[Reader-list] The business of war...

[Avishek Ganguly]

Halliburton Makes a Killing on Iraq War

By Pratap Chatterjee,
<http://www.corpwatch.org>CorpWatch
March 23, 2003

As the first bombs rain down on Baghdad, thousands of
employees of 
Halliburton, Vice President Dick Cheney's former
company, are working 
alongside US 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 profit.

Linda Theis, a public affairs officer for the U.S.
Army Field Support 
Command in Rock Island Arsenal, Illinois, confirmed
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."

Local Labor in Kuwait

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 
and officials. Army officials working with Brown and
Root say 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 percent 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.

Meanwhile, In Turkey ...

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 Oct. 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 
civilian targets.

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
percejnt 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.

Wartime Profiteering

Meanwhile Dick Cheney's 2001 financial disclosure
statement, states that 
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 filed by all top government
officials says only that 
they are in the range of $100,000 and $1 million. Nor
is it clear how they 
are calculated.

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," he added. "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 60 years to the World War Two
era, almost 
everybody was manufacturing something that either
directly or indirectly 
had something to do with defense."

Sasha Lilley and Aaron Glantz helped conduct
interviews for this article.

Pratap Chatterjee is an investigative journalist based
in Berkeley, Calif. 
He traveled to Afghanistan and Uzbekistan in January
2002 and to Incirlik, 
Turkey, in January 2003 to research this article.


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