The Baghdad Embassy Bonanza

By David Phinney, CorpWatch. Posted March 8, 2006.

Work for what is planned to be the largest, most fortified U.S. embassy in the world was quietly awarded last summer to a controversial Kuwait-based construction firm accused of exploiting employees and coercing low-paid laborers to work in war-torn Iraq against their wishes.

More than a few U.S. contractors competing for the $592-million Baghdad project express bewilderment over why the U.S. State Department gave the work to First Kuwaiti General Trading & Contracting (FKTC). They claim that some competing contractors possessed far stronger experience in such work and that at least one award-winning company offered to perform the all but the most classified work for $60 million to $70 million less than FKTC.

“It's stunning what First Kuwaiti has been able to get from the State Department,” one contractor said.

Several other contractors that competed for the embassy contracts shared similar reactions and believe that a high-level decision at the State Department was made to favor a Kuwait-based firm in appreciation for Kuwait's support of the invasion and occupation of Iraq.

“It was political,” said one contractor.

Mohammad I. H. Marafie, chairman and co-owner of FKTC, is a member of one of the most powerful mercantile families in Kuwait.

Cheap labor from Asia

Undoubtedly, most of the 900 FKTC workers living and working on the construction site of the massive embassy project have been pulled from ranks of low-paid laborers flooding into Iraq from Asia's poorest countries to work under U.S. military and reconstruction projects.

Meanwhile, FKTC’s general manager and co-owner, Wadih al-Absi jets back and forth to the United States, dreaming of magazine covers celebrating his rise to a global player in large-scale engineering and construction.

Raised in Beirut, he says he began his career much like the people he now employs -- as a laborer installing drywall. The Lebanese Christian escaped war in his home country in the late 1970s and moved to Kuwait. The Persian Gulf country welcomes, even recruits, expatriate blue-collar workers like al-Absi once was to do the grunt work and domestic chores in its booming, oil-rich economy. Today glitzy shopping malls, flashy cars and sprawling villas have become the norm and migrants make up the nearly two-thirds of this tiny desert state's 2.3 million population.

Building his own personal fortune, al-Absi, too, relies on migrant labor. FKTC is one of the many Middle East companies that collectively ship tens of thousands of cheap day laborers to Iraq's war zones where they are paid just dollars a day.

Fortune favors a few

American contractors witnessing the plight of some of these migrants at military camps around Iraq have openly complained that the Asians endure abysmal working conditions, live in cramped housing, eat poor food, and lack satisfactory medical care and safety gear.

Typically, these migrants work 12 hours a day, often seven days a week, and earn as little as $500 a month performing tasks considered unsuitable for U.S. war fighters. They work construction, drive trucks, run laundries, clean latrines, pick up rubbish and operate stores, dining facilities and warehouses. Without them, and the "body shop" subcontractors that provide such laborers, the U.S. and coalition military camps -- virtually small cities -- would shut down.

It is a lucrative business for many companies, one that has helped trigger explosive growth of FKTC.

The company boasted of having $35 million in assets less than three years ago. Today, the firm has racked up hundreds of millions of dollars in U.S. contracts in Iraq, pushing the company well past the $1 billion mark. With 7,000 employees in Iraq, the company claims to be holding $800 million in construction and supply contracts directly with the Army for military camps, plus more than $300 million under Halliburton 's multibillion dollar contract to perform military logistics for the occupation forces in Iraq.

It's the kind of success that allows al-Absi to enjoy finely tailored suits with French cuff shirts, send his children to American universities and enjoy the fruits of being a newly-minted millionaire. "I love America," he says freely.

Meeting over a morning coffee last September at the posh Four Seasons Hotel in Washington, a legendary Georgetown retreat favored by pampered heads-of-state, Hollywood elite, the Rolling Stones and business executives, al-Absi's eyes widened as he talked about his company's greatest prize – the U.S. embassy in Baghdad.

The new embassy

Indeed, the massive $592-million project may be the most lasting monument to the U.S. occupation in the war-torn nation. Located on a on a 104-acre site on the Tigris river where U.S. and coalition authorities are headquartered, the high-tech palatial compound is envisioned as a totally self-sustaining cluster of 21 buildings reinforced to 2.5 times usual standards. Some walls as said to be 15 feet thick or more. Scheduled for completion by June 2007, the installation is touted as not only the largest, but the most secure diplomatic embassy in the world.

David Phinney is a journalist and broadcaster based in Washington D.C.

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