Everything's Private

Private contractors in Iraq might be the largest U.S. coalition partner.

| Tue Nov. 4, 2003 3:00 AM EST

Quote of the day :
"Contractors' deaths aren't counted among the tally of more than 350 U.S. soldiers killed in Iraq. No one is sure how many private workers have been killed, or, indeed, even how many are toiling in Iraq for the U.S. government. Estimates range from under 10,000 to more than 20,000 - which could make private contractors the largest U.S. coalition partner ahead of Britain's 11,000 troops." (Jim Krane, A Private Army Grows, Associated Press)

Imagine that -- our number two coalition partner turns out to be an army of private corporate contractors now swarming over Iraq. Who says we have no eager allies? As Roger Triling of the Village Voice has written in "Bush's Golden Vision":

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"Deputy Defense Secretary Paul Wolfowitz and other neoconservatives have long justified regime change in Iraq as the first step in a larger, longer, vastly more ambitious regional transformation. And while some critics have focused on the military dimension-Syria next, then Iran-right now it's about money. More soldiers may be a possibility, but contractors are inevitable.

"So is a certain amount of campaign cash, cycled back from those who profit in the reconstruction. Against the backdrop of a treasury-draining scheme to remake the world, a few million dollars in corporate contributions to a sitting president may seem insignificant, but one can be sure they matter to Bush-and to his political opponents. For Democrats, the spectacle of a Republican administration larding out contracts to close allies is a political disaster [It's enough in fact] to consolidate the existing distribution of power in Washington."

Before the invasion of Iraq, critics joked that, because the Bush administration was offering so much money to garner allies, it was creating not a "coalition of the willing" but "of the billing." Now we can see what the real Coalition of the Billing looks like. Los Angeles Times reporter David Streitfeld vividly describes, for instance, the lives of Bechtel workers in the Little America of the new Iraq (U.S. Engineers Working Under the Gun in Iraq):

"Bechtel's Baghdad compound is deep inside the Green Zone, a vast swath of land along the Tigris River where Hussein built palaces, gardens and monuments. The civilian coalition forces have made the area their headquarters, tightly restricting access. Bechtel's camp, set in what used to be a garden, is protected by a fence, which recently was deemed to be inadequate security. The company has hired a team of elite Gurkha guards from Nepal.

"Resembling over-wide house trailers, the prefabricated units are roomy and nicely cool. Their wood paneling evokes suburban family 'rec' rooms from the early 1970s. There's a special trailer with a pool table and exercise machines, and an admonition taped to the wall: 'Drinking will occur only at the end of the work day.'"

But he also describes the daily dangers -- as a Bechtel engineer he's with responds to gunshots: "[Tom] Rodenfels' hired guards, two British ex-soldiers sporting MP-5 machine guns, take up positions at the edge of the construction site. But the Bechtel Group engineer barely notices. 'Just another day at the office,' he says."

In an extraordinary piece of Freedom of Information Act sleuthing, the Center for Public Integrity has given us the fullest picture yet of what the new Gilded Age of Iraq Contractors looks like -- and it looks like there's an unbelievable amount of money sloshing around Washington and Baghdad, some of which is unaccounted for, and a percentage of which is going into Republican and Bush reelection coffers. Maybe Rumsfeld's "long, hard slog" was a slip of the pen for "long, hard slosh." For further reporting on "missing" moneys, read Emad Mekay's More mystery over missing Iraqi millions in the Asia Times. Otherwise check out the Center's website, where you can find lists of Iraq contracts (to the extent that they are known), portraits of corporate contractors and a fine overall view of the situation, Winning Contractors, which shows that the old revolving door from government to Bechtel or KRB or Dyncorp or the other corporations at the Iraqi trough is now fully automated:

"More than 70 American companies and individuals have won up to $8 billion in contracts for work in postwar Iraq and Afghanistan over the last two years, according to a new study by the Center for Public Integrity. Those companies donated more money to the presidential campaigns of George W. Bush-a little over $500,000-than to any other politician over the last dozen years, the Center found.

"Kellogg, Brown & Root, the subsidiary of Halliburton-which Vice President Dick Cheney led prior to being chosen as Bush's running mate in August 2000-was the top recipient of federal contracts for the two countries, with more than $2.3 billion awarded to the company. Bechtel Group, a major government contractor with similarly high-ranking ties, was second at around $1.03 billion. There are even contractors to evaluate the contractors.

" nearly every one of the 10 largest contracts awarded for Iraq and Afghanistan went to companies employing former high-ranking government officials or individuals with close ties to [the Pentagon, the State Department, the Agency for International Development] or Congress. In addition, those top 10 contractors were established political donors, contributing nearly $11 million to national political parties, candidates and political action committees since 1990, according to an analysis of campaign finance records."

Jim Krane of the Associated Press adds the following vision of a future Washington: "The connection between companies and politicians in Washington raises the specter of executives lobbying for a hawkish U.S. foreign policy since they profit from war."

And for every corporation in Iraq, there are many more awaiting the right moment to hit Baghdad International Airport without being knocked off by a missile. The Bangor News reports, in a piece aptly titled Gold Rush, that the latest of a series of meetings to auction off Iraq is about to happen in Maine:

"Some of the world's largest corporations will meet in Maine this month to talk about how to take advantage of the growing economic opportunities in post-war Iraq. Although hesitant to make a move while car bombs continue exploding in the streets of Baghdad, many of the largest U.S. companies reportedly are lining up for membership in the U.S.-Iraq Business Alliance, a group backed by the Bush administration that hopes to get American companies into Iraq before the best business opportunities are gone"

Many of these prefer to remain anonymous. "When asked why alliance members were so reluctant to be identified, [Alliance founder Dennis] Sokol offered a quick answer: 'This war effort is not popular you know.'"

Iraq itself is a guinea pig for whatever experiment crosses any neocon brain in Washington or Baghdad, anything that can't yet, but might someday be tried out at home, once a few more barriers have come tumbling down. You want to get rid of unions and can't quite do it in the U.S., well, why not Iraq? You want a flat tax and Americans won't listen, well, sure. ("The flat tax, long a dream of economic conservatives, is finally getting its day -- not in the United States, but in Iraq. It took L. Paul Bremer, the U.S. administrator in Baghdad, no more than a stroke of the pen Sept. 15 to accomplish what eluded the likes of publisher Steve Forbes, Reps. Jack Kemp (R-N.Y.) and Richard K. Armey (R-Tex.), and Sen. Phil Gramm (R-Tex.) over the course of a decade and two presidential campaigns." Dana Milbank and Walter Pincus, the Washington Post.) You want to privatize everything in a few giant hands and create a system of no-competitive-bidding crony capitalism, welcome to Iraq. As Tim Shorrock wrote recently in the Nation (Big Bucks in Iraq):

"Many observers, including even US businessmen and Iraqis who favored 'regime change' in Iraq, agree. They say the shock therapy being applied in Iraq will concentrate wealth in the hands of large US and Iraqi corporations, particularly the family-owned businesses that have won the majority of subcontracts from Bechtel and Halliburton. 'I like the analogy of Wal-Mart coming into a town,' says Timothy Mills, an attorney in the Washington law firm Patton Boggs who represents several US and foreign corporations that have contracted with the US government and are doing business in Iraq. 'The downtown dies, Wal-Mart grows and the owners of local businesses are displaced. The effect of Iraq's new foreign investment law for the medium and small-sized Iraqi business could be very detrimental and could result in even more concentration of capital in Iraq.' With the US Export-Import Bank providing $500 million to insure US investors, he added, 'If I was an Iraqi and I was political, I'd say this was a ploy to favor US companies and let them steal the riches of Iraq.'"

And lest you think no one's profiting from all this, the vaunted "peace dividend" of the post-Soviet-collapse years may never have come about, but the "war dividend" turns out to be all to real. Check out, for example, Halliburton, a company not doing all that well before Iraq came along (David Teather, Oil firm linked to Cheney gets Iraq boost, the Guardian):

"Halliburton, the oil services company formerly run by US vice president Dick Cheney, yesterday reported soaring revenues from its contracts to help rebuild Iraq. The company said sales in the third quarter were 39% higher at $4.1bn. Iraq-related work transformed the prospects of its Kellogg Brown & Root subsidiary. The division's total revenues increased by 80% to $2.3bn, of which $900m came from Iraq and profits grew fourfold to $49m, of which $34m was Iraq business."

Let me leave the last word to University of Michigan history professor Juan Cole, who comments that land reform in Japan, India and elsewhere has always preceded successful democratization:

"So far the CPA plan for Iraq appears to be to just let businessmen and wealthy landlords run wild, with all the risks of repeating the disastrous errors made in post-Soviet Russia.

"I'd add that it is widely recognized that the trade unions played key roles in Japanese and German reconstruction and prosperity after WW II, whereas Bremer has been dissolving all such associations. It is not clear that the Iraqi workers will even retain the right to organize or strike

"I'd say that one could forgive the Iraqis if they conclude that the American system in Iraq is a form of state socialism, with Bremer playing the Politburo, giving orders and exercising a veto even though no one elected him to office, and Halliburton and Bechtel playing state-supported industries. Perhaps it looks more like Cuba so far than like capitalist democracy.".

Additional contributions from Tom Engelhardt can be found throughout the week at TomDispatch.com, a weblog of The Nation Institute.