Read below how the US leaders and friends make the big bucks on the war culture while pretending to be 'liberating' the Iraqi people.
Halliburton Makes a Killing on Iraq War
Cheney's Former Company Profits from Supporting Troops
By Pratap Chatterjee
Special to CorpWatch
March 20, 2003
As the first bombs rain down on Baghdad, CorpWatch has learned that
thousands of employees of Halliburton, United States Vice President Dick
Cheney's former company, are working alongside United States troops in
Kuwait and Turkey under a package deal worth close to a billion dollars.
According to US Army sources, they are building tent cities and providing
logistical support for the war in Iraq in addition to other hot spots in
the "war on terrorism."
While recent news coverage has speculated on the post-war reconstruction
gravy train that corporations like Halliburton stand to gain from, this
latest information indicates that Halliburton is already profiting from
war time contracts worth hundreds of millions of dollars.
Cheney served as chief executive of Halliburton until he stepped down to
become George W. Bush's running mate in the 2000 presidential race. Today
he still draws compensation of up to a million dollars a year from the
company, although his spokesperson denies that the White House helped the
company win the contract.
In December 2001, Kellogg, Brown and Root, a subsidiary of Halliburton,
secured a 10-year deal known as the Logistics Civil Augmentation Program
(LOGCAP), from the Pentagon. The contract is a "cost-plus-award-fee,
indefinite-delivery/indefinite-quantity service" which basically means
that the federal government has an open-ended mandate and budget to send
Brown and Root anywhere in the world to run military operations for a
Linda Theis, a public affairs officer for the U.S. Army Field Support
Command in Rock Island Arsenal, Illinois, confirmed for Corpwatch that
Brown and Root is also supporting operations in Afghanistan, Djibouti,
Georgia, Jordan and Uzbekistan.
"Specific locations along with military units, number of personnel
assigned, and dates of duration are considered classified," she said. "The
overall anticipated cost of task orders awarded since contract award in
December 2001 is approximately $830 million."
The current contract in Kuwait began in September 2002 when Joyce Taylor
of the U.S. Army Materiel Command's Program Management Office, arrived to
supervise approximately 1,800 Brown and Root employees to set up tent
cities that would provide accommodation for tens of thousands of soldiers
Army officials working with Brown and Root says the collaboration is
helping cut costs by hiring local labor at a fraction of regular Army
salaries. "We can quickly purchase building materials and hire
third-country nationals to perform the work. This means a small number of
combat-service-support soldiers are needed to support this logistic aspect
of building up an area," says Lt. Col. Rod Cutright, the senior LOGCAP
planner for all of Southwest Asia.
During the past few weeks, these Brown and Root employees have helped
transform Kuwait into an armed camp, to support some 80,000 foreign
troops, roughly the equivalent of 10% of Kuwait's native born population.
Most of these troops are now living in the tent cities in the rugged
desert north of Kuwait City, poised to invade Iraq. Some of the
encampments are named after the states associated with the attacks of
Sept. 11, 2001 -- Camp New York, Camp Virginia and Camp Pennsylvania.
The headquarters for this effort is Camp Arifjan, where civilian and
military employees have built a gravel terrace with plastic picnic tables
and chairs, surrounded by a gymnasium in a tent, a PX and newly arrived
fast food outlets such as Burger King, Subway and Baskin-Robbins, set up
in trailers or shipping containers. Basketball hoops and volleyball nets
are set up outside the mess hall.
North of Iraq approximately 1,500 civilians are working for Brown and Root
and the United States military near the city of Adana, about an hour's
drive inland from the Mediterranean coast of central Turkey, where they
support approximately 1,400 US soldiers staffing Operation Northern
Watch's Air Force F-15 Strike Eagles and F-16 Fighting Falcons monitoring
the no-fly zone above the 36th parallel in Iraq.
The jet pilots are catered and housed at the Incirlik military base seven
miles outside the city by a company named Vinnell, Brown and Root (VBR), a
joint venture between Brown and Root and Vinnell corporation of Fairfax,
Virginia, under a contract that was signed on October 1, 1988, which also
includes two more minor military sites in Turkey: Ankara and Izmir.
The joint venture's latest contract, which started July 1, 1999 and will
expire in September 2003, was initially valued at $118 million. US Army
officials confirm that Brown and Root has been awarded new and additional
contracts in Turkey in the last year to support the "war on terrorism"
although they refused to give any details.
"We provide support services for the United States Air Force in areas of
civil engineering, motor vehicles transportation, in the services arena
here - that includes food service operations, lodging, and maintenance of
a golf course. We also do US customs inspection," explained VBR site
manager Alex Daniels, who has worked at Incirlik for almost 15 years.
Cheap labor is also the primary reason for outsourcing services, says
Major Toni Kemper, head of public affairs at the base. "The reason that
the military goes to contracting is largely because it's more cost
effective in certain areas. I mean there was a lot of studies years ago as
to what services can be provided via contractor versus military personnel.
Because when we go contract, we don't have to pay health care and all the
another things for the employees, that's up to the employer."
Soon after the contract was signed Incirlik provided a major staging post
for thousands of sorties flown against Iraq and occupied Kuwait during the
Gulf war in January 1991 dropping over 3,000 tons of bombs on military and
Central Asian Contracts
Still ongoing is the first LOGCAP contract in the "war on terrorism" which
began in June 2002, when Brown and Root was awarded a $22 million deal to
run support services at Camp Stronghold Freedom, located at the Khanabad
air base in central Uzbekistan. Khanabade is one of the main US bases in
the Afghanistan war that houses some 1,000 US soldiers from the Green
Berets and the 10th Mountain Division.
In November 2002 Brown and Root began a one-year contract, estimated at
$42.5 million, to cover services for troops at bases in both Bagram and
Khandahar. Brown and Root employees were first set to work running laundry
services, showers, mess halls and installing heaters in soldiers' tents.
Future Contracts in Iraq
Halliburton is also one of five large US corporations invited to bid for
contracts in what may turn out to be the biggest reconstruction project
since the Second World War. The others are the Bechtel Group, Fluor Corp,
Parsons Corp, and the Louis Berger Group.
The Iraq reconstruction plan will require contractors to fulfill various
tasks, including reopening at least half of the "economically important
roads and bridges" -- about 1,500 miles of roadway within 18 months,
according to the Wall Street Journal.
The contractors will also be asked to repair 15% of high-voltage
electricity grid, renovate several thousand schools and deliver 550
emergency generators within two months. The contract is estimated to be
worth up to $900 million for the preliminary work alone.
The Pentagon has also awarded a contract to Brown and Root to control oil
fires if Saddam Hussein sets the well heads ablaze. Iraq has oil reserves
second only to those of Saudi Arabia. This makes Brown and Root a leading
candidate to win the role of top contractor in any petroleum field
rehabilitation effort in Iraq that industry analysts say could be as much
as $1.5 billion in contracts to jump start Iraq's petroleum sector
following a war.
Meanwhile Dick Cheney's 2001 financial disclosure statement, states that
the Halliburton is paying him a "deferred compensation" of up to $1million
a year following his resignation as chief executive in 2000. At the time
Cheney opted not to receive his severance package in a lump sum, but
instead to have it paid to him over five years, possibly for tax reasons.
The company would not say how much the payments are. The obligatory
disclosure statement filled by all top government officials says only that
they are in the range of $100,000 and $1million. Nor is it clear how they
Critics say that the apparent conflict of interest is deplorable. "The
Bush-Cheney team have turned the United States into a family business,"
says Harvey Wasserman, author of The Last Energy War (Seven Stories Press,
2000). "That's why we haven't seen Cheney - he's cutting deals with his
old buddies who gave him a multimillion-dollar golden handshake. Have they
no grace, no shame, no common sense? Why don't they just have Enron run
America? Or have Zapata Petroleum (George W. Bush's failed oil-exploration
venture) build a pipeline across Afghanistan?"
Army officials disagree. Major Bill Bigelow, public relations officer for
the US Army in Western Europe, says: "If you're going to ask a specific
question - like, do you think it's right that contractors profit in
wartime - I would think that they might be better [asked] at a higher
level, to people who set the policy. We don't set the policy, we work
within the framework that's been established."
"Those questions have been asked forever, because they go back to World
War Two when Chrysler and Ford and Chevy stopped making cars and started
making guns and tanks. Obviously it's a question that's been around for
quite some time. But it's true that nowadays there are very few defense
contractors, but go back sixty years to the World War Two era almost
everybody was manufacturing something that either directly or indirectly
had something to do with defense," he added.
Sasha Lilley and Aaron Glantz helped conduct interviews for this article.
Pratap Chatterjee is an investigative journalist based in Berkeley,
California. He traveled to Afghanistan and Uzbekistan in January 2002 and
to Incirlik, Turkey, in January 2003 to research this article.