Corporations of the Whirlwind
Corporations of the Whirlwind
"At times it is hard to ignore the comparisons between Baghdad (where I was less than a month ago and have spent more of the last two years) and New Orleans: The anarchy, the looting, some of it purely for survival, some of it purely opportunistic. We watched a flatbed truck drive by, a man on the back with an M-16 looking up on the roofs for snipers, as is common in Iraq. Private security contractors were stationed outside the Royal St. Charles Hotel; when asked if things were getting pretty wild around the area, one of them replied, 'Nope. It's pretty Green Zone here.'" (David Enders, Surviving New Orleans, Mother Jones on-line)
In the decade before September 11th, 2001, "globalization," a word now largely missing-in-action, was on everyone's lips and we constantly heard about what a small, small world this really was. In the aftermath of Katrina, that global smallness has grown positively claustrophobic and particularly predatory. Iraq and New Orleans now seem to be morphing into a single entity, New Oraq, to be devoured by the same limited set of corporations, let loose and overseen by the same small set of Bush administration officials. In George Bush's new world of globalization, first comes the destruction and only then does one sit down at the planetary table to sup.
In recent weeks, news has been seeping out of Iraq that the "reconstruction" of that country is petering out, because the money is largely gone. According to American officials, reported T. Christian Miller of the Los Angeles Times last week, "The U.S. will halt construction work on some water and power plants in Iraq because it is running out of money for projects." A variety of such reconstruction projects crucial to the everyday lives of Iraqis, the British Guardian informs us, are now "grinding to a halt" as "plans to overhaul the country's infrastructure have been downsized, postponed or abandoned because the $24bn budget approved by Congress has been dwarfed by the scale of the task."
Water and sanitation projects have been particularly hard hit; while staggering sums, once earmarked for reconstruction, are being shunted to private security firms whose hired-guns are assigned to guard the projects that can't be done. With funds growing scarce, various corporations closely connected to the Bush administration, having worked the Iraqi disaster for all it was worth (largely under no-bid, cost-plus contracts), are now looking New Orleans-ward.
Ground Zero Iraq
The American occupation of Iraq began in April 2003 with a prolonged moment of chaos that set the stage for everything to follow. In the first days after Baghdad fell, the occupying army stood by idly (guarding only the Oil Ministry and the intelligence services) while Iraqi looters swept away the institutional, administrative, and cultural underpinnings of the country. The newly installed Coalition Provisional Authority (CPA), soon to be led by American viceroy L. Paul Bremer, followed up by promptly disbanding the only institution that remained half-standing, the Iraqi military. At the same time, a new American administration was set up inside the increasingly well-fortified and isolated Green Zone in Baghdad, staffed largely by Bush cronies. ("Neocon kindergarten" was the way some insiders derisively referred to the young Bush supporters sent out from Washington to staff the lower levels of the CPA for months at a time.)
The CPA then instituted a flat tax, abolished tariffs, swept away laws that might have prevented the foreign ownership of Iraqi companies, allowed the full repatriation of profits abroad, and threatened to reduce state-sponsored food and fuel subsidies. For Iraqis, this was more than just "shock and awe"; it was to be caught in the whirlwind. Call it Year Zero for Iraq or Ground Zero for the new Bush order. Iraq, stripped for action, was ready to be strip-mined -- and it was then that Washington called in its crony corporations to "reconstruct" the land.
Leading the list was Kellogg, Brown & Root (KBR), a subsidiary of the energy firm Halliburton, the mega-corporation Vice President Dick Cheney once presided over. From providing fuel to building bases, doing KP to supplying laundry soap, it supported the newly privatized, stripped-down American military -- and for that it "received more money from the U.S. involvement in Iraq than any other contractor," a sum that has already crested ten billion dollars with no end in sight. The Bechtel Corporation, the San Francisco-based engineering firm, known at home for its staggering cost overruns on Boston's "Big Dig" and its especially close ties to the Republican Party, raked in almost $3 billion in Iraq reconstruction contracts just in the nine months after the fall of Saddam Hussein. Fluor Corporation, an Orange County, California-based firm that inked a joint $1.1 billion deal with a London company in 2004 for "construction services for water distribution and treatment systems in Iraq" was a winner; as was the Shaw Group Inc. which, in early 2004, opened a Baghdad office to support "an approximately $47 million task order in Iraq for facility upgrades, installation of utilities and other infrastructure improvements" and was also awarded a separate $88.7 million construction deal, among other contracts. Another successful bidder in the Iraqi lottery was CH2M Hill, a Colorado-based company that, in a joint venture, took in a $28.5 million reconstruction contract in 2004 and teamed up with other contractors for a $12.7 million electrical power generation deal. These firms were joined at the table by other heavy-hitters and a dizzying array of smaller-fry American subcontractors, from the KBR-connected food service company Event Source to Bechtel's marine survey subcontractor Titan Maritime.
Over two years after the American superpower occupied Iraq and called in its reconstructors, however, the scorecard for "reconstruction" looked remarkably like one for deconstruction. The country was essentially looted and no one was left on guard, not even at the Oil Ministry. Money was spent profligately, and sometimes evidently simply pilfered. L. Paul Bremer himself reputedly had a slush fund of $600 million dollars in cash for which, according to Ed Harriman (who did a superb study of the various reports by U.S. auditors on the ensuing mayhem in the London Review of Books), there was "no paperwork."
When Bremer left Baghdad in June of last year, the CPA had already run through $20 billion dollars in Iraqi funds, mostly generated by oil revenues and earmarked for "the benefit of the Iraqi people" (though only $300 million in U.S. funds). Much of it seems to have gone to American companies for their various reconstruction tasks. U.S. auditors, Harriman reports, "have so far referred more than a hundred contracts, involving billions of dollars paid to American personnel and corporations, for investigation and possible criminal prosecution." It was evidently a field day of malfeasance and -- a particular signature of the Bush administration -- lack of accountability. In the meantime, KBR was massively overcharging the Pentagon for all those privatized tasks the military no longer cared to do, while its officials were living the good life. (Typically, KBR's "tiger team" of accountants, sent out to Kuwait to check on company overcharges, stayed in a five-star hotel to the tune of $1 million in taxpayer money.)
The results we now know well. Electricity and oil production, for instance, still remain at or below the figures for the worst days of Saddam Hussein's embattled regime; and on that cleared land at Ground Zero Iraq, a fierce resistance movement rages, while, from Basra to Mosul, disappointment with and disapproval of the American occupiers only grows.
Now, these same corporations are being loosed on the Southeastern United States on the same no-bid, cost-plus basis. Like Baghdad and much of Iraq, New Orleans and the Mississippi coast have just experienced "shock and awe" -- Katrina's winds and waters, not U.S. cruise missiles. With troops occupying New Orleans, the Bush administration-allied corporations of the whirlwind that feed off chaos and destruction are already moving in. In this sense, the next wave of chaos has, from their point of view, arrived like the proverbial cavalry, just in the nick of time.
Bringing the Post-War Home
As Reuters reported recently, "A slowing of reconstruction work in Iraq has freed up people for Fluor Corp. to begin rebuilding in the U.S. Gulf Coast region after Hurricane Katrina, the big engineering and construction company's chairman and chief executive said on Friday. 'Our rebuilding work in Iraq is slowing down and this has made some people available to respond to our work in Louisiana,' Fluor chief Alan Boeckmann said in a telephone interview." And Fluor responded in a thoroughly reasonable way -- they put an experienced man on the job, sending their "senior project manager" in Iraq to Louisiana.
In fact, with Congress already making a $62 billion initial down payment on post-Katrina reconstruction work, the Bush administration has just given out its first 6 reconstruction contracts, five of them -- could anyone be surprised -- to Iraqi reconstructors, including Fluor. Small world indeed. The Bush version of crony capitalism should perhaps be termed predatory capitalism, following as it does so closely in the wake of war and natural disaster much as camp followers used to trail armies, ready, in case of victory, to loot the baggage train of the enemy.
But let's pull back for a moment and try to reconstruct, however briefly, at least a modest picture of the massively interconnected world of the reconstructors. A good place to start is with George Bush's pal Joseph Allbaugh, a member of his "so-called iron triangle of trusted Texas cohorts." Allbaugh seems to display in his recent biography just about every linkage that makes New Oraq what it is clearly becoming. He ran the Bush presidential campaign of 2000; and subsequently was installed as the director of FEMA which, in congressional testimony, he characterized as "an overstuffed entitlement program," counseling (as Harold Meyerson of the American Prospect pointed out recently) "states and cities to rely instead on 'faith-based organizations... like the Salvation Army and the Mennonite Disaster Service."
As at the Coalition Provisional Authority in Baghdad, so at FEMA in Washington, the larder of administrators would soon be stocked with second and third-rate Bush supporters and cronies. Five of FEMA's top eight managers would, according to Spencer S. Hsu of the Washington Post, arrive with "virtually no experience in handling disasters," three of them "with ties to President Bush's 2000 campaign or to the White House advance operation." A "brain drain" of competent administrators followed as -- Ã la the Pentagon -- FEMA's focus turned to the war on terror, money was drained from natural-disaster work, and the agency was "privatized" with previously crucial activities outsourced to Bush-friendly corporations.
In March 2003, Allbaugh departed FEMA, putting the increasingly starved and down-sized operation in the hands of Michael Brown, an old college buddy whose previous job had been overseeing the International Arabian Horse Association. He then made his faith-based career choice -- no, not to join the Salvation Army or the Mennonite Disaster Service. Instead he opted for what the Bush administration really believed in -- both in Iraq and at home. He became a high-priced consultant/lobbyist, founding in the ensuing years three consulting firms. At Blackwell Fairbanks, LLC, he teamed up with Andrew Lundquist, who led the Dick Cheney task force that produced the administration's National Energy Policy, to "successfully represen[t] clients before the executive and legislative branches of the United States government." Then there was the Allbaugh Company through which he represents Halliburton's KBR as well as military-industrial powerhouse Northrop Grumman. Finally, there was New Bridge Strategies, LLC, where he serves as chairman and director. New Bridge Strategies bills itself as "a unique company that was created specifically with the aim of assisting clients to evaluate and take advantage of business opportunities in the Middle East following the conclusion of the U.S.-led war in Iraq."
Not surprisingly, the firm's vice chairman and director, Ed Rogers (who, during the "2004 campaign cycle... made over 150 live TV news appearances defending and promoting the Bush administration") also serves as vice chairman of the consulting firm Barbour, Griffith & Rogers, Inc. (which he founded with Haley Barbour, now the governor of storm-battered Mississippi); New Bridge's Director, Lanny Griffith, who serves as the CEO of Barbour, Griffith & Rogers, "was national chairman for the Bush/Cheney Entertainment Task Force and coordinated entertainment for the 2001 Bush Inaugural." He was, typically enough, one of the 2004 Bush campaign's "Rangers" -- an elite group of fundraisers, each of whom was responsible for gathering up over $200,000 for the President; while New Bridge Strategies' Advisory Board Member Jamal Daniel is "a Principal with Crest Investment Company" -- a firm co-chaired by the president's younger brother Neil.
In answer to critics who claimed he and others were cashing in on their service to Bush and Cheney, Allbaugh responded, "I don't buy the 'revolving door' argument. This is America. We all have a right to make a living."
As President and CEO at Allbaugh Co. and assumedly as a former head of FEMA, not to say as close friend and mentor to FEMA's (now departed) head and as a Presidential pal, he found himself at the front of the Katrina disaster line, apparently pushing hard (although he denied it) for such companies as -- you guessed it -- KBR and the Shaw Group. By September 7 at the latest, unlike the administration, he was down in Louisiana surveying the damage in the Gulf Coast and the wreckage of the agency he once presided over, while directing his clients to the lucrative world of American disaster, now that the lucrative world of Iraqi disaster had been sucked reasonably dry.
Ground Zero New Orleans
On September 12, 2005, the Wall Street Journal reported, "FEMA and the Army Corps of Engineers have awarded six contracts, most for as much as $100 million, for recovery and rebuilding work." It should be of little surprise that the Shaw Group landed two of these $100 million deals (a FEMA contract to refurbish existing buildings and for other emergency housing tasks as well as an Army Corps of Engineers contract to aid recovery efforts, including pumping water from New Orleans). Others on the list included a who's who of favorite Bush administration contractors from Iraq: Bechtel, Fluor, and CH2M Hill (all signed on to construct temporary housing). In fact, of the companies on the Journal's list, only one (Dewberry, LLC) was not, apparently, involved in Iraq. Halliburton was, of course, not left out in the cold. In the immediate aftermath of the hurricane, its KBR subsidiary reaped "$29.8 million in Pentagon contracts to begin rebuilding Navy bases in Louisiana and Mississippi."
These companies, however, aren't the only ones returning from Iraq, like so many predator drones, to pick up lucrative deals. In the wake of Katrina, Intelsat, a global satellite services provider that, in Iraq, had teamed up with Bechtel on a big USAID reconstruction program, agreed to new post-Katrina contracts with the Defense Department and FEMA. Similarly, just two days after Katrina ravaged the Gulf Coast, the Air National Guard contracted with another satellite services provider, Segovia, which, according to a 2004 company press release, had "emerged as a key telecommunications provider for the Iraqi reconstruction efforts."
Along with their service in Iraq, the Katrina reconstruction companies are tied together in another important way. They tend to be particularly well linked to the Bush administration and the Republican Party. As former Oklahoma Republican Governor Frank Keating said of Allbaugh, "Joe... knows how elected officials and appointed officials like me think and work, and that culture is a fraternity." Halliburton, for instance, picked off "another high-level Bush appointee, Kirk Van Tine, earlier this year to work as a lobbyist. Similarly, in 2001, Bush appointed Robert G. Card, then a senior vice president at CH2M Hill, undersecretary at the U.S. Department of Energy, a position he held until 2004. Today, Card is the president and group chief executive of the International Group at CH2M Hill.
Not surprisingly, during the 2004 election season, CH2M Hill was the top "construction services" contributor to political campaigns, sending nearly 70% of its $476,800 in contributions to Republican candidates. In fact, fourteen people on the CH2M payroll contributed to Bush's 2004 campaign, including the company's chairman and CEO, president, senior vice-president, and president of regional operations, each of whom gave between $1,000 and $2,000. Meanwhile, Bechtel's political action committee contributed 68% of its funds to Republican candidates and causes; while Halliburton, which ranks among the top twenty "Oil and Gas" contributors to political campaigns, handed out 87% of its money to Republicans.
Theoretically, there should be nothing more glorious than the job of healing the war-torn or rebuilding the lives of those devastated by natural disaster, nor anything more relevant to government. Unfortunately, in the case of KBR World, there's nothing glorious about it, except the 5-star hotels for the reconstructors. Prediction is usually a dismal science for any writer. In this case, however, it's already easy to imagine -- as some Democrats in Congress are beginning to do -- the consequences of Bush-style "reconstruction" in the United States.
Those no-bid, cost-plus contracts already being dealt out to the usual suspects tell you what you need to know about future cost-overruns, klepto-reconstruction activities, and the like which are practically guaranteed to deconstruct the bulk of the Gulf Coast and leave New Orleans, the destroyed parts of Mississippi, and the hundreds of thousands of evacuees, not to speak of Congress, gasping for breath amid a landscape largely sucked dry, not of water, but of cash and sustenance.
George Bush's version of capitalism is of a predatory, parasitical kind. It feeds on death, eats money, goes home when the cash stops flowing, and leaves further devastation in its wake. New Orleans, like a rotting corpse, naturally attracts all sorts of flies. Reports have been trickling in that the private security firms -- call them mercenary corporations like Blackwater USA -- which have flooded Iraq with an estimated twenty to twenty-five thousand hired guns (some paid up to $1,000 a day), have been taking the same route back to New Orleans and the Mississippi coast as KBR, Bechtel, and the Shaw Group.
They first arrived in the employ of private corporations and local millionaires who wanted their property protected. A week or so into September, however, Jeremy Scahill and Daniela Crespo of Democracy Now! found the hired-guns of Blackwater cruising the streets of New Orleans, carrying assault weapons, claiming to have been deputized, insisting that they were working for the Homeland Security Department and that they were sleeping in camps the Department had organized. ("'When they told me New Orleans, I said, "What country is that in?,"' said one of the Blackwater men.") Then, on September 13, the Washington Post reported that "Blackwater USA, known for its work supporting military operations in Iraq, said it would provide 164 armed guards to help provide security at FEMA sites in Louisiana."
Today, New Orleans' streets are under military occupation; its property is guarded by hired guns; and the corporations of the whirlwind are pouring into town. All that's missing is the insurgency.
Copyright 2005 Tom Engelhardt and Nick Turse
Tom Engelhardt, who runs the Nation Institute's Tomdispatch.com ("a regular antidote to the mainstream media"), where this article first appeared, is the co-founder of the American Empire Project and the author of The End of Victory Culture, a history of American triumphalism in the Cold War.
Nick Turse works in the Department of Epidemiology at Columbia University and is Associate Editor and Research Director of TomDispatch. He writes for the Los Angeles Times, the San Francisco Chronicle, the Village Voice and regularly for Tomdispatch on the military-corporate complex and the homeland security state.