Rumours are rife about who will make money out of rebuilding Iraq
IT WAS an inevitable conspiracy theory DU JOUR: if the war goes well,
the real winner will be Vice-President Dick Cheney's former firm,
Halliburton, and other Bush administration cronies. Newspapers have
reported that Halliburton has secretly won gigantic contracts for work
in a post-war Iraq and that were America to run Iraq, more deals would
The Bush administration has been keeping mum about such matters.
Discussing victory plans before the shooting had even begun would be
widely viewed as unforgivable hubris. That said, it would also be
irresponsible for the administration to ignore the reconstruction needs
of a country that it intended to deconstruct.
If, as rumours suggest, bids have been solicited for reconstruction
work only from American companies, that would not be illegal or even
unusual, especially on defence-related contracts--though it would not
be good politics. Excluding the French may be understandable in the
present circumstances--but surely not the British firms whose
complaints have been widely reported in the press.
Actually, the suspicion that American firms have stitched up the
lucrative contracts to come in Iraq is probably ill-founded. The
administration says that contractors from other countries, including
Iraq, will be included as consortium members (and so will profit) when
reconstruction starts. The contracts discussed so far--for about $900m
of work--are peanuts compared with the billions of dollars that will
eventually be up for grabs.
Given the particular sensitivity of Halliburton, what can the Bush
administration do to allay suspicions of cronyism? The White House has
already been burnt once when, last year, it appeared to defend
questionable accounting practices at Halliburton during Mr Cheney's
tenure which are now under formal investigation.
Alas for the administration's reputation, there may be no better
qualified firm for many of the jobs that will need to be done.
Halliburton has one main challenger for the title of the world's
leading oil-services firm: Schlumberger, which is, ahem, French in
origin. But when it comes to military outsourcing, Halliburton's
Kellogg Brown & Root division has a more impressive record than any of
During the second world war, Brown & Root built the Corpus Christi
naval air station in Texas. More recently, it has built detention
centres in Guantanamo Bay, Cuba, to hold suspected terrorists, and has
men on the ground in Afghanistan and even Kuwait. If that too hints at
cronyism, remember that the firm has flourished under Democrat
presidents such as Bill Clinton. It owns and runs some British defence
facilities, including the Devonport naval shipyard, provides logistical
support and maintains submarines for the Royal Navy.
In short, it is hard to argue that Halliburton is an otherwise
unqualified firm that has won business only because of its political
connections. Back in 1999, when he still ran Halliburton, Mr Cheney
boasted in an interview with THE ECONOMIST that "the first person to
greet our soldiers as they arrive... and the last one to wave good-bye
is one of our employees." He was talking about the extensive role,
including managing the airfields where soldiers arrived, that Brown &
Root played in the Balkans. It will be no surprise if it plays the same
role in Iraq. That would be good news for Halliburton's current
management and maybe even for Iraq, but a political headache for its