War creates huge profits

The reason for the war? - Rocket River

--------------------------------------------------------------------------------

Posted on Sat, Nov. 27, 2004


IRAQ
War creates huge profits

BY ANTONIA JUHASZ
www.ifg.org

President Bush and Vice President Dick Cheney are correct when they say that things are not all bad in Iraq. It just depends on your perspective. Although the military campaign is in chaos, the economic campaign is moving along quite nicely, at least for U.S. corporations and the Republican Party.

• Halliburton, far and away the largest recipient of Iraq reconstruction dollars with about $18 billion in contracts, has seen revenues increase by 80 percent in the first quarter of 2004, compared with the same quarter of 2003, according to the Financial Times. These revenues reflect ``steep profits from their Iraq operations.''

• Next in line is the Bechtel Group of San Francisco, with nearly $3 billion in Iraq reconstruction contracts. In fact, revenues generated outside the United States have increased by 158 percent since 2003 for Bechtel -- turning around a three-year slump in that category.

• San Ramon, Calif.-based ChevronTexaco has a contract to market Iraqi oil. Its profits have increased 90 percent during the first half of 2004 compared with the same period in 2003, for a total increase of more than $3 billion.

• And then there's Lockheed Martin, which hasn't even had to risk operating in Iraq to earn its war booty. In 2004, Lockheed's shares have more than tripled in value since their low in early 2000. A Lockheed spokesman told The New York Times that the company's success since 2000 came from the ``changed geopolitical landscape.''

Helping to boost these bottom lines are rules put in place by L. Paul Bremer III, the head of the Bush administration's now-defunct Coalition Provisional Authority in Iraq. Among them are ''orders'' that ensure that none of the profits made by contractors has to be reinvested in the fledging Iraqi economy or in helping with reconstruction. Instead, every last penny can be sent back to the United States. The orders also make it difficult, come January, for an elected Iraqi government to overturn such rules.

Not surprisingly, some of the profits generated by the war in Iraq appear to be making their way into Republican Party coffers. According to the nonpartisan Center for Responsive Politics, each of these corporations was among the leaders in its industry in 2003-2004 election-cycle contributions, with most of the donations going to Republicans. Halliburton funneled 85 percent of its $165,949 in contributions to Republicans. ChevronTexaco donated 83 percent of $367,731 in political contributions to Republicans. Lockheed, whose contribution total of $1.4 million is more than the contributions of the other three corporations combined, gave 59 percent to Republicans, and Bechtel, 53 percent of $199,847.

And there's more largess to come from Bush's remaking of Iraq's economy. Bremer's Order No. 39 allows for the privatization of Iraq's 200-plus state-owned enterprises. Although full privatization hasn't happened yet, the process is moving forward.

For example, Bechtel's contracts include the rehabilitation of Iraq's water and sewer systems. Bechtel is one of the world's top 10 private water companies, with interests in more than 200 water and wastewater-treatment plants worldwide. The Baghdad Water Authority has announced plans to distribute questionnaires to discern its customers' willingness to pay for their utilities. In April, Iraq's minister of public works said that Iraq was considering privatizing its water industry to ``fund essential works.''

Moreover, a December symposium on business opportunities in Iraq -- with the U.S. government among its sponsors -- specifically targets ''privatization specialists.'' But if all this adds up to good news from the Bush administration's standpoint, from a different perspective the economic campaign seems just as out of kilter as the military campaign.

For example, the U.S. Agency for International Development (which oversees Bechtel's contracts in Iraq) has found that ''water meant for consumption is pumped through the system largely untreated while raw waste flows untreated directly into city streets, rivers or marshlands. Many rural communities are not connected to main water or sewer lines, have no access to potable water and suffer from health problems related to poor sewage disposal.'' When they were asked recently, 44 percent of Iraqis said that U.S. forces were not trying ''at all'' to restore basic services, and 41 percent said that they were trying ``only a little.''

And that takes us back to the good-news/bad-news equation. U.S. corporate bank accounts and Republican coffers are indeed filling up. But for Iraqis -- and U.S. taxpayers, who are footing the bill -- the glass isn't just half empty; it's bone dry.

Antonia Juhasz is project director for the International Forum on Globalization in San Francisco.

©2004 The Los Angeles Times