Profiting from a liberated Iraq

While U.S. war aims are couched in terms of “liberating” Iraq, the Bush administration is already divvying up the spoils of war. Long before troops moved into Iraq – even before Bush put forward his 48-hour ultimatum – corporations were lining up to feed from the Iraq trough. Kellogg Brown & Root (KBR), a subsidiary of Halliburton (formerly headed by Vice President Dick Cheney), was the first to be served.

The company won a 10-year contract to “mitigate and prevent” oil fires in Iraq. Just to prove the Department of Defense was being on the level about the bidding process for this job, they set up a toll-free number that companies could call. A friendly woman’s voice instructs you to leave your name, your company’s name and assures you that the DOD will get back to you.

What the recording doesn’t mention is the Bush administration’s diktat that only U.S. companies will get the contracts – and will be required to subcontract with “friendly” companies.

The next contract up for bid was for a $900 million job rebuilding Iraq’s infrastructure: government buildings, schools, mosques, roads, water systems, and hospitals; printing new textbooks, and, of course, rebuilding the country’s oil infrastructure.

For such an important job, no toll-free number was set up. Instead, the U.S. Agency for International Development contacted five large companies – KBR, Fluor, Bechtel, Louis Berger, and Parsons – each with a history of being large donors to Republican Party causes.

The $900 million is a drop in the bucket of the total cost of rebuilding and occupying a post-war Iraq. A panel led by former CIA director James Schlesinger, has called on Bush to ask Congress for an initial commitment of $3 billion. The Center for Strategic and International Studies estimates the total cost to U.S. taxpayers at about $20 billion a year.

There’s also a contract to rebuild Iraq’s ports, one that is expected to provide the winner with almost certain control over Iraq’s future trade.

The prize to be won with these contracts is not the initial contract itself. The company that wins the contract will get in on the ground floor of the Bush administration’s occupation of Iraq – and with it, first dibs on Iraq’s oil.

U.S. oil companies have been banished from direct involvement in Iraq for more than a decade, while the Iraqi government has recently awarded drilling concessions to French, Russian and Chinese oil companies for land that contains an estimated 44 billion barrels of oil. U.S. oil companies, who have 41 members at different levels of the Bush administration, would surely like nothing better than control over this oil, and a successful “regime change” could accomplish just that.

According to most estimates, somewhere between $5 billion and $7 billion would have to be invested in Iraq’s oil production and distribution infrastructure if production is to be boosted beyond present levels and generate money to rebuild the country. It should not come as any surprise if one of the next contracts to be awarded will be for such a rebuilding job.

The Bush administration claims it is preparing for a post-war Iraq, something that was – and still is – missing after the war in Afghanistan. However, the preparation falls short falls short in improving on making sure the Iraqi people have democracy and focuses, instead, on making sure that U.S. corporations have the first opportunity at taking over Iraq’s oil. As Michael McKinley, a professor of political science at the Australian National University in Canberra, has said, “The U.S. has no interest in Afghanistan apart from putting a pipeline through it.”

The author can be reached at ismith@politicalaffairs.net



PDF version of 'Profiting from a liberated Iraq'