 20 AEI members. Incidently, Lynne Cheney, Dick Cheney's companion, remains a senior AEI staff member.
Bechtel
Also profiting from the latest US neo-colonial "acquisition" is Bechtel, a US construction giant. The April 17 London Financial Times revealed that the corporation had won a contract valued at up to $680 million. The FT reported that contract was controversial, since USAID invited only a "handful of other large and well-connected US companies, including Halliburton, Fluor and Parsons, to compete". (Philip Carroll, the White House-appointed Iraq oil czar, was formerly chief executive of Fluor.)
Corp Watch's Pratap Chatterjee reported on April 24 that Terry Valenzano, the man who ran Bechtel's construction business in Saudi Arabia, on April 21 flew into Kuwait city to meet with Jay Garner, the Pentagon official who had been appointed to oversee Iraq's "reconstruction".
Chatterjee noted that Bechtel Corporation is one of the world's largest engineering-construction firms, with projects that range from the first major oil pipelines in Alaska and Saudi Arabia, to nuclear reactors in Qinshan, China and refineries in Zambia. Founded in 1898, the company has worked on 20,000 projects in 140 nations on all seven continents. In 2002, Bechtel earned $11.6 billion in revenue.
There is "revolving door" between the US government, the Republican Party and Bechtel, noted Chatterjee. In 1962, Caspar Weinberger was the chairperson of the California Republican Party, the state in which Bectel is based. Then-governor Ronald Reagan appointed him chairperson of the Commission of California State Government Organisation and Economy. In 1975, he became the Bechtel Group of Companies' vice-president. In 1981, he resigned from this position to become President Ronald Reagan's secretary of defence until 1987.
Bechtel's current board includes George Shultz, Reagan's secretary of state from 1982 to 1989. From 1969 to 1970, Shultz was US President Richard Nixon's secretary of labour. During Nixon's second term, Shultz was secretary of the treasury until May 1974. From '74 to '82, Shultz was the Bechtel Group's president and director; he resumed his position on the Bechtel board when his term ended at the State Department.
Shultz is chairperson of the Committee for the Liberation of Iraq's board, a "neo-con" lobby group for "regime change" in Iraq. Last September, Schultz penned a Washington Post op-ed that said, "A strong foundation exists for immediate military action against Hussein and for a multilateral effort to rebuild Iraq after he is gone." He failed to mention that his company was likely to be a prime beneficiary.
Crude Vision, a report released in March by the Institute for Policy Studies and the Sustainable Energy and Economy Network, revealed that Bechtel's interest in Iraq is not new. In 1983, none other than Donald Rumsfeld (today Bush's war secretary) visited Baghdad on a special mission from then-secretary of state Shultz. One of the topics discussed between Rumsfeld and Saddam Hussein was a proposal that Bechtel construct an oil pipeline from Iraq to Jordan.
Corp Watch also revealed on April 24 that Andrew Natsios, the head of US government's Agency for International Development (USAID), which awarded the corporation its lucrative contract in Iraq, "was overseeing Bechtel just two years ago as the chairman of the Massachusetts Turnpike Authority, which hired the company to complete the Boston Central Artery project".
According to the Center for Cooperative Research (CCR) profile of the company (<http://www.cooperativeresearch.org/corporation/profiles/bechtel.html>), the ties between the Bush gang and Bechtel don't end there. They include:
- Jack Sheehan, a retired Marine Corps general and a senior vice-president of Bechtel, sits on the Pentagon's Defense Policy Board. According to the CCR, Sheehan is responsible for Bechtel's "business strategy in the region that includes Europe, Africa, the Middle East and south-west Asia".
- The April 18 New York Times reported Bush's export council includes Riley Bechtel — the corporation's CEO and the the 104th wealthiest man in world. Riley's job is to advise Bush on how to create markets for US companies overseas.
- In June 2001, former CEO of Bechtel Energy Resources Corporation, Ross Connelly, was appointed by Bush as executive vice-president and chief operating officer of the Overseas Private Investment Corporation (which provides insurance and loans to US corporations investing in "risky" locations, such as Iraq and Afghanistan).
From Green Left Weekly, May 21, 2003.
Visit the Green Left Weekly home page.