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US companies reap rewards of invasion

20/04/03 00:00

By Tina Marie O'Neill The Sunday Business Post (Ireland)

As United States Marines in Iraq were last week admonished by their commanders for looting piles of Saddam memorabilia, the real spoils of war were being divided up by US companies.

Nearly all of them have ties to US President George Bush's administration.

US Marines collecting Iraqi guns, uniforms and pictures of Saddam Hussein were ordered to dump their loot or face losing their rank. "You did not conquer this country. Get off your high horse," they were told by Lieutenant Colonel Michael Belcher. "You took some thugs and ran them out.There will be no `I won this country back. I can take what I can get'," he barked.

The Bush administration is doing exactly the opposite.

The cost of reconstructing Iraq is estimated at about $100 billion and it is expected to take several years. The usual process of putting contracts out to tender has been brushed aside as large corporations such as Halliburton, Bechtel and Louis Berger Group received exclusive invitations to bid for lucrative work.

Bush signed a bill last Wednesday providing $2.48 billion for an Iraq relief and reconstruction fund. Congress gave the Pentagon a role in rebuilding Iraq, but limited White House spending. Some ask what difference it will make, since the White House wants Iraqi oil sales to pay for the reconstruction process anyway.

The US agency for international development (USAid) is awarding eight of the contracts,with a combined value of about $1.7 billion.

It argued that the usual tender process was not used because the projects in Iraq were simply too large and ambitious for non-profit or non-governmental organisations (NGOs) to handle, particularly within the one-year specified period.

NGO officials say their approach is more effective in the long-run and USAid's one-year timeline was only set in order to have everything wrapped up before the next election cycle. Companies that have already won contracts in Iraq say non-profit organisations may be `loving and caring' in relief work, but that's not appropriate for nation-building.

Already, Halliburton subsidiary Kellogg Brown & Root has been awarded a $7 billion contract to fight oil well fires. Oil and gas corporation Halliburton was formerly run by US Vice-President Dick Cheney. He received a $33 million golden handshake in 2000 before stepping down to run for office. He still receives an annual income of $180,000 from the Dallasbased company.

Bechtel is a San Francisco company that has worked on the Channel Tunnel and Hoover Dam as well as cleaning up Chernobyl. George Shultz, former secretary of state, sits on its board. Louis Berger Group is a privately-owned business that has a $300 million contract for the postwar construction of Afghanistan. Former secretary of the US army Kenneth Oscar is vice-president of the largest publicly-quoted construction company, Fluor. He oversaw the Pentagon's $35 billion procurement budget. All have been invited to bid for reconstruction contracts.

There were no surprises when USAid announced that Creative Associates International had won a $62 million contract to improve primary and secondary education in Iraq. Creative Associates is doing the same thing in Afghanistan.

TheResearch TriangleInstitute in North Carolina, better known for its scientific research into Aids prevention and conducting research surveys for government agencies, has received a $7.9 million contract to help restore local government in Iraq. As a subcontractor to Creative Associates, it will also help form educational policy within the Iraqi Ministry of Education.

International Resources Group in Washington won a $7 million contract to help plan for emergency relief. Stevedoring Services was awarded a $4.8 million contract to manage and repair Iraqi ports, including Umm Qasr.The first 15 company employees arrived in Iraq last week.

The White House has come under fire at home and abroad for its clandestine approach to awarding contracts and for limiting them to US companies. Pressure from British Prime Minister Tony Blair produced a slight compromise when the Bush administration agreed to allow non- US companies to tender for subcontracting work, but even that has been limited.

Last week, the Pentagon said it was drawing up a blacklist of non-US companies investing in Iran's energy sector. The Pentagon said many of them would be barred from US-awarded reconstruction contracts in Iraq.

Since Britain's Shell is one,the question is now being asked whetherAmerica's ally will be barred.

Italy, also a part of the `coalition of the willing', will be concerned whether Eni's investment in Iran will also exclude it from Iraqi contracts.

If Eni is allowed to tender for contracts, what of France, whose TotalFinaElf is among those investing in Iran?