The profits of war


Someone once said ‘the business of business is business’, but war is also about business.

The invasion and occupation of Iraq was not only about the exercise of American political and military power; it was also about commercial domination and profit. But the activities of American, British and Australian companies in Iraq are rarely reported on in the local media. The exception is the Sydney Morning Herald, which occasionally runs pieces on American firms in post-war Iraq.

The biggest US company in Iraq is Halliburton, the CEO of which was Dick Cheney until he became Vice-President. Next comes Bechtel of which former Secretary of State, George Shultz, was President. (George Shultz, incidentally, was, and is, a close friend and golfing partner of Bob Hawke.)

Halliburton is a giant, Texas-based oil services company, which has been awarded contracts by the Bush administration in excess of US$200 billion to ‘rehabilitate’ Iraq. Halliburton is the sixth-largest US military contractor and its directly owned subsidiary, Kellogg, Root & Brown (KBR) supplies everything from housing to daily meals to the American troops stationed in Iraq, Kuwait and Afghanistan. In 2003, Halliburton received a US$77 million contract to repair Iraq’s oilfields – this included the pumping and selling of Iraq’s oil. (link here).

An organisation called USAID, whose administrator is Andrew Natsios, determines the contracts awarded to companies to reconstruct Iraq. Only US companies are chosen, but there is intense competition from other concerns for the subcontracts. The German firm, Siemens, for instance, concluded a deal worth US$95 million to build a power station near Baghdad. Siemens already has subcontracts worth US$50 million in Iraq. This is good news for the Siemens shareholders, but bad for the Iraqis, who lack both the expertise and the money to re-build their war-torn country.

Australia, as a loyal member of the ‘coalition of the willing’ has been keen to get a piece of the subcontract action. In a brown-nosing, telephone interview with the Minister for Trade, Mark Vaile, on 29 April 2003, all was revealed. (Vaile was in Washington, lobbying for subcontracts from Halliburton and engineering giant, Bechtel Corporation; and the interview, incidentally, included Tim Colebatch of the Melbourne Age.) All Vaile and the interviewing journalists were concerned about was that Australian business should profit from Iraq’s post-war reconstruction. Vaile reassured the journalists that the Americans would look kindly upon their ‘Aussie mate’. Vaile dropped names everywhere, said John Howard was a ‘special guest’, staying overnight at President Bush’s ranch in Crawford and proved he was getting the hang of US internationalspeak – ‘I think we better have one last question you guys, it’s getting late and I’m wearing out’. (link here)

As we have seen, the second biggest corporation in post-war Iraq is Bechtel of California. Bechtel is an international engineering firm. In 2003 alone, Bechtel received rebuilding contracts worth US$680 million for every element of Iraq’s infrastructure, including power generation, electrical grids and sewage systems. Bechtel is active in South America, Turkey, the Philippines, India – and Australia, of which more later. Bechtel had profitable links with Saddam Hussein, when it signed a contract for the engineering and construction of a petrochemical plant near Baghdad in 1988. It is highly likely that the plant may have developed chemical weapons for use against the Kurds. Secretary of Defense Donald Rumsfeld was on a peace mission in the Middle East at the time and shook Saddam warmly by the hand. But Rumsfeld’s chief concern was the proposed pipeline to carry oil from Iraq to the Red Sea port of Aqaba, which Bechtel hoped to build.

Bechtel has always enjoyed close links with Washington and has been a generous contributor to the Republican party. Andrew Natsios, the administrator of USAID, whose name Mark Vaile was so keen to drop, is a former project supervisor for Bechtel.

Of the twenty four companies that assisted Saddam Hussein’s pre-Gulf War program, Bechtel was one. Others included DuPont, Eastman Kodak, Hewlett Packard, International Computer Systems and Unisys. (see link here)

The food contract for Abu Ghraib prison went to American Service Center (ASC), a little known company, based in Qatar. ASC’s contract manager was a Vietnam veteran who was murdered by three masked gunmen on 16 February 2004. The food contained dirt, bugs, maggots and pieces of rat. This and torture. So much for the Pentagon’s contract system. (see link here)

Both Halliburton and Bechtel are alive and well in Australia.

Through its subsidiary, KBR, Halliburton enjoys a 38 per cent share in Freightlink, the operator of the 3000 km rail line from Adelaide to Darwin. It also has a 50 per cent share in Adrail, the company that built the new rail link from Alice Springs to Darwin. Asia Pacific Transport (APT) is comprised of a consortium, which includes KBR and which will own and operate the railway for fifty years from 2003. The chairman and CEO of Halliburton, David Laser, launched the first freight train in the enthusiastic presence of Senator Nick Minchin, Minister for Finance and Administration, Mike Rann, Premier of South Australia and Claire Martin, Chief Minister of the Northern Territory. (see link here)

The Bechtel Corporation is very active in the development of the Liquid Natural Gas (LNG) at Darwin. They are constructing a storage tank and building a pipeline. Claire Martin has visited the site of the $1.6 billion project in the company of Bechtel’s site manager and says the project ‘is great news for local business’.

The terms and conditions of the contracts with Halliburton and Bechtel have not been made public. In Iraq, according to the New York Times, the contracts with Bechtel provide for a cost plus fixed fee deal. Once the cost of a project is established, the contractor is entitled to recover those costs, plus a fee that is a fixed percentage of those costs. Is this something to go on, with the LPG deal? Both Halliburton and Bechtel have been continually charged with over-stating costs in their Iraq and other operations.

Like Nick Minchin, Claire Martin has welcomed Halliburton and Bechtel with open arms.

Like Iraq, Australia is being colonised, but unlike Iraq, we have not been bombed into submission.

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