Mother Jones Daily
May 5, 2003
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Weapons Watch: 
Coalition Watch: 
Occupation Watch: 
The Oil Grab Begins? Wouldn't it be nice to believe that there would be no profiteering from this war?
The Oil Grab Begins? Our current fearless leaders would have us believe that men who hop from the world of government to the world of business and back maintain an unassailable, conflict-of-interest-free separation between the two. Whatever happens, they assure us, whatever rules change after industrialists get into office, whatever contracts are awarded to government officials' former companies, it's simply a matter of merit and coincidence.
The Los Angeles Times reported Wednesday that Secretary of Defense Donald Rumsfeld's buddy, Richard Perle, who just happens to sit on the Defense Policy Board, also just happened to get a classified briefing from the top secret Defense Intelligence Agency on crises in North Korea and Iraq last February. 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." write reporters Ken Silverstein and Chuck Neubauer. Synchronicity, or deep conflict of interest?:
- "The disclosures in recently released board agendas and investment documents are the latest illustrations of how Perle's private consulting and investment interests overlap with his role on the board, which advises the secretary of Defense.
Perle resigned as board chairman on March 27 after published reports that he had been employed as a consultant by bankrupt telecommunications firm Global Crossing Ltd., which was trying to get Pentagon clearance to be sold to Asian investors. The reports also had him soliciting investment money from a Saudi who was seeking to influence U.S. policy on Iraq.
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Perle did not return phone calls or e-mails seeking comment. He is considered to be one of Washington's most influential defense thinkers and was a leading supporter of the war in Iraq. He is close to Rumsfeld and his top deputy, Paul D. Wolfowitz, as well as to Undersecretary of Defense Douglas J. Feith, who oversees the policy board and who formerly worked with Perle as a consultant to the government of Turkey."
It would be nice, for example, to think that Vice President Dick Cheney's tenure as CEO of Halliburton would never, ever, have influenced Halliburton's current ability to swing fat and juicy government contracts in postwar Iraq. The argument goes something like this: American companies deserve to reap enormous profits from the war because American soldiers fought it. Halliburton and Bechtel -- despite SEC investigations, a track record of gouging the government, and other glitches -- have such otherwise fantastic track records that they are really the only contractors worthy of the job.
"Let's give ourselves a break here," writes Hilary Kramer for Fox News. "What the critics choose to ignore is that Cheney dumped all of his Halliburton shares prior to taking office, so he's clearly not profiting from Halliburton's contract. Nor do they note Halliburton's stellar qualifications -- it's the world's second largest oilfield services company in addition to having built a distinguished history of providing logistical support for the U.S. military."
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When Halliburton was first awarded a contract, they answered critics' accusations that they were making a first greedy grab for Iraqi oil by assuring the public they were simply being hired to put out a few oil fires. Now, the indefatigable Representative Henry Waxman (D-California) is saying that the administration was hiding Halliburton's actual, expanded role:
- Mr. Waxman, the senior Democrat on the House Government Reform Committee, wrote Lt. Gen. Robert B. Flowers of the corps today, saying the contract "is considerably broader in scope than previously known."
He also said the corps' proposal to replace the Halliburton contract with another long-term deal was at odds with administration statements that Iraq's oil belongs to the Iraqi people.
- "We did not think that operation and distribution (of oil products) would be needed and that that would be handled by a follow-on contract,' said [spokesman for the U.S. Army Corps of Engineers, Scott] Saunders.
'But the needs of the Iraqi people dictated otherwise and we had to exercise that option as they are about to run out of gas and propane,' he told Reuters.
- For example, Defense Secretary Cheney conveniently changed the rules restricting private contractors doing work on US military bases, allowing the Kellogg Brown & Root subsidiary of his future employer, Halliburton, to receive the first of $2.5 billion in contracts over the next decade. When Cheney left to become CEO of the entire company, he recruited his Pentagon military aide, Joe Lopez, to become senior Vice President in charge of Pentagon dealings, which ultimately formed the most lucrative part of the otherwise ailing company's business.
Since returning to the public office, these disturbing patterns have continued.
In a scathing expose of Halliburton's military contracts, for example, the New York Times revealed that the Vice President's old company had been the main beneficiary of the Pentagon's rush to build antiterrorism military bases around the world. This new work will cost taxpayers many billions, and, according to Pentagon investigators' estimates, without any cost controls the final bill will be considerably higher than if the military's own construction units do the work.
Cheney denies having a role in securing those recent contracts, as he does knowledge of Halliburton's alleged accounting improprieties.
- September 2000 report by the General Accounting Office, Congress's budget oversight arm, found that Brown and Root was providing nearly twice the electricity necessary to the army's facilities in Kosovo, at a cost of some $17 million a year. The same report found that Brown and Root ordered $5.2 million worth of furniture for camps in Kosovo, an amount so excessive the Army struggled to find space for all the furniture and spent $377,000 just processing the order. The GAO also charged that Brown and Root routinely either overstaffed operations, resulting in employees standing around on long breaks, or was over-eager in its hiring, paying employees to work around the clock for no apparent reason. Offices at the Army's Camp Bondsteel in Kosovo were cleaned four times a day, the report states, latrines a mere three times.
