Laughing All the Way to Wall St.: President George Bush Has Been Accused of Carving Up the Spoils of War to the Exclusive Benefit of US Corporations. Joel Bainerman Analyses the Extent of the Nepotism and Spotlights Those Who Are Securing Multi-Million Dollar Profits to the Detriment of Iraqi Private Enterprise
Bainerman, Joel, The Middle East
War remains a profitable business--at least for a select few. While the US public is being asked to foot the monthly cost of nearly $4bn to occupy Iraq, a handful of US corporations with deep ties to members of the Bush Administration are laughing all the way to the bank. With the cost of reconstructing Iraq estimated to be around $16bn, their corporate future looks increasingly bright.
The two major contractors are Halliburton (2002 sales, $12.4bn; 83,000 employees) and Bechtel Group (2002 sales, $11.6bn; 47,000 employees):
Halliburton: This is the company vice president Dick Cheney ran from 1995-2000 during the Clinton years. It has a major subsidiary company called Kellogg Brown and Root (KBR) which has received $1.7bn worth of contracts to reconstruct Iraq's oilfields. Few of these contracts were put out to tender so no other company was allowed to submit a bid. The company is the single largest supplier of private services to the US government in Iraq and its share of the reconstruction contracts could eventually reach $7bn.
The contract was awarded despite the fact that the company was recently found to have committed fraud in a project they administered in the Balkans and were ordered to pay a $2m fine. It has also admitted to the US Securities Exchange Commission (SEC) that it was forced to bribe Nigerian officials in order to secure a reduction in taxes owed to the government in Lagos.
A group of senior House Democrats in the US Congress has requested an investigation of the contracts awarded to Halliburton. The company, says Congressman John Dingell of Michigan, "has a record of gouging the government in contracts awarded without competition."
In early January the US military announced it was taking over the task of providing fuel for Iraq, ending a Pentagon deal with Halliburton. The Pentagon's Defence Energy, Support Centre confirmed it had been directed to assume control of rebuilding Iraq's oil industry and that new contracts would be awarded through a competitive bidding process.
The Defence Energy Support Centre said in a statement that the agency had been directed to "support the Iraqi Ministry of Oil and Task Force-Restore Iraqi Oil (TF-RIO) by importing and distributing fuel to the Iraqi civilian population."
Bechtel Group: This privately owned, family-controlled company has been awarded a $1.3bn contract for Iraqi reconstruction work to repair and rehabilitate water, power and sewage infrastructure; repair and upgrade seaports, hospitals, schools, ministry buildings and transportation links. In February 2003 the CEO of Bechtel, Riley Bechtel, was appointed by President Bush to the Export Council which was created by the White House as a means to increase US exports. Other employees of Bechtel who currently hold advisory positions in the US federal government include Jack Sheehan and Daniel Chan.
Other US companies that have been awarded contracts are:
DynCorp: Founded in 1946, DynCorp has long provided US government agencies---particularly the Defence Department--with logistical and training support. Computer Sciences Corp (CSC), acquired DynCorp in March of this year for $950m. CSC is one of the country's leading information technologies (IT) consulting firms and reported revenues of more than $11bn in 2002.
The US State Department awarded DynCorp a multi-million-dollar contract to advise the Iraqi government on setting up effective law enforcement, judicial and correctional agencies. DynCorp will arrange for up to 1,000 US civilian law enforcement experts to travel to Iraq to help locals "assess threats to public order" and mentor personnel at municipal, provincial and national levels. The company will also provide any logistical or technical support necessary for this peacekeeping project. DynCorp estimates it could recoup up to $50m during the first year of the contract.
Stevedoring Services of America: The largest marine terminal operator in the United States, which made an estimated $1bn in sales last year, has been awarded a $14. …