Bush Cronies Hit $8 Billion Jackpot In Iraq, Afghanistan

by Emad Mekay

"This is all outrageous," said Charles Lewis, executive director of the Center for Public Integrity (CPI), the organization that carried out the investigation.

"The last time I checked, in this democracy we are supposed to have a government of the people, by the people and for the people, not public officials protecting private companies behind closed doors," he said.

According to the six-month probe by the center, the 70 firms donated more money to the presidential campaign of George W. Bush than they collectively did to any other politician over the past dozen years.

The investigation, which examined contracts awarded in 2002 through September 2003, provides the most complete list to date of U.S. contractors in the two nations that were invaded by the United States in its self-styled war on terror.

The study does not look into dozens of subcontracts.

The findings that came out in a brief report, 'Windfalls of War: U.S. Contractors in Iraq and Afghanistan,' show that Kellogg, Brown & Root (KBR), the subsidiary of the giant U.S. oil field services firm Halliburton, was the top recipient of federal contracts for the two countries, worth more than 2.3 billion dollars.

Vice President Dick Cheney led the Houston-based corporation prior to being chosen as Bush's running mate in August 2000. Cheney still receives a six-figure deferred annual compensation from Halliburton that the company says is not affected by current business decisions.

Halliburton said on Wednesday that its revenue rose to 4.1 billon dollars from 3.0 billon dollars in the third quarter as a result of government work by KBR.

KBR's no-bid contract with the U.S. Army Crops of Engineers to modernize Iraq's oil industry has been under fire from many congressional Democrats and civil society groups who say the deal illustrates favoritism in the Republican administration.

The San Francisco-based Bechtel Group, a leading engineering company and a major government contractor, also with high-ranking ties, was second with awarded contracts worth 1.03 billion dollars.

Bechtel's CEO Riley Bechtel was appointed in February by Bush to the President's Export Council, an influential economic advisory panel.

Another company with ties to the administration that won contracts in Iraq and Afghanistan is Science Applications International Corp (SAIC).

It received seven contracts in Iraq, one of them to help rebuild the country's media, a deal estimated to be worth 38 million dollars in year one but perhaps more than 90 million dollars in 2004.

David Kay, the former United Nations weapons inspector who was hired by the Central Intelligence Agency (CIA) to track down weapons of mass destruction in Iraq, is a former vice president of SAIC.

The CPI, which prides itself on "public service journalism" and says it does not accept funding from corporations, labour unions or governments, said its research also found that dozens of lower-profile but well-connected companies also won big in the reconstruction bonanza.

The top 10 U.S. contractors in Iraq include International American Products, Perini Corporation and Contrack International.

"Their tasks ranged from rebuilding Iraq's government, police, military and media, to providing translators for use in interrogations and psychological operations," said the report. "There are even contractors to evaluate the contractors."

The center says that nearly 60 percent of the 70 companies had employees or board members who either served in or had close ties to the executive branch for Republican and Democratic administrations, for members of Congress of both parties or at the highest levels of the military.

It also found that nearly every one of the 10 largest contracts awarded for Iraq and Afghanistan went to companies employing former senior government officials with close links to those agencies or to Congress.

Using an analysis of campaign finance records, the findings show that the top 10 contractors were also long-time political donors.

The companies gave nearly $11 million to national political parties, candidates and political action committees since 1990.

"Indeed, most of the companies that won contracts in Iraq and Afghanistan were political players," says the report.

Among individual candidates that received money from those contractors, Bush collected more money than any other, a little more than 500,000 dollars.

According to the investigation, Iraq outpaced Afghanistan, once ground zero in Washington's war on terrorism, as the locale for contracted work.

The center says at least $5.7 billion in government funding went to U.S. contractors in Iraq.

Nearly half of that, 2.7 billion dollars, went for work in Afghanistan.

The center's team of journalists, researchers and former media officials complained that they had to wrestle the information in the report from the administration.

The group had to rely on 73 Freedom of Information Act (FOIA) requests and appeals to demand information from the Pentagon, the State Department and the United States Agency for International Development (USAID).

The center filed suit in the U.S. District Court in Washington, D.C., against the State Department and the Army after both agencies failed to cooperate fully with its request for information as outlined under the FOIA.

In a statement, the center charged that USAID and the Pentagon went as far as to initially omit the largest contracts they had awarded in Iraq from the information provided to the investigation -- contracts to Bechtel and to Halliburton's KBR subsidiary.

The CIP warned that because of such secrecy shrouding contracts in Iraq, and because of official reluctance to share information, the total value of contracts awarded for reconstruction work in Iraq and Afghanistan may be actually much larger than what is publicly known.

Experts say such findings are disturbing and illustrate how U.S. policy in Iraq is in fact counter-productive.

"Both U.S. and Iraqi interests would be better served if the management of reconstruction funds served as a concrete demonstration of how to create a capable post-war state rather than a secretive contracting operation," said Gayle Smith of the Center of American Progress, a liberal think tank here.

"The mere perception that U.S. contractors with ties to the Bush administration are profiting from their connections damages support for the operation in Iraq and at home."