A WorldCom of Trouble
AUSTIN, Texas -- My, my, my, the great Iraqi Gold Rush is on, and who should be there at the front of the line, right along with Halliburton and Bechtel, but our old friends at WorldCom, perpetrators of the largest accounting fraud in American history.
WorldCom, shortly to become MCI, has been given a contract worth $45 million in the short term to build a wireless phone network in Iraq. I learned via The Associated Press that Washington Technology, a trade newspaper that follows computing-related sales to the U.S. government, "found WorldCom jumped to eighth among all federal technology contractors in 2002, with $772 million in government sales." And that is only counting the deals in which WorldCom is the primary contractor. It is actually getting much more as a subcontractor.
The Securities and Exchange Commission recently reached a settlement with WorldCom, fining the company $500 million for its $11 billion defrauding of investors. The company did not have to admit any guilt. "The $500 million is in a sense laundered by the taxpayers," Tom Schatz, president of Citizens Against Government Waste, told AP.
WorldCom got the Iraq contract without competitive bidding, to the anger of rival companies A&T, Sprint, etc., which actually have experience in building wireless networks, according to AP. A WorldCom spokesman "also stressed the company's deep, overall relationship with the U.S. military and government."
Among those continuing to make a good thing out of the Iraqi war is Richard Perle of the Pentagon's Defense Policy Board. According to the Los Angeles Times, last February Perle and the board received a classified briefing on the potential for conflict in Iraq and North Korea, including information on new communications networks. "Three weeks later, the then-chairman of the board, Richard N. Perle, offered a briefing of his own at an investment seminar on ways to profit from possible conflicts with both countries," wrote reporters Ken Silverstein and Chuck Neubauer.
It's a subject on which Perle is fully qualified. He was forced to resign as the Policy Board's chairman (though he did not resign from the board itself) in late March after it was learned he had been employed as a consultant by Global Crossing Ltd., then trying to get Pentagon clearance to sell itself to an Asian concern. Perle also serves on the board of several defense contractors and is co-founder of Trireme Partners, a venture capital firm that invests in the defense and homeland security industries.
Also according to Silverstein and Neubauer, Perle's partner at Trireme, Gerald Hillman, has been put on the Defense Advisory Board, despite having no background in national security or defense.
One has to scramble to keep up with the Gold Rush and its players. Tim Shorrock has an excellent article in the June 23 issue of The Nation detailing the state of play: Hundreds of major corporations are interested in getting a piece of this pie. Meanwhile, the invaluable Rep. Henry Waxman of California is keeping an eye on Halliburton. He is raising questions about the company's ties to countries that sponsor terrorism, specifically Iraq, Iran and Libya.
As President Bush begins his two-week, $20 million "shock and awe" campaign fund-raising sprint, we will naturally be keeping an eye on the connections between the campaign contributions and government contracts. And if you think that's too cynical, boy, have you not been paying attention.
One of the many horrors Shorrock found was a statement by Martin Hoffman, former secretary of the Army and close adviser to Donald Rumsfeld, on the privatization of Iraq. He told Shorrock his strategy is like that of the strategic hamlets program in Vietnam. "That was basic economic development," Hoffman said.
Ooops. The only problem is that the strategic hamlet program was a colossal failure, producing untold damage, chaos and hatred. It was a key reason we lost that war.
Another player with business interests in all this is Paul Bremer, the American viceroy in Iraq. Bremer's company is Crisis Consulting Practice, set up after 9-11 to advise multinationals on how to handle terrorism. Naomi Klein concludes in The Nation: "Many have pointed out that Bremer is no expert on Iraqi politics. But that was never the point. He is an expert at profiting from the war on terror and at helping U.S. multinationals make money in far-off places where they are unpopular and unwelcome. In other words, he's the perfect man for the job."
Other efforts to abruptly introduce a capitalist economy into a state-run system have had awful results. The "shock therapy" applied to Russia after the Soviet Union broke up almost destroyed the country, and it still hasn't recovered. Argentina went through a similar process.
So where's a president like Franklin D. Roosevelt when we need him? "I don't want to see a single war millionaire created in the United States as a result of this world disaster," he said during World War II.