First Johnson, Now Bush-Cheney - Part 3
In April 1937, in a special election to fill the seat of a lawmaker who had died of a heart attack, the 28-year-old Lyndon Johnson won his first public office, as a congressman in Texas' 10th District. Almost immediately after the election, he went to work for Brown & Root, whose first large construction project with the federal government, the Marshall Ford Dam, faced the possibility of a shutdown for technical, legalistic reasons. (The land it was being built on was not owned by the federal government but by the state of Texas, which was forbidden by charter from handing it to the feds.) Johnson correctly saw the possibility of helping Brown & Root as an opportunity to gain untold future rewards. Just 11 days after winning office, Johnson managed to pull some strings in the Roosevelt administration in order to let Brown & Root's dam project go forward. "Thereafter," writes Bryce, "the Browns bankrolled Johnson every step of the way."
In a short time, the relationship between the Browns and Johnson got to a point at which each couldn't live without the other. In an era of few election finance rules, Johnson, who faced increasingly tough races during the course of his career -- for the Senate and then for the White House -- constantly needed the Browns' deep pockets. And the Browns had no choice but to keep pumping money into Johnson, not only because of what they wanted him to do for their business interests but also because they feared the consequences of a Johnson loss. If any opponent ever beat Johnson, they thought, he'd have an interest in making things very bad for Johnson's longtime benefactor, Brown & Root. On this point, both Briody and Bryce mention an interview that Ed Clark, a Brown & Root attorney, once gave to the Johnson biographer Robert Caro: "The Browns had to win this. They had to win this," Clark said of Johnson's 1948 Senate primary race against Texas Gov. Coke Stevenson. "Stevenson was a man of vengeance, and he would have run them out of Washington. Johnson, if he lost, he was going back to being a nobody. They were going back to being nobody."
Money from the Browns and from a host of Texas oilmen "flowed to Johnson like an inexhaustible river," Bryce writes. "While Stevenson traveled the state in an old Plymouth, Johnson was in the air, flying on Brown & Root's DC-3s between multiple Texas cities on a single day."
When the polls closed on Aug. 28, 1948, Johnson had won the count against Stevenson by a razor-thin margin of just 87 votes, less than a tenth of a percent of all the votes cast. But a statewide battle over allegations of election fraud ensued. In a precinct controlled by a Johnson ally, an investigation revealed that 202 names had been added to the voter list after polls had closed. Thus, writes Bryce, "Johnson was ahead, but the winner wouldn't be determined by the voters. The winner would be the candidate who was able to muster more supporters, more money, more legal muscle, more influence." In an uncanny parallel to the kind of luck that would help out another well-connected Texas man 50 years later, Johnson was eventually declared the winner when his side managed to press Supreme Court Justice Hugo Black to put a halt to an investigation of vote fraud in one Texas county.
What would Brown & Root get in return for all its support of Johnson? Over the years the company would enjoy contracts galore -- awards to build naval bases and space centers, Army bases and ships. There is no indication that the government was dissatisfied with Brown & Root's work; usually, the company produced quality work, though, as Briody notes, its projects would often balloon in cost. It was during the Vietnam War, when Johnson was America's vice president and then president, that Brown & Root saw its greatest successes. In that war, for the first time, Brown & Root began to function as it does in today's military -- as a contractor that not only builds equipment for the government but also maintains services on a day-to-day basis. This work made Brown & Root very successful: In 1947, it was the 47th largest construction company in the nation, Briody says. By 1965, it was No. 2. In 1969, just after Johnson left the White House, Brown & Root was No. 1, with sales of $1.6 billion.
The years following the Johnson administration were not the best of times for Brown & Root. After Richard Nixon came to office, the company -- which had been purchased by Halliburton in 1962 but functioned as a completely autonomous unit for many decades -- saw a sudden decline in its political access. Briody notes that the company had not planned it this way; indeed, in the 1960s, it had placed a bet on John Connally, a Democrat who had served as Johnson's campaign director for many years, as Texas governor (he was in the front seat of the car in which John F. Kennedy was shot in 1963) and, eventually, as Nixon's treasury secretary. After Watergate, Connally was talked about as a possible replacement for Vice President Spiro Agnew, but eventually Nixon picked Gerald Ford. When Nixon resigned in disgrace, Connally's fortunes burst. "Brown & Root's horse had exited the race," Briody writes, "brought down by one of the strangest political controversies in American history."
During the 1970s and 1980s, Brown & Root languished. In 1976, four of its executives died in a plane crash in Alaska. The next year, Foster Parker, the company's president, facing a federal indictment in a price-fixing scheme, committed suicide. In the late 1970s, Brown & Root and other units of Halliburton seemed to bet the future of the company on work in Iran, where the profligate Shah had pledged to spend more than $9 billion on a giant deepwater port along the Gulf of Oman. But after writing checks of just a few hundred million, the Shah was ousted from Iran by the Ayatollah Khomeini's Islamic revolution.
With the blessing of the Reagan administration, Brown & Root then switched its sights to Saddam Hussein in Iraq, which offered the company lucrative contracts to work on its oil infrastructure. Brown & Root employees were working on Iraq's Mina al-Bakr oil platform right up until Aug. 2, 1990, when Saddam Hussein invaded Kuwait. This was, temporarily, bad for business; not only did Iraq still owe Brown & Root more than $17 million for services rendered at Mina al-Bakr, but once again, the company seemed to have bet on the wrong political horse.
It was only after the first Gulf War that Brown & Root began to find its fortunes once again. First, the company won a host of contracts to rebuild oil infrastructure damaged by the war, and then, in 1992, the Pentagon (which at the time was headed by Dick Cheney) selected Brown & Root to develop a secret plan to demonstrate how a private contracting firm could provide logistics support for the military. Cheney was impressed with Brown & Root's plan, so he made it a reality, asking a host of private contractors to submit bids for what would be the nation's first umbrella logistics contract, called LOGCAP and worth many billions of dollars. Brown & Root, which had drawn up the contracting plan, was eventually awarded the deal it designed.
Dan Briody quotes sections of the Code of Federal Regulations that seem to indicate that it's illegal for a firm to design a contract and then be awarded that very same contract. "It would be safe to say that the contract was awarded under highly questionable circumstances," Briody says. "Brown & Root clearly had a competitive advantage in addition to proprietary knowledge and should never have been allowed to compete for the contract. As they had done so many times before, the company had worked the system to perfection, and scored a contract that has netted the company more than $2.5 billion since it was first enacted."
The LOGCAP contract has thus become extremely valuable to Halliburton, as were the many other contracts that Dick Cheney helped to bring in during his tenure at the firm. In the five years preceding Cheney's term at Halliburton, Briody says, Brown & Root received $1.2 billion in government contracts. During Cheney's five years as CEO, it received $2.3 billion in contracts. Before Cheney came to Halliburton, the firm received $100 million in government-secured loans from the U.S. Export-Import bank -- during his time there, the government backed $1.5 billion in Halliburton's loans.
Cheney accomplished these feats, Briody says, by "hiring a handful of his pals from the Beltway." These included David Gribbin, Cheney's former chief of staff, who lobbied for Halliburton in Washington, and a Navy admiral, Joe Lopez, who became Brown & Root's "governmental operations expert." Since Cheney joined the Bush administration, things have only gotten better for Halliburton's government-contracting business. Not only has it been awarded about $2 billion in contracts for work in Iraq, it has also been tasked to work on various other projects in the worldwide war on terrorism -- for instance, building the prisons in Guantánamo Bay.
What this all means, of course, is that Halliburton is hitched to Cheney and Bush in much the same way that Brown & Root was once tied to Lyndon Johnson. The company may suffer some P.R. damage for its close association with the administration, but it has no choice but to support Bush. John Kerry regularly criticizes Halliburton during his speeches. "This president has an open hand for his friends at Halliburton, but he has turned his back on our friends and neighbors," the senator said on the night he won in Iowa. One imagines that a Kerry administration would be a very hostile place for George and Herman Brown's Texas company.
Halliburton and all its Texas pals will no doubt pull every string, therefore, to support Bush for the remainder of the current campaign. That support will be both obvious -- through political donations -- and subtle. In 2000, members of the Bush campaign flew on corporate jets 367 times, and many of those jets were provided by Halliburton and Enron, Bryce notes. That's exactly what Brown & Root did for Lyndon Johnson in 1948.
For Democrats, though, there may be some consolation. Lyndon Johnson, after all, was only elected to one term as president. And it was his bad decisions relating to a costly, deadly, far-off war that brought him down. |
