News Release

Who Profits From This War?


Chatterjee is author of the new book Iraq Inc. and has traveled to Iraq twice. He said today: “Nineteen months after the invasion, most services [in Iraq] have not been restored, the bills have reached astronomical proportions and Iraqis have very few jobs. Iraqi security guards get less than 1 percent of their foreign counterparts for the same work, the average Iraqi worker is paid $100 a month while truck drivers from the United States are paid $8,000 for work with similar skills by Halliburton, and American consultants provide grants of less than $100,000 for Iraqi organizations for a full year of work while paying individual expatriate employees more than that. It is small wonder that most of the infrastructure is hardly improved from pre-war levels.”

Chatterjee added: “Today, while [many of these private] companies continue to be guaranteed profits as high as 25 percent, few of them have done a decent job for the Iraqis, let alone the American taxpayer. Halliburton’s overcharging for supplying oil to the military is only the tip of the iceberg — private security companies are charging double by using shell companies in the Cayman Islands. Companies hired to supervise elections are squandering 90 percent of their money on expensive expatriate advisors while ignoring local experts. Television executives hired by the Pentagon pay themselves $200 an hour while refusing to pay local staff a similar sum for a whole month’s work. And as if wasting money wasn’t bad enough, private contractors have been caught raping prisoners and stealing equipment from the very places they were hired to repair. Today, 18 months after the fall of Baghdad, millions of Iraqis are still without proper electricity, clean water and health care despite having surrendered tens of billions of dollars of their own oil revenue.” Pratap Chatterjee is the managing editor of CorpWatch.
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Juhasz’s op-ed article titled “A Nice Little War to Fill the Coffers” appeared in the Los Angeles Times on October 14. According to Juhasz: “Halliburton, far and away the largest recipient of Iraq reconstruction dollars with about $18 billion in contracts, has seen revenues increase by 80 percent in the first quarter of 2004 compared with the same quarter of 2003, according to the Financial Times. These revenues reflect ‘steep profits from their Iraq operations.’ Next in line is the Bechtel Group of San Francisco, with nearly $3 billion in Iraq reconstruction contracts. In fact, revenues generated outside the United States have increased by 158 percent since 2003 for Bechtel — turning around a three-year slump in that category. Helping to boost these bottom lines are rules [and orders] put into place by L. Paul Bremer III, the head of the Bush administration’s now-defunct Coalition Provisional Authority in Iraq. Among them are ‘orders’ that ensure that none of the profits made by contractors have to be reinvested in the fledging Iraqi economy or in helping with reconstruction. Instead, every last penny can be sent back to the United States. The orders also make it difficult, come January, for an elected Iraqi government to overturn such rules. … Not surprisingly, some of the profits generated by the war in Iraq appear to be making their way into Republican Party coffers. According to the nonpartisan Center for Responsive Politics, each of these corporations is among the leaders in its industry in 2003-2004 election-cycle contributions, with most of the donations going to Republicans.”

Juhasz also points out: “The Bremer orders control every aspect of Iraqi life — from the use of car horns to the privatization of state-owned enterprises. … Orders No. 57 and No. 77 ensure the implementation of the orders by placing U.S.-appointed auditors and inspector generals in every government ministry, with five-year terms and with sweeping authority over contracts, programs, employees and regulations. Order No. 17 grants foreign contractors, including private security firms, full immunity from Iraq’s laws. Even if they, say, kill someone or cause an environmental disaster, the injured party cannot turn to the Iraqi legal system. Rather, the charges must be brought to U.S. courts. With few reconstruction projects underway and with Bremer’s rules favoring U.S. corporations, there has been little opportunity for Iraqis to go back to work, leaving nearly 2 million unemployed 1 1/2 years after the invasion. … Clearly, the Bremer orders fundamentally altered Iraq’s existing laws. For this reason, they are also illegal. Transformation of an occupied country’s laws violates the Hague regulations of 1907 (ratified by the United States) and the U.S. Army’s Law of Land Warfare. Indeed, in a leaked memo, the British attorney general, Lord Goldsmith, warned Prime Minister Tony Blair that ‘major structural economic reforms would not be authorized by international law.'” Juhasz is a project director with the International Forum on Globalization and a Foreign Policy In Focus scholar.
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167