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Bush and his corporate pals rob Iraq
The cronyest capitalists in the world

May 9, 2003 | Page 5

ELIZABETH SCHULTE reports on the "crony capitalists" in charge of the "new" Iraq.

AS DETAILS of the plans for postwar Iraq emerge, they give new meaning to the phrase "It's who you know that counts." From the crew that came up with the foreign policy that put Iraq on the hit list in the first place, to the manufacturers of the weapons that pummeled Baghdad, to the companies with contracts to reconstruct Iraq, to the ones eyeing the oil--they all have one thing in common: Corporate America.

The invasion of Iraq was a long-term project of the neo-conservative "hawks" who now serve throughout the Bush administration--but are especially concentrated on the Defense Policy Board (DPB), a panel that advises the Pentagon.

The "hawks" were drawing up the blueprint for a pre-emptive war long before Bush stole the White House. And no wonder. Of the 30 members of the DPB, at least nine have ties to companies that won more than $76 billion in defense contracts in 2001 and 2002, according to the Center for Public Integrity. Now that the war is over, the administration's hawks are helping their friends clean up.

Before the invasion, the U.S. Agency for International Development (USAID) secretly asked six U.S. companies to submit bids for a $900 million contract to repair and reconstruct water systems, roads, bridges, schools and hospitals in Iraq. Bechtel Group and Kellogg, Brown & Root, a subsidiary of Halliburton, won millions out of this bidding.

Not that they had anything to worry about. The head of USAID, Andrew Natsios, has longtime ties to Bechtel. Meanwhile, Halliburton's former CEO is none other than White House puppet-master Dick Cheney.

Non-U.S. companies weren't even in the running for contracts--because of "national security" restrictions. But after Stevedoring Services of America (SSA) won a contract to run shipments of humanitarian and reconstruction materials at the port of Umm Qasr, USAID discovered that the company didn't have the required security clearance. So Natsios and the boys changed the rules--just this once.

The U.S. is determined to rebuild Iraq in its own free-market image. Initial plans were laid out in a confidential 100-page document titled "Moving the Iraqi Economy from Recovery to Sustainable Growth," which was obtained by the Wall Street Journal last week.

The report, prepared by the Treasury Department and USAID, calls for the privatization of state-owned industries. Unprofitable enterprises would be quickly sold off under what the report calls the "broad-based Mass Privatization Program." Within a year, according to the report, a "world-class" stock exchange would be created to handle the buying and selling of big-ticket Iraqi assets.

"I'm a deep skeptic about all the pronouncements coming out of right-wing think tanks in Washington," said economist Jeffrey Sachs, director of the Earth Institute at Columbia University. "Privatization would end up being done by American guns, not by democratic decision."

The immediate concern, however, is oil. "The U.S. government is setting up Iraq's oil industry to run much like an American corporation, with a chief executive and management team vetted by U.S. officials who would answer to a multinational board of advisers," the Wall Street Journal Europe reported last week.

The oil advisory board will be chaired by Philip Carroll--the former CEO of Fluor. Fluor has energy contracts around the world--from Alaska to Kazakhstan to Saudi Arabia and Afghanistan. The company is currently facing a lawsuit from Black South African workers who say that Fluor "exploited and brutalized them during the apartheid era." Among their charges is that Fluor security men dressed up as Ku Klux Klan members in white robes and attacked unarmed workers.

Before Fluor, Carroll ran operations for Shell Oil, the U.S. unit of the oil giant Royal Dutch Shell. While he was at Shell, the company faced protests by the Ogoni people of Nigeria, where the company had set up operations on tribal lands. Private police hired by Shell attacked activists--and the Nigerian government helped out by arresting and executing leading opposition figures, including writer and movement leader Ken Saro-Wiwa.

"They are like a colonial force running the communities," said Oronto Douglas, of Friends of the Earth in Nigeria. With a record like this, Carroll isn't likely to let the Iraqi people get in the way of U.S. companies exploiting the country's oil wealth.

The U.S. hopes that there's a buck to be made off of agriculture as well. Dan Amstutz will be in charge of agricultural reconstruction in Iraq. Amstutz is a former vice president of Cargill, the giant agribusiness that controls a large portion of U.S. grain exports.

During the Reagan administration, Amstutz drafted the original text of the main international agreements governing the trade of agricultural goods. Amstutz's rules allow wealthy countries to dump their subsidy-backed agricultural surpluses on world markets, pushing down prices to levels that growers in developing nations can't compete with.

"This guy is uniquely well-placed to advance the commercial interests of American grain companies and bust open the Iraqi market--but singularly ill-equipped to lead a reconstruction effort in a developing country," said Kevin Watkins, policy director for the hunger-relief group Oxfam.

Last week, the Treasury Department appointed two officials to coordinate economic "reconstruction" in Iraq. Peter McPherson, the deputy U.S. Treasurer in the Reagan administration and a former group executive vice president of Bank of America, will be the Pentagon's financial co-coordinator. His deputy will be George Wolfe, a senior Treasury Department lawyer.

"It's very much like the Bush administration itself--a bunch of private-sector alumni called upon to perform the task in government they were performing in the private sector," commented the Left Business Observer's Doug Henwood. "They are going to have a whole country to play with now."

Free market crooks at home and abroad

GEORGE W. BUSH is freeing the Iraqi people. Freeing them from their oil, that is.

The plan that the Bush administration wants to bring to Iraq is based on the model of the free market. But if the U.S. is supposed to be an example of how well the supposedly free market works, the plan might be a hard sell.

Last week, 10 Wall Street investment firms were finally forced to pay $1.4 billion to settle charges that they promoted worthless stocks for big corporate clients, at the expense of investors. Among the "respectable" firms connected to the fraud were Citigroup and Merrill Lynch.

The fine may seem large, but after it's divided among the 10, and all the exceptions are taken into account, the firms will pay about $50 million each--a slap on the wrist for these Wall Street monsters.

In other words, crime does pay--if the crime you commit is big enough. This is the real logic of the free market--stealing from the poor to give to the rich.

How defense CEOs made a killing

BUSH HAS declared a war on the world. But defense contractors are the ones making the killing. According to a new report from United for a Fair Economy titled "More Bucks for the Bang: CEO Pay at Top Defense Contractors," the median pay for a CEO at the 37 largest defense contractors rose 79 percent from 2001 to 2002. Overall CEO pay went up just 6 percent.

The study also compared executive compensation at defense contractors to a U.S. Army private's pay of $19,585 a year--and found that the average CEO made 577 times more than the private in 2002.

The study also showed that contractors that made the largest campaign contributions in the 2000 and 2002 election cycles were awarded the fattest Pentagon contracts.

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