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U.S. Corporations Invade Iraq

August 19, 2003

The war against Iraq has once again vividly shown how the U.S. army is used to grab new economic territory for the big corporations.

The U.S. government waged this war not because of "weapons of mass destruction," much less to "liberate the Iraqi people," but to grab the oil and set up a "free market" base for U.S. capitalism to further penetrate the Middle East.

In fact, even before the war officially started, the U.S. government began contracting out the "spoils." Last fall, the army hired Kellogg, Brown and Root (KBR), a subsidiary of Halliburton (whose former CEO was Dick Cheney) to begin planning for the U.S. occupation. In April, KBR was awarded a 2-year, $7 billion contract to put out oil fires and evaluate Iraq's oil industry. KBR is also already involved in upgrading refineries, managing airports, operating a laundry and a host of other activities in Iraq.

The overall U.S. goal is nothing less than the complete takeover of the Iraqi economy. In early May, Bush declared that "liberating" and "reconstructing" Iraq would serve as a starting point for establishing a "US-Middle East free-trade area" including 22 nations and based on the "free market system." Later that month, Defense Secretary Rumsfeld underscored that the U.S. occupying authority would adopt policies that "favor market systems" and Paul Bremer, head of the Coalition Provisional Authority (CPA), has repeatedly emphasized the need to privatize Iraq's state-owned industries, which formerly employed 30% of the country's labor force. Bremer has also stressed the need to overcome the Iraqi peoples "sense of entitlement" as the old system provided certain guarantees for health care, food rations, etc. Most recently, the CPA convened a conference of international bankers, including Citicorp, Morgan Chase and others, to plan the privatization of Iraq's banking and financial system. A stock market is also expected to be set up.

Over the last 3 months, the U.S. government has organized several conferences with hundreds of major corporations to proceed with the takeover of the Iraqi economy. As John Taylor, Under Secretary for International Affairs, assured these companies, the occupying authority is setting up "a good system of rule of law and property rights in a way very conducive to foreign investment."

Already U.S. companies, have been awarded $4.9 billion in contracts for the "reconstruction" of Iraq and financial analysts estimate that total contracts could easily amount to more than $200 billion over the next few years.

The cost of these contracts will largely be robbed from Iraq's economy and underwritten by U.S. taxpayers. Many of the contracts already signed by the CPA will be paid for with seized Iraqi assets which, according to a U.S. corporate spokesman, are "subject to a less formal approach" than U.S. government money. In addition, Iraq's capital stock is simply being given to U.S. and other foreign companies. For example, the CPA is about to award contracts for three wireless phone networks but the most of the infrastructure, including towers and fiber-optic lines, have already been built under the former Iraqi regime. This infrastructure will simply be turned over to the successful bidders. Paul Bremer is pushing for laws that guarantee future contracts with payments from Iraq's oil revenues.

In addition, the CPA has opened the door to foreign imports, allowing U.S. and other foreign companies to flood the Iraqi market, wiping out many local industries, small farmers and thousands of jobs. For example, the U.S. giant Tyson is rapidly wiping Iraqi chicken producers and monopolizing the market.

Below we list some of major contracts already given to U.S. corporations. In addition to the fact that members of Boards of Directors of these corporations have directly served in high government positions in many administrations, over the last 4 years, the first four companies listed have publicly contributed more than $3 million to the Republican and Democratic parties.

U.S. Corporate Contracts in Iraq (Partial List)

Halliburton and Kellogg, Brown and Root: $8 billion (oil, private security)

Bechtel: $680 million (infrastructure)

MCI WorldCom: $30 million (wireless network)

Dyncorp: $50 million (law enforcement)

Flour Corporation: $100 million (construction for army)

Perini Corp: $100 million (construction for army)

Stevedoring Services of American: $4.8 million (manage ports)

Skylink Air and Logistic Support USA: $10.2 million (manage airports)

Louis Berger Group: $4.8 million (harbor cleanup)

Research Triangle Institute: $167 million (set up local governments)

Creative Association Int. Inc.: $62.6 million (revise educational system)