Arms And The Man
Who's Making A Killing On Killing In Iraq?

Friday, October 31, 2003  




"WASHINGTON, Oct. 30 — Executives, employees and political action committees of the 70 companies that received government contracts for work in either Iraq or Afghanistan contributed slightly more than $500,000 to President Bush's 2000 election campaign, according to a comprehensive study of the contracts released on Tuesday.

"The overwhelming majority of government contracts for billions of dollars of reconstruction work in Iraq and Afghanistan went to companies run by executives who were heavy political contributors to both political parties.

"Though the employees contributed to both parties, their giving favored Republicans by a two-to-one margin. And they gave more money to Mr. Bush than any other politician in the last 12 years...." [emphasis added] [more]

* * *



Analysis - By Jim Lobe

"WASHINGTON, Oct 30 (IPS) - A major Pentagon hawk has abruptly resigned his post in a move that, in the context of other recent developments, is likely to fuel speculation that the White House might be trying to soften the harder edges of its controversial policies.

"The Pentagon announced Wednesday evening that Assistant Secretary of Defence for International Security Policy, J.D. Crouch II, was resigning effective Friday, in order to return to ''academia'' at Southwest Missouri State University (SMSU).

"Significantly, the announcement did not give a reason for his departure nor for the suddenness with which it is taking place. And no one was named to replace him.

"While officials stressed that Crouch, who has a long association with many of the key figures who have promoted military pre-eminence as U.S. post-Cold War strategy, was leaving voluntarily, some sources said his resignation reflected a loss of influence on the part of right-wing and neo-conservative hawks centred in the Pentagon and Vice President Dick Cheney's office.

"''He's not being fired, but they're starting to move people around,'' said one knowledgeable source. ''It's all about (Bush's) re-election and how to get rid of the loonies without looking like they screwed up.''..." [more]

* * *



The Associated Press

"A look at major private military contractors and some of the countries in which they have operated in recent years:

-- DynCorp, a division of Computer Sciences Corp., based in Reston, Va.: Iraq, Afghanistan, Ecuador, Sudan

-- Kellogg, Brown & Root Inc., a unit of Halliburton, based in Houston: Iraq, Afghanistan, Cuba, Albania, Macedonia, Bosnia and Herzegovina, Croatia, Uzbekistan, Turkey, Democratic Republic of the Congo

-- Vinnell Corp., a division of Northrop Grumman, based in Fairfax, Va.: Iraq, Saudi Arabia, Egypt, Pakistan, Taiwan, Turkey, Japan

-- MPRI, a division of L-3 Communications, Alexandria, Va.: Iraq, Colombia, Croatia, Equatorial Guinea, Bosnia and Herzegovina, Kuwait, Bulgaria, Nigeria, Kenya, Ghana, Senegal, Taiwan, Macedonia

-- ArmorGroup, based in U.S. and U.K.: Iraq, Angola, Mozambique, Democratic Republic of the Congo, Kazakhstan, Russian Federation

-- Defence Systems Ltd., a subsidiary of ArmorGroup, based in London: Iraq, Algeria, Democratic Republic of the Congo, Angola, Rwanda, Colombia , United Arab Emirates, Jordan, Saudi Arabia.

-- Control Risks Group Ltd., based in London: Iraq, Algeria, Bahrain, Bosnia and Herzegovina, French Guiana, Nigeria, Pakistan, Philippines, Colombia, Myanmar

-- Sandline International, based in London: Sierra Leone, Papua New Guinea


Source: The Center for Public Integrity; George Washington University, Professor Deborah Avant. "

posted by Major Barbara | 5:53 AM

Thursday, October 30, 2003  



By Sue Pleming

"WASHINGTON (Reuters) - San Francisco engineering company Bechtel on Thursday strongly defended its work in Iraq and said allegations it won sweetheart deals, overcharged the U.S. government and excluded Iraqis were ``simply not true.''

"Bechtel is lead contractor in Iraq for the U.S. Agency for International Development and has so far clocked up just over $1 billion in business there for infrastructure work such as restoring power and water and rebuilding schools and bridges.

"The privately held company reacted to what it said were ``inaccurate and misleading statements'' about its work in Iraq, especially from California Rep. Henry Waxman, a Democrat who has been particularly critical of the contracting process in Iraq.

"``These charges simply are not true. It is important to get the facts straight about such allegations,'' Bechtel said.

"A report by the watchdog group, the Center for Public Integrity, said on Thursday that contracting deals for post-war Iraq and Afghanistan reeked of cronyism and favoritism and cited the fact that Bechtel's board included former Secretary of State George Shultz.

"Bechtel was particularly upset by a letter to the White House Office of Management and Budget from Waxman. The letter said a general told a congressional delegation about a $15 million estimate from the Army Corps of Engineers to rebuild a cement plant in Iraq while an Iraqi company managed to do it for $80,000.

"Waxman wrote these Army Corps estimates were often based on consultations with private contractors such as Bechtel and Halliburton Co. (HAL), the oil services company once run by Vice President Dick Cheney that is repairing Iraq's oil industry.

"``Bechtel did not provide any estimate, did not make a proposal and is not involved in any way,'' the company said of the concrete factory estimate.

"Waxman, in turn, reiterated his complaints of a lack of transparency for Bechtel's Iraq work and said there was virtually no information publicly available about how much Bechtel was charging for their work...." [more]

posted by Major Barbara | 7:07 PM



By LARRY MARGASAK, Associated Press

"WASHINGTON -- Companies awarded $8 billion in contracts to rebuild Iraq and Afghanistan have been major campaign donors to President Bush, and their executives have had important political and military connections, according to a study released Thursday.

"The study of more than 70 U.S. companies and individual contractors turned up more than $500,000 in donations to the president's 2000 campaign, more than they gave collectively to any other politician over the past dozen years.

"The report was released by the Center for Public Integrity, a Washington-based research organization that produces investigative articles on special interests and ethics in government. Its staff includes journalists and researchers.

"The Center concluded that most of the 10 largest contracts went to companies that employed former high-ranking government officials, or executives with close ties to members of Congress and even the agencies awarding their contracts...." [more]

posted by Major Barbara | 10:25 AM




"Despite mounting criticism of the administration's Iraq policy, Vice President Dick Cheney appears to be ratcheting up his commitment to the circle of neoconservative intellectuals who helped spearhead President Bush's war policy, adding one of its most controversial proponents to his national security staff in a little-noticed move last month.

"David Wurmser, a neoconservative scholar known for his close ties to the Israeli right, was appointed in mid-September to join the team led by Cheney's national security adviser, Lewis "Scooter" Libby. In recent years Wurmser, who boasts a complex network of relationships to a variety of pro-Likud think tanks and activist groups, has frequently written articles arguing for a joint American-Israeli effort to undermine the Syrian regime.

"Wurmser's appointment sheds light on the prominent role played by Cheney and his national security staff in shaping foreign policy and coincides with the deterioration in the relations between Washington and Damascus. In recent months, Washington has accused Syria of sheltering Iraqi leaders, weapons and money and of allowing terrorists into Iraq. The administration backed Israel's recent bombing of a suspected terrorist training camp in Syria and dropped its objections to a congressional bill that grants the president the right to impose sanctions on Damascus...." [more]

posted by Major Barbara | 7:24 AM



"WASHINGTON (Reuters) - The U.S. government is paying Vice President Dick Cheney's former firm Halliburton ``enormous sums'' -- $2.65 a gallon -- for gasoline imported into Iraq from Kuwait, two lawmakers charged on Wednesday.

"Democrats Rep. Henry Waxman of California and Rep. John Dingell of Michigan said this gross overpayment was made worse by the fact that the U.S. government was turning around and reselling the gasoline in Iraq for four to 15 cents a gallon.

"In a letter of complaint sent to National Security Adviser Condoleezza Rice, the two lawmakers said experts they consulted think the cost of buying and transporting gasoline from Kuwait into Iraq should cost less than $1 a gallon.

"The Iraqi oil company SOMO is paying only 97 cents a gallon to import gasoline from Kuwait to Iraq, they said.

"Waxman added in a statement: ``We know that someone is getting rich importing gasoline into Iraq. What we don't know is who is making the money, Halliburton or the Kuwaitis?''..." [more]

posted by Major Barbara | 6:36 AM

Wednesday, October 29, 2003  

The Guardian:


David Teather in New York

"Halliburton, the oil services company formerly run by US vice president Dick Cheney, yesterday reported soaring revenues from its contracts to help rebuild Iraq.
The company said sales in the third quarter were 39% higher at $4.1bn (£2.5bn).

"Iraq-related work transformed the prospects of its Kellogg Brown & Root subsidiary. The division's total revenues increased by 80% to $2.3bn, of which $900m came from Iraq and profits grew fourfold to $49m, of which $34m was Iraq business.

"Boeing, the world's largest plane maker, and defence contractor Northrop Grumman also enjoyed a war dividend. Boeing raised its revenue guidance for the full year as military systems and aircraft offset the weakness in commercial jets. Northrop, maker of the B-2 stealth bomber, turned a $59m loss a year ago into a $184m profit.

"Halliburton has been at the centre of a storm over the award of post-war reconstruction contracts in Iraq.

"It was given a contract in Iraq without being forced into a competitive pitch, drawing close scrutiny of its links to the Bush administration. It has already secured business worth $1.3bn under that award and another $1.4bn in a separate, competitively bid contract to provide support services to troops...." [more]

* * *

Reader Chris K. observes that Halliburton's revenues would have been much higher still had it not been for asbestos litigation!

posted by Major Barbara | 7:38 PM

Donald Luskin is a self-described stalker.

So why is his lawyer dogging Atrios for using the same description?

The likely answer is that attorney Jeffrey Upton intends to use the legal process to unmask Atrios, who prizes his anonymity.

I, too, rely upon anonymity in publishing this blog, and can only guess that Atrios has received far more threats than I have. The freedom to write anonymously is essential not just to those of us who write, but to everyone in this democracy.

Upton's letter to Atrios is a very serious threat, to each and every one of us. Anonymous tracts helped create this country, and blogs are today's pamphlets. Tom Paine and Ben Franklin deserved no more freedom in the 18th century than bloggers do today.

Please write Mr. Luskin and Mr. Upton and tell them how you feel about threatening Atrios -- and the freedom this country is built upon.

posted by Major Barbara | 5:27 PM



Associated Press Writer

"In Iraq, private contractors do just about everything a soldier would do. They sling Spam in mess tents. They tote guns along base perimeters. They shoot. They get shot. Sometimes they get killed. And it's not just in Iraq, but around the world--in conflict zones from Liberia to Kosovo to Afghanistan--that the United States is putting hired help behind the front lines to ease the burden of its overworked armed forces.

"By paying civilians to handle military tasks, the Bush administration is freeing up U.S. troops to fight. But the use of contractors also hides the true costs of war.

"Their dead aren't added to official body counts. Their duties _ and profits--are hidden by close-mouthed executives who won't give details to Congress. And as their coffers and roles swell, companies are funneling earnings into political campaigns and gaining influence over military policy--even getting paid to recommend themselves for lucrative contracts...." [more]

posted by Major Barbara | 4:32 PM




"WASHINGTON (AP)--Citing new damage to Iraq's oil industry from saboteurs, the Bush administration Wednesday delayed its planned replacement of a lucrative no-bid contract that was awarded to Halliburton--Vice President Dick Cheney's former company.

"Halliburton, paid $1.59 billion so far, could stay on the job until early next year under the new schedule announced by the U.S. Army Corps of Engineers.

"The Corps, which supervises the reconstruction, already has received competitive bids for replacement contracts, but needs revised proposals that reflect the additional work that will be needed.

"The anticipated workload has increased because of ``continued sabotage ... plus the need to provide additional security,'' the Corps said.

"The new schedule calls for selection of the winning bidders in either December or January, although the Corps said it hoped to award the contracts in December.

"The Corps decided to divide Halliburton's work among separate contractors for the northern and southern oil fields. Each contract will have a minimum value of $500,000. As amended, the maximum cost for the northern oil fields contract will be $800 million and for the southern fields, $1.2 billion.

"Halliburton's KBR subsidiary has been performing the restoration work under a contract that evolved from emergency firefighting at Iraq's oil wells after Saddam Hussein was toppled, to restoration of Iraq's damaged oil industry.

"Democratic members of Congress have said the no-bid contract showed favoritism to the Houston company that Cheney led before he ran for vice president. They also accused Halliburton of gouging U.S. taxpayers by paying too much for emergency imports of oil from Iraq's neighbors.

"Cheney's office has said the vice president has no current ties to Halliburton and had nothing to do with the contract. He still receives deferred payments for services performed while he was employed by the company.

"Halliburton has said that its contracts were awarded by civil servants, adding the company performs dangerous support work for the military that allows U.S. forces to concentrate on their primary missions.

"More recently, the company denied any price gouging for imported gasoline products.

"``To allege that KBR is overcharging for this needed service insults the KBR employees who are performing this dangerous mission to help bring fuel to the people of Iraq. The drivers transporting the fuel face the real risk of being killed or wounded, and vehicles and contents being destroyed,'' Halliburton said."

posted by Major Barbara | 10:55 AM


Consultant News:

CSC's acquisition of DynCorp named 'Transaction of the Year'

"Computer Sciences Corporation received the Transaction of the Year Award for its acquisition of DynCorp at the inaugural Greater Washington Government Contractor Awards, held earlier this month in McLean, Virginia. CSC completed its acquisition of DynCorp on March 7, 2003....

"Accepting the award on the company's behalf, CSC President and Chief Operating Officer Mike Laphen said, "Although CSC has made more than 80 acquisitions in the past 10 years or so, DynCorp is by far our largest and a major testament to our continued commitment to federal clients. For more than 40 years -- and since 1946 for DynCorp -- the government has been at the core of our business, and we are extremely proud to be a part of this thriving government contracting community.""

* * *

Here's a little background on Dyncorp, courtesy of CorpWatch. It helps explain why CSC's acquisition of Dyncorp in March was such a brilliant move.

A snippet from the piece -- written only a month after the acquisition: "Half a world away from the bedlam in Iraq, just outside of Forth Worth, Texas, police recruiters are currently manning the phones for Dyncorp, a multi-billion dollar military Contractor. For Dyncorp the turmoil that is emerging in Iraq could mean a boom in business.

"When the area is safe, we will go in. Watch CNN. In the meantime fax us a resume if you want a job," Homer Newman, a Dyncorp recruiter told Corpwatch...."

What a well-timed acquisition!


posted by Major Barbara | 5:59 AM



"MOSCOW -- Russia on Tuesday resumed efforts at reviving multibillion-dollar oil deals in Iraq, on hold since the U.S.-led invasion, by urging new Iraqi oil minister Ibrahim Bahr al-Uloum to visit Moscow.

"After opposing the U.S.-led military campaign that ousted Iraqi leader Saddam Hussein this spring, Russia risks losing out to U.S. and other Western companies.

"Russian firms signed contracts worth about $4 billion with Saddam's government to drill oil wells, deliver equipment and develop Iraq's massive oil reserves, second only in size to Saudi Arabia's.

"A Russian Energy Ministry official, requesting anonymity, said officials were was seeking to understand whether previous contracts were still considered valid.

""We need to discuss at least six big projects, including those of Lukoil. We still believe that these contracts have been signed with the legitimate authorities and see no reason why they should not be respected."

"The key deal is a $3.7 billion contract held for years by Russian oil giant Lukoil to develop the huge West Qurna field. United Nations sanctions in the Gulf War barred the companies from implementing the deals by working in Iraq.

"Saddam scrapped the contract last year after Baghdad got wind of a Lukoil approach to Iraqi opposition leaders to allow the Russian company to keep the field should Saddam be overthrown."

posted by Major Barbara | 5:11 AM

Tuesday, October 28, 2003  



By Andrea Shalal-Esa

"WASHINGTON, Oct 28 (Reuters) - A study released on Tuesday raises questions about a U.S. Air Force proposal to give Boeing Co. a $5.3 billion contract to maintain 100 767 refueling tankers, the latest congressional report to criticize the multibillion-dollar lease proposal.

"Sen. John McCain, chairman of the Senate Commerce Committee and a vocal critic of the $24.3 billion lease and buy deal, released the Congressional Research Service report challenging the Air Force's assertion that Boeing is "uniquely qualified" to provide initial maintenance support.

"CRS said many other companies routinely serviced 767s, and Boeing was not "the only, or even the largest, organization capable of handling the maintenance needs of the 767."

"Air Force Secretary James Roche told the Senate Armed Services Committee in a letter dated Oct. 9 that it made sense to give the maintenance contract to Boeing since much of the 767 engineering data was proprietary. But CRS said much of this data could be licensed to a third party to handle maintenance.

"Lawmakers have raised many questions about the proposed lease deal, including a Congressional Budget Office (CBO) estimate that it will cost $6.7 billion more than an outright purchase.

"Some have also been irked by the Air Force's decision to hand Boeing more than $6 billion in additional revenue from maintenance and training contracts, without a competitive bid.

"CBO concluded in a recent study that the Air Force was paying two to three times too much for the maintenance contract...." [more]

posted by Major Barbara | 8:36 PM



"ANCHORAGE - A new political watchdog group has filed an ethics complaint against U.S. Sen. Ted Stevens over his acceptance of nearly $22,000 in campaign contributions from Boeing executives in 2001.

"The contribution came a month before Stevens tucked a rider in an appropriations bill to allow the Air Force to lease 100 Boeing 767s in a deal worth more than $20 billion.

"The director of Washington, D.C.-based Citizens for Responsibility and Ethics said it was unimportant to determine whether the campaign contributions prompted Stevens to support the deal.

""I would say that it's wrong," director Melanie Sloan said. "It's got the appearance of conflicts all over it."..." [more]

* * *

Original story by Liz Ruskin, Anchorage Daily News.

posted by Major Barbara | 1:11 PM

National Journal:


By Sydney J. Freedberg Jr.

"Ahmed Ibrahim, a general in Iraq's reformed police force, was talking about the gunfight he had gotten into some weeks earlier with members of the anti-American fedayeen. "They shot me about two months ago," Ibrahim recalled. "But in seven days, I came back to my job." Ibrahim, who is now a deputy interior minister, had a warning for the guerrillas who had winged him—those holdouts of the same regime that had, under Saddam Hussein's rule, jailed and tortured him in the 1980s: "If you want to kill the tiger, you must kill him. But if you make a mistake and merely injure the tiger, that means the tiger will kill you."

"Ibrahim is defiant—and fortunate. For the past five months, U.S. soldiers have been dying in Iraq in a steady drumbeat, but often overlooked is that many Iraqis have been dying at the Americans' sides as well. The Iraqis are "taking on the hard missions; they are fighting and taking casualties with us," Deputy Defense Secretary Paul Wolfowitz, one of the ideological architects of the invasion, told the Senate Armed Services Committee on Sept. 9. "We have gone from no Iraqis fighting with us when Baghdad fell to currently more than 55,000."

"Indeed, since major combat ended on May 1, Americans and their coalition partners have been working quickly to set up five indigenous Iraqi forces to put an "Iraqi face" on the occupation and its police and security functions. This effort is massive and ongoing, and will take a couple of more years to complete. And it doesn't always go smoothly. Even while they help U.S. forces fight guerrillas, criminals, and terrorists (the lines between them are often blurred), many of these Iraqis are ambivalent about America and divided in their loyalties...." [more]

posted by Major Barbara | 6:40 AM



"UNITED NATIONS - Iraq's U.S. administration, under fire for secrecy in its handling of Iraqi oil money, released figures Monday showing proceeds of $1.4 billion from oil sales since Saddam Hussein's ouster.

"The U.S.-led Coalition Provisional Authority said a total of $3 billion had been deposited in its Development Fund for Iraq, authorized by the U.N. Security Council last May to hold the oil revenues and other money earmarked for reconstruction.

"About $666 million had been spent from the fund, leaving a balance of $2.4 billion as of last Saturday, the authority said in a new posting at, its Web site.

"Some Security Council diplomats have criticized the authority for shrouding the fund in secrecy since it first was set up in May - as an account at the U.S. Federal Reserve Bank of New York, not at the Central Bank of Iraq, as specified by a council resolution.

"Christian Aid, a prominent British aid agency, accused the authority last week of failing to account for $4 billion to $5 billion in oil revenues and other money meant to go toward rebuilding the country.

"Christian Aid said the authority had not publicly detailed cash flows since Saddam Hussein's ouster in April."

posted by Major Barbara | 6:29 AM


Bechtel Gets G.O.P. Support for a Potential Tax Break


"WASHINGTON, Oct. 27 - The Bechtel Corporation, which hired a former commissioner of the Internal Revenue Service to lobby on its behalf, has won support from House Republicans for what could be a generous new tax break.

"The tax break, which will be taken up on Tuesday by the House Ways and Means Committee, was originally intended to help shore up factory jobs in the United States by reducing the corporate tax rate for domestic manufacturers to 32 percent from 35 percent.

"But the bill now includes a provision sought by Bechtel, an engineering conglomerate that is also one of the biggest recipients of government contracts for Iraqi reconstruction, that would reduce taxes on "architectural and engineering services."

"The new provision would also benefit the Halliburton Company, whose previous chief executive was Vice President Dick Cheney and which now has a Pentagon contract to repair the Iraqi oil infrastructure. The Fluor Corporation, which recently won a $102 million contract to work on Iraq's electrical system, would receive a tax reduction as well...." [more]

posted by Major Barbara | 6:25 AM

Monday, October 27, 2003  



By Sue Pleming

"WASHINGTON, Oct 27 (Reuters) - U.S. contractors helping to rebuild Iraq weighed the risks of operating in such a hostile environment on Monday, after a string of deadly coordinated attacks in Baghdad.

"Suicide bombers struck four times in Baghdad on Monday, killing 35 people and wounding 230 in attacks that included one on the Red Cross. On Sunday, rockets pounded a hotel where a top Pentagon official was staying, killing a U.S. colonel and injuring 17 others.

"Government contractors, many of them with hundreds of millions of dollars in business at stake, said publicly they were committed to Iraq but privately voiced concern over the long term and said they wanted to keep a very low profile.

""We are reluctant to become targets and so even to announce that we are staying there tells people that we are there on the ground and puts us at risk," said one U.S. contractor, who asked not to be named...." [more]

posted by Major Barbara | 1:46 PM



Sniper fire and looting are part of the risks on the job for Bechtel employees, whose tasks include reopening a port, restoring a sewage facility and repairing 1,200 schools.

By David Streitfeld, Times Staff Writer

"BAGHDAD — Tom Rodenfels looks a little silly, wearing a combat helmet and body armor in the middle of a decrepit school courtyard. He's surrounded by a dozen Iraqi laborers, none of them clad in much more than coveralls.

"He seems less ridiculous when the shooting starts.

"The gunfire is coming from somewhere beyond a trash-strewn field, with at least three people firing. They might be guests at a wedding or mourners at a funeral or guerrillas shooting at the U.S. Army. Whoever it is, they're close.

"Rodenfels' hired guards, two British ex-soldiers sporting MP-5 machine guns, take up positions at the edge of the construction site. But the Bechtel Group engineer barely notices. "Just another day at the office," he says.

"If you're hired to rebuild Iraq, you can't let gunfire stop you — even if you're the target. You're not supposed to worry about being stoned by the locals or having your work looted, sometimes while you're still doing it. (One Bechtel-rebuilt school was even looted by its teachers.)

"Then there are the accusations that your expenses are too high, that Iraqis could do your work cheaper and better, that you're too slow or that your company got this job only because of its close ties to the White House.

"So it goes for the engineers of Bechtel, a San Francisco company accustomed to tackling enormous projects, but nothing quite like this...." [more]

posted by Major Barbara | 9:21 AM


By Newsweek

"The human and financial costs of the war in Iraq-symbolized by death-a-day news reports and President George W. Bush's $87 billion funding request-are beginning to worry administration insiders.

""If we don't get Iraq right in time," fretted one National Security Council official, "we could lose the election."

"Republican Sen. John McCain, who Bush aides hope will campaign for the president in the 2004 election, for the first time compares the situation in Iraq to Vietnam, where he survived six years of wartime imprisonment, and openly distances himself from Bush's war strategy.

""This is the first time that I have seen a parallel to Vietnam," McCain tells Newsweek this week, "in terms of information that the administration is putting out versus the actual situation on the ground. I'm not saying the situation in Iraq now is as bad as Vietnam. But we have a problem in the Sunni Triangle and we should face up to it and tell the American people about it."

"Also reminiscent of Vietnam, McCain says, was the administration's reluctance to deploy forces with the urgency required for the quickest victory. "I think we can be OK, but time is not on our side ... If we don't succeed more rapidly, the challenges grow greater." For Bush, the political challenges are growing just as rapidly. Having made one of the most fateful decisions in the modern presidency -- to try to remake the Middle East, starting with Iraq -- he has no choice but to press ahead with his request for the $87 billion, even if it is unpopular, reports Chief Political Correspondent Howard Fineman.

"Six months ago, the Bush administration decided to cut corners on normal bidding procedures and hand over large postwar reconstruction contracts to traditional defense contractors on a limited-bid or no-bid basis. It bypassed the Iraqis and didn't worry terribly much about accountability to Congress. The plan was for a "blitzkrieg" reconstruction. But by sacrificing accountability for speed, America is not achieving either very well right now report Correspondent-at-Large Rod Nordland and Senior Editor Michael Hirsh.

"Bechtel, the U.S. construction giant, has the prime contract, now worth over $1 billion, for restoring Iraq's infrastructure. That includes Daura, Baghdad's largest power plant, which should supply one third the city's generating capacity but today, six months into the U.S. occupation, is producing only ten percent. And Daura offers a small window into problems that have become all too typical of America's postwar morass in Iraq, a Newsweek investigation shows...." [more]

posted by Major Barbara | 6:08 AM

Sunday, October 26, 2003  



It’s the boldest reconstruction project since the Marshall Plan. And we cannot afford to fail. But where are the billions really going?

By Rod Nordland
and Michael Hirsh

"Nov. 3 issue — Helmut Doll waits. And waits. Doll, the German site manager for Babcock Power, a subcontractor of Siemens, is hoping for the arrival of Bechtel engineers at the Daura power plant, Baghdad’s largest. U.S. construction giant Bechtel has the prime contract, now worth about $1 billion, for restoring Iraq’s infrastructure. That includes Daura, which should supply one third of the city’s generating capacity but today, six months into the U.S. occupation, is producing only 10 percent. “Nobody is working on the turbine,” explains Doll. “Bechtel only came and took photos. We can’t judge Bechtel’s work progress because they’re not here.” Questioned, Bechtel spokesman Howard Menaker says Iraq’s power has to be viewed as “a holistic system”—generation doesn’t have to come from a particular plant—and in recent weeks Bechtel has sent engineers to the site. He also blames the delay on more stringent—or finicky, depending on your point of view—American standards. Menaker said the Daura turbine is “covered with friable asbestos and is right now a hazardous work site.” The company says it has just completed “a protocol for asbestos abatement.”

"STILL, IT’S NOT easy determining why the biggest power plant in Iraq’s largest city seems to be such a low priority. Baghdad is still beset by blackouts, and so much of America’s success or failure depends on power: the economy can’t recover with-out it. The next logical place to ask is the U.S. Agency for International Development, which gave Bechtel the contract last April. Questioned by NEWSWEEK about Daura, USAID chief Andrew Natsios referred to a priority list drawn up by a coordinating committee under the Coalition Provisional Authority—the chief occupying power—and said he didn’t know where Daura was on it. His aide said the CPA would know. No, Natsios said, he thought Bechtel would know. But Bechtel’s Menaker responded: “We perform the work tasked to us by USAID. We don’t make decisions on priorities. USAID and CPA make those decisions.” Some CPA officials concede privately that the problem stems from the lack of preparation before the war. “It always comes back to the same thing: no plan,” says one CPA staffer...." [more]

posted by Major Barbara | 11:22 AM

Baltimore Sun:


Government turns to California company for variety of sensitive jobs

By Scott Shane
Sun Staff

"When the Pentagon wanted to assemble a team of Iraqi exiles to assist in restoring postwar Iraq, it gave the job to a company with a name not chosen for flashy marketing: Science Applications International Corp.

"When Gov. Robert L. Ehrlich Jr. wanted experts to assess alleged security problems with electronic voting machines Maryland is buying, he, too, turned to SAIC.

"The National Security Agency signed a contract with SAIC last year to overhaul its top-secret eavesdropping systems. The Army hired the company to support the delicate task of destroying old chemical weapons at Aberdeen Proving Ground. The National Cancer Institute relies on SAIC to help run its research facility in Frederick.

"And this month, when the Transportation Security Administration decided it needed help disposing of all those nail clippers confiscated from air travelers, it gave the multimillion-dollar contract to SAIC.

"While SAIC is dwarfed by such defense giants as Bethesda-based Lockheed Martin, no contractor does a more mind-boggling variety of jobs for the government. None is entrusted with more sensitive tasks. Yet few Americans have heard of the San Diego-based company, whose forgettable name and low public profile have long been a draw for publicity--shy intelligence agencies.

"SAIC is the 34-year-old brainchild of one man, physicist J. Robert Beyster, who will step down as chief executive officer next month, and its structure as an employee-owned, decentralized company is unique. But its role as on-call contractor for the Washington bureaucracy illustrates the benefits and controversies of contracting at a time when the private sector handles much of government's business and officials move routinely from agencies to contractors and back.

""We're in an era when everything from garbage collection to prison systems to public schools are being turned over the private companies," says P.W. Singer, a Brookings Institution scholar and author of Corporate Warriors: The Rise of the Privatized Military Industry. "The privatization wave is immense and often shocking."..." [more]

posted by Major Barbara | 6:42 AM

Saturday, October 25, 2003  


Much work to do before Iraq can cash in on reserves

Verne Kopytoff, Chronicle Staff Writer

"Iraq's oil pipelines, the arteries of that nation's wounded economy, are regularly blown up by sabotage. Much of its pumping equipment is decrepit or outdated, a consequence of years of neglect under Saddam Hussein when there wasn't money for thorough repair jobs. These problems must be resolved before Iraq can restore its oil production to prewar levels of 2.8 million barrels per day. And that day is looking further off, according to many analysts, despite this week's prediction by Iraq's interim oil ministry that production will reach its prewar threshold by March.

"The interim oil minister, Thamir al-Ghadban, told a conference of oil executives in Geneva this week that Iraq's oil industry would be largely repaired by early spring. He added that the nation will also open four new oil fields in 2004, adding 340,000 barrels to the daily production.

"Citing widespread looting, electricity outages and the possibility of more sabotage, analysts were skeptical that Iraq can meet the production deadline. Falling short would mean billions of dollars in lost revenue for Iraq's rebuilding, almost all of which is financed by the United States...." [more]

posted by Major Barbara | 7:01 AM

Friday, October 24, 2003  



Associated Press Writer

October 24, 2003, 5:02 PM EDT

"WASHINGTON -- The president of military contractor Halliburton has asked employees to join a "Defending Our Company" campaign by writing to newspapers and lawmakers to counter criticism of the firm's no-bid contract in Iraq.

"Dave Lesar said in the Oct. 17 memo that he is offended by "those who are distorting our efforts" to restore Iraq's oil industry and provide other services to the U.S. military there.

"He cautioned workers to "be positive," adding, "We should avoid stooping to our critics' level of dialogue, no matter how tempting that may be."..." [more]

posted by Major Barbara | 9:28 PM


Commerce Secretary says Iraq has potential

By Martin Crutsinger, Associated Press

"WASHINGTON -- Oil production in Iraq has the potential to hit 5 million to 6 million barrels per day in the next three to four years, triple the current output, Commerce Secretary Don Evans said Thursday in an interview with The Associated Press.
The estimate was more optimistic than those by Iraqi oil officials.

"Evans, just back from a visit to Iraq, said he was impressed with the free-market spirit and the number of foreign companies eager to set up operations even in the face of continuing security risks.

""I went to Iraq expecting to find a frightening environment, a feeling of desperation. I found anything but that," Evans said.

"Evans' visit to Baghdad, where he presided over the unveiling of the country's new currency, was part of an administration campaign to counteract increased criticism of President Bush's Iraq policy.

"As evidence of Iraq's potential, Evans cited the country's oil reserves, second largest in the world behind Saudi Arabia.

""Are there vast resources that would cause somebody to think that over the next three to four years they could get oil production up to 5 to 6 million barrels a day? I think that is realistic to think in those terms," said Evans, an oil company executive in Midland, Texas, for more than 25 years before joining the Bush Cabinet in 2001.

"Iraq's oil ministry has a long-term target of producing 6 million barrels daily by 2014. The ministry's chief executive, Thamir al-Ghadban, told potential foreign investors this week that he hoped a strong recovery would allow the country to reach that target much sooner.

"A study produced by a U.S. working group for the Pentagon earlier this year said it could take up to three years to return Iraq production to its pre-1990 levels of 3.5 million barrels per day and that could happen only after billions of dollars in repairs.

"This estimate ran counter to optimistic administration forecasts that much of Iraq's reconstruction could be financed by oil sales.

"While Evans said Iraq produced 2 million barrels of oil one day during his trip, al-Ghadban said that the goal for October was 1.5 million barrels daily and that that would be difficult to meet.... [more]

posted by Major Barbara | 8:16 AM

Thursday, October 23, 2003  

Christian Aid Report:

Transition and transparency in post-war Iraq

"The humanitarian situation in Iraq is still critical and there are plenty of immediate needs on which money from international donors can be spent. As this Christian Aid report demonstrates, the widespread assumption that reconstruction could be paid for entirely by Iraqi oil money is a false one. Due, not least, to continuing insecurity, Iraq does not produce enough oil to pay for its immediate needs.

"What this report shockingly reveals, however, is that the billions of dollars of oil money that has already been transferred to the US-controlled Coalition Provisional Authority (CPA) has effectively disappeared into a financial black hole. For all the talk of freedom and democracy for the Iraqi people – before, during and after the war which toppled Saddam Hussein – there is no way of knowing how the vast majority of this money has been spent...." [more]

posted by Major Barbara | 3:21 PM

Deutsche Presse-Agentur:


"WASHINGTON/BAGHDAD - Rebuilding Iraq promises to be a business opportunity worth billions of dollars, and US firms are leading the pack.

"Companies from countries that opposed the US-led war — especially Germany and France — have few short-and medium-term prospects to capture contracts in Iraq, according to diplomats in Baghdad.

"Iraq's energy infrastructure was already dilapidated as a result of neglect during Saddam Hussein's rule, and supporters of the old regime have frequently targeted the vital petroleum sector for sabotage during the 6-month-old occupation. Restoring the oil industry to full capacity and reliability will take several years and investments of billions of dollars.

"According to US government data, Iraq sits atop more than 11 percent of the world's proven oil reserves, second only to neighbouring Saudi Arabia.

"Yet, Iraq currently relies on petrol imports from Turkey because domestic refineries are in such disrepair, which ordinary Iraqis find humiliating. In Iraq, many people suspect that their most important industry will be restored to suit US interests.

"In Fallujah and other hotbeds of armed resistance to the occupation, Iraqis say over and over: We are a wealthy country, and the Americans are only here to steal our riches.

"US troops and jubilant Iraqis toppled statues of Saddam on April 9 in Baghdad, just as the regime was evaporating. Days earlier, Washington began arranging for urgent work inside Iraq — and issued the early contracts exclusively to US firms with security clearances.

"With a foot in the door already, US businesses are likely to continue to dominate projects inside Iraq for the foreseeable future. Trade experts have observed that many major contracts appear to have been tailor-made for specific US bidders...." [more]

posted by Major Barbara | 9:17 AM

Asia Times:


By Herbert Docena

"MADRID - In London on October 13, an investors' conference entitled "Doing Business in Iraq: Kickstarting the Private Sector" was agog with reports that McDonald's, among other corporations, may begin selling burgers and fries in Iraq by next year. Attracting up to 145 multinational prospectors, the London conference was held less than a month after the United States announced its economic masterplan for Iraq, a blueprint which The Economist heralded as a "capitalist dream" that fulfills the "wish list of international investors".

"Whether Ronald McDonald cuts the ribbon in time and makes the dream come true, however, will depend to a large extent on the outcome of a US-convened donor's conference that was scheduled to open in Madrid on Thursday.

"As the US struggles against popular resistance in Baghdad, it battles its cash-flow woes in the balmy Spanish capital. Behind closed doors at the Campo de las Naciones, representatives of creditor countries and multilateral financial institutions will meet for two days to determine how and when McDonald's and other multinational corporations will finally be able to open their doors in Iraq.

"In exchange for allowing the entry of their corporations to Iraq, rich creditor nations will be pledging hundreds of millions of dollars to finance the occupation in order to make sure that it goes on unhampered - long enough for the Golden Arches to rise by the Tigris and the Euphrates.

"Those who will pay the price for the burgers and fries, however, will have no seat at the table...." [more]

posted by Major Barbara | 6:52 AM



"LONDON (AP) -- The U.S.-run body governing Iraq has failed to account for billions of dollars allocated for rebuilding the country, a prominent British aid group charged Thursday.

"Christian Aid said in its report that the Coalition Provisional Authority had only explained publicly how it had spent $1 billion of the $5 billion it has been given for Iraqi development.

"The funds include $1 billion from the former United Nations Oil for Food program, $2.5 billion in assets seized from Saddam Hussein's former regime an $1.5 billion in oil revenues, the group said.

""This is Iraqi money," said Roger Riddell, Christian Aid's international director. "The people of Iraq must know where it is going and it should be used for the benefit of all the country's people, particularly the poorest."

"In Baghdad, the provisional authority said it was "unequivocally committed to maintaining the highest standards of transparency and accountability in stewarding Iraqi funds."

"It said it was "adhering fully" to the United Nations resolution which established it and was working with international agencies to set up a monitoring board. Once it is established, the board will audit all the Development Fund of Iraq's transactions, the authority said.

"Riddell said the provisional authority's alleged failure to account for the funds was "little short of scandalous" and urged Britain's government to demand full disclosure of the authority's spending...." [more]

posted by Major Barbara | 6:48 AM

Wednesday, October 22, 2003  


By Steve Schifferes
BBC News Online economics reporter

Security is still tight in Iraq

"Even before the battle raged in the field, the struggle over who was to run the reconstruction of Iraq was being waged in Washington.

"And the controversy over which companies received contracts to rebuild the country has damaged the administration.

"It was only shortly before the outbreak of hostilities that the question of who would run post-war Iraq was resolved, with the establishment of the Pentagon's office of civilian reconstruction, despite strenuous objections from the State Department, which traditionally oversees such efforts.

"But soon after major combat operations ended, it became clear that the Pentagon had based its planning for reconstruction on the last Gulf war...." [more]

posted by Major Barbara | 9:05 PM


Country plans to resume exports via northern pipeline in Nov., but expects attacks to continue.

"BAGHDAD (Reuters) - Iraq aims to resume post-war exports from its northern crude oil pipeline to Turkey in early November, but sabotage still threatens to undermine Baghdad's efforts, an Iraqi oil ministry source said Wednesday.

""The plan is to resume Kirkuk exports in the first week of November after storing five million barrels of oil in Turkey," the ministry source told Reuters. "But these are just plans. I don't think the pipeline can function in the foreseeable future because the sabotage will just continue."..." [more]

posted by Major Barbara | 6:42 AM

Boston Globe:

Complaint to GAO 1st against authority

By Ross Kerber, Globe Staff

"An international consortium has asked a federal agency to intervene in a contract dispute in Iraq, claiming that its bid to offer cellphone service was rejected by the US-appointed Coalition Provisional Authority in Baghdad without any stated grounds and in violation of federal bidding law.

"The complaint to the General Accounting Office by Turkcell, listing two American companies that were prospective partners, is the first against any award by the authority, said Daniel I. Gordon, a GAO lawyer.

"The agency, a nonpartisan auditing arm of Congress, has oversight over federal procurement.

"The bid protest may deepen scrutiny of contracts and licenses awarded by the authority, which is headed by L. Paul Bremer III, the US administrator, and includes a number of provisional Iraqi ministers.

"Separately, a GAO official said yesterday the agency has opened a review into whether the Bush administration has followed federal procurement rules in awarding work in Iraq...." [more]

posted by Major Barbara | 6:37 AM


From Gaza to Iraq, military contractors are taking over more and more jobs from the military -- a practice that is proving wildly profitable and terribly perilous.

By Julian Brookes

"President Bush, Secretary of State Colin Powell, and dozens of pundits reacted with outrage last week when a U.S. diplomatic convoy traveling through Gaza was hit by a bomb attack, claiming the lives of three security guards. What few bothered to mention was that the victims -- John Branchizio, Mark Parson, and John Linde, Jr. -- weren't U.S. soldiers or State Department staff. They were employees of Dyncorp, a Virginia-based defense contractor hired to provide security to U.S. diplomats in Israel.

"State Department officials downplayed that fact after the attack, referring to the slain security men as "part of the Embassy and part of the team." Still, the attack in Gaza highlighted a growing trend in federal contracting -- Washington's reliance on "private military companies" to perform tasks once reserved for the military.

"Dyncorp's contract in Israel is just one small part of a diverse portfolio that makes the Falls Church, Virginia company the tenth largest government contractor in the nation. Dyncorp is also busy in Iraq, training a new Iraqi police force, and in Afghanistan, providing security to President Hamid Karzai.

"Washington has long outsourced work to private firms. What's new is the size and variety of contracts being doled out, particularly by the Pentagon. Private military companies now do more than simply build airplanes -- they maintain those planes on the battlefield and even fly them; construct detention camps in Guantanamo Bay, pilot armed reconnaissance planes and helicopter gunships to eradicate coca crops in Colombia; and operate the intelligence and communications systems at the U.S. Northern Command in Colorado -- work that brings the various companies an estimated $100 billion a year.

"That figure will have to be revised upward this year, thanks to the occupation of Iraq, which is proving a bonanza for U.S. private military companies like Dyncorp, Vinnell, and of course, Dick Cheney's Halliburton...." [more]

posted by Major Barbara | 6:32 AM

Tuesday, October 21, 2003  



Associated Press Writer

"WASHINGTON (AP)--Democratic lawmakers released a letter from Iraq's national oil company Tuesday confirming it pays far less to import gasoline than Halliburton, the Texas contractor that buys petroleum goods for Iraqis with U.S. government money.

"Halliburton said it has no choice but to charge more, since its contract with the U.S. Army Corps of Engineers requires only short-term deals.

"Iraq's State Oil Marketing Organization said it pays between 90 and 98 cents per gallon to buy oil from neighboring countries and transport it to different locations in Iraq.

"Halliburton charges the government $1.59 and then receives a markup that could boost the price to $1.62 to $1.70, according to Democratic Reps. Henry Waxman of California and John Dingell of Michigan, who released information supplied by the Iraqi company.

"Waxman and Dingell have persistently criticized Halliburton's role in Iraq, contending it is gouging the U.S. Treasury while earning profits from a no-bid contract to restore the country's oil industry...." [more]

* * *

Here's Rep. Waxman's latest letter to Lt. Gen. Robert B. Flowers.

posted by Major Barbara | 5:41 PM

Houston Business Journal:


"Halliburton Co. said it takes only a small profit from fuels sale to Iraq as part of its denial of accusations from U.S. lawmakers that it overcharged the United States for the fuel it delivers to the war-torn country, Reuters reported on Tuesday.

"According to Reuters, Thomas Crum, chief operating officer for the Middle East Region of Halliburton unit Kellogg Brown & Root Government Operations, told a conference on Monday that Halliburton delivers gasoline and other fuels into Iraq at "actual cost and with very low margin."

"KBR has a contract with the U.S. Army Corps of Engineers to rebuild Iraq's oil sector. This has included importing fuel products which are in short supply in the oil-rich nation.

"Reuters reported that U.S. Rep. Henry Waxman, D-California, said last week army documents showed that as of Sept. 18, the United States paid Halliburton $300 million to import about 190 million gallons of gasoline into Iraq.

"Halliburton billed the government an average price of $1.59 per gallon, which included a transport cost of about 90 cents per gallon between Kuwait and Iraq, according to Waxman, who called the charges "highway robbery."

"But Crum, who spoke at an American Petroleum Institute conference in New Orleans, cited the constant threat and risks faced by KBR employees in getting fuel into the country, where violence is still common. He also noted that several KBR employees had been killed.

"In a statement released on Oct. 17, Halliburton said the contract allows for billing "solely for costs incurred plus a 2 percent fee."

"Crum added that Halliburton has nothing to do with the below-cost prices set for Iraqis of less than a dime for a gallon of gasoline...." [more]

posted by Major Barbara | 2:01 PM


By Sue Pleming

"WASHINGTON, Oct. 21 — A leading Democratic senator said on Tuesday he had asked the General Accounting Office, the U.S. Congress's investigative arm, to audit billions of dollars in contracts awarded to U.S. firms to rebuild Iraq.

"Michigan Sen. Carl Levin released a copy of a letter he sent to the GAO in which he voiced concern that ''important safeguards'' had been ignored and excessive rates charged for work done under contracts in Iraq paid for by U.S. taxpayers.

"''We need an independent audit of these issues to ensure that the taxpayers' hard-earned money is not being wasted,'' said Levin, the ranking Democrat on the Senate Armed Services Committee.

"Most contracts for Iraq have been issued by the U.S. Agency for International Development or the Army Corps of Engineers, whose main contractor is a subsidiary of Texas company Halliburton, once run by Vice President Dick Cheney.

"Both of these government departments have come under heavy criticism over how contracts were handed out to rebuild Iraq, particularly ones given without any competition. Both departments say they have been fair in awarding contracts.

"Halliburton's Kellogg Brown & Root has so far clocked up more than $1.5 billion from its no-competition contract issued in March to rebuild Iraq's oil industry and Levin said this deal was the most worrying of all to him.

"Levin asked the GAO to look at, among other issues, how the contracts were awarded, profit margins, how much work was given to subcontractors and to what extent the U.S.-led authority in Iraq relied upon expensive consultants...." [more]

posted by Major Barbara | 12:59 PM

Asia Times Online:


By Jim Lobe

"WASHINGTON - A neo-conservative strategist who has long called for the United States and Israel to work together to "roll back" the Ba'ath-led government in Syria, has been quietly appointed as a Middle East adviser to Vice President Dick Cheney.

"David Wurmser [Google!], who had been working for the undersecretary of state for arms control and international security, John Bolton, joined Cheney's staff under its powerful national security director, I Lewis "Scooter" Libby, in mid-September, according to Cheney's office.

"The move is significant, not only because Cheney is seen increasingly as the dominant foreign policy influence on President George W Bush, but also because it adds to the notion that neo-conservatives remain a formidable force under Bush, despite the sharp plunge in public confidence in Bush's handling of post-war Iraq resulting from the faulty assumptions propagated by the neo-cons before the war.

"Given the recent intensification of tensions between Washington and Damascus - touched off by this month's US veto of a United Nations Security Council resolution deploring an Israeli air attack on an alleged Palestinian camp outside Damascus - Wurmser's rise takes on added significance.

"The move also follows House of Representatives' approval of a bill that would impose new economic and diplomatic sanctions against Syria.

"Wurmser's status as a favored protege of arch-hawk and former Defense Policy Board chairman Richard Perle at the American Enterprise Institute (AEI) also speaks loudly to Middle East specialists, who note Perle's long-time close association with Cheney, Pentagon chief Donald Rumsfeld and Rumsfeld's chief deputy Paul Wolfowitz.

"Wolfowitz was the first senior administration official to suggest that Washington might take action against Syria amid reports in April that Damascus was sheltering senior Iraqi leaders and weapons of mass destruction in the wake of the US invasion.

""There's got to be a change in Syria," Wolfowitz said, accusing the government of President Bashar Assad of "extreme ruthlessness". Rumsfeld subsequently accused Syria of permitting Islamic "jihadis" to infiltrate Iraq to fight US troops...." [more] [link added]

posted by Major Barbara | 8:47 AM

Business Day SA:


"WASHINGTON - US companies have received the lion's share of contracts during the first six months of rebuilding Iraq, as countries prepare for a donors conference in Madrid this week designed to raise billions of dollars to finance other development projects.

"The first bidding proposals were unveiled last spring by the US Agency for International Development (USAID) and the US Army Corps of Engineers, the two organisations in charge of distributing contracts for priority work, following the fall of the Iraqi regime of Saddam Hussein.

"According to an official account published at the end of September by the USAID, these contracts were primarily awarded to US companies. Construction giant Bechtel received, for example, 10 of them.

""That is US law," argued Ellen Jansen, spokeswoman for the USAID. "Under federal acquisition regulations, we are required to issue the prime contracts to American big companies essentially because these are US taxpayers' dollars."

""However, the prime contractors have the ability to issue subcontracts for any company located in any country of the world that is not on the terror list," she added.

"At the same time, certain offers have been short-circuited given the urgency of the situation, and foreign companies found themselves excluded from the contest...." [more]

* * *

Financial Times:


By James Politi

"George Bush, former US president, is retiring from his position as senior adviser to the Carlyle Group, officials at the well-connected Washington-based private equity firm said yesterday.

"Mr Bush, whose son George W Bush is the current US president, had been a senior adviser to Carlyle's Asia Advisory Board since 1999. Carlyle offered no particular explanation for the retirement of Mr Bush, other than his age and desire to move on to other endeavours.

"Mr Bush was one of a handful of former politicians to occupy high-level positions at Carlyle. Others include James Baker, secretary of state in Mr Bush's administration between 1989 and 1993, John Major, a former conservative British prime minister, and Frank Carlucci, defence secretary under Ronald Reagan. James Politi, New York."

posted by Major Barbara | 6:43 AM




"GENEVA, Oct. 20 - How well is the Iraqi oil industry faring? It depends on whom you listen to: the Iraqi oil ministry, or the Iraqi oil ministry.

"Speaking before executives from the world's largest oil companies at a conference here on Monday, Thamir Ghadhban, the chief executive of the ministry, reported that the industry's revival was going far better than predicted, putting it on track to be pumping as much oil by April as before the war.

"Minutes later, Falah al-Khawaja, one of the ministry's leading economists, told the executives, all of them hoping to cash in some day on Iraq's oil bounty, that he would be surprised if Iraq reached its prewar output level before next summer. Maybe only next fall.

"Whom to believe? Who knows?..." [more]

posted by Major Barbara | 6:30 AM

Houston Chronicle:

Fuel estimates called too pricey


"WASHINGTON -- The U.S.-controlled government in Baghdad appears to be overestimating the cost of purchasing fuel for Iraq, the Congressional Research Service told lawmakers.

"The Coalition Provisional Government, which is importing gasoline, cooking oil and other refined products into oil-rich Iraq to meet domestic needs, has requested $900.6 million for 2004 to purchase fuels.

"Last week, key Democratic lawmakers accused Houston-based Halliburton Co. subsidiary KBR, formerly known as Kellogg Brown & Root, of overcharging to truck fuel from Kuwait into Baghdad. KBR is the U.S. Army Corps of Engineers' prime contractor responsible for repairing the oil sector in Iraq.

"Energy policy experts at the Congressional Research Service examined the request and calculated the provisional authority could obtain the fuel for between $652 million and $704 million.

""If the request is only for commodity fuel purchase at spot prices, it would seem" that the provisional government is seeking "substantially more money than is called for by current fuel prices in the Persian Gulf trading area," the energy policy experts noted in a report to the Senate Energy Committee...." [more]

posted by Major Barbara | 6:19 AM

Monday, October 20, 2003  



By Sue Pleming and F. Brinley Bruton

"WASHINGTON/LONDON, Oct 20 (Reuters) - The United States could delay awarding Iraq oil field contracts worth up to $1 billion to check if firms bidding can meet criteria required, a source close to the contracts told Reuters on Monday.

"An announcement by the U.S. Army Corps of Engineers, scheduled to come in mid-October, would now most probably come on Wednesday, the source said.

"The Corps of Engineers was more likely to announce a delay in awards but could name the winners to the two contracts, one each for northern and southern oil fields, the source said.

"Iraq has the second-largest oil reserves in the world. The United States has been anxious to repair the country's oil industry, which was run down by years of war and sanctions and is now being targeted by looters and saboteurs.

"The U.S.-led Coalition Provisional Authority (CPA), which is running Iraq following the ousting of Saddam Hussein, has been looking closely at the contracts to ensure they meet their needs, the source said.

""These are the final review items (between the CPA and the Army Corps of Engineers) that are making the delay right now," said the source.

"Tensions have been mounting in recent weeks between the CPA and authorities in the United States, with the CPA wanting to take more control of reconstruction work in Iraq and the contracting process.

"A spokesman for the Corps said the winners for the two contracts currently being awarded would be announced by the end of October.

"Three groups have emerged as the front-runners for the contracts -- a subsidiary of giant Halliburton, a joint venture between the U.S.-based Fluor and Britain's Amec Plc , and a joint venture between the United States' Parsons Corp and Australia's Worley Group Ltd ..." [more]

posted by Major Barbara | 1:40 PM

WaPost Opinion:


By William Raspberry

"There is a legend, the Rev. Earl Neil told the congregation of Trinity Episcopal Church here one recent Sunday, that certain African tribesmen have a clever way of trapping monkeys.

"They begin by making a paw-sized hole in a coconut, then filling the coconut with rice or some similarly attractive food. A monkey will come along, stick in his paw and grab a fistful of rice -- and then find that he can't get his paw out.

""It screams for help, but it is trapped by its own greed," Neil explained. "As you and I can see, all the monkey would have to do is turn loose of the rice. His open hand could easily be withdrawn. The problem is that the monkey places greater value on the rice than on his own freedom."

"That was the attention-getting windup. Here was the pitch:

""The Bush administration has stuck its hand into a coconut called Iraq, grabbed a fistful of oil and control, and now is finding it difficult to get out. It is trapped by its power and its greed. Now it screams for help from the United Nations (which it had earlier dismissed as irrelevant and inconsequential). And all the administration would have to do is to turn loose some control, and it might be able to withdraw with dignity.

""But like the monkey, it places greater value on the spoils of war than on freedom for the Iraqi people, reconciliation with the world order and what might very well be the soul of our nation."..." [more]

posted by Major Barbara | 5:55 AM

Sunday, October 19, 2003  




"BANGKOK, Oct. 19 — Under pressure from potential donors, the Bush administration will allow a new agency to determine how to spend billions of dollars in reconstruction assistance for Iraq, administration and international aid officials say.

"The new agency, to be independent of the American occupation, will be run by the World Bank and the United Nations. They are to announce the change at a donor conference in Madrid later this week.

"The change effectively establishes some of the international control over Iraq that the United States opposed in the drafting of the United Nations Security Council resolution that passed on Thursday. That resolution referred to two previously established agencies devised to ensure that all aid would be monitored and audited.

"But diplomats say other countries were unwilling to make donations because they saw the United States as an occupying power controlling Iraq's reconstruction and self-rule...." [more]

posted by Major Barbara | 7:38 PM




"WASHINGTON, Oct. 18 — Hoping to speed up reconstruction work in Iraq, American officials in Baghdad are offering contracts totaling hundreds of millions of dollars, but giving companies as little as three days to submit competing bids.

"Procurement experts said the extremely short deadlines were legal, but some warned that they could stifle open competition, favor well-connected contractors at the expense of outsiders and lead to higher costs.

""Three days is absurd," said Steven Schooner, a professor of procurement policy at George Washington University's law school. "You can objectively conclude that in the United States we don't do this. It's highly unusual."..." [more]

posted by Major Barbara | 7:32 AM

Saturday, October 18, 2003  


Associated Press Writer

"ISTANBUL, Turkey (AP)--Iraq resumed pumping oil through its northern pipeline to Turkey on Saturday but stopped the flow after about two hours because of technical problems.

"The brief pumping--the first flow through the pipeline in two months--illustrates the uphill battle Iraq faces in restoring its oil industry, essential for reconstruction in the war-battered nation.

"Gurhan Unal, a top official at Turkey's Ceyhan port, said a leak in the pipeline from the northern Iraqi city of Kirkuk stopped the flow before the oil reached Ceyhan, the Anatolia news agency reported.

"While sabotage has stopped the flow of oil through the 600-mile pipeline in the past, Iraq said technical problems--not sabotage _ caused the disruption at around 11 a.m., a Turkish energy ministry official said.

"Frequent attacks on Iraq's pipelines in the past have slowed the flow of oil. A brief pumping through the northern line in August _the first since the war--was halted because of sabotage and other problems...." [more]

posted by Major Barbara | 7:59 AM

Friday, October 17, 2003  

The Nation - Editorial:


"Shortly after 9/11, the government received an extraordinary gift of hundreds of files on Al Qaeda, crucial data on the activities of radical Islamist cells throughout the Middle East and Europe and intelligence about future terrorist plans. These dossiers did not come from Israel or Saudi Arabia, whose kingdom appeared more concerned at the time with securing safe passage for members of the bin Laden family living in the United States, but--as Seymour Hersh revealed in the July 28 New Yorker--from Syria. One CIA analyst told Hersh, "the quality and quantity of information from Syria exceeded the agency's expectations." Yet, the analyst added, the Syrians "got little in return for it."

"What they got instead was an unrelenting Washington-sponsored campaign of vilification. It began last year, when the "Axis of Evil" was expanded to include Syria, largely because Syria--a member of the 1991 coalition against Saddam Hussein--refused to support a pre-emptive war against Iraq. And it has culminated in the Syria Accountability Act, approved 33 to 2 by a House committee on October 8. If the bill passes, Syria will not be able to receive "dual use" goods unless it cuts all ties with Hamas and Islamic Jihad (neither of which is linked to Al Qaeda) and cracks down on Hezbollah (a guerrilla movement that enjoys wide popular support among Lebanese Shiites); withdraws its troops from Lebanon; and proves that it is not developing weapons of mass destruction. What's more, the President would be directed to choose from a menu of six additional sanctions, including a freeze on Syrian assets in the United States and a ban on US exports, except food and medicine.

"The committee's vote came on the heels of Bush's endorsement of an Israeli airstrike on a Palestinian training camp outside Damascus, Israel's first assault on Syrian territory since 1974. Never mind that the apparently moribund camp belonged to the Popular Front for the Liberation of Palestine-General Command, not to Islamic Jihad, which claimed responsibility for the October 4 suicide attack in Haifa; or that Israel's attack threatened to widen the already explosive Israeli-Palestinian conflict. In Bush's words, "Israel must not feel constrained in terms of defense of the homeland."

"The Syria Accountability Act is all but certain to destroy the fledgling cooperation between US and Syrian intelligence agencies, which have a common interest in combating Islamic extremism. To sabotage such a relationship would seem downright perverse, when America is in desperate need of Arab allies in the "war on terrorism." But a perversion of priorities is something we have come to expect from the Bush Administration, and from the influential neoconservative clique--many of them closely allied with the Israeli right--shaping policy in the Pentagon.

"In an eerie replay of the buildup to the war on Iraq, the demonization of Syria has swelled to a chorus in Washington...." [more]

posted by Major Barbara | 9:30 AM

Yahoo! Op/Ed:


By Richard Reeves

"WASHINGTON -- "PMC" is about to become a household acronym. The letters stand for "private military company."

"One PMC called DynCorp -- you can see its building and sign on the Virginia side of the Potomac River on the road out to Dulles Airport -- was the employer of the three security guards killed by a bomb as they guarded American diplomats in the Gaza Strip on Wednesday. When you call to ask questions about DynCorp, you are referred to the State Department, which does not discuss the trade secrets of private companies.

"In other words, private companies doing the public's business are not accountable to the public. It is a big business now. DynCorp alone, with 23,000 employees, had at least $2 billion in federal contracts last year. Two more facts: PMCs are a $100 billion industry, most of that money coming from taxpayers; one in 10 Americans doing military work and occupation duty in Iraq are actually civilians working for PMCs. They are called contract employees now -- flying and maintaining military helicopters around the world, among other things. Once upon a time they would have been called mercenaries...." [more]

posted by Major Barbara | 5:54 AM



Associated Press Writer

"WASHINGTON (AP)--The Bush administration's Iraq reconstruction plan appears to overcharge taxpayers some $200 million for the purchase and importation of petroleum products, according to a congressional report obtained Thursday.

"The legislation seeks $900.6 million for specified amounts of liquefied petroleum gas (propane), gasoline, kerosene and diesel fuel during the fiscal year that began Oct. 1. The products could be bought and delivered for $704 million, the nonpartisan Congressional Research Service reported.

"``If the request is only for commodity fuel purchase at spot market prices, it would seem that the CPA (Coalition Provisional Authority) is asking for substantially more money than is called for by current fuel prices in the Persian Gulf trading area,'' the CRS said in the report obtained by The Associated Press.

"The report, prepared for the Senate Energy and Natural Resources Committee, said the amount of the apparent overcharge could jump from $197 million to $249 million if another country donates fuel to Iraq...." [more]

posted by Major Barbara | 5:43 AM

Thursday, October 16, 2003  



PETE YOST, Associated Press Writer


"In the terror-conscious post-Sept. 11 world, DynCorp, the employer of the three security guards killed in the Mideast bombing Wednesday, has become the 10th-largest contractor of the U.S. government.

"With more than 23,000 employees, DynCorp's duties are as varied as maintaining military aircraft in the Middle East and furnishing international police monitors in Bosnia and East Timor.

"In Iraq, DynCorp has a $50 million State Department contract to send up to 1,000 former police officers to train Iraqi police and advise the occupation administration on reorganizing the country's law enforcement agencies, according to the research firm Hoover's.

"DynCorp employees also help guard Afghanistan's leader.

"And a DynCorp subcontractor was killed last month when the U.S. plane he piloted was shot down over Colombia, apparently by anti-government rebels.

"DynCorp's federal contracts in 2002 were just over $2.1 billion, up $700 million from the previous year...." [more]

posted by Major Barbara | 9:26 AM

WashTimes (Caveat lector!):


By David Sands

"The deaths yesterday of three employees of a Reston-based defense company protecting U.S. diplomats in the Gaza Strip highlight the explosive growth of — and growing perils to — private companies taking over jobs once the exclusive domain of government and the military.

"So-called private military companies can be found in some of the world's most dangerous places, from Afghanistan to postwar Iraq to the coca-growing jungles of Colombia.

"Tom Maneri, spokesman for the CSC Corp., the parent company of Reston's Dyncorp, confirmed yesterday that three Dyncorp employees — John Branchizio, Mark T. Parson and John Martin Lind Jr. — had been killed when a bomb exploded in the midst of a convoy of U.S. diplomats traveling along a main highway in the Palestinian territory. The three, well-known to journalists and U.S. officials working in the region, were there as part of a Dyncorp contract to provide security and other logistical services to the U.S. Embassy in Israel.

"Mr. Maneri referred all questions about Dyncorp's work to the State Department, reflecting the low profile preferred by private military companies in their work around the globe.

"But Peter Singer, a fellow at the Brookings Institution who has written extensively on these firms, said yesterday the attack could focus new attention and questions on the role of private military companies in U.S. foreign policy.

""It appears the work these men were doing was not controversial, but overall, you are talking about maybe a $100 billion industry operating in some of the most sensitive parts of the world, and few Americans are even aware of what they do," Mr. Singer said...." [more]

posted by Major Barbara | 6:11 AM

Houston Business Journal:


"The U.S. Army Corps of Engineers is considering awarding two contracts to restore Iraqi oil production later this month that could replace a contract held by Halliburton Co. subsidiary Kellogg Brown & Root, Dow Jones Newswires reported on Wednesday.

"The KBR contract has been controversial because some believe it wasn't awarded competitively.

"The contract has drawn fire in Washington because Vice President Dick Cheney was Houston-based Halliburton's CEO before he stepped down in 2000 to run for office.

"According to Dow Jones, the Army Corps has ordered $1.4 billion of work with Halliburton so far, with looting, sabotage and the need to import fuel pushing costs well above original estimates. The Bush administration has requested $2.1 billion in additional funding to restore Iraqi oil production."

posted by Major Barbara | 6:07 AM

Wednesday, October 15, 2003  

More on the price of coal in Newcastle....




"Two senior Democratic congressmen are questioning whether Halliburton is overcharging the United States government in the procurement of gasoline and other fuel for Iraq, which is now importing oil products to stave off shortages.

"In a letter sent yesterday to the White House Office of Management and Budget, the two lawmakers, Representative Henry A. Waxman of California and Representative John D. Dingell of Michigan, contended that "Halliburton seems to be inflating gasoline prices at a great cost to American taxpayers."

"The overcharging by Halliburton is so extreme that one expert has privately called it `highway robbery,' " the letter said.

"According to the two lawmakers, Halliburton has charged the government $1.62 to $1.70 a gallon for gasoline that could be bought wholesale in the Persian Gulf region for about 71 cents and transported to Iraq for no more than 25 cents. The fuel was sold in Iraq for 4 cents to 15 cents a gallon, the letter said...." [more]

posted by Major Barbara | 9:18 PM



By Sue Pleming

"A U.S. Democratic lawmaker on Wednesday accused Halliburton , the Texas oil services company once run by Vice President Dick Cheney, of overcharging the U.S. government for gasoline the firm imports into Iraq.

"Halliburton subsidiary Kellogg Brown & Root has a contract with the U.S. Army Corps of Engineers to rebuild Iraq's oil sector, which has included importing gasoline products in short supply to the oil-rich nation.

""Millions of Americans want to help Iraqis but they don't want to be fleeced (by Halliburton)," Rep. Henry Waxman, of California, told a news conference.

"Waxman said army documents showed that as of Sept. 18, the United States had paid Halliburton $300 million to import about 190 million gallons (719 million litres) of gasoline into Iraq.

"Halliburton charged an average price of $1.59 per gallon (3.7 litres), excluding the company's fee of 2 percent to 7 percent, said Waxman.

"He said the average wholesale cost of gasoline during that period in the Middle East was about 71 cents a gallon, a figure an oil industry source told Reuters was accurate. That meant Halliburton was charging more than 90 cents a gallon to transport fuel into Iraq from Kuwait

""When we checked with independent experts to see if this fee was reasonable, they were stunned," said Waxman, adding a reasonable transport cost would be 10 to 25 cents per gallon, especially as the U.S. military was providing security.

"Waxman sent a letter on Wednesday to the White House Office of Management and Budget complaining KBR was overcharging for petroleum products.

""From the facts available to us, Halliburton seems to be inflating gasoline prices at a great cost to American taxpayers. The overcharging by Halliburton is so extreme that one expert privately called it 'highway robbery,"' he wrote...." [more]

* * *

Here's Congressman Waxman's letter to the OMB -- and his statement.

Here's more about Waxman's work on this.

posted by Major Barbara | 3:38 PM


Likely that Basra crude already in state's gas pumps

Verne Kopytoff, Chronicle Staff Writer

"Your car could be running on gasoline made from Iraqi oil.

"ChevronTexaco and ConocoPhillips both imported Iraqi crude to California in August, according to a filing Tuesday by the Energy Information Administration, the statistical arm of the U.S. Department of Energy.

"The shipments mark the first time that Iraqi oil has reached California shores since the United States launched its invasion to unseat Saddam Hussein in March. It also represents a big step toward normalcy for California drivers.

"Before the war, Iraq had been California's biggest source of foreign oil. It accounted for 20.1 percent of all the state's imports in 2002, or 6.09 percent of total supplies.

"But the link was cut after the United States attacked Iraq in March. When the war was declared over, oil companies stayed on the sidelines because of the uncertainty over who exactly owned the crude.

"Iraq's state-owned oil marketing company eventually reorganized and began awarding oil export contracts to foreign firms in June. The proceeds go to a fund controlled by the United States and its allies that is earmarked for rebuilding Iraq.

"ChevronTexaco, based in San Ramon, was the first American firm to get a contract from Iraq, for 2 million barrels. It has since signed a longer-term deal for an undisclosed amount of Basra crude covering the period between early August and Dec. 31, according to ChevronTexaco. The oil company declined to disclose the amount it paid.

"The ultimate destination of ChevronTexaco's Iraqi oil was disclosed in a regular monthly filing by the Energy Information Administration that details all U.S. oil imports...." [more]

posted by Major Barbara | 6:15 AM