Econ-atrocity: Halliburton and Iraq

[Andrew Page <programs@populareconomics.org>]

An Econ-Atrocity, brought to you by the Center for Popular Economics.  If
you would like more information about CPE please visit our website at
<www.populareconomics.org>.  If you would like to write an Econ-Atrocity or
if you have an idea for an Econ-Atrocity, please write to us at
<programs@populareconomics.org>.  To see our archive of Econ-Atrocities
please visit The Ultimate Field Guide to the U.S. Economy's website at
<www.fguide.org>.

The Iraqi Concession
By Vijay Prashad

Iraq is an econ-atrocity. US taxpayer money went toward the destruction of
its public enterprises - such as telecommunications and petroleum - to
install the principles of corporate selection, Bush style. Firms close to
Bush Inc. earned contracts to areas of economic life previously outside the
profit sector (although in the palm of the rapacious Ba'th Party led by
Saddam Hussein): the multinational telecommunications firm, MCI, for
instance, earned a $30 million no-bid contract on mobile telecommunications
(Senator Edward Kennedy offered this tart response: "MCI was found to have
committed the largest corporate fraud in history, and that should be a
major factor in determining the fitness of contractors to do business with
the federal government. The firm's false and deceptive reports of earnings
caused substantial harm to its employees and shareholders and to the
telecommunications industry as a whole").

In other words, Liberated Iraq is the latest victim of Enronism, or the
sale of public assets to the private, profit sector.

But the main agent of atrocity is Halliburton and its subsidiary, Kellogg,
Brown and Root. Despite all talk of "The Oil of Iraq belongs to the Iraqi
people" (Secretary of State Colin Powell), the Army Corp of Engineers has
already turned over 'management' of Iraqi oil to Vice President Dick
Cheney's former firm.

On May 2, 2003, Lt. General Robert B. Flowers of the Corp wrote to
Congressman Henry Waxman about its role as overseer of the new Iraq's
economy. Flowers notes that Halliburton had not only got the contract to
douse oil fires, but that it would take charge of the "operation" and
"distribution" of Iraqi oil, a $9 billion deal. The US chose Thamer Abbas
Ghadban to run the Iraqi oil industry and put a former Shell Oil man,
Phillip Carroll, in overall charge of the liquid gold. In his reply to
Flowers, Waxman noted, "The administration's decision to appoint a former
American oil executive to chair an advisory board overseeing the Iraqi oil
ministry may well increase the perception among some Iraqis that they are
not being given full control over the resources the administration
previously indicated belonged to them."

Halliburton's success is tied intimately to its closeness to governmental
largess. When Enron went into a nose-dive in late 2001, Halliburton seemed
poised to follow. Boosted by Arthur Andersen's technique of "unbilled
receivables," Halliburton postponed losses and counted uncollected money as
revenue. Additionally, Halliburton was in the midst of potentially lethal
lawsuits over its use of asbestos.

Then, miraculously two things happened. First, rumors began to float in
January 2002 that Bush's tort reform would put a cap on asbestos lawsuits,
a tale that sent Halliburton stock up by 43%. As the Dow Jones News Service
noted, "companies under the cloud of potential asbestos liability saw their
bonds gain Friday on speculation that President Bush may address the
question of mounting asbestos litigation." Second, Halliburton scored
crucial contracts from the Pentagon to build forward operating bases for
the War on Terror at a bill of several billion dollars, and a substantial
profit. Add to this Halliburton's role as one of two major prison builders
and you have a bonanza for the firm from the increased global repression.

Halliburton's boss boasted to the media, "Augmenting our military troops
with contractor-provided support has proven to be an invaluable force
multiplier." What he said, in essence, was that the Pentagon provided the
bailout to prevent an Enron-like burnout.

More bailouts are on the way. Ahmed Chalabi, now on the US-run Governing
Council of Iraq, head of the State Department's Iraqi National Congress and
fugitive from Jordanian justice for embezzlement, told the Washington Post
in September 2002, "American companies will have a big shot at Iraq's oil."
Halliburton is one such firm, and its stability is premised on the
econ-atrocity of imperialism.

Sources: Details are in my Fat Cats and Running Dogs: The Enron Stage of
Capitalism (Common Courage, 2002).

(c) 2003 Center for Popular Economics

The Center for Popular Economics is a collective of political economists
based in Amherst, Massachusetts.  CPE works to demystify economics by
providing workshops and educational materials to activists throughout the
United States and around the world.  If you would like to get more
information about setting up a workshop for your organization, or would
like to receive more materials about CPE, please write to us as
<programs@populareconomics.org>.

*********
Econ-Atrocities are a periodic publication of the Center for Popular
Economics. If you would like to unsubscribe from this list please send an
email to <econ-atrocity@populareconomics.org> with "Unsubscribe" as the
subject.
If you received this bulletin from a friend and would like to subscribe to
receive Econ-Atrocities bulletins automatically please send an email to
<econ-atrocity@populareconomics.org> with "Subscribe" as the subject.