Iraq: A Corporate Gold Mine

By Pratap Chatterjee, deleted. Posted May 22, 2003.

Engineers and executives from San-Francisco-based Bechtel, one of the world's largest construction firms, kicked off a road show this week for companies that want to win profitable contracts in the reconstruction of Iraq.

The first conference was held a block from the White House at the Ronald Reagan Building on May 21. Two days later, the UK Department of Trade and Industry will host a meeting for the company at the Novotel in Hammersmith in southwest London; the final stop is May 28 at the Sheraton hotel in Kuwait city.

Bechtel expects to answer questions on the selection of subcontractors, insurance requirements and performance securities for winning bids to implement the firm's 680-million-dollar reconstruction deal awarded by the U.S. Agency for International Development (USAID) Apr. 17.

"Bechtel is honored to have been asked to help bring humanitarian assistance, economic recovery and infrastructure reconstruction to the Iraqi people," Tom Hash, president of Bechtel National, said in a press release at the time.

Several interested bidders have already followed Terry Valenzano, Bechtel's manager for Iraq reconstruction, to the Crowne Plaza and Hilton resort in Kuwait, where the engineering teams are based, alongside many top military officials.

The travelling trade show illustrates the central role that business has played in the attack and occupation of Iraq by U.S.-led forces, and to what extent the lines between Wall Street and the Pentagon have become blurred.

Major companies have already begun working in Iraq. Oil giants British Petroleum (BP) and Shell have sent employees to southern Iraq to work for a common British boss, Major Mark Tilley, who has been appointed interim chief executive of Iraq's South Refineries by the occupying forces.

Paul Vick and Scott Hayward, construction managers for Houston, Texas-based engineering company Halliburton, recently arrived in the cities of Basra and Umm Qasr respectively to oversee repairs, under the supervision of Brigadier General Robert Crear, U.S. Army Corps of Engineers.

U.S.-led forces have already contracted out much of this nation-building to U.S. companies or their former employees: Phil Carroll, the former head of Houston-based Shell Oil and construction giant Fluor, has been appointed head of a new advisory board that will oversee the activities of an oil ministry.

Halliburton, which was secretly given the contract to douse the oil fires set by Saddam Hussein's regime, hired two Houston-based companies: Boots & Coots International Well Control and Wild Well Control, to put out the fires. Now the firm is overseeing repair of the oil refineries, running the pipelines and trucking propane to Iraqi consumers.

The contracts have become political hot potatoes because the administration of President George W. Bush never offered them for competitive bidding or mentioned them publicly until well after the work began, despite the fact that they were signed months before the attack even started.

"It certainly gives me the sense they have something to hide," said Congressman Henry Waxman from California, the ranking Democrat on the House Government Reform Committee and a long-time critic of Vice President Dick Cheney. "I don't know if they do, but they're certainly acting that way."

Cheney was chief executive officer of Halliburton, the company that has won the most contracts in the "war on terrorism".

Scott Saunders, a spokesman for the Corps of Engineers, says Halliburton may be permitted to export Iraqi oil in the future, so that the country can generate money to pay for the rebuilding process, unless Iraqis "can reconstitute their oil industry and bureaucracy quickly enough" to do the job themselves.

Meanwhile, Stevedoring Services of America is hard at work rebuilding Iraqi seaports, while Airlink USA is waiting in the wings to refurbish the airports as soon as they are repaired.

The actual construction work is being done by Iraqi workers, who clamor for the two-dollar-a-day jobs in the stifling heat under threat of sniper fire.

Struggling to maintain law and order, the U.S. military has turned to yet another U.S. multinational to run a new Iraqi police force: Dyncorp, whose recruiters are manning phones just outside of Forth Worth, Texas, to hire "individuals with appropriate experience and expertise to participate in an international effort to re-establish police, justice and prison functions in post-conflict Iraq".

Many of these companies were hired even before the invasion began Mar. 20. For example, BP engineers travelled with the troops as the war was launched, to help them seize the oil wells.

Halliburton had 1,800 employees in the Kuwaiti desert setting up tent cities, providing food and washing clothes for the soldiers before the invasion, while Dyncorp employees patrolled the perimeters of army bases to keep out angry civilians.

Inside the Kuwaiti bases, Military Professionals Resources Incorporated (MPRI) of Alexandria, Virginia, a private company set up by ex-U.S. military generals, trained the soldiers to use weapons.

Back in California, two San Diego companies were hired for more secretive operations before the war: Titan corporation was recruiting Kurdish spies and translators while its neighbor, Science Applications International Corporation, was hired to run a government of Iraqis in exile.

The wholesale privatization of the U.S. military is not surprising given that the three bureaucrats Bush hired to run the Army, Navy and Air Force when he became president in 2000 were all plucked from corporate America: Gordon England of General Dynamics was appointed secretary of the Navy, James Roche of Northrop Grumman was appointed Air Force secretary, and Thomas White of Enron was appointed secretary of the Army.

Although all three men have resigned in the last 12 months, the two former military men recruited to run Iraq, Jay Garner and Paul Bremer, were chief executives of consulting companies to the multinationals -- SY Technologies and Marsh McLellan. SY helps design missiles while Marsh advises companies in crisis.

Richard Perle, former head of the Pentagon's Defence Policy Board, was advising Goldman Sachs investors on Wall Street about reconstruction contracts.

Harvey Wasserman, author of 'The Last Energy War', calls the private military contracts a scandal. "The Bush-Cheney team have turned the United States into a family business. That's why we haven't seen Cheney -- he's cutting deals with his old buddies, who gave him a multi-million dollar golden handshake," he told IPS. "Have they no grace, no shame, no common sense?"

Liked this story? Get top stories in your inbox each week from AlterNet! Sign up now »