| Cheney, Halliburton and Iraq
The Purloined Letter
Juan Cole
09/08/04 -- Why was Dick Cheney so eager to invade Iraq? Why did
he repeatedly link Saddam Hussein to al-Qaeda after September
11, and why did he maintain that not only did Iraq have weapons
of mass destruction but that he, Cheney, knew exactly where they
were?
Cheney clearly came into office wanting a war on Iraq, as
revealed by former Treasury Secretary Paul O'Neil.
Cheney was the CEO of Halliburton in 1995-200. Halliburton is a
corporation that does a number of things, including energy and
oil and military contracting.
In 2001, Halliburton won a contract from the Department of
Defence to provide "emergency services" to the
Pentagon. The contract was above-board. Bids were taken from
five competitors, and Halliburton won with the low bid. There
was nothing illegal or irregular about such a process. But that
contract may explain Cheney and his gang on Iraq.
In Edgar Allan Poe's "The Purloined Letter," the
blackmail note that the police are looking for is in plain
sight. It isn't hidden, just crumpled as though it were trash.
The police don't bother to examine it for that reason.
It is the contract itself that is the scam. It is quite simple.
A standing contract to provide "emergency services" to
the Pentagon is a potential gold mine under exactly one
circumstance. If a major war breaks out, the need for
"emergency services" will inevitably be enormous. The
contract was worth billions. But only if there was a war. If
there was peace, the need for "emergency services"
would be small. Halliburton was not doing that well. It needed
the big bucks.
In
1998, when Cheney was CEO, Halliburton secretly changed its
accounting techniques to show a higher level of profit. Without
the change, it would have come in below expectations, which
would have hurt its price. The change was unorthodox and
"aggressive," and should have been communicated to the
stockholders, which only happened after a long and quite
improper delay. Halliburton
finally settled this case with the Securities Exchange
Commission, by paying a paltry $7.5 million fine.
Part two of the scam is also in plain view. It is the very idea
that "emergency services" should and could be supplied
to the US military by a private company.
The fact is that civilian employees of private firms cannot be
ordered into a war zone. Halliburton, and its subsidiary Kellog,
Root and Brown, was to supply air-conditioned quonset huts to
the US troops for summer, 2003. It did not do so. It could not
do so. Once the guerrilla war broke out, it was impossible to
get enough civilian workers out to the troop positions to build
the quonset huts and put in airconditioning. As a result, US
troops "looked like hobos and lived like pigs" in the
words of one, with their shaving cream cans exploding in the 140
degrees heat.
If, on the other hand, US troops had been assigned to build the
quonset huts and put in the airconditioning, that could easily
have been accomplished.
So, the "emergency services contract" was a boondoggle
only in the case of a war, but in case of a war, many of the
services contracted for could not actually be supplied, at least
in a timely manner.
Of course, other sorts of work could be done, including in the
oil fields. The Iraq war has been worth billions of dollars to
Halliburton. Additional Pentagon work was thrown its way once
the war began, on the grounds that it was the only corporation
with the necessary experience to undertake certain tasks.
Halliburton subsidiary Kellog, Brown and Root has been accused
of not
being able to account for some charges it sent to the
Pentagon, and of overcharging
for some services it did provide.
And now Halliburton's $13 bn. contract with the Pentagon is
being rebid. There are not, however, very many companies that
can do what Halliburton and its subsidiaries do, and which have
a long association with the Pentagon and its various
bureaucratic techniques, such that they know how to fit in with
the Department of Defense bureaucracy.
What was in it for Cheney? I don't think it was a
matter of money. At least I hope it wasn't. Cheney sold half
his Halliburton stock options in 2000 for $5 million, and it is
hard to imagine a man taking his country to war to increase the
other half in value by a few million.
I suspect it is political. Not all corporations make money on
war. Some actually lose money. But Halliburton, Bechtel and a
few other components of the Military Industrial Complex do
benefit from war. Strengthening that sector of the American
economy strengthens the political Right. Turning the Republic
into a praetorian state would permanently yield profits for the
military industrial complex in such a way as to create a
permanent Republican dominance of all the branches of the US
government.
Juan Cole is Professor of History at the University of
Michigan. http://www.juancole.com
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