in High Places
quiz: What’s the most exclusive club in America? How about
the Augusta National Golf Club, whose 300 members withstood
the slings and arrows of Martha Burk with nary a scratch earlier
this month? Or maybe it’s the U.S. Senate, where a seat at
one of the historic roll-top desks can go for as much as $60
Nope, not even close. Our proud democracy’s most select body
is the tiny group of contenders invited to bid for capitalism’s
crown jewel: the Iraq contract.
Talk about cozy. Sneaking a peek through the blackout curtains
the Bush administration has used to cloak the awarding of
contracts to rebuild Iraq is like catching a glimpse of a
very special incest episode of ElimiDate: a bunch of
muscular, cash-drunk, hand-picked corporate Lotharios vying
for the affection of their governmental kissing cousins.
The relationship between those doling out these fantastically
valuable deals and those receiving them is so intimate that
taxpayers should demand that the participants be checked for
STDs before the first megabuck check is left on the dresser.
An orgy of unsafe corporate intercourse has been going on.
For full impact, this column should be a flowchart, like the
ones the FBI uses to show the inner workings of a mafia crime
family. But instead of illustrating the interrelationships
of the Soprano crew, this chart would lay out the connections
that guaranteed that the big winners in the post-Saddam sweepstakes
would be those two ultimate Washington insiders, Halliburton
and Bechtel Group.
We all know about Halliburton and its former CEO in the very
highest of secure and undisclosed places, Dick Cheney. But
the Bechtel chart is really Byzantine—starting with George
Shultz, former Bechtel president, former Reagan Secretary
of State, and currently both a Bechtel board member and chairman
of the Committee for the Liberation of Iraq.
Then there is Jack Sheehan, a senior VP at Bechtel and a member
of the Pentagon’s influential Defense Policy Board. And then
we have chairman and CEO Riley Bechtel, who in February was
appointed by Bush to the hoity-toity President’s Export Council.
Of course, using access, influence, and positions of ostensible
public service to make a buck or two—or, say, 680 million
of them—off Iraq is nothing new to the fine folks at Bechtel.
They offer their customers the most precious commodity of
all: experience. Back in the 1980s, the company wanted to
build a pipeline to carry oil from Iraq to the Jordanian port
of Aqaba—a project ardently supported by the Reagan administration,
which included Shultz and a fellow Bechtel alumnus, Secretary
of Defense Casper Weinberger. Backers of the Bechtel pipeline
lined up a veritable Who’s Who of former Reagan-Bush
power players to push for the scheme, including former Secretary
of Defense and CIA chief James Schlesinger, former National
Security Advisor William Clark, former National Security Advisor
Robert McFarlane, and former Attorney General Edwin Meese.
I guess the thought being that all that political star power
might help people forget Saddam’s annoying little habit of
And even though he wasn’t on the Bechtel payroll, one of those
working hardest to convince the Iraqis to hop into bed with
the company was the macho man himself, Don “We Don’t Need
No Stinkin’ Antiquities” Rumsfeld. While working as Reagan’s
special envoy to the Middle East in 1983, Rumsfeld met with
Saddam personally and tried to convince him to sign on to
Bechtel’s pipeline pipe dream.
And Rummy isn’t the only current administration official with
a close encounter of the Bechtel kind on his CV. Andrew Natsios,
administrator of the U.S. Agency for International Development,
the agency responsible for handing the lucrative Iraqi rebuilding
contract to Bechtel, used to be in charge of overseeing Boston’s
Big Dig, a massive highway project managed by Bechtel that
went from a projected cost of $4.5 billion to an actual cost
of $14 billion.
In a scathing letter sent to Natsios, the Massachusetts Inspector
General called Bechtel’s handling of the Big Dig “an invitation
to fraud, waste and abuse.” Apparently, this amounted to a
sterling recommendation in Natsios’ eyes, because three years
later, when the time came to draw up the very short list of
companies invited to bid on $1.5 billion in Iraq contracts,
he didn’t hesitate to include the old gang at Bechtel. Hey,
what’s a little “fraud, waste and abuse” among chums?
In today’s business-loving Washington, a propensity for playing
fast and loose with taxpayer money clearly qualifies as “no
harm, no foul.” It certainly hasn’t hurt Halliburton, which,
despite being fined $2 million for routinely overbilling the
Pentagon, continues to land hugely profitable government contracts—like
the $2.2 billion it scored to provide troop support in the
Balkans. According to a GAO study, the company boosted its
bottom line by charging the Army $85 for plywood that cost
$14, and racked up profits by cleaning the same base offices
up to four times a day.
It goes without saying that everyone involved in these cushy
deals denies any impropriety. In fact, they are downright
offended by the suggestion that these contracts—bid on by
a very select group of well-connected companies, and awarded
based on secretive, unexplained criteria—were anything but
on the up-and-up.
won this work on our record, plain and simple,” crowed Riley
Bechtel in an e-mail to employees, making it sound as if their
record of scheming and insider dealing was something to brag
about. And a spokesman for the company assured reporters that
Bechtel had not “attempted to bring any political pressure
to bear.” They didn’t have to. When the fix is in, no one
has to remind the referee to count to 10 when the chump takes
his dive. It’s all done with a wink and a nod. And sometimes
not even that.
The perfect explanation for how this all works came from none
other than Our Man in Baghdad, retired Gen. Jay Garner. When
asked about his uncanny success as a businessman following
his long military career—especially how he helped Sy Technology
boost its government contracts from $8.5 million in 1999 to
$46.8 million in 2001, with much of that business coming from
the Army division he used to run—Garner replied: “I do not
go to friends for business. I get business from my friends,
but it’s not solicited by me.” Don Corleone couldn’t have
put it any better.
Here’s another way of looking at the process: “The purpose
behind the abuse,” said Sen. Charles Grassley (R-Iowa), “was
so that cronies of the president could win the spoils of political
gain for themselves.” Although Grassley’s description suits
the Bechtel pact to a tee, he was actually talking about Bill’s
and Hillary’s Travelgate.
Let’s hope Sen. Grassley—or anyone on his side of the aisle—can
muster a similar fit of indignation over a case of crony capitalism
that makes Travelgate seems like a tempest in a Teapot Dome.