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Who Thrives?

Who Thrives?


: Conflict of Interest in the Iraq War

: Carving Up The New Iraq, Sunday Herald

The Oil Industry

: The Bush 100, Center for Public Integrity

: In Iraqi War Scenario, Oil Is Key, WP

: Straw Admits Oil is Key Priority, Guardian

: Chevron Trading With the Enemy, CBS

: US Firms Aiding Iraqi Oil Industry, WP

: Doing Business with Iraq Discreetly, FT

: Cheney & Halliburton: Go Where the Oil Is, Multinational Monitor

: Planning Underway to Manage Iraqi Oil, Boston Globe

: Oil from Iraq: Israeli Pipedream?, Jane's

The Defense Industry

: The Defense Policy Board and Defense Contractors, Center for Public Integrity

: Corporations That Supplied Iraq's Weapons Program, Die Tageszeitung

: GOP Leader Seeks Defense Contract Changes, NYT

: Dyncorp Rent-a-Cops May Head to Post-Saddam Iraq, CorpWatch

Recontruction of Iraq

: Rebuilding Iraq — The Contractors, Open Secrets

: Bomb Before You Buy by Naomi Klein

Other Profiteers

: Exporting Iraqi Antiques, SMH

Who Thrives?

Freedom for Iraqis

Among other things, the Bush administration has also said that this war was a fight for Iraqi freedom. Sami Abdul-Rahman, deputy prime minister of the Kurdish administration, responded, "Conquerors always call themselves liberators."

There is indeed now Iraqi jubilation at Saddam's fall and freedom for political prisoners, as well as horrifying suffering, fear of chaos, discontent over slow aid, suspicion of American intentions and anger at the deaths of loved ones. The coming months will show the extent of the freedom Iraqis have suffered for.

So far, the US has committed to a US-run protectorate that eases into a Iraqi-run democracy in two years. This plan has drawn criticism from Iraqi dissidents. Kanan Makiya turned to predicting that given current US plans, "The Iraqi opposition is going to become anti-American the day after liberation. It is a great irony."

Marc Grossman, the Undersecretary of State for Political Affairs, told the Senate Foreign Relations Committee, "While we are listening to what the Iraqis are telling us, the United States government will make its decisions based on what is in the national interest of the United States." The State Department has planned reforms for schools, courts and hospitals; 600 pages of changes in Iraq's criminal code have been written. And the State Department has brokered a deal between Iraqi exiles and senior US officials to restructure the Iraqi oil industry.

Who Thrives?

The Road to War

: The Thirty-Year Plan for the Middle East, Mother Jones

: The War Lobby and the Disciples of NSC-68, Online Journal

: Project for the New American Century

: Iraq Wars, Z-Net

: Plans For Iraq Attack Began On 9/11, CBS

: How Long has War Been in the Cards?, FT

In early 1998, a group of Republicans sent letters to then-President Clinton, Speaker of the House Newt Gingrich and Senator Trent Lott, advocating the overthrow of Saddam Hussein and an expansion of US presence in the Gulf. These letters were signed by Donald Rumsfeld, Elliott Abrams, Paul Wolfowitz, John Bolton, Richard Perle, Richard Armitage, and Zalmay Khalilzad, all now members of the Bush administration. In addition to the letter-signatories, others now in the administration, including Dick Cheney, I. Lewis Libby, and Stephen Cambone, founded the Project for the New American Century.

In September 2000, PNAC produced a report entitled Rebuilding America's Defenses: Strategy, Forces, and Resources for a New Century which stated, "The United States has for decades sought to play a more permanent role in Gulf regional security. While the unresolved conflict with Iraq provides the immediate justification, the need for a substantial American force presence in the Gulf transcends the issue of the regime of Saddam Hussein."

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..:: Oil Companies

US oil companies, particularly those which make oil production equipment, will be among the chief beneficiaries of war with Iraq.

The US Undersecretary of Commerce, Grant Aldonas, told a business forum that a war in Iraq "would open up this spigot on Iraqi oil." Elliott Abrams, convicted felon and National Security Council special assistant, has argued that the US should assert de facto control of Iraqi oil fields.

Increased production, and cheaper oil, could more easily be achieved by lifting sanctions: both James Tobin and Milton Friedman have argued that going to war to protect access to oil is unnecessary. (In fact, increased importing from Iraq is currently helping the US compensate for the Venezuelan strike.) The importance of opening up the spigot is less for US consumers than for oil companies, who have already benefited from increased prices.

Since the UN enforced sanctions on Iraq in 1990, US oil companies have watched as Saddam Hussein signed deals with Russian, Chinese, French and other firms to exploit new oil fields once sanctions are lifted. US access to Iraqi oil will depend on a post-Saddam regime tearing up thirty major oil development contracts that Saddam has signed. Post-war US occupation puts the US military in the lead in enforcing oil claims, and the US-approved Iraqi opposition officials have said that they will not be bound by Saddam's deals.

Richard Lugar, chair of the Senate Foreign Relations Committee, has said that if the Russians and the French "want to have a share in the oil operations or concessions or whatever afterward, they need to be involved in the effort to depose Saddam as well." James Woolsey, former CIA director, friend of Ahmed Chalabi and member of the Defense Policy Board, has said, "France and Russia have oil companies and interests in Iraq. They should be told that if they are of assistance in moving Iraq toward decent government, we'll do the best we can to ensure that the new government and American companies work closely with them. If they throw in their lot with Saddam, it will be difficult to the point of impossible to persuade the new Iraqi government to work with them." The French and the Russians, like the Germans, balked at war with Iraq.

Last year, State Department officials claimed that its task force on post-war Iraq, the Future of Iraq Group, did not have oil on its list of issues. In April, 2003, the oil and energy working group of the Future of Iraq Group brokered a deal between Iraqi exiles and senior US officials to have international oil companies take a leading post-war role in reviving Iraq's oil industry. The participants also discussed the restructuring and partial privatization of Iraq's State Oil Marketing Organisation.

In 1998, when the UN relaxed its sanctions against Iraq, and allowed Iraq to buy spare parts for its oil fields, Halliburton, headed by Dick Cheney, signed contracts to repair war damage and get oil pipelines flowing at full capacity. Two Halliburton subsidiaries signed $73 million worth of contracts. Halliburton, with its many connections in the Bush administration, is again poised to reap huge profits from the damage of war.

As Vice-President, Cheney commissioned a report on energy policy from the James Baker Institute for Public Policy. The task force for the report included Kenneth Lay, chief executive of Enron; Luis Giusti, a Shell non-executive director; John Manzoni, regional president of BP; and David O'Reilly, chief executive of ChevronTexaco. Sheikh Saud Al Nasser Al Sabah, the former Kuwaiti oil minister and a fellow of the Baker Institute is said to have influenced its contents. The report, which was submitted in 2001, recommended that the United States "conduct an immediate policy review toward Iraq" that includes "set[ting] the groundwork to eventually ease Iraqi oil-field investment restrictions" as well as "military... assessments."

Former CIA Director John Deutch is a member of the Bush administration's Foreign Intelligence Advisory Board. He is also a member of the board of Schlumberger, the second largest US oil services company. Schlumberger has serviced Iraqi oil rigs through the sanctions years, and used a French subsidiary, Services Petroliers Schlumberger, and Schlumberger Gulf Services of Bahrain to submit contracts to Iraq.

..:: Defense and Security Companies

Secretary of Defense Donald Rumsfeld created the Defense Policy Board in 2001 as a bipartisan advisory group to advise the Pentagon. Its members are selected by the Under Secretary of Defense for Policy, currently Douglas Feith, and approved by the Donald Rumsfeld. Nine out of 30 members of the Defense Policy Board have ties to companies which have won more than $76 billion in defense contracts in 2001 and 2002. Companies with ties to Defense Policy Board members include Boeing, TRW, Northrop Grumman, Lockheed Martin and Booz Allen Hamilton. Defense Policy Board members include Henry Kissinger, Pete Wilson and Dan Quayle.

Until recently, the chairman of the Defense Policy Board was Richard Perle, who has been aggressive in pursuing war with Iraq. Perle is also a managing partner of Trireme Partners LP, a venture capital firm investing in defense companies which was registered in November, 2001, in Delaware. A letter written by the firm to prospective investors argued that the fear of terrorism would increase the demand for homeland security and defense products.

Perle has also participated in a Goldman Sachs conference call on investment opportunities arising from the war.

Perle was also retained by Global Crossing, a telecommunications company, to help overcome Defense Department resistance to its proposed sale to a foreign firm. The Pentagon and the FBI have opposed the sale of Global Crossing to a joint venture between Hong Kong-based Hutchison Whampoa and Singapore Technologies Telemedia because the US government uses Global Crossing's fiber optic network. Perle stood to gain $725,000 if the sale went through. Perle and his lawyers prepared an affidavit and a legal notice to be filed in the firm's bankruptcy proceedings which describe him as uniquely qualified to advise the company because of his job as head of the Defense Policy Board.

Perle resigned as chairman of the Defense Policy Board after his conflict of interest drew attention, but has stayed on as a member of the board.

Another member of the Defense Policy Board is former CIA Director James Woolsey. Woolsey is also a principal in the Paladin Capital Group, a venture capital firm which is soliciting investments for companies that specialize in domestic security. Woolsey is also a partner in the law firm of Shea and Gardner, a registered foreign agent for the Iraqi National Congress. Woolsey is also a member of the Committee for the Liberation of Iraq, a PNAC-linked pro-war group formed last year whose manifesto says it's "committed to work beyond the liberation of Iraq to the reconstruction of its economy."

The Carlyle Group, an investment consortium which has a big interest in the contracting firm, United Defense, recently met in Lisbon, reportedly to discuss its involvement in rebuilding Iraq's infrastructure. The Carlyle Group is headed by former Defense Secretary Frank Carlucci. Carlyle's board includes George Bush Sr and James Baker, the former Secretary of State whose think-tank produced a report pushing for a military action against Iraq. One United Defense program alone — the Crusader artillery system — has earned Carlyle more than $2 billion in advance government contracts. United Defense also provides the Defense Department with combat vehicle systems, fire support, combat support vehicle systems, weapons delivery systems, amphibious assault vehicles, combat support services and naval armaments, including the contraversial Bradley Fighting Vehicle. Bush was once appointed to the board of a Carlyle subsidiary, and then directed investments to the Carlyle Group on becoming Governor of Texas.

Missile communications systems developed by SY Coleman, a division of L-3 Communications, will be used in a war on Iraq. Jay Garner, who was head of SY Technology, is now head of the Office of Reconstruction and Humanitarian Assistance under the Department of Defense. Garner joined SY Technology on leaving the Army, where he worked on missile defense, a contraversial defense system plagued with technological problems which has been embraced by the Bush administration. Garner's appointment to the agency in charge of rebuilding Iraq after a war has troubled ethics experts.

Duck Products manufactures nearly half the duct tape sold in the USA. Duct tape has been promoted by the Office of Homeland Security to an absurd extent, including PBS plugs by Tom Ridge. The founder of Duck Products, Jack Kahl, is a leading donor to the GOP who gave more than $100,000 in the 2000 election cycle. The Office of Homeland Security's advertising efforts have more than tripled sales, according to Duck Products CEO, John Kahl.

..:: Reconstruction Companies

The US had a $900 million contract to rebuild Iraq. USAID invoked special authority to solicit bids from a select list of companies, bypassing regulations which would have allowed a larger number of firms to bid. The select list consisted of Bechtel Group Inc., Fluor Corp., Halliburton subsidiary Kellogg Brown & Root, Louis Berger Group Inc. Washington Group International Inc. and Parsons Corp. These firms have donated a combined $3.5 million in political contributions, two-thirds to Republicans.

Bechtel was awarded the primary USAID contract, worth up to $680 million. Bechtel gave $1.3 million in individual, PAC and soft money contributions between 1999 and 2002. In the early 80s, Bechtel had a proposal to build an oil pipeline from Iraq to Aqaba in Jordan. In 1981, George Schultz went from being president of Bechtel to becoming Reagan's Secretary of State and Caspar W. Weinberger went from being a Bechtel Vice President and General Counsel to becoming Defense Secretary. In 1983, Reagan's envoy to Baghdad, Donald Rumsfeld, promoted the Bechtel pipeline proposal to Saddam. Saddam declined, and Bechtel went on to supply Iraq's weapons program. Now, George Shultz is on the board of directors of Bechtel, and the chairman of the advisory board of the pro-war Committee for the Liberation of Iraq. Jack Sheehan, a retired Marine Corps general, is a Senior Vice President at Bechtel, and also a member of the Defense Policy Board. Bechtel's CEO, Riley P. Bechtel, was recently named to Bush's Export Council.

Fluor gave more than $483,000 in individual, PAC and soft money contributions in the previous two election cycles. Its VP of Strategy and Government Services, Kenneth Oscar, was until recently the acting Assistant Secretary of the Army, where he directed its $35 billion-a-year procurement budget.

Kellogg, Brown & Root (KBR) is owned by parent company Halliburton, which was headed by Dick Cheney until he assumed the Vice Presidency. KBR recently agreed to pay the US government $2 million to settle allegations it had defrauded the military under Cheney's tenure. KBR and Halliburton gave more than $709,000 in the last election cycle, and gave $17,677 to Bush’s presidential campaign. KBR has not won the primary USAID contract, but it is unclear if it recused itself due to public criticism or whether its bid was simply not competitive. Halliburton still stands to be a profitable subcontractor to the USAID contract.

KBR has been given the Defense Department contract to oversee any firefighting in Iraqi oilfields after a US invasion. The Army Corps of Engineers estimates that the contract could be worth as much as $7 billion over two years. The Pentagon hired KBR in November, 2000 to draw up a (classified) plan to deal with any oilfield fires, and then awarded KBR the contract with no bidding process. The contract is a "cost-plus" contract which compensates KBR for expenses and adds up to 7% percent of profit: this could amount to $490 million for KBR. KBR's December, 2000 contract with the Army's Logistics Augmentation Program will similarly reward KBR for every extra dollar spent, providing an incentive for it to maximize costs. KBR has a similar deal with the Navy with no limit on spending. KBR was awarded the $16 million contract to build detention camps for the Afghanistan war's POWs in Guantanamo Bay, a $7 million contract to expand it and a $9.7 million contract for an additional 204-unit detention center. KBR also has a contract to feed troops at Bagram Air Base in Afghanistan. KBR has provided most of the Army's logistics services since 1992.

Qualcomm is a telecommunications firm which owns the patents on primary technology for the CDMA wireless standard. Rep. Darrell Issa (R-CA) has introduced legislation urging the US to build a cellular network for relief efforts in Iraq based on the CDMA standard, rather than the GSM standard, which is used in every country in Europe and the Middle East. Qualcomm is Issa's second biggest corporate donor: he received $5,500 from Qualcomm in the last election cycle.

The US-led reconstruction of Iraq will privatize what are currently governmental functions. The partial privatization of the State Oil Marketing Organisation is being discussed, Iraqi airports will also be privatized. Stevedoring Services of America was awarded the $4.8 million management contract for the port in Umm Qasr.

..:: The Bush Administration

The Bush administration draws many of its members from the defense industry. A review of high-ranking Bush appointees found that 32 of them are former executives, consultants, or major shareholders of top defense contractors.

The Bush administration is also deeply implicated in the energy business. Bush is a former director of Harken Energy Corp. and Cheney served as chief executive officer of Halliburton Energy Services Corp. Six other members of the administration, including, in the Commerce Department, Secretary Donald Evans and Undersecretary Kathleen Cooper, went straight from the energy industry to Washington. National Security Council Director Condoleezza Rice served on the board of directors of Chevron. The Center for Public Integrity found that the top 100 Bush appointees collectively had most of their holdings in the energy sector, valuing to almost $150 million.

George Bush Sr. is on the board of the Carlyle Group, which means that Bush stands to benefit financially from his administration's decisions through his father's investments.

..:: The Republican Party

The war is also being used for political gain. John Podhoretz has explicitly called for Bush to go to war to distract from the economy. Podhoretz wrote, "Go on, Mr. President: Wag the dog... You're in some domestic political trouble, Mr. President. You need to change the subject... Your enemies are delirious with excitement about the corporate-greed scandals and the effect they might have on your popularity and the GOP's standing in November."

Bush adviser Karl Rove told Republicans to use the war to gain votes. Bush insinuated that the Democrats are less concerned with national security; other right-wing leaders have promoted war on Iraq as the ultimate wedge issue to divide the Democratic Party. Bush's chief of staff, Andrew Card has described the war's timing with "from a marketing point of view, you don't introduce new products in August."

..:: Other Profiteers

The American Council for Cultural Policy is an organization which favors relaxation of Iraqi laws on the export of antiquities and US laws on their importation. The ACCP's meetings with State Department and Defense officials have given rise to concerns that the war will propel the movement of Iraqi artifacts to the US. These concerns have been exacerbated by the looting of Iraq's museums and national library, by thieves with glass-cutters and the ability to distinguish originals from duplicates. US troops were asked by Iraqis to protect museums from looters and declined to do so.