"With the war over, rebuilding efforts underway and U.N. sanctions lifted, German companies are trying to rekindle their once large trade relationship with Iraq. But many German firms have signaled they prefer direct engagement in Iraq rather than subcontracts from the U.S. or British companies dominating the rebuilding effort.
Before the U.N. imposed sanctions against Iraq, Germany was one of Baghdad's leading trade partners. In the 1980s, Germany exported goods and services worth up to EUR4 billion to Iraq, but trade between the two countries has shrunk drastically since the Gulf War in 1990/91. In 2001, for example, German companies exported goods worth no more than EUR350 million ($393 million) to Iraq.
"Although German companies have more experience and business contacts in the war-torn country than their U.S. counterparts, the lack of a stable financial sector in Iraq and German banks' reluctance to issue export guarantees make access to the newly re-opened market difficult.
"“There is wide interest from German companies to become engaged in Iraq,“ Peter Kreutzberger, regional director for Africa and the Middle East at Germany's main industry association, BDI, told F.A.Z. Weekly. “But direct business can only be done with cash at the moment.“
"Since Iraq is one of the largest potential markets in the region, the development of a stable democratic system and a functioning market economy in that country are of vital importance for German companies, which would benefit from an outstanding reputation and presence in the Middle East.
"“Many companies already doing business in Iraq don't want to talk about it just yet,“ Kreutzberger said. “They hesitate to show off their contacts in Iraq and many economic questions are guided by political concerns.“
"Chancellor Gerhard Schröder's opposition to the U.S.-led attack on Iraq has made it more difficult for German companies to enter the Iraqi market, especially because American and British companies are dominating the initial rebuilding effort.
"But there is high demand in Iraq for the industrial products and expertise that Germany is so well-known for, including mechanical engineering, plant construction, environmental services, medical technology and telecommunications. Companies like Thyssen Krupp and Salzgitter are therefore anxiously watching developments in the country.
"Doing business with Iraq is difficult because of local security risks and difficulties on the part of Iraqi businesspeople to obtain visas to visit Germany, according to Kreutzberger. Until things settle down in Iraq, German companies are therefore more likely to profit from getting one of the 900 subcontracts from U.S. companies. Siemens, for example, is already working in cooperation with Bechtel, the California-based construction and logistics company, to service its own power plants in Iraq. And the electronic and engineering group is also bidding for a job to rebuild Iraq's mobile telephone network.
Although the United States has signaled a preference for companies from countries that supported the U.S.-led attack on Iraq, Bechtel, which received a EUR680 million contract from the U.S. government to rebuild the basic infrastructure, said many German companies are being considered for some of the subcontracting.
German firms can also access the market via a representative from neighboring countries such as Jordan or Kuwait, according to Paul G. Dolan, co-chairman of the Economic Forum Deutschland, a private business organization which recently founded a “Rebuild Iraq“ taskforce to help small and medium-sized German companies do business in the Middle Eastern country.
“The market there is going to be won by the early bird, by those that open new markets and develop a name despite the fact that it's a little dangerous,“ Dolan said....
"Halliburton, the second biggest oilfield service company in the world, yesterday said work in Iraq had boosted revenue as it swung from a loss to record second-quarter net income of $26m, or 6 cents a share, compared with the year-earlier period.
"The Houston-based company credited the quarter's 11 per cent rise in revenue, to $3.6bn largely to increased activity in its Engineering and Construction Group (ECG) projects, including government services work in the Middle East...."
"VIENNA, Austria - Iraqi and U.S. officials said yesterday that they had agreed on a $1.6 billion plan to rehabilitate Iraq's oil industry over eight months.
"The plan would be the first step to overhauling an industry eroded by 12 years of U.N. sanctions and the last five months of war and looting, according to Iraqi and American officials and industry analysts.
""The rehabilitation plan is not to increase production but to take it back to previous levels," said Shamkhi al-Faraj, head of the Iraqi Oil Ministry's economics department. "It would focus on facilities that have been damaged. There will be some below-ground work, some studies, but basically it is above-ground."
"The government of Saddam Hussein pressured the oil industry to pump as much oil as possible, despite a dearth of spare parts under the U.N. sanctions strategy that damaged oil reservoirs and the quality of Iraqi oil, analysts say. Repairing the deterioration underground will take a different intiative and longer than eight months, they say.
"The new plan focuses instead on pipelines, pumping stations and other plants that also suffered from a lack of spare parts and were disabled after the war by widespread looting and sabotage.
"The goal is for Iraq to be producing 2 million to 2.5 million barrels a day by the end of the year, Faraj said, and to reach its prewar output of 2.8 million barrels a day by spring. But industry analysts who have recently visited Iraq say they think that such forecasts are optimistic, even with the new plan, given the dire state of the industry. Moreover, some recent repairs have been destroyed by looting and sabotage.
"American authorities in Iraq recently issued an invitation seeking an international corporate security company to protect Iraq's oil pipeline system, Faraj said.
"The rehabilitation plan was developed by the oil ministry and the U.S. Army Corps of Engineers, which has overseen the postwar repairs of Iraqi oil fields, the Kellogg Brown & Root unit of Halliburton and the Coalition Provisional Authority, said Walid Khadduri, the editor of the Middle East Economic Survey. The head of the Corps of Engineers oil reconstruction effort, Brig. Gen. Robert Crear; the acting chief executive of the Iraqi oil ministry, Thamir Ghadhban; and the provisional authority's adviser to the ministry, Phillip J. Carroll; recently signed an agreement to start the plan, a corps spokesman said yesterday.
"The plan includes 222 projects in the oil sector, and work already has begun on some of them, the spokesman said. All projects are expected to be completed by March 31.
"According to a recent report by Khadduri, the United States will finance $1 billion for the repairs through Kellogg Brown & Root, and the Iraqis will provide the rest...."
"An arm of the controversial Halliburton group, led until recently by US vice-president Dick Cheney and already profiting from Iraqi reconstruction deals, has been made preferred bidder for a £4bn Ministry of Defence contract in Britain.
Kellogg Brown & Root - in partnership with UK construction group Mowlem - is in pole position for the private finance initiative contract to upgrade and provide services to British Army garrisons at Aldershot and around Salisbury Plain.
"Shares in Mowlem rose 6% to 187.5p as a bullish spokesman at Kellogg Brown & Root's Houston headquarters predicted "for all intents and purposes ... it's a done deal". The move is a blow to Bovis Lend Lease and Amey, which were also in the running, and is a reminder that most companies who win the right to final negotiations usually land PFI deals.
"The long-awaited contract involves construction work worth £1bn with additional services being provided over 30 years worth an extra £3bn. The MoD shortlisted three bidders exactly one year ago and last month said it needed more time before making its final decision on a preferred bidder.
"There are 18,000 servicemen and women plus support staff based at Aldershot, the biggest single barracks in the country, and at various locations around Salisbury. The work involves refurbishing and maintaining buildings as well as catering, cleaning and transport.
"The choice of Halliburton is likely to provoke political concern given the Texan company has been through a turbulent period with a securities & exchange commission investigation into its finances, criticism for its close links to Washington and its connection to projects such as building the Guantanamo Bay prison in Cuba where Taliban fighters are held...."
"WASHINGTON (AP) -- The Pentagon will abandon a plan to establish a futures market to help predict terrorist strikes, the chairman of the Senate Armed Services Committee said Tuesday.
Sen. John" Warner, R-Va., said he spoke by phone with the program's director, "and we mutually agreed that this thing should be stopped."
"Warner announced the decision not long after Senate Democratic Leader Thomas Daschle took to the floor to denounce the program as "an incentive actually to commit acts of terrorism."
"Warner made the announcement during a confirmation hearing for retired Gen. Peter J. Schoomaker, nominated to be Army chief of staff.
""This is just wrong," declared Daschle, D-S.D. ..."
"Federal officials have approved Bechtel Group's blueprint for Iraq's reconstruction, making restoration of electric power the top priority in a $680-million budget that authorities concede will just scratch the surface of what needs to be done.
"The spending plan, approved last week by the U.S. Agency for International Development, clears the way for Bechtel to hire subcontractors to do everything from repairing bridges to fixing schoolroom toilets.
""The money is now spoken for," said Cliff Mumm, Bechtel's project director in Iraq. "We're moving ahead to implementation."
"About a third of the money, $230 million, is devoted to restoring electricity — which officials say is critical because little else can be done without it. The plan also earmarks $53 million to repair 1,300 schools and health clinics and sets aside $45 million for water purification and sanitation.
"Any one of these areas could easily have eaten up the entire $680 million, which USAID awarded Bechtel on April 17 under an 18-month contract...."
"WASHINGTON July 28 — The Pentagon is setting up a stock-market style system in which investors would bet on terror attacks, assassinations and other events in the Middle East. Defense officials hope to gain intelligence and useful predictions while investors who guessed right would win profits.
"Two Democratic senators demanded Monday the project be stopped before investors begin registering this week. "The idea of a federal betting parlor on atrocities and terrorism is ridiculous and it's grotesque," Sen. Ron Wyden, D-Ore., said.
"The Pentagon office overseeing the program, called the Policy Analysis Market, said it was part of a research effort "to investigate the broadest possible set of new ways to prevent terrorist attacks." It said there would be a re-evaluation before more money was committed.
"The market would work this way. Investors would buy and sell futures contracts essentially a series of predictions about what they believe might happen in the Mideast. Holder of a futures contract that came true would collect the proceeds of investors who put money into the market but predicted wrong.
"A graphic on the market's Web page showed hypothetical futures contracts in which investors could trade on the likelihood that Palestinian leader Yasser Arafat would be assassinated or Jordanian King Abdullah II would be overthrown.
"Although the Web site described the Policy Analysis Market as "a market in the future of the Middle East," the graphic also included the possibility of a North Korea missile attack.
"That graphic was apparently removed from the Web site hours after the news conference in which Wyden and fellow Democratic Sen. Byron Dorgan of North Dakota criticizing the market.
"Dorgan described it as useless, offensive and "unbelievably stupid."..."
"The department's "Defense Advanced Research Project Agency" designed what it calls the "The Policy Analysis Market."
"The program works much like the financial markets where traders buy and sell "futures" based on the possibility of a specific event in the Middle East, 11 News reported.
"Some of the examples listed on the agency's Web site include the assassination of Palestinian leader Yassar Arafat and a missile attack by North Korea. Bidders would profit if the events for which they hold futures occur.
"Defense officials said the market-based system is highly accurate when assessing such things as political and civil stability, economic health and military disposition of Middle East countries.
"Participants would only have to pick a username and password to participate and the agency said it won't have access to their identities or funds.
"But critics said this allows terrorists who are planning an attack to profit on the assault or even make false bets to mislead authorities.
"Members of Congress said the market idea is not only wasteful, but repugnant.
""I think this is unbelievably stupid. That is a gentle thing to say about a program that is so devoid of value," Sen. Byron Dorgan, D-North Dakota, said. "It combines the worst of all our values in my judgment. It's a tragic waste of taxpayer money. It will be totally offensive to almost everyone."
""[The] idea of a federal betting parlor on atrocities and terrorism is ridicules and grotesque," Sen. Ron Wyden, D-Oregon, said. "The bizarre plan we are describing today is a waste of taxpayer money and it needs to stop immediately. The program's intent is clear: the federal government is encouraging people to bet on and make money from atrocities and terrorist attacks."
"Registration for the site begins Friday and will be limited to the first 1,000 traders. Actual trading will begin Sept. 1 and the Department of Defense plans to open the site to 10,000 traders by Jan. 1, 2004...."
"July 28, 2003 (USA TODAY) — BearingPoint has won a controversial U.S. contract to rebuild Iraq's shattered economy, opening its banks, setting tax rates, issuing a new currency and generating jobs for millions of idle workers.
"The McLean, Va.-based consulting group in late April looked to be the winner of a sole-source contract for the same work from the U.S. Agency for International Development. But USAID abruptly put the job out for competitive bidding after a consortium led by Booz Allen Hamilton, Deloitte & Touche and IBM Global Services complained to the agency and Congress that it had been shut out of the process.
"The complex job of reforming and restarting Iraq's economy has taken on urgency as U.S.-led occupation forces have become the focus of violent attacks and widespread resentment. The 21-day war has left most Iraqis jobless, reliant on savings, scavenging and small payments from the U.S.-led authority to civil servants.
"BearingPoint will be responsible for creating Iraq's budget, writing business laws, setting up tax collection, laying out trade and custom rules.
"It also is to:
"Privatize state-owned enterprises by auctioning them off or issuing Iraqis shares in the enterprises.
"Reopen banks and jump-start the private sector by making small loans of $100 to $10,000. (Bank of America, Citigroup and J.P. Morgan are expected to seek work as subcontractors to revive Iraq's banks.)
"Wean Iraqis from the U.N. oil-for-food program, the main source of food for 60% of the population.
"Issue a new currency and set exchange rates.
"USAID spokeswoman Ellen Yount said Sunday that she could not confirm the agency's selection until a contract is signed, most likely today. But an official with the Booz Allen-led consortium said it was notified Friday that BearingPoint was the agency's choice. BearingPoint officials did not return calls Sunday.
"USAID has not publicly disclosed the contract's size. One firm involved in bidding puts the value at $60 million to $200 million. The award runs for a year but can be renewed up to two years. BearingPoint's fixed fee is expected to be 6% to 10% of the value...."
"BAGHDAD, Iraq, July 27 — After several false starts, Iraq seems poised to resume a steady flow of oil exports starting in August. For months, the Organization of the Petroleum Exporting Countries has been puzzling over what such an infusion of oil into world markets might mean for prices and what member nations should do to hold prices in a profitable range.
"As the group prepares to meet on Thursday in Vienna, the answer seems to be nothing, industry analysts said. But within the mandarin politics of the oil world, doing nothing still means something. It indicates OPEC's relative comfort with and confidence in the relatively high price of oil, which has surpassed $25 a barrel for most of the year, settling in New York late Friday at $30.17. Moreover, it signals OPEC's skepticism, shared by many oil traders, about whether Iraq can sustain the 600,000 to 650,000 barrels a day its officials say the country will begin shipping in a matter of days...."
LONDON, July 23 (Reuters) - Occupation powers governing Iraq's crippled oil sector have agreed a $1.6 billion investment plan to lift crude output almost threefold by April 2004, a newsletter reported on Wednesday.
The Middle East Economic Survey said in a special report that the U.S. authorities sanctioned the nine-month plan in early July, with an interim target to double current production to two million barrels per day (bpd) by year-end.
It aims to reach 2.8 million bpd by April, fully recovering Iraq's pre-war level, and also repairing refineries and pumping stations.
MEES said the new figures were optimistic because they assume an easing of sabotage and looting, which have dashed previous targets.
Kellogg Brown and Root, a unit of Halliburton (nyse: HAL - news - people), has already spent $300 million on repairs to Iraq's oil infrastructure. But some of its new equipment has already been stolen and output has been stuck around 800,000 bpd since May.
The United States government will provide more than $1 billion of the new funds through a private-sector contractor, with Iraq paying the balance, the report said.
The U.S. Army invited companies earlier this month to bid by mid-August for up to $1 billion worth of business to replace the contract now held by Halliburton, which used to be led by U.S. Vice President Dick Cheney.
CSM: US ASSEMBLES NEW IRAQI ARMY Recruiting for a force to protect convoys, guard borders, and staff checkpoints began over the weekend.
By Ann Scott Tyson | Staff writer of The Christian Science Monitor
"BAGHDAD – With American ground forces stretched thin and facing dozens of daily guerrilla attacks in Iraq, the US-led coalition is stepping up the recruitment of thousands of Iraqis for the New Iraqi Army while making plans for a civil defense force.
The effort to tap Iraqis to perform some jobs now handled by coalition troops is part of a broader plan to put "an Iraqi face" on the postwar administration. It also comes amid recent setbacks to Washington's requests for thousands of additional occupation forces from foreign countries.
"So far, finding Iraqi enlistees has not been a problem. A recruitment drive launched in three Iraqi cities over the weekend attracted long lines of Iraqi men in Baghdad, where US authorities handed out 3,600 applications in the first three days alone. "Some people try to jump to the front of the line, just like at Six Flags," said Army Capt. Jim Hickman as he worked to keep order at the recruitment center in the sweltering, 100-degree F. heat.
"Down the sidewalk and across the street, groups of Iraqis huddled together filling out the detailed, 19-page application form and discussing their prospects for the new military.
"Many of those seeking to join are former Iraqi soldiers and officers, including those bombed by US forces during the war. Driven by both a need for income and a desire to defend Iraq, none of those interviewed were deterred by recent, deadly attacks on Iraqis cooperating with coalition authorities.
""I'm not afraid. I'm ready to be trained," said Fasel al-Aubaidi, an electrical engineer and 19-year veteran of the Iraqi Army who worked in a military factory during the war.
"Indeed, Mr. Aubaidi and others crowding the recruitment center were enthusiastic about the possibility of gainful employment after the old, 400,000-strong force was disbanded in May after the fall of the Saddam Hussein regime.
"Angry protests by former soldiers and officers led the coalition authorities to agree to rank-based stipends and severance pay for conscripts.
"'No choice' for jobs"
"But payments so far have not been enough for many like Aubaidi, a former captain and father of four, who has received a single $80 payment from the coalition. If selected for the new Army, he will earn an initial salary of $60 a month plus free food and lodging, and have access to healthcare.
""For jobs, I have no other choice," Aubaidi says.
"The coalition plans to form three divisions - one each headquartered in Baghdad, Mosul, and Basra - over the coming two years, including some 30 battalions.
"An estimated 12,000 troops will be trained during the first year. The Vinnell Corp. in Fairfax, Va. won a contract for training the new Army under the leadership of Maj. Gen. Paul Eaton who commanded the US Army's infantry school at Fort Benning, Ga. ..."
"WASHINGTON, July 21 — A coalition of anti-war groups has opened an “Occupation Watch Center” in Baghdad to monitor alleged human rights violations by U.S. troops and the actions of corporations such as Halliburton in rebuilding Iraqi infrastructure. The coalition is also exploring the idea of advising U.S. soldiers in Iraq on how they can claim conscientious objector status so that they could be discharged and shipped home...."
"WASHINGTON - It is often said that war is too important to be left to the generals. But what about the C.E.O.'s? The Pentagon's plan to hire a private paramilitary force to guard sites in Iraq may have surprised many Americans, but it was really just another example of a remarkable recent development in warfare: the rise of a global trade in hired military services.
"Known as "privatized military firms," these companies are the corporate evolution of old-fashioned mercenaries — that is, they provide the service side of war rather than weapons. They range from small consulting firms that offer the advice of retired generals to transnational corporations that lease out battalions of commandoes. There are hundreds of them, with a global revenue of more than $100 billion a year, operating in at least 50 countries.
"Even the world's most dominant military has increasingly become reliant on them. From 1994 to 2002, the Pentagon entered into more than 3,000 contracts with private military firms. Companies like Halliburton, Vice President Dick Cheney's former employer, now provide the logistics for every major American military deployment. Corporations have even taken over much of military training and recruiting, including the Reserve Officer Training Corps programs at more than 200 American universities. (Yes, private employees now train our military leaders of tomorrow.)
"Perhaps nothing better illustrates the industry's growing role than the campaign against Iraq. Private employees worked on everything from feeding and housing coalition troops to maintaining weapons systems like the B-2 bomber. Indeed, there was roughly one private military worker in the region for every 10 soldiers fighting the war (as opposed to one for every 100 troops in the 1991 gulf war).
"And companies will play an even greater role in the occupation. In addition to the proposed security force, the new Iraqi military will be trained by corporate consultants. Washington has also contracted DynCorp, whose pilots have long helped the Pentagon destroy coca fields in Colombia, to train the new police force...."
"WASHINGTON (AP) -- Vice President Dick Cheney's energy task force appeared to have some interest in early 2001 in Iraq's oil industry, including which foreign companies were pursuing business there, according to documents released Friday by a private watchdog group.
"Judicial Watch, a conservative legal group, obtained a batch of task force-related Commerce Department papers that included a detailed map of Iraq's oil fields, terminals and pipelines as well as a list entitled "Foreign Suitors of Iraqi Oilfield Contracts."
"The papers also included a detailed map of oil fields and pipelines in Saudi Arabia and in the United Arab Emirates and a list of oil and gas development projects in those two countries.
"The papers were dated early March 2001, about two months before the Cheney energy task force completed and announced its report on the administration's energy needs and future energy agenda...."
"File this under "holy shit": there's a reason Cheney was so adamant about keeping the deliberations of the Energy Task Force secret. It wasn't about Enron or ANWAR (although I'm sure they surely had their role), it was about divying up Iraq's oil fields. It really was about the oil.
"Judicial Watch, the conservative legal group that bedeviled the Clinton Administration has effectively done the same for Cheney and Bush:
"Judicial Watch, the public interest group that investigates and prosecutes government corruption and abuse, said today that documents turned over by the Commerce Department, under court order as a result of Judicial Watch’s Freedom of Information Act (FOIA) lawsuit concerning the activities of the Cheney Energy Task Force, contain a map of Iraqi oilfields, pipelines, refineries and terminals, as well as 2 charts detailing Iraqi oil and gas projects, and “Foreign Suitors for Iraqi Oilfield Contracts.”
"So were such documents used for truly innocent purposes? It'll be interesting to see the administration's and its backers' tortured explanations as to why the Task Force would have pondered over who held the contracts to Iraq's oil wealth.
"Given the Iraq sanctions, those oil wells could not play any role in the formulation of US energy policy.
"SAN FRANCISCO (Reuters) - Amid growing concern that the rebuilding of Iraq is moving too slowly, Bechtel Corp., a key contractor in the repair work, said Thursday it had completed its first project, a 3 km (1.86 mile) bridge bypass.
"Bechtel, the San Francisco construction company, said construction of the four-lane bypass on a major highway in western Iraq was completed largely by its subcontractor, the Al-Bunnia Trading Co of Baghdad.
"Privately held Bechtel, which in April was awarded a contract worth up to $680 million over 18 months to rebuild key infrastructure in Iraq, has said it is trying to assign at least 50 percent of the work to Iraqi companies.
"Although it has not yet met that goal, it has made progress since last month, when only 20 percent of the subcontracts it had awarded went to Iraqi companies. On Thursday it said that of the 40 subcontracts it has awarded to date, 16 of them have gone to 14 different Iraqi companies.
"In addition to Al-Bunnia, which employed about 50 engineers and field employees to build the bridge overpass, other Iraqi subcontractors include the Iraqi Consultants and Construction Bureau for general construction services at the Baghdad International Airport; the Iraq Projects Company, for perimeter fencing and lighting at the Port of Umm Qasr, and Al-Sabah General Co, for school rehabilitation in Basrah.
"Large chunks of the work have also gone to British and American companies, including Lockheed Martin Corp. and Motorola Inc. , for various telecommunications services...." [Emphasis mine.]
Commerce & State Department Reports to Task Force Detail Oilfield & Gas Projects, Contracts & Exploration
Saudi Arabian & UAE Oil Facilities Profiled As Well
"(Washington, DC) Judicial Watch, the public interest group that investigates and prosecutes government corruption and abuse, said today that documents turned over by the Commerce Department, under court order as a result of Judicial Watch’s Freedom of Information Act (FOIA) lawsuit concerning the activities of the Cheney Energy Task Force, contain a map of Iraqi oilfields, pipelines, refineries and terminals, as well as 2 charts detailing Iraqi oil and gas projects, and “Foreign Suitors for Iraqi Oilfield Contracts.” The documents, which are dated March 2001, are available on the Internet at: www.JudicialWatch.org.
"The Saudi Arabian and United Arab Emirates (UAE) documents likewise feature a map of each country’s oilfields, pipelines, refineries and tanker terminals. There are supporting charts with details of the major oil and gas development projects in each country that provide information on the projects, costs, capacity, oil company and status or completion date....
"Some of the same peace activists who protested the U.S. invasion of Iraq have now set up camp in Baghdad, determined to scrutinize a military operation they couldn't prevent.
"Their new International Occupation Watch Center, which opened last week in Iraq's chaotic capital, will keep a skeptical eye on the activities of U.S. troops and officials.
"Its four-member staff will shadow U.S. companies Bechtel Corp. and Halliburton, whose role in Iraq's reconstruction provoked protests at home.
"More to the point, the center will actively oppose the occupation itself and call for its swift end. Its views, to be published in newsletters printed in English and Arabic, will probe the occupiers' tolerance for dissent.
""This is a test of our rights -- of freedom of speech, freedom of the press, freedom of assembly -- and we'll press those rights to the full extent," said San Francisco activist Medea Benjamin in an interview from Baghdad.
"It is unclear whether more staffers will join the initial group, or how much access the activists will actually have to either military officials or private business concerns....
""We're already under close and expert scrutiny by USAID, the Army Corps of Engineers and the international media," company spokesman Jonathan Marshall said. "To this mix, Global Exchange really doesn't bring much to the table, other than an ideological and political agenda."
"A $20,000 seed grant from Global Exchange and United for Peace and Justice helped establish the center, which Benjamin anticipates will operate for at least 18 months.
"Its mission ranges from preparing reports and posting them on its Web site, www.occupationwatch.org, to supporting the formation of Iraqi human rights groups and labor unions. Its staff will investigate claims that occupation troops have used unnecessary force against civilians, Benjamin said.
"The center will try to talk with the occupation authorities, as well as representatives of U.S. companies, as much as possible, Benjamin said. Some of its investigative work throughout the country will be performed by the center's own staff while other reports will be prepared by groups working with the center.
"In addition, the center will work with activists elsewhere to put pressure on the countries participating in the occupation. Benjamin and others at the center met last week with Italian activists who want to force their own country to pull out, and Benjamin wants to expand that effort to Poland and Australia...."
"BAGHDAD, Iraq, July 16 — In a further indication of the troubles facing its once mighty oil industry, Iraq plans to export only eight million barrels of oil this month, industry officials here said, a small fraction of its prewar output.
"The unexpectedly slow revival of this pillar of the Iraqi economy, which has been plagued by looting and sabotage, has helped keep oil prices hovering around $30 a barrel on world markets for weeks. The industry's difficulties may also derail some of the plans of the allied authority here, whose budget for the year assumes sizable oil revenues.
""Certainly for this year and most of next year, the vast majority will come from oil," L. Paul Bremer III, the American occupation administrator in Iraq, said of budget revenues at a news conference last week. "That is a fact of life we cannot get away from."
"American officials said recently that Iraq's budget for the rest of 2003 would be $6 billion to $7 billion. Half or somewhat more — about $3.5 billion — would come from oil exports, they said.
"That is far below the $15 billion to $20 billion in annual Iraqi oil revenue that the Bush administration had projected before the war. ..."
HELP WANTED The task of rebuilding Iraq has been lonely and frustrating for the United States and its British allies. Why Washington can’t—or won’t—get the rest of the world to lend a hand
"July 15 — Before the war in Iraq, the White House believed it could count on the rest of the world to help rebuild the country. Whatever the disputes in the run-up to the conflict, official thinking went, life would change once Saddam was gone. European companies would be clamoring for a slice of the action in Iraq. Foreign governments would be rushing to rebuild Baghdad, just as they did in Kabul.
"“THE UNITED STATES and our international partners would have to be completely devoted to the reconstruction of Iraq,” Condoleezza Rice, the president’s national security adviser, told me in an interview in September. That was a message that George W. Bush himself repeated just a week before the war began, in a mini-summit in the Azores with the British Prime Minister Tony Blair and his Spanish counterpart Jose Maria Aznar. With a new United Nations resolution behind him, President Bush was convinced he could—in his own words—”encourage broad participation in the process of helping the Iraqi people to build a free Iraq”.
"It hasn’t worked out that way. Like the hunt for weapons of mass destruction, the task of rebuilding Iraq has been a lonely and frustrating one for the United States and its British allies. This week the Indian government dumped a huge disappointment on the White House by rejecting its long-negotiated plans to send 17,000 troops to help stabilize Iraq.
"Given the steady killing of American troops, the extended deployment of the U.S. army and the long delays in restoring normal life to Baghdad, the White House now faces a critical challenge. That’s not the challenge of how to explain the pre-war intel on African uranium. It’s the far more urgent challenge of how to get the rest of the world’s help in saving Iraq...."
"Baghdad, 15 July 2003 (RFE/RL) -- Iraq's U.S. administrator, L. Paul Bremer, said today it is up to the Iraqi people how long U.S.-led forces remain in the country.
"Bremer, speaking at a news conference today in Baghdad, said the length of time coalition forces remain in Iraq depends on how quickly Iraqis pass a constitution to be written by Iraqi leaders, and hold "democratic, free, and fair" elections.
""The constitution will be written by Iraqis, for Iraqis. The final product will be submitted to the Iraqi people in a referendum and, once approved, democratic, free, and fair elections can be held in Iraq for a fully sovereign Iraqi government. And then our job, the coalition's job, will be done," he said.
"Earlier, Western media quoted unnamed U.S. military officials as saying thousands of U.S. soldiers will remain in Iraq "indefinitely." Some 9,000 soldiers from the 3rd Infantry Division had been scheduled to return home in September...."
"DALLAS, July 14 (Reuters) - The cost of restoring the flow of Iraqi oil to prewar levels is estimated at about $1.6 billion and bidding for up to $1 billion in U.S. contracts to rebuild Iraq's oil business is open to companies from a wide array of countries, U.S. Army Corps of Engineers officials said on Monday.
"At a conference on the Corps of Engineers' "Operation Restore Iraqi Oil" attended by representatives from about 100 companies held in Dallas, officials said they are hoping to have an award on the U.S. government contracts by mid-October and people on the ground in Iraq in November or December.
"Last week, the Corps of Engineers invited bids for two long-awaited oil contracts for the north and the south of Iraq, both which were set at a minimum of $500,000 but could grow to as much as $500 million each over time.
"Representatives from several companies said that continuing violence in the country has tempered some of the interest in the contracts, but they expect there to be a long-term need for foreign help in bolstering Iraq's oil production.
"Army Corps of Engineers officials said the U.S. Department of Defense will provide security to workers on the ground fixing damaged pipelines, repairing looted facilities or any of the other tasks involved in boosting Iraqi oil production to the prewar figure of 3 million barrels of oil a day.
""The minimum damage caused by the war and the mass looting and targeted sabotage from the war have caused varying levels of damage across the entire oil system," said Col. Michael Schultz, acting commander with U.S. Army Corps of Engineers, Southwestern Division.
"U.S. construction giants Bechtel Corp -- already at work on a major rebuilding contract in Iraq -- and Fluor Corp. (nyse: FLR - news - people) have said they would most likely compete for a piece of the work, and sources at the Army Corps say more than 200 other firms have expressed interest as well....
"The U.S. Army Corps of Engineers contract replaces a short-term contract that was awarded in March to Kellogg Brown & Root, a unit of Halliburton (nyse: HAL - news - people), the Texas oil company that was once led by U.S. Vice President Dick Cheney. KBR has completed about $285 million in work on restoring the flow of Iraqi oil as of the start of July, officials said...."
Including the ongoing work, the total cost of returning to prewar production levels was estimated to reach a total of about $1.6 billion, but that figure could vary upward or downward by 40 percent, the officials said.
"CHICAGO, July 14 (Reuters) - U.S. states, which have trillions of dollars in investments, are starting to put pressure on companies with business ties to countries accused by the U.S. government of sponsoring terrorism.
"Officials who invest public funds are scouring their holdings for shares in such companies, partly because of the added risk and partly in order to pressure the companies to sever the ties. The State Department lists Iran, Iraq, Libya, North Korea, Sudan and Syria as sponsors of terrorism.
"Nevada Treasurer Brian Krolicki, the head of the National Association of State Treasurers, said several state treasurers have raised the issue as the group tries to pull together corporate governance guidelines.
""We all share the belief that no one in this country should be helping anyone in the area of terrorism," he said of a sentiment that has been widely held since the attacks on the United States on Sept. 11, 2001.
"But Krolicki said it was a "grey and murky" issue that was unlikely to make it into the guidelines, which are due out later this year.
"But some steps have already been taken. Earlier this year, New York City Comptroller William Thompson accused General Electric Co. (nyse: GE - news - people), Halliburton Co. (nyse: GE - news - people) and ConocoPhillips (nyse: GE - news - people) of putting shareholder value at risk by doing business in countries accused of being linked to terrorism.
"Pressured by the city's $31 billion pension funds, all three companies have considered possible reviews of those ties, according to Thompson's office. GE shareholders rejected a proposal to review the company's business in Iran, a GE spokesman said. A spokeswoman for Halliburton said the company has agreed to appoint a committee to review its operations in Iran and will report on it in the fourth quarter. A spokeswoman for ConocoPhillips was not immediately available to comment...."
"BASRA, Iraq, July 13 — Giant U.S. engineering firm Bechtel on Sunday told Iraqi companies they could be part of rebuilding the country and got a first-hand look at how local firms are struggling to adapt in a post-Saddam world.
"Bechtel, awarded the prime reconstruction contract for Iraq by the U.S. Agency for International Development (USAID), met 200 representatives of potential Iraqi subcontractors in Iraq's second city Basra, the hub for southern commerce on the Gulf.
"But in a country smothered by decades of state control and 13 years of U.N. sanctions under Saddam Hussein, educating people about U.S.-style capitalism may be one of Bechtel's most massive tasks under a contract worth up to $680 million.
"''Iraq has been like an island for 13 years. It's like Cuba in a lot of ways,'' said Tom Elkins, the Bechtel official in charge of procuring equipment and services for the Iraq project.
"Bechtel officials said they had given Iraqis 16 of the 50 subcontracts issued so far to build or repair ports, power networks, airports, schools, roads and other infrastructure.
"Elkins said the unlisted San Francisco-based company expected to hand Iraqi companies three out of every four of its subcontracts under its USAID deal. Bechtel has said it would subcontract 90 percent of its work in Iraq...."
Faisal Islam, economics correspondent
Sunday July 13, 2003
The Observer
"American plans to mortgage Iraq's future oil supplies to pay for expensive postwar reconstruction work risk a repeat of mistakes made with Germany after the First World War, debt relief campaigners said this weekend.
"Much of the revenue will be securitised over at least a decade under the proposals being pushed by the US Export Import Bank, the Bush administration's trade promotion body, and a lobbying group that includes key American contractors Bechtel and Halliburton.
"Reports suggest that $30 billion of loans will be backed by Iraq's reserves, the second biggest in the world.
"Anne Pettifor, head of the Jubilee Plus debt relief campaign, said 'It is outrageous that the poor people of Iraq will be lumbered with billions of dollars of debt that will be used to boost the share prices of Wall Street financiers and US construction giants.'
"She warned against the coalition 'using the instrument of debt to control Iraq', after it leaves. Such a motive was behind the way Germany was treated after 1918, provoking resentment that eventually encouraged the rise of Adolf Hitler.
"The World Bank has said such commitments should only be made by a sovereign Iraqi government. The plans will complicate a conference on Iraq's existing $120bn debt, which the US wants European powers to cancel.
"The Department for International Development would not rule out British participation in the scheme."
* * *
PIPE DREAMS OF IRAQI OIL Millions of barrels must flow soon to pay for reconstruction contracts, write Faisal Islam and Oliver Morgan
Sunday July 13, 2003
The Observer
"The oil has started to flow at last. For the first time since the beginning of the war in Iraq, supplies from the world's second largest reserve are being pumped into a sluggish global economy in need of an injection of cheap black gold.
"Today, a BP tanker is scheduled to load 2 million barrels of Basra Light crude oil at the Gulf port of Mina Bakr. US oil giant ChevronTexaco will lift a further 2m barrels next Sunday, and Shell will take its own tranche the following week. These are the first direct purchases of freshly pumped Iraqi crude since the fall of Saddam. Other exports have been taken from stocks, or last week's cargo to a Swiss-based trading house. At least three-quarters of the new oil will be heading for the US.
"It is a landmark for Iraq. The occupying authorities say that it will be the first time that proceeds from the country's oil wealth will directly benefit its people. Most of the $200m proceeds from the sale will go into the coalition-controlled Development Fund for Iraq, though some will be diverted to Kuwait to pay reparations for Saddam's invasion of the country in 1991.
"British and American tankers making off with the first few million barrels of Iraqi oil are only likely to confirm long-held suspicions of war-sceptics. But the sales, though more than $5 per barrel below standard US crude prices, will be the lifeblood of Iraq's reconstruction. The problem for the Iraqi and world economies is that the country is not exporting enough of its oil....
"This is partly due to sabotage of the pipeline from the northern fields near Kirkuk to the Turkish port of Ceyhan. No fresh oil has been pumped through this key pipeline since the US-led invasion of Iraq. So the first challenge after stabilisation is repair.
"Last week the US Army Corps of Engineers (ACE), Iraqi oil officials, and contractor Kellogg, Brown & Root, a subsidiary of Vice President Dick Cheney's former company Halliburton, held a four-day conference in Baghdad aimed at pushing oil production to 3m barrels per day.
"Tomorrow the US ACE will hold a conference in Dallas to issue two further contracts, worth $1 billion in total, for upgrading the oil industry infrastructure in the north and south of Iraq. ..." [Emphasis mine.]
"SAN FRANCISCO, July 11 (Reuters) - More than 200 companies are expected to compete for up to $1 billion in contracts to repair Iraq's oil infrastructure, but continued violence there has tempered some interest.
"The U.S. Army Corps of Engineers invited on Thursday bids for two long-awaited oil contracts for the north and the south of the country, both which were set at a minimum of $500,000 but could grow to as much as $500 million over time.
"U.S. construction giants Bechtel Corp -- already at work on a major rebuilding contract in Iraq -- and Fluor Corp (nyse: FLR - news - people) have said they would most likely compete for a piece of the work, and sources at the Army Corps say more than 200 other firms have expressed interest as well.
"But while the first major contract -- awarded to Bechtel by the U.S. Agency for International Development -- was the subject of intense competition, there is a now a growing sense that some of the potential competitors have lost some interest.
"Part of the difference appears to be a more open bidding process this time around. Unlike the U.S. AID contract, which went out for bidding to only a few companies, this one has been widely anticipated and is open to any company wishing to apply.
"The U.S. Army Corps of Engineers contract replaces a short-term contract that was awarded in March to Kellogg Brown & Root, a unit of Halliburton (nyse: HAL - news - people), the Texas oil company that was once led by U.S. Vice President Dick Cheney.
"But there is another difference as well.
"Back in March, when war first broke out in Iraq and U.S. government agencies began discussing plans to rebuild the country, there was a sense there would be a decisive victory followed by American companies moving into Iraq.
"If the official victory was quick, localized skirmishes and continued sabotage by Saddam loyalists now offer a sobering view of the danger and the time involved in rebuilding Iraq....
"After initially assuming that any work order in Iraq would be hugely lucrative, there is a growing sense it could be extremely complex logistically and slow to get off the ground...."
This site links to only one cartoonist: Tom Tomorrow. For me, the most verbose cartoonist in the English language is also the most intelligent -- and politically astute.
Mr. Tomorrow (I don't know him well enough to call him "Tom") has been kind enough to link to this site on a few occasions, even prodding his readers to bookmark.
For a long time, Mr. Tomorrow has been my favorite cartoonist. And since he has called this site "indispensable," let me just call him a ... national treasure. An immortal bard. A god of narrative inking and subversive-yet-progressive wit.
"Washington -- The Bush administration is considering a provocative proposal to pledge a portion of Iraq's future oil and gas revenue to secure long-term reconstruction loans before a new Iraqi government is in place to sign off on the idea.
"The plan, endorsed by the Export-Import Bank of the United States and some of America's biggest companies, would help avert a looming cash crunch that has the potential to stall the postwar rebuilding effort. One U.S. official rated its prospects as 50-50.
"But the proposal is drawing fire from some administration officials, lawmakers, policy analysts and prominent Iraqis who say it would mortgage the Persian Gulf nation's most treasured resource, prevent future leaders from deciding how to spend their oil money and put U.S. taxpayers at risk.
""Iraqis believe their oil should not be touched by foreigners, that it should remain in the hands of the Iraqi government, and that no one has a right to do anything before an elected government is in place," said Fadhil Chalabi, executive director of the Center for Global Energy Studies in London and a former Iraqi Oil Ministry official.
""As an economist, I believe in what they are proposing," Chalabi said. "You couldn't come up with a better formula. But Iraqi politics and the way they look at these things are not encouraging. It could create problems later on. Better to wait until a government is formed."
"That may be too late, in the view of the plan's supporters. The Export- Import Bank and an industry coalition that includes Halliburton Co., Bechtel Group Inc. and other major firms interested in winning contracts in Iraq are warning that unless steps are taken soon to secure new funds, the reconstruction well could run dry.
"Common sense says, get Iraq running. How do you get the country running? "By using its own oil revenue 100 percent for the benefit of the Iraqi people," said Export-Import Bank Chairman Philip Merrill. "If you want to wait three or four years, be my guest. But that means the country is going to be running on the dole of the United States."
"Many experts agree that Iraq is headed for a possible cash flow crisis as reconstruction costs escalate, initial funds are depleted, and the resumption of oil exports is delayed from damage caused by looting and sabotage.
"But they part company over whether the U.S.-led occupation in Baghdad has the legal or moral authority to pledge future oil revenue as loan collateral before the issue can be debated by elected Iraqis.
""Unless a reconstituted Iraqi government or the U.N. Security Council authorizes the plan, it appears to violate international law," said Rep. Henry Waxman, D-Los Angeles. "We do not have the right, without additional authority, to impose financial obligations on the future government of Iraq."..."
"July 11 (Bloomberg) -- Halliburton Co.'s Kellogg Brown & Root subsidiary has been hired by the U.S. Army to feed and house as many as 100,000 troops in Iraq, where thousands of soldiers may be stationed for years to come, the New York Times reported today, citing Gen. Tommy Franks.
"The contractor could set up large tents, but an Army spokesman told the Times that the $200 million contract placed last month could include semi-permanent wooden buildings...."
"WASHINGTON -- They are among America's largest companies: Verizon Communications Inc., AT&T Wireless, Barnes & Noble Inc. booksellers and Dole Food Co.
"But in the government's contractor database they are listed as small businesses.
"The mistaken designations, contained in records obtained by The Associated Press, mean the government has overstated the contract dollars that are going to small businesses at a time when the Bush administration has been pressing to give smaller firms as much federal work as possible.
""(The mistake) has led to the apparent diversion of contract dollars intended for small business," acknowledged Sue Hensley, a spokeswoman for the U.S. Small Business Administra- tion.
"But the government has no idea how many big companies are incorrectly categorized as small businesses.
"The General Services Administration, which maintains the records entered by contracting officials across the government, vows to make sure future entries are accurate. But David Drabkin, senior procurement officer for the agency, said past errors are "not something we can clean up overnight."
"Once a company's status is mischaracterized, it stays that way through the life of a contract -- which can be 20 years....
"Among the contractors designated as small businesses in the records obtained by the AP were: ...
"KBR, a Halliburton subsidiary formerly known as Kellogg, Brown & Root. KBR is one of the world's largest providers of oil - field services and part of the company Vice President Dick Cheney ran before 2001. " [Emphasis mine.]...
"The price tag to rebuild war- and sanctions-torn Iraq may soar to $60 billion, according to various estimates. But that substantial figure is eclipsed by what Iraq owes to foreign countries, individuals and corporations that gave Saddam Hussein’s government billions of dollars in loans over the years.
"Hussein’s Iraq owed those groups approximately $383 billion, according to studies by the Center for Strategic and International Studies in Washington and the General Accounting Office. Foreign countries comprise at least $127 billion of that total, with Russia, Kuwait and other Persian Gulf nations holding nearly 50 percent of the regime’s governmental debt. And because Iraq stopped repaying most loans following the first Gulf War, it has accrued a whopping $47 billion in interest charges.
"Hussein’s government also owes billions to individuals and corporations. Through the United Nations, Iraq has paid more than $40 billion in reparations claims filed after the country’s invasion of Kuwait, but nearly $200 billion is still owed. Collectively, Iraq’s burden makes it the most indebted nation in the developing world, with obligations translating to approximately $16,000 for each of Iraq’s 24 million citizens, according to researchers with the Heritage Foundation in Washington.
"The key to demolishing that mountain of debt is Iraq’s 121 billion barrels of oil reserves, the world’s second largest. Saudi Arabia, with 264 billion barrels, boasts the world’s largest supply. The sale of oil and the country’s huge natural gas supply will be used for payments, as well as funding for the wide array of projects to build the country’s infrastructure.
"But oil has been slow to flow. Estimates are that Iraq could pump 2.5 billion barrels a year if its current infrastructure was fully functioning. But damaged by neglect and, more recently, sabotage by unidentified groups, pumps and pipelines reportedly are spitting out less than five percent that amount.
"While foreign creditors look to recoup their years’ old debts, President Bush has declared null and void any claims against Iraq’s oil and natural gas or revenues from their sale. Those claims could disrupt the reconstruction process, and thus represent “a threat to the national security and foreign policy of the United States,” the president said in an executive order issued in May...."
"WASHINGTON, July 10 — The U.S. Army invited bids on Thursday for two new contracts worth up to $1 billion to rebuild Iraq's oil industry, opening up the lucrative business to foreign firms previously excluded from such deals.
"The contracts -- one for southern Iraq and the other for northern -- replace a no-competition contract awarded in March to Kellogg Brown & Root, a unit of Halliburton, the Texas oil firm once led by Vice President Dick Cheney.
"That contract was met with a barrage of criticism, with Democratic lawmakers complaining one company with links to Cheney was getting too much business out of the Iraq war. The White House has strongly rejected any favoritism.
"''The formal bidding process for these two contracts can now begin,'' said U.S. Army Corps of Engineers spokesman, Army Lt. Col Gene Pawlik. ''Foreign companies can apply,'' he added.
"The Request for Proposals had been scheduled for release on Tuesday but was delayed until very late on Wednesday after the army made some ''language changes,'' said one defense official.
"The government's preference was to award the contracts to two separate companies as the ''geographic areas of the two contracts will not overlap,'' said the bidding notice.
"KBR has indicated it will bid on the new contracts and other companies such as Fluor Corp, which recently set up a joint venture with British engineering group AMEC Plc, has also expressed interest.
"The minimum amount of the proposed contracts will be $500,000 each and the maximum $500 million each...."
"BAGHDAD -- They travel like foreign dignitaries, their SUVs escorted by two US Army Humvees and a security detail led by a master sergeant. No Iraqi official is too busy to meet them and when it comes to Iraq's most precious resource, oil, they are granted total and instant access.
"Officials from Kellogg, Brown & Root Services, a subsidiary of oil-services giant Halliburton Co., are using a broadly worded contract to evaluate and repair Iraq's petroleum infrastructure, ''as directed'' by the US government, to gain a huge head start over potential competitors in redeveloping the country's vast, outdated oil industry. With much of Iraqi reconstruction bogged down by sabotage, chronic looting, and bureaucratic mire, KBR -- which also is supposed to repair war-damaged oil wells and provide general logistical support to the US Army -- has expanded its role to include everything from gasoline imports to laundry services.
"Some Iraqi oil officials say KBR is using what appears to be an open-ended mandate to effectively corner a market coveted by its rivals and to win business Iraqis can do themselves...."
"David Posten, a furniture dealer from Maryland, was intrigued by the idea of doing business in post-war Iraq - so keen in fact that he paid $475 to attend a recent conference in Washington on the country's reconstruction.
"Crowded into a hotel ballroom with 500 other delegates, Mr Posten listened attentively as panellists outlined the historic opportunities in an oil-rich country half-way across the world.
"They spoke in breathless tones of Iraq's ancient commercial tradition and how life was gradually returning to normal on Baghdad's streets. And then the subject turned to security.
""You better wear a bullet-proof everything," was the lesson Mr Posten came away with, almost certainly to the chagrin of the conference organisers. "Just when you're comfortable doing your job, someone's liable to come shoot you in the head."
"That disturbing revelation has been dawning across the US business community after months of excited buzz about the billions of dollars to be made rebuilding Iraq...."
"BAGHDAD, July 8 (Reuters) - U.S. civilian ruler Paul Bremer said on Tuesday Iraq should consider privatising its state-owned sectors and foreign investment in its oil industry before a permanent sovereign government takes over.
"Bremer said that a soon-to-be-appointed governing council of Iraqis needed to give clear backing to the entry of foreign capital to reassure private investors.
""Privatisation is obviously something we have been giving a lot of thought to," Bremer told reporters.
""When we sit down with the governing council...it is going to be on the table," he said.
"Although Bremer would have the authority to change Iraq's legal code, in place since the toppling of Saddam Hussein in April, foreign investors need some assurance any legal changes could survive once an elected Iraqi government takes over, he said.
""The governing council will be able to make statements that could be seen as more binding and the trick will be to figure out how we do this," Bremer said.
""Everybody knows we cannot wait until there is an elected government here to start economic reform."..."
"In March, as war against Iraq loomed, Frederick "Skip" M. Burkle Jr., a senior official at the U.S. Agency for International Development (AID), traveled to Kuwait with a disaster relief team to prepare for the aftereffects of the fighting. It was a natural assignment for Burkle. A physician with a master's degree in public health, he ran a trauma center near the Kuwaiti border during the first Gulf War and then went to northern Iraq to help with the Kurdish crisis. He traveled to Somalia and Kosovo to deal with the humanitarian emergencies there. A Naval reserve officer who earned several combat medals in Vietnam, Burkle set up a center at the University of Hawaii in the mid-1990s to promote cooperation between the military and relief organizations. In 2002, he joined AID as deputy assistant administrator for global health.
"On April 10, as fighting continued in Baghdad, the 63-year-old Burkle arrived in the city to visit local hospitals and assess their needs. His convoy came under fire, however, and he was forced to leave. Two weeks later, he returned at the request of retired Lt. Gen. Jay Garner, then head of the U.S. Office of Reconstruction and Humanitarian Assistance. The two men visited Yarmouk Hospital, where they heard pleas for security, electricity, supplies. Told that he was to serve as the senior U.S. adviser to the Iraqi ministry of health, Burkle returned to Kuwait to collect his belongings.
"There, however, he was abruptly informed that he had been relieved of his duties and replaced by James K. Haveman Jr. Unlike Burkle, Haveman, 60, was largely unknown among international public health professionals. A social worker by training, he has no medical degree or any formal instruction in public health, and he hasn't been in the military. From 1991 to 2002, he served in the cabinet of John Engler, the Republican governor of Michigan, directing state health programs. Most of Haveman's recent overseas experience had come through International Aid, a Christian relief organization that provides health care and spreads the Gospel in the Third World...."
"Part of the US defence group Northrop Grumman has been given a year and $48m (£28.7m) to create a new Iraqi army.
"The contract was awarded to Northrop's military training arm, the Vinnell corporation, which already trains the Saudi National Guard.
"An adviser to the US authorities in Iraq said the first unit would be a light infantry division made up of twelve-thousand men, with two more units to be added the following year.
"The new troops will replace the old Iraqi army which was disbanded by US-led forces a month ago.
"Vinnell's website is recruiting former US Army and Marine officers and other specialised military experts to work in Iraq.
"Vinnell is expected to start work this month and should be completed within a year...."
"Oilfield firefighting company Boots & Coots International Well Control Inc. said Wednesday that Prudential Insurance Co. has agreed to waive its current covenant loan defaults.
"The Houston firm, which fell into default in March 2002, said it will issue about $2.4 million in new subordinated notes to Prudential that represent past-due interest...."
Mother Jones has created a nifty tutorial -- with Macromedia Flash -- illustrating the massive corporation's international business dealings. Point and click to visualize the thin blue lines of international corruption.
New York - Troubled Houston firefighting specialty company Boots & Coots International Well Control disclosed late June 30 it plans a one-for-four reverse stock split to get its penny stock back above American Stock Exchange listing requirements.
The company also revealed its share count has continued to swell amid a wave of poorly disclosed insider selling. And it has lost more than half its directors amid a continuing brouhaha over its no-bid US government contract for work in Iraq through alliance partner and preferred stockholder Halliburton.
That apparently rich Iraq deal will end with the looming August tender for Iraq oil support work by the US Army Corp of Engineers, after pointed prodding by Congressional critics of the alleged sweetheart award to Halliburton's Kellogg Brown & Root unit. Unless that contract is retained by KBR against likely stiff competition, Boots & Coots' brief first-quarter profit of $2.6-mil could return to red ink, analysts say. The company is already in default on a $30-mil debt to Prudential Insurance, has a severe $14-mil working capital deficiency and has warned it could be forced into bankruptcy.
Credibility issue
Now it also has a serious credibility problem. In a preliminary proxy statement for a planned Aug 19 shareholder meeting, Boots & Coots admitted its shares outstanding have ballooned from 45.7-mil last Sep 30 to 84.7-mil in late June, with another 48.6-mil that could be issued for pending warrants, options and preferred stock conversions.
The filing revealed four of its seven directors have quit in recent months, including former Red Adair veteran Brian Krause, leaving only one "independent" director. That is Richard Anderson, president of Elliott & Associates' Prime Natural Resources and a former Hein + Associates accountant.
The filing admitted Anderson has been late in filing Form 4 stock sale or conversion notices recently, along with CEO Jerry Winchester and chairman Kirk Krist.
The stock fell almost 5% July 1 to $0.41/share, down from a brief spike to more than $2 in March during the Iraq war and more than $10/share in 1997 when the company went public by merging into a listed shell.
Admitted Ponzi schemer Reed Slatkin, the seller of that shell company, is now awaiting sentencing in California after pleading guilty to unrelated federal fraud and money laundering charges.
The highly regarded but extremely volatile fire-fighting operation of Boots Hansen and Coots Matthews, the now-retired former associates of legendary Red Adair, was acquired and taken public in 1997 along with IWC by former Savings and Loan investor and mortgage banker Larry Ramming, who departed a year ago.
Ramming launched Boots & Coots IWC on a series of ill-fated oilfield service company acquisitions, resulting in write-offs and the 2000 bankruptcy sale of its International Tool & Supply unit. But its main attraction remained an alliance deal forged by IWC with Halliburton making IWC the designated operator of all well control and fire-fighting work on Halliburton oilfield.
Halliburton, however, has apparently had to take various steps to prop up its faltering partner, particularly as the prospect of large work obligations loomed in Iraq. In addition to supplying a number of former Halliburton employees to run Boots & Coots, including former chairman Jed DiPaolo and current CEO Winchester, Halliburton in 1999 injected $5-mil of equity in the form of 6.25% Series A preferred stock.
Cash crunch
As the Iraq war loomed and Boots & Coots faced a cash crunch, a murkyPanamanian-based lender called Checkpoint Business emerged to grant it a $1-mil loan, collateralized by all Boots & Coots IWC's assets. On the same day that loan was made, DiPaolo quit as chairman.
When that loan was declared in default less than a month later, Checkpoint proposed a bankruptcy takeover of the company. Boots & Coots opted to pay off the debt, using some of the $6-mil of cash it had obtained by selling fire-fighting hardware. Sources say that was an unusual sale of equipment to the US Army for the Iraq effort, at a huge profit.
Boots & Coots declines to discuss the nature or pricing of its Iraq work, which unhappy rivals say may have been billed at far above prevailing industry rates.
"Haj Umran, Iraq -- This isolated highway crossing on the Iranian border has become a black hole into which Iraq's former wealth is being sucked.
"The dozens of backhoes, industrial generators, drilling rigs, cement mixers, cranes and heavy factory machines lined up here waiting to cross into Iran are a virtual catalog of the vast amount of equipment stolen from Iraqi government facilities after the fall of Saddam Hussein's regime.
"The smuggling of looted goods desperately needed to rebuild the country passes without any interference from the local autonomous Iraqi Kurdish government -- nor from the United States, which allows the Kurds to maintain a standing militia and control of the border posts.
"U.S. occupation authorities insist that American and British forces have neither the mandate nor the manpower to halt the trade.
"U.S. officials have repeatedly blamed the nationwide looting on Hussein loyalists bent on sabotaging reconstruction. But Kurdish officials, truck drivers and the owner of one large smuggling enterprise charge that the trade in stolen goods is an organized criminal activity in which both businessmen and Kurdish leaders take a cut of the action.
""It's a mafia, which we can't stop," said an official of the Kurdistan Democratic Party, or KDP, which rules Haj Umran and the northern half of the Kurdish region...."
BECHTEL GIVES WORK TO 6 IRAQI FIRMS U.S. contractor awards less than 20% of $680 million reconstruction contract to Iraqi companies. July 1, 2003: 7:10 AM EDT
"SAN FRANCISCO (Reuters) - Bechtel Corp, the U.S. company at the center of the post-war rebuilding of Iraq, has so far awarded subcontracting work to six Iraqi companies -- less than 20 percent of the bids it has given out so far, the company said.
"A list Bechtel released Monday showed that out of 34 companies that have been awarded subcontract work to date, only six were Iraqi, while more than half went to American and British companies, including a London-based security firm that hires only ex-members of British Special Forces.
"The work awarded to Iraqi companies covers emergency bridge demolition and work at airports and the port of Umm Qasr.
"One contract went to Iraq's Tawf Construction to paint stripes on the runway at Baghdad's airport...."
