The Guardian November 26, 2003


As Iraq death toll rises, so do war profits

by Tim Wheeler

As the roster of dead and wounded in Iraq grows longer, George W 
Bush is pleading that the people of the US stay the course 
despite admissions by his administration that the occupation has 
become a "long, hard slog".

But Bush faces tough questions, including this one: Why does he 
demand the ultimate sacrifice from our nation's [US] working-
class youth while his wealthy contributors make no sacrifice at 
all? On the contrary, Halliburton and Bechtel, with crony ties to 
the Bush White House, have reaped a bonanza in war profits.

Are US soldiers and countless Iraqis dying to insure blood money 
for Halliburton, and its subsidiary, Kellogg Brown & Root (KBR)? 
How much of the USUS$87 billion just approved by Congress for 
Iraq will end up in the coffers of Chevron-Texaco, and JP Morgan, 
two other Iraq contractors?

Halliburton-KBR, the Houston-based oil-field equipment 
corporation, secured a US$2.3 billion no-bid, cost-plus contract 
for the so-called "reconstruction of Iraq", the largest single 
contract awarded so far. The trail of money and death leads to 
Halliburton's former CEO, Dick Cheney, who received a US$33 
million severance package when he stepped down to become Bush's 
running mate. Cheney is still receiving deferred payments from 
the corporation, a case of cashing in on the death and misery of 
US military personnel deployed in Iraq.

Similar corrupt deals in Iraq have been granted to the Bechtel 
Corporation (US$1.03 billion), International American Products 
(US$527 million), Perini Corp. (US$525 million), Fluor (US$500 
million), and the Washington Group International (US$500 
million).

The CBS news program, 60 Minutes, carried a feature story on 
Halliburton. The program pointed out that many of the key 
decisions in the Iraq war and its aftermath have been made by the 
Pentagon's Defence Policy Board (DPB). The 30 members of this 
secretive body "are a 'Who's Who' of former government and senior 
military officials. . Nine have ties to corporations that have 
won US$76 billion in defence contracts in just two years."

Among the DPB members are Richard Perle, who has longstanding 
ties to Boeing, and retired General Jack Sheehan, Vice President 
of the Bechtel Corp.

Neo-conservatives such as Cheney, Defence Secretary Donald 
Rumsfeld, Assistant Secretary of Defence Paul Wolfowitz, and the 
DPB have played the central role in drawing up and implementing 
the pre-emptive and unilateral war strategy against Iraq.

One of the principal motives for the unilateralism was to oust 
France, Germany, and Russia, each of which had billions of 
dollars in Iraqi investments, and to hand these juicy plums over 
to Bush-connected US corporations. Iraq holds the second largest 
oil reserves in the world after Saudi Arabia.

A windfall in Bush's election coffers The Centre For Public 
Integrity released a report October 30, titled Windfalls of War: 
US Contractors in Iraq and Afghanistan. The report charges that 
70 US corporations with US$8 billion in no-bid contracts in Iraq 
have donated US$500,000 to the Bush 2004 election campaign (cheap 
at the price). Since 1990, the report adds, these same companies 
have poured US$49 million into the coffers of mostly Republican 
candidates for federal and state political office.

Chevron-Texaco, listed in the report as a major US government 
contractor and Republican donor, joined five other international 
oil companies selected by the Iraqi State Oil Marketing 
Organisation to market Iraqi oil. JP Morgan, the nation's second 
largest bank, which was implicated in the Enron scandal, has been 
contracted by the Iraq Coalition Provisional Authority (CPA) to 
run a consortium of 13 banks that will constitute the Trade Bank 
of Iraq.

A White House cover-up

The Centre charged that they were hampered in their research by 
administration secretiveness and stonewalling. Many of the 
contracts have been classified secret in the name of national 
security, a perfect cover for corporate and government thievery. 
But the people are paying with their tax dollars and their sons' 
and daughters' blood, and understandably demand to know how their 
money is being spent in Iraq.

During debate on the administration's request for US$87 billion 
for the occupation of Iraq and Afghanistan, October 15, Democrat 
Rep. Henry Waxman, ranking member of the House Committee on 
Government Reform said, "There is growing evidence that favoured 
contractors like Halliburton and Bechtel are getting sweetheart 
deals that are costing the taxpayers a bundle but delivering 
scant results".

Waxman cited a deal in which Halliburton was paid US$162.5 
million by the Pentagon in the six months since the war ended to 
truck 61 million gallons of gasoline from Kuwait into Iraq, at 
about US$2.65 per gallon. The gas was then sold in Iraq for 4-15 
cents per gallon. The difference was made up by US taxpayers.

Waxman and Democrat Representative John Dingell wrote a joint 
letter to National Security Adviser Condoleezza Rice in her new 
position as overseer of the Iraq occupation. "The US Government 
is paying nearly three times more for gasoline from Kuwait than 
it should and is then reselling this gasoline at a huge loss 
inside Iraq", they wrote. "Whether this is due to incompetence, 
malfeasance, or some other reason, the waste of taxpayer dollars 
must be stopped."

Waxman and Dingell point out that Bush requested US$900 million 
for "fuel imports" in the US$87 billion Iraq aid package.

The big Iraqi oil grab

In a letter dated May 2, Lt General Robert B Flowers of the US 
Army Corps of Engineers which is handling the Iraqi contracts 
informed Waxman that the Bush administration was preparing a new 
contract to replace the original US$2.3 billion Halliburton deal.

This new plan would be "long term" and involve not only 
extinguishing oil well fires and repair of Iraqi oilfield 
equipment. It would also put Halliburton in charge of "operation" 
of Iraqi oilfields and "distribution" of Iraqi oil. The real 
value of this contract to Halliburton would be at least US$7 
billion.

Waxman fired off a reply to Flowers: "These new disclosures are 
significant and seem at odds with the administration's repeated 
assurances that Iraqi oil belongs to the Iraqi people", he wrote.

Two members of the Iraqi Governing Council met in Washington with 
Waxman staff members, telling them, "the costs to the American 
taxpayer of many reconstruction projects could be reduced by 90 
percent if the contracts were awarded to local Iraqi companies 
rather than to large government contractors like Halliburton or 
Bechtel".

He cites as an example a war-idled cement plant in Northern Iraq. 
Major General David Petraeus announced it would cost US$15 
million to reopen the plant if the job were assigned to Bechtel. 
But Iraqis restored production for US$80,000.

Privatising Iraq

New laws drafted by Bush's Iraq czar, Paul Bremer, and unveiled 
September 21, allow foreign investors to own 100 percent of any 
Iraqi assets and to remit profits and royalties when they choose.

A key adviser to Bremer is Wall Street investor, Tom Foley, a 
generous Bush contributor. He cooked up a scheme to invite 14 
Eastern European finance officials to Baghdad to give advice 
about privatisation. They included the notorious Yegor Gaidar, 
who presided over the Russian mass privatisations of the early 
1990s, Moscow News reports.

As if on cue, Iraq's new oil Minister, Ibrahim Bahr al-Uloum, 
handpicked by the Bush administration, announced that his main 
aim is privatisation of Iraqi oil.

Stop the looting, bring the troops home!

Iraq war profiteering is stirring a backlash in the US among 
families angry that their sons and daughters have been placed in 
harm's way to enrich Cheney and his ilk.

The Institute for Southern Studies, based in Durham, NC, recently 
unveiled its "Stop the War Profiteers Campaign". Supporters are 
invited to sign an online petition. (see below for address)

The petition demands that Congress investigate the war 
profiteering, enact an "excess profits tax" on the profiteers, 
and end the "corporate take-over and selling off of Iraq's 
industry and resources . that they be returned immediately to the 
Iraqi people."

Dr Rania Masri, a co-ordinator of the campaign, declares, "A 
handful of Bush-connected corporations are poised to make 
billions in profits while US troops are killed almost daily and 
Iraq plunges deeper into a colonial nightmare. Halliburton, 
Bechtel, MCI and other war profiteers are part of a larger 
invasion by outside corporate interests hoping to control the 
wealth and resources of Iraq wealth and resources that belong to 
the Iraqi people."

So far, 600 organisations, including Veterans for Peace, New York 
Labor Against the War, Global Exchange and United for Peace and 
Justice, as well as authors Noam Chomsky, Jim Hightower and 
Howard Zinn, have signed on to the campaign's founding statement.

Democrat Representative Dennis Kucinich, a Democratic 
presidential contender, has also spoken out against the war 
profiteering. In his announcement speech October 13 in Cleveland 
he laid out his plan to end the war: "Number one, that the UN 
will handle all the oil assets on behalf of the Iraqi people with 
no privatisation. Number two, that the UN will handle the 
contracts. No more Halliburton sweetheart deals. No more war 
profiteers, no more contracts going to political contributors of 
the administration. . We need to bring the UN in and bring our 
troops home."

If you have access to the Internet, sign-on to
http://www.southernstudies.org, and add your name to the petition.

* * *
People's Weekly World, paper of Communist Party USA. Abridged, for full text visit: http://www.pww.org

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