By
Pratap Chatterjee, 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 ˆ 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 ˆ 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" ˆ about 1,500 miles of roadway within 18
months,
according to the Wall Street Journal.
The contractors will also be asked to repair 15 percent 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 ˆ 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."
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