Divvying up the Iraq Pie

By Stephen Pizzo, misleader.com. Posted October 7, 2003.

Editor's Note: The following report is a detailed breakdown of the small group of individuals and companies that are reaping the benefits of the Iraq war reconstruction.

The Wall Street Journal describes it as "the largest government reconstruction effort since Americans helped to rebuild Germany and Japan after World War II." Just how much the rebuilding of Iraq will cost American taxpayers is a figure still too elusive to capture. But the President's request for an additional $87 billion in September, atop the $3.7 billion a month we are already spending, indicates the final figure will be, as one pundit described it, quite "an adult number." Recent estimates now put the final figure somewhere between $200 billion to as much as half a trillion dollars over the next ten years.

America's Iraq-sticker-shock may turn to anger when taxpayers discover the small group of men and companies reaping the benefits of President Bush's newly found appreciation for nation building. While Vice President Dick Cheney's company, Halliburton, has attracted most of press attention for its Iraq-related contracts, Halliburton is hardly the whole story. Halliburton's share is but a slice of multi-billion dollar pie being divided up among a brotherhood of unusually well connected and economically related individuals and entities.

Science Applications International, Inc. (SAIC)
San Diego California

The Associated Press describes Science Applications International Inc. (SAIC) as "the most influential company most people have never heard of." The Asia Times calls it "the most mysterious and feared of the big 10 defense giants."

SAIC ranks among the top ten companies receiving defense contracts. Founded in 1969 by former Los Alamos physicist, Dr. J.R. Beyster, the company is the largest employee-owned company in the nation. The company boosts in excess of $6 billion in annual revenues and 30,000 employees worldwide. Employees are encouraged to buy shares in the company and are allowed to sell them to one another once a year at prices set by the company's auditor. If they leave the company they are required to sell their shares back to the company.

SAIC might best be described as "the-company-of-what's-happening-now" in defense and intelligence. If it's important and it's happening, it's likely that SAIC has piece of the action. The company's ranks overflow with former or retired government person, many from the military and intelligence agencies. Much of SAIC's work is highly classified.

At any given point in time, SAIC's board of directors represents a Who's Who of former military and intelligence officials. Retired Admiral Bobby Inman has been a fixture on SAIC's board of directors for years. Inman served as Director of Naval Intelligence, Vice Director of the Defense Intelligence Agency, Director of the National Security Agency, and finally Deputy Director of Central Intelligence.

SAIC's board changes to reflect the politics of the time. Gone from SAIC's board are directors with expertise in Cold War and Iran/Contra eras like former Nixon Defense Secretary Melvin Laird, Ex-CIA Director Robert Gates, Secretary of Defense William Perry, and former CIA Director John Deutch.

They have been replaced by people with more timely contacts, such as SAIC director Gen. Wayne Downing, (US Army retired.) Before the war Downing served as a lobbyist for the US-backed Iraqi National Congress and its head, Ahmad Chalabi. Downing (along with Bechtel director George Shultz) also served on the board of the Committee for the Liberation of Iraq.

Long before the shooting began SAIC was already at work on Iraq. The trail of contracts begins with William Owens, another former high-level military officer who sits on the boards of five companies that received millions in defense contracts last year. Owens also served as president, chief operating officer and vice chair of SAIC. And, Owens is a member of Defense Secretary Donald Rumsfeld's internal think-tank, the Defense Policy Board.

Noteworthy: In 1995 the company was ordered to pay a $2.5 million fine after a whistleblower charged SAIC had cheated the Air Force on a contract to develop jet fighter cockpit displays. (Hollis v SAIC, #93-CV-390)

To say the Defense Policy Board's membership tips to the right would not be an overstatement. Among its members; Ken Adelman (who made the rounds of network talk shows assuring Americans a war in Iraq would be "a cake walk,") Newt Gingrich, Richard Perle, Dan Quayle and Bechtel senior vice president, retired Army General Jack Sheehan. The Center for Public Integrity reports that of the 30 DPB members nine have ties to companies that have won more than $76 billion in defense contracts last year.

SAIC's Iraq contacts (at least those not classified) appear to begin some time in February 2003, nearly two months before the war, when the Pentagon formed the Iraqi Reconstruction and Development Council (IRDC). Initially based in Virginia the group was composed of a hastily assembled group of Iraqi dissidents. The IRDC was the first attempt to "put an Iraqi face" on the US's postwar administration of Iraq. While it had an Iraqi face, the IRDC had an American paymaster - SAIC. IRDC members were on the SAIC payroll. (Ref. Middle East Conference)

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