The Guardian October 1, 2003

The stench of corruption

The stench of corruption permeates the occupation of Iraq as huge US 
corporations are awarded enormously profitable contracts by the US Army and 
other government agencies. Heading the list is Halliburton which was 
formerly headed by Dick Cheney who is now Bush's Vice President.

The company has won contracts worth more than US$1.7 billion under 
"Operation Iraqi Freedom" and stands to make hundreds of millions more 
dollars under a no-bid contract awarded by the US Army Corps of Engineers.

"The amount of money [going to Halliburton] is quite staggering, far more 
than we were originally led to believe", said Democrat representative for 
California, Henry Waxman. "This is clearly a trend under this 
administration, and it concerns me because often the privatisation of 
government services ends up costing the taxpayers more money rather than 

It is estimated that as much as one-third of the monthly US$3.9 billion 
cost of keeping US troops in Iraq is going to private contractors.

Services performed by Halliburton, through its Brown and Root subsidiary, 
include building and managing military bases, logistical support for the 
1200 intelligence officers on a fruitless hunt for Iraqi weapons of mass 
destruction, delivering mail and producing millions of hot meals.

Often dressed in Army fatigues with civilian patches on their shoulders, 
Halliburton employees and contract personnel have become an integral part 
of Army life in Iraq.

Halliburton has emerged as the biggest single government contractor in 
Iraq. Others making big windfalls include Bechtel, a California-based 
engineering firm that has won hundreds of millions of dollars in US Agency 
for International Development reconstruction contracts, and DynCorp, which 
is training the new Iraqi police force.

Indicating that wars have been planned well in advance, Daniel Carlson, a 
spokesman for the Army's Joint Munitions Command, said Brown and Root won a 
competitive bidding process in 2001 to provide a wide range of 
"contingency" services to the military in the event of the deployment of US 
troops overseas.

Halliburton was awarded a no-bid contract in March with a US$7 billion 
limit to put out fires at Iraqi oil wells. In the event, very few oil wells 
were torched by the Iraqis.

The practice of delegating a vast array of logistics operations to a single 
contractor dates to the aftermath of the 1991 Gulf War and a study 
commissioned on military outsourcing when Dick Cheney was Defence 

The Pentagon chose Brown and Root to carry out the study and subsequently 
selected the company to implement its own plan. Cheney served as chief 
executive of Brown and Root's parent company, Halliburton, from 1995 to 
2000, when he stepped aside to run for the vice presidency.

The new Defence Secretary, Donald Rumsfeld is another champion of 

It is estimated that the number of contract workers in Iraq is 20,000, or 
about one for every 10 soldiers. During the first Gulf War, the proportion 
was about one in 100.

Inevitably reliance on private corporations suffers from a lack of 
accountability and transparency on the part of private military firms and 
questionable billing practices.

Furthermore, neither these private corporations nor their employees are 
bound by military justice, and it is up to them whether they show up or 
not. This has resulted in delays in providing services for troops such as 
showering facilities and even getting their cooked meals.

Another consequence is the rising cost of hiring contract workers because 
of skyrocketing insurance premiums. One correspondent says that insurance 
premiums have increased by 300 percent to 400 percent this year. All these 
costs are passed on to American taxpayers.

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Acknowledgement to CorpWatch

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