Profits of doom
Editor’s Note: When the San Francisco-based Bechtel Corp. was awarded a lucrative contract to rebuild Iraq last week, connections between Bechtel and the Bushes quickly found their way into wire stories and even a few newspapers. In the following essay, writer Mark Sommer explains how some well-connected friends of the current administration will benefit from the reconstruction of the Iraqi oil industry while the rest of America (and Iraq) foots the bill.
If anyone outside the United States harbored lingering doubts about the motives behind the U.S. invasion of Iraq, they surely were put to rest in recent weeks by shameless profiteering by officials in George W. Bush’s administration and their extended financial family in both the destruction and reconstruction of Iraq.
Costs of a reconstruction project slated to be the largest since the rebuilding of Western Europe after World War II may reach $250 billion throughout the next decade. The project will be spearheaded by former Gen. Jay Garner, who, until recently, was president of SY Technology, a defense contractor specializing in Star Wars missile defenses. Coincidentally, just as Garner moved back into government, the company won a $1.5 billion contract to provide logistics services to U.S. special forces, and another to build Patriot missiles for Israel and Kuwait.
Halliburton, the huge oil-exploration company headed by Dick Cheney until his (s)election as vice president, also has secured huge contracts to provide necessities and amenities (golf courses, gyms and Burger Kings) to U.S. Army legions and to construct and maintain military bases “wherever troops go” in the next 10 years. Given the Bush administration’s imperial designs, “wherever” could range far and wide.
Through its subsidiary, Kellogg Brown and Root, Halliburton has established the gold standard for guaranteed profits and freedom from accountability through “cost-plus-award-fee” contracts that leave the company essentially free to charge what it will and still earn a bonus.
Bush-administration operatives plan to use revenues from a derelict Iraqi oil industry reconstructed by Halliburton and U.S. oil companies to finance much of the reconstruction effort. But independent analysts note that between a crumbling pre-war infrastructure, uncounted billions in damage wrought by the U.S. invasion, $130 billion in foreign debt and $172 billion in unsettled claims from the first Gulf War, it could be years before revenues from a reconstructed Iraqi oil industry could be taken to the bank.
The mayhem that has followed the precipitous collapse of Saddam Hussein’s regime validates pre-war warnings by U.S. Army Chief of Staff Gen. Eric Shinseki that restoring law and order would require “several hundred thousand” U.S. troops for several years. With the cost of equipping and deploying each U.S. service member a staggering $265,000 a year, the price tag for just one year of U.S. occupation could come to a debt-defying $80 billion.
Given fierce wrangling between the United States and the anti-war coalition in Western Europe and Russia over who will govern after Hussein, who will reconstruct and who will pay for it, as well as U.S. leaders’ insistence on maintaining a “dominant influence” in postwar Iraq, it is likely that the lion’s share of the bill will be delivered to the White House.
The world that voted against war couldn’t prevent the Americans from launching their pre-emptive attack. But if not given a substantive role in postwar reconstruction and governance, the world may well stand aside and leave the resulting mess for the Yanks to clean up.
Moreover, many institutional and individual investors could start withdrawing their money from a U.S. economy that is no longer the attractive haven it was two years ago. With a stagnant stock market, a sinking dollar, rapidly increasing debt and record trade deficits, even investors solely in search of high returns may find it more profitable to turn elsewhere. The Bush team is masterful at conquest and destruction but hapless at governance and reconstruction. In fact, direct costs of the invasion of Iraq—more than $100 billion—and the looming costs of reconstruction are rapidly deconstructing the American economy. The United States is rich, but not so rich that it can sustain both an empire and a democracy. In the very act of asserting its imperial dominance, Bush and company are hastening the definitive decline of the American empire.
Americans who sheepishly followed their president into war face gargantuan costs for occupation and reconstruction at a time when, even before these costs are factored in, every state is being forced to make drastic cuts in services while a comatose Congress approves still more top-tier tax breaks.
The double burden of bearing massive reconstruction costs for Iraq while Americans endure the destruction of their own schools, hospitals, roads, police and fire departments can’t help but produce severe cognitive dissonance even in the sleepwalking center of American politics.
Facing certain public pressure and never much interested in reconstructing anything Iraqi other than oil fields, the Bush team may quietly abandon the effort altogether. We need only consider the administration’s last conquest, Afghanistan, a nation seduced and abandoned by an empire too busy making new messes to clean up its old ones.
While Afghanistan’s U.S.-installed leader, Hamid Karzai, makes pitiful pleas for the United States and the world to fulfill their financial pledges, the Four Horsemen of the Apocalypse—Bush, Cheney, Donald Rumsfeld and Paul Wolfowitz—saddle up for Syria and beyond.