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To: The Collective Human Conscience Subject: Bechtel's sordid history, and its administration
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Bechtel awarded
http://www.wsws.org/articles/2003/apr2003/bech-a29.shtml
By Joseph Kay
29 April 2003
On April 17 the US Agency for International Development (USAID) awarded a
contract worth $680 million to Bechtel Corp., a private company with close ties
to the Republican Party and the Bush administration.
The outcome of a secretive bidding process open only to a select group of
American corporations, the contract is the latest and largest in a series of
windfalls for corporate
The areas covered by the contract include the rehabilitation of
Bechtel stands to gain much more than the initial contract. USAID officials
have indicated that the final price tag will run into the tens of billions of
dollars. Much of this work—which includes operations in nearly every important
area of the country’s infrastructure—will go to Bechtel and its subcontractors.
“This has never been done before—an American corporation rebuilding an entire
foreign country,” noted Daniel Brian, Executive director of Project of
Government Oversight, which is based in
Previous contracts included a multi-billion dollar deal secured by Halliburton,
a company previously headed by Vice President Dick Cheney. The cost-plus-profit
contract was awarded without competition to Halliburton’s subsidiary, Brown
& Root, which was also one of the six original contenders for the contract
awarded to Bechtel. Brown & Root eventually opted out of the bidding
process after charges of favoritism were raised. Cheney still receives up to $1
million a year from Halliburton as part of his severance package.
Other American corporations that have won contracts include Research Triangle
Institute, which will receive up to $167 million for work in local governance
services, and Creative Associates International, which won a $62.2 million
contract to rebuild Iraq’s devastated educational system.
All of these costs will initially be paid by American taxpayers, who will also
pay for the bombs used to destroy Iraqi infrastructure in the first place. The
rest of the burden will fall on the Iraqi people, as the
In an attempt to answer charges of political favoritism, USAID spokesman Luke
Zahner argued, “The reality is that there are only a few companies that can
handle a contract of this size.” There is a grain of truth in this. A handful
of giant companies dominates the market for contracts
like that awarded to Bechtel, and all of them have political connections. In
addition to Halliburton, the other major competitor is Fluor Corp., which has
on its board a former head of the National Security Agency and deputy director
of the CIA, in addition to other military ties.
During last month’s anti-war demonstrations, Bechtel headquarters in
The Center for Responsive Politics, a government watchdog organization, reports
that all six companies that were originally allowed to bid for the contract are
heavy donors to American politicians, particularly to the Republican Party.
Combined, they gave $3.6 million between 1999 and 2002, 66 percent to
Republicans. Bechtel itself contributed $1.3 million of this.
But Bechtel’s connections extend far beyond campaign contributions. The company
has operated for decades as a halfway house for Republican politicians and
military officials heading both into and out of government service.
One of Bechtel’s senior vice presidents is Jack Sheehan, who is also a member
of the Defense Policy Board, which advises Secretary of Defense Donald
Rumsfeld. Right-wing forces closely aligned with Rumsfeld dominate the defense
board. Its former head was Richard Perle, a vociferous advocate of war in
Sheehan is responsible for Bechtel’s petroleum and chemical operations, and
oversees the execution and strategy for the company’s activities in the
Bechtel’s chairman and CEO, Riley Bechtel, was appointed by Bush to the Export
Council, which advises the president on international trade issues.
George Shultz served as the president of Bechtel for seven years, in between
his posts as Nixon’s treasury secretary and Reagan’s secretary of state. After
leaving government, Shultz again joined Bechtel, taking a seat on the company’s
board of directors, a post he still holds today. Shultz chairs the advisory
board of the Committee for the Liberation of Iraq, a right-wing outfit that was
critical in manufacturing a justification for the war.
Caspar Weinberger was Bechtel’s general counsel from 1975 to 1981, before
joining the Reagan administration as secretary of defense.
The list goes on. The head of USAID, Andrew Natsios, was at one time the
director of
These are only the most prominent of Bechtel’s political connections. In his
book, Friends in High Places: The Bechtel Story, Leon McCartney documents the
close ties that emerged between Bechtel and the CIA during the 1950s. Former
CEO Steve Bechtel had close ties with then-CIA Deputy Director Allen Dulles,
and he served as the CIA’s liaison with the Business Council and other
organizations linked to the intelligence agency. According to McCartney,
Bechtel had a hand in the overthrow of Mossadeq in Iran and Sukarno in
Indonesia, placing the company in a good position to do business with the
pro-American dictatorships installed in their stead—at the cost of hundreds of
thousands of workers’ lives.
Thus, Bechtel’s exploitation of political connections and war for purposes of
profit is not of recent vintage. The company began working in the
After the first gulf war in 1991, the company won a contract—which, according
to some allegations, was greased with a payoff to the Kuwaiti monarchy—to carry
out much of the cleanup work. The deal was worth an estimated $2 billion.
But the most revealing episode involves the Aqaba oil pipeline scheme, first
reported by investigative journalists Jim Vallette, Steve Kretzmann and Daphne
Wysham of the Sustainable Energy & Economy Network and the Institute for
Policy Studies. The report, “Crude Visions: How oil interests obscured
The negotiations were at their apex from 1983 to 1985, a period of ferocious
fighting in the Iran-Iraq war. During this time the Iraqi regime used chemical
weapons against Iranian forces, something subsequently cited as a justification
for the overthrow of Saddam Hussein. At that time, however, the
On the contrary, Bechtel was among 24 American companies and 80 German
companies that reportedly supplied Hussein with chemical, biological and
nuclear weapons or equipment during this time. This is according to the
The Reagan administration, and especially Secretary of State George Shultz (the
former Bechtel president) and Donald Rumsfeld, then special envoy to the
The project was discussed in detail at meetings between Rumsfeld, Iraqi Deputy
Prime Minister Tariq Aziz and Saddam Hussein in December 1983. Rumsfeld
reported that
There followed a flurry of activity on the part of operatives in the American
government, including then-Undersecretary of State for Political Affairs Lawrence
Eagleburger, who is now on the board of directors of Halliburton, to ensure
financing for the project and gain Israeli cooperation. On
This pressure succeeded, and in June of 1984, the Ex-Im Bank approved $484.5
million for the project. The Overseas Private Investment Corporation, another
government credit agency, also took interest in the plans. Support from these
institutions was a way to indicate that the pipeline had the support of the
government, without requiring that Congress approve the project.
Bechtel attempted to deal with the problem of Israeli cooperation through the
intervention of Swiss billionaire Bruce Rappaport, who was a friend of Shimon
Peres, the Labor Party leader and then-prime minister of
McKay’s report continued: “[Rappaport] then negotiated with Bechtel an
exclusive oil-lift agreement including a 10 percent discount [for Rappaport].
It would generate substantial profits for him, a portion of which he intended
to pay to
In a letter to Meese, Rappaport indicated that, though “it would be denied
everywhere...a portion of these funds will go directly to Labor,” that is, into
the coffers of the Israeli Labor Party.
In the course of his negotiations, Rappaport obtained the services of two more
pillars of American imperialism, James Schlesinger and William Clark.
Schlesinger is a former director of the CIA and served as secretary of defense
under Nixon and Ford.
The Vallette report notes: “In a project where the lines between corporation
and government were often obscure,
Independent Counsel McKay’s investigation into Meese, which encompassed other
breaches of financial and ethical regulations, eventually led to the attorney
general’s resignation in May of 1986.
The Bechtel project for the Aqaba oil pipeline eventually fell through, when
Hussein decided to reject it.
The Vallette report, written before the invasion of
While the motives driving the war extend beyond the immediate interests of one
company, the decision to award Bechtel the largest reconstruction contract is
an indication of the complete integration of the interests of corporate
Copyright 1998-2003
World Socialist Web Site
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