Winter 2003/2004
Occupation,
Inc.
War profiteers in
By
Pratap Chatterjee and Herbert Docena
The giant steam turbine at the Najibiya power plant is quiet. If the Russian
engineers who built the original equipment over 30 years ago stopped by to take
a look, they might have a hard time recognizing the machinery: over the years
Iraqi engineers have replaced many of the original blue parts with a patchwork
of white and grey makeshift materials.
Across the street the lights go out. Yaruub Jasim, the general director of
electricity for the southern region, a kindly-looking man in his sixties
dressed neatly in a grey suit, is apologetic. “Normally we have power 23 hours
a day but today there is a problem. We should have done maintenance on these
turbines in October, but we had no spare parts and no money.”
Jasim tells us the needed parts were
supposed to be supplied by Bechtel, a California-based company in charge of
repairing the power system under a contract to restore
Bechtel won the contract last April, before President Bush
declared an end to major conflict. The company is to repair and refurbish
sewage, water, and school systems to the tune of over a billion dollars and
growing, making Bechtel’s business in
Just days before our visit in mid-December, the
“Three out of four of our power stations were built in
As we walk around the power plant, we notice four brand-new industrial-sized
The engineers in southern
A quiet, unassuming man, Hassan wears a checked shirt, no tie, and a brown
jacket that might be seen on any street in this city.
“Bechtel has put us in a very difficult
position. My minister has said to them if the people get angry, don’t blame us.
You know electricity is the first (biggest) problem in
“The Americans have very high standards, ours are very low,”
he adds, holding out his hands and bringing them closer together to illustrate
his point. “We need to meet in between.” We ask him why Bechtel is so slow, as
surely this is a company that is very capable, having built the Saudi Arabian
electricity system from scratch. “These are unusual circumstances,” says
Hassan. “No security, there is sabotage, the system is upset.”
One of the reasons that Bechtel has taken so long is because its electrical team spent two months simply examining power plants, substations, and high-voltage lines before they started any work, infuriating the Iraqi staff, who say they could have told the company what was necessary. Theft and sabotage has been another problem—as soon as Bechtel started replacing 10 sabotaged electrical towers near Nassiriya, another 10 were destroyed nearby.
Bechtel denies responsibility for the situation. "A lot of people thought
the
This reasoning is echoed by
“This looks so splendid,” he proclaims, gesturing at the
convention center. We ask the Secret Service guy who he is, perhaps a member of
Congress? “No, he’s Ambassador Ted Morse, who runs
Morse focuses relentlessly on the positive. “When we came here, the entire city
was still without light. The entire city was insecure and there was fighting
going on. But now, in terms of the whole city, there has been tremendous,
tremendous progress.”
When we tell him that we have talked to the power plant managers, and they have
a different story to tell, he insists that everything will be resolved in time.
“Six months is a little unrealistic to ask for it [reconstruction] to be over.
The bottleneck is sheer time. If you look at how much time it took to rebuild
Mohsen Hassan doesn’t agree. “We, the Iraqi engineers, can repair anything,” he says. “But we need money and spare parts and so far Bechtel has provided us with neither. The only thing that the company has given us so far is promises. We have brought the power generation up to 400 megawatts without any spare parts, but we will need something more than words if we want to provide this city with the 2,800 megawatts that it demands.”
Iraqis point out that the previous regime got things up and
running again after the first Gulf war in a matter of months, even though the
damage was much more extensive because the
The complaints are not limited to electricity. Telephones
don’t work because
“From the beginning, the
Yet activists have long warned
that the twelve-plus years of United Nations sanctions had severely impacted
utilities because it was practically impossible to buy spare parts. A report by
the New York-based Global Policy Forum in August 2001 states: “Civilian
infrastructure has suffered disproportionately from the lack of maintenance and
investment. For example,
Suffer little
children
The situation in
"The new fans are cheap and burned out immediately upon
use. All inspected were already broken," wrote a
Much of the criticism focuses on Bechtel's Iraqi subcontractors. "The
contractor has demanded the schools managers to hand over the good and broken
furniture. The names of the subcontractors are unknown to us because they did
not come to our office," wrote an Iraqi school planner.
"In almost every case, the paint jobs were done in a hurry, causing more
damage to the appearance of the school than in terms of providing a finish that
will protect the structure. In one case, the paint job actually damaged
critical lab equipment, making it unusable."
Bechtel officials defend their work. "The people at Bechtel really care
about this one. We've all got kids. We've all been to school. In a country with
a lot of hurt, this is meaningful. So, it's a system, it's people who care and
it's being done in the middle of chaos, chaos evolving into something more
orderly and more Iraqi," Bechtel's Gregory Huger, a manager in the
reconstruction program, told a Cox reporter.
To find out for ourselves, we visit four
Most shocking to Huda is the price tag: “I could fix everything here for just
$1,000. Mr. Jeff [a Bechtel sub-contractor] spent $20,000!” she fumes. She went
to the district council and complained and then marched off to the convention
center to confront the military. “They were very angry and spoke to our
councilmember Hassan but nothing happened. And we have no receipts for money
spent. It’s useless, they won’t do a thing,” she says.
We head over to Al-Wathba school, easily in the worst condition of all the
schools we visit. Ahmad Abdu-satar, a friendly man in a dapper suit who has
worked here for two years, shows us the toilets and sinks: new brass taps and doors
painted a dark blue but the sinks are in a terrible state, they don’t look like
they have been touched in a decade. There is no new paint on any of the walls,
and, like
the previous school, the playground is flooded.
”I’ve been thinking of turning it into a swimming pool,” he remarks
sarcastically. “Honestly, nothing has changed since Saddam’s time. I ask you,
would American children use these toilets?” We tell him that budgets have been
slashed in
”We have no books, no stationary, nothing. At least we had that in Saddam’s
time. Yes, our salaries have gone up, but so have prices. When I
asked the contractor why they didn’t finish the job, they said: we don’t work
for you, we work for the Americans.”
We stop briefly at the Al Raja’a school, but it is still being repaired. Jamal
Salih, the guard, shows us around, then complains that he had asked the
contractor to fix his house, but they refused. We take a peek inside,
surprising his two daughters and wife who are busy preparing a meal of potato
chips for lunch. The workers also invite us to join them for their falafel
lunch, but we decline and hasten to the last stop of the day before the school
closes at
This is Hawa school, run by Batool Mahdi Hussain. Hussain is a tall woman,
dressed all in brown, including her traditional Islamic headscarf. She appears
young for the 11 years she has spent at this school, which she recently took
over when the parents voted her in as headmistress after the war. Like the two
previous headmistresses, she is eager to talk and show us around.
She is also bitter about the contractors. The school has a
fresh coat of paint on the outside with all of the characters from the Disney
version of Aladdin, complete with the genie and the prince.
But, she says, things are worse than under Saddam. “UNICEF painted our walls
and gave us new Japanese fans. They painted the cartoons outside. When the
American contractors came, they took away our Japanese fans and replaced them
with Syrian fans that don’t work,” she says angrily.
We are joined by the school guard, Ali Sekran, who speaks a few words of English. He repeatedly uses his AK-47 as a pointer to help Hussain illustrate all the problems. We pray that the gun isn’t loaded.
The headmistress takes us to the toilets where a new water system has been
installed, pipes, taps and a motor to pump the water. The problem is the motor
doesn’t work so the toilets reek with unflushed sewage. She then uncovers a new
drain cover to show us that it is nothing but a cover. She walks quickly, not
waiting for the camera to catch up, a whirlwind of show-and-tell. “These doors,
the hinges are broken. We were supposed to get steel doors, we got wooden
doors. The new paint is peeling off. There isn’t enough power to run our
school.”
We notice a brand new blackboard. Hussain says that the teachers paid for it
out of their own pocket. As we bid farewell, she walks us out of the gate and
points to the construction debris in the road.
“They didn’t even take their rubbish with them. They gave us
no papers to tell us what they had done and what they did not do. We had to pay
to haul the trash. Honestly, the condition of our school was better before the
contractors came.”
Bechtel Baghdad
spokesman Francis Canavan says the company has “received inquiries"
on a number of the schools it
contracted to repair. He says Bechtel has directed its subcontractors to make
repairs, and is witholding 10 percent of the subcontractors' payment to ensure
that repairs will be made.
But the United States Agency for International Development
(USAID) is unapologetic about the state of the schools. An official
spokesperson tells us: “If you are going to do a slam article that complains
that the paint is peeling on a school that we didn’t fix, I don’t see why I
should talk to you. I don’t even know that you went to schools that were fixed
by AID—26 of the 52 schools that have submitted complaints were not even part
of our contract.” We assure her that we only visited schools that were listed
by Bechtel, showing her Bechtel’s own list. She acknowledged the list with bad grace, clearly rattled by numerous
news reports of the failure of the school repair program which officials had
hoped would bring them much-needed positive publicity.
Despite the
spokesperson’s acceptance of the school list, Canavan, in a later email
response, told us he can’t find the schools we visited on Bechtel’s list. He
noted, however, that “school names change, and the English spelling of school
names in
In any case, this
episode points up another problem that seems to plague the
Making a killing
To its credit, Bechtel is one of the few companies that has made extensive use
of local contractors and holds regular meetings to explain how to get work from
them. It is also the most accessible
to the international press, being the only company to maintain offices at the
However, the company is not as accessible to ordinary Iraqis. Getting to
Bechtel’s offices isn’t easy. It takes half an hour on a good day to get
through three body searches and a maze of barbed wire, sandbags, solid concrete
road blocks, and soldiers, designed to keep out suicide bombers.
Visitors to the basement of the convention center where Bechtel keeps its
offices might meet Maniram Gurung outside the
For the retired Gurkha rifleman from
But Gurung is not a member of the coalition forces—his red badge identifies him
as an employee of a private security company called Global Risk. Some 500
Gurkhas and 500 Fijians make up the bulk of this British company’s armed staff,
and as a security force for the CPA, they face just as much danger and
resentment as the soldiers. In early August a Gurkha was killed by a bomb in
Why all this security? Almost every day a
This summer, a Bechtel engineer and four guards were attacked by a crowd that hurled giant chunks of ripped-up
concrete at the business executives in the SUV they were traveling in,
shattering most of the windows.
Today
While guards like Gurung make a relatively princely salary by Middle Eastern
standards, their Iraqi counterparts make far less. Mohammed al-Husany, the ever
cheerful head of security at the Palestine Hotel’s outer barricade, tells us
that he makes just 100 dollars a month, not enough to support his wife and two
kids. “I want a job with the American companies. I have a second degree black
belt in karate and I know how to fire every kind of weapon. AK-47s, M-16s, all
of them. But my friends who work for Halliburton’s security make $400 dollars a
month and the American security guards even more,” he confides to us.
Not that the security and barricades have prevented all Iraqi resisters. Did we
see the bombing of the hotel last week?, he asks. “The rockets went just one
meter over my head,” he says, imitating the sound of the missile. “They fired
it from a donkey cart. Now no more animals allowed around here.”
But as far as we have been able to determine, most Iraqi security guards
rarely make over $100 a month for five 12-hour shifts a week. Their employers,
however (and there are dozens of Western security companies in
War Profiteering?
The three employees of Kellogg, Brown, and Root (a Halliburton subsidiary),
standing at the base of a stairwell at the convention center chatting on their
tea break, are excited. Khaled Ali tries several times to pronounce the word
“congratulations” but fails. Exasperated, he turns to me to ask if there is a
better word. I suggest slapping his friend on the back and saying: Good job!
Well done! But he shakes his head violently. “No, I cannot say that—Mr. Lewis
is an American, my boss. I must say something more polite.”
We start talking. Khaled Ali is an engineer in charge of construction at the
convention center, Sabah Adel Mostafa is an interpreter, and Daoud Farrod is a
supervisor. Farrod is older but the first two are in their late twenties. They
are friends and live in the same neighborhood. Every morning Halliburton sends
a car to pick them up and bring them to work at
They are enthusiastic about their work. “It’s my first job. I was not able to
practice my English before. And the [previous
government] pay was just $10 a month,” Mostafa tells me. Ali says it his
first job, too. “And you are in charge of all the construction here,” I ask. He
nods proudly, beaming when we say “Congratulations!” Mostafa earns $200 a
month, right in the middle of the typical pay scale for Halliburton’s Iraqi
workers, which ranges from $100 to $300 a month. By comparison,
If the local staff gets paid so little, the question
is what happens to the rest of the money? To date, Halliburton has made over
$2.2 billion from the war in
Breaking down the numbers reveals some startling details: Halliburton has spent
$40 million to support the unsuccessful search for weapons of mass
destruction—enough to support 6,600 families in
Other numbers are just as startling—Halliburton’s net profit for the second
quarter of 2003 was $26 million, which contrasts markedly with the company’s
net loss of $498 million in the same quarter of 2002. Most of its new income is
from the contracts in
Easily the most controversial contract that the company has won in
The
The prices Halliburton is charging for gasoline were first
uncovered by two Democrats in Congress, John Dingell of
"I have never seen anything like this in my life," Phil Verleger, a
California oil economist and the president of the consulting firm PK Verleger,
told the New York Times. "That's
a monopoly premium—that’s the only term to describe it. Every logistical firm
or oil subsidiary in the
Meanwhile,
The good news about Hallliburton’s overcharging is that these prices have not
been passed on to Iraqi consumers directly. The price of fuel sold in
Yet these numbers are cold comfort to most
The bad news for Iraqis is that the money for Halliburton's gas contract has
come principally from the United Nations oil-for-food program (now called the
Iraq Development Fund), money that should rightfully be spent on food and basic
necessities for the Iraqi people rather than paid to Halliburton for expensive
oil imports, though some of the costs have been borne by American taxpayers.
An
internal Pentagon audit has confirmed the overcharging, indicating that
Halliburton billed the government an extra $61 million for gasoline (and also
attempted to overcharge by $67 million for dining services for the military).
On our way back from our interviews, we pass yet another line for gasoline: it stretches around the block and all the way across the bridge over the river. We decide to chat with the men waiting in line. We are quickly surrounded by angry people.
”We were a rich country—now our very wealth has been stolen by the Americans,”
says one. “Under Saddam we never had to wait in line for benzene [the local
word for gas or petrol], now we must spend half a day and then sometimes they
run out,” says another. The popular theory is that Americans are re-selling the
high quality Iraqi gasoline to other countries or keeping it for themselves.
“They sell us Turkish or Kuwaiti or Saudi oil. This is bad for our engines and
creates more pollution.” One little boy joins the fray: “George Bush Ali Baba,
George Bush Ali Baba.” (Ali Baba is the popular local term for thief,
popularized by the
Just a block away from the gas station, it is possible to buy black market
gasoline for one dollar a gallon—ten times more than at the pump. We decide to
buy from the black marketers, and ask the man why he chooses to sell the money
at such a high mark-up. “Listen, I used to be an electrical engineer. Now I
have no job. Who will feed my wife and three children?” he asks.
Despite all the private security
and the tens of thousands of troops, life for ordinary Iraqis has
unquestionably become far worse: two blocks from our hotel, a man was shot in
the head and lay bleeding. A passerby discovered him and took him to the police
station, but the police refused to investigate.
”What has happened to
Propaganda for the
People
Dressed in regulation camouflage khakis, the G.I. from the First Armored Battalion is causing a minor traffic jam by handing out newspapers in the middle of traffic at the Sahar Antar (Sahar means roundabout) in the Al Adamiyah neighborhood. His fellow soldiers watch warily from their Humvee and Bradley convoy parked to the side, just in case anyone decides to take a potshot at their colleague.
We gasp as we flip open our copy of Baghdad
Now, a bilingual newspaper issued
by the military. Two headlines read “Operation Iron Hammer Nets
Terrorists” and “Iraqi-American Friendship on the rise.” Pratap has a flashback
to Cold War propaganda in
On the front cover was a photo of an Iraqi Civil Defense Corps (ICDC) soldier
toting an M-16 and looking as menacing as possible. A page six article
headlined “
Writes Colonel Brad May of the 2nd Armored Cavalry Regiment, “
We show this paper to Dr. Aziz, who runs a small printing business just outside
the Sheraton hotel in
Pratap Chatterjee is managing editor for
Corpwatch (http://www.corpwatch.org) in
© Southern Exposure,
2003-2004
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