<font color=brown>Part III<font color=black>
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newyorker.com
In the spring of 2000, Cheney’s two worlds—commerce and politics— merged. Halliburton allowed its C.E.O. to serve simultaneously as the head of George W. Bush’s Vice-Presidential search committee. At the time, Bush said that his main criterion for a running mate was “somebody who’s not going to hurt you.” Cheney demanded reams of documents from the candidates he considered. In the end, he picked himself—a move that his longtime friend Stuart Spencer recently described, with admiration, as “the most Machiavellian fucking thing I’ve ever seen.”
One man who was especially pleased by Cheney’s candidacy was Ahmed Chalabi, the Iraqi dissident who was the leading proponent of overthrowing Saddam Hussein. Cheney had come to know Chalabi through conservative circles in Washington. “I think he is good for us,” Chalabi told a U.P.I. reporter in June, 2000.
For months there has been a debate in Washington about when the Bush Administration decided to go to war against Saddam. In Ron Suskind’s recent book “The Price of Loyalty,” former Treasury Secretary Paul O’Neill charges that Cheney agitated for U.S. intervention well before the terrorist attacks of September 11, 2001. Additional evidence that Cheney played an early planning role is contained in a previously undisclosed National Security Council document, dated February 3, 2001. The top-secret document, written by a high-level N.S.C. official, concerned Cheney’s newly formed Energy Task Force. It directed the N.S.C. staff to coöperate fully with the Energy Task Force as it considered the “melding” of two seemingly unrelated areas of policy: “the review of operational policies towards rogue states,” such as Iraq, and “actions regarding the capture of new and existing oil and gas fields.”
A source who worked at the N.S.C. at the time doubted that there were links between Cheney’s Energy Task Force and the overthrow of Saddam. But Mark Medish, who served as senior director for Russian, Ukrainian, and Eurasian affairs at the N.S.C. during the Clinton Administration, told me that he regards the document as potentially “huge.” He said, “People think Cheney’s Energy Task Force has been secretive about domestic issues,” referring to the fact that the Vice-President has been unwilling to reveal information about private task-force meetings that took place in 2001, when information was being gathered to help develop President Bush’s energy policy. “But if this little group was discussing geostrategic plans for oil, it puts the issue of war in the context of the captains of the oil industry sitting down with Cheney and laying grand, global plans.”
The Bush Administration’s war on terror has became a source of substantial profit for Halliburton. The company’s commercial ties to terrorist states did not prevent it from assuming a prominent role. The Navy, for instance, paid Halliburton thirty-seven million dollars to build prison camps in Cuba’s Guantánamo Bay for suspected terrorists. The State Department gave the company a hundred-million-dollar contract to construct a new embassy in Kabul. And in December, 2001, a few years after having lost its omnibus military-support contract to a lower bidder, Halliburton won it back; before long, the company was supporting U.S. troops in Afghanistan, Kuwait, Jordan, Uzbekistan, Djibouti, the Republic of Georgia, and Iraq. Halliburton’s 2002 annual report describes counterterrorism as offering “growth opportunities.”
The Department of Defense’s decision to award Halliburton the seven-billion-dollar contract to restore Iraq’s oil industry was made under “emergency” conditions. The company was secretly hired to draw up plans for how it would deal with putting out oil-well fires, should they occur during the war. This planning began in the fall of 2002, around the time that Congress was debating whether to grant President Bush the authority to use force, and before the United Nations had fully debated the issue. In early March, 2003, the Army quietly awarded Halliburton a contract to execute those plans.
As it turned out, oil-well fires were not a problem. An Army War College study shows that of the fifteen hundred oil wells in Iraq’s two major oil fields, only nine were damaged during the war. Colonel Gardiner said he was puzzled by the Pentagon’s inability to predict this outcome. “Our intelligence before the war was good enough to know that,” he said.
After months spent trying to obtain more information about the classified Halliburton deals, Representative Waxman’s staff discovered that the original oil-well-fire contract entrusted Halliburton with a full restoration of the Iraqi oil industry. “We thought it was supposed to be a short-term, small contract, but now it turns out Halliburton is restoring the entire oil infrastructure in Iraq,” Waxman said. The Defense Department’s only public acknowledgments of this wide-ranging deal had been two press releases announcing that it had asked Halliburton to prepare to help put out oil-well fires.
The most recent budget request provided by the Coalition Provisional Authority in Iraq mentions the building of a new oil refinery and the drilling of new wells. “They said originally they were just going to bring it up to prewar levels. Now they’re getting money to dramatically improve it,” Waxman complained. Who is going to own these upgrades, after the United States government has finished paying Halliburton to build them? “Who knows?” Waxman said. “Nobody is saying.”
It is so complicated to secure an Iraq contract from the United States government that several big Washington law firms have gone into the business of shepherding applicants through the process. More than twenty billion dollars has been set aside for Iraqi relief and reconstruction projects, with work contracts being awarded by the Defense, State, and Commerce Departments, and by the U.S. Agency for International Development, in coördination with L. Paul Bremer, the head of the Coalition Provisional Authority. There’s an additional five billion dollars sitting in the Development Fund for Iraq, also administered by the C.P.A. Officials at the C.P.A. say that contracts are awarded on the basis of competitive bidding, but rumors proliferate about political influence. When asked if connections helped, an executive whose firm has received several contracts replied, “Of course.” One businessman with close ties to the Bush Administration told me, “Anything that has to do with Iraq policy, Cheney’s the man to see. He’s running it, the way that L.B.J. ran the space program.”
Cheney’s spokesman confirmed that the Vice-President speaks “on occasion” with officials at the C.P.A., and refers inquiries to the authority from third parties “expressing interest in getting involved in Iraq.” The businessman offered an example of Cheney’s backstage role. He said that Jack Kemp, the former Republican congressman and Secretary of Housing and Urban Development, got help from Cheney with a venture involving Iraq. Last summer, the businessman said, Kemp had Cheney over for dinner, along with two sons of the President of the United Arab Emirates. In an interview, Kemp confirmed the event, and his business plans, but denied receiving any special assistance from Cheney. “It was just social,” Kemp said. “We’re old friends. We didn’t talk about business.” He acknowledged, however, that Cesar Conda, who until last fall was Cheney’s domestic-policy adviser, was helping him with a study on how to fashion a public-private partnership plan to develop the Iraqi economy.
Kemp said that he is working on two business ventures in Iraq. He described the first project, a company called Free Market Global, as “an international company that trades in gas, petroleum, and other resources.” Although Kemp provided only vague details about the project, he said, “I can tell you that General Tommy Franks has joined the advisory board of Free Market Global.” Last year, General Franks commanded the invasion of Iraq.
Franks’s lawyer, Marty Edelman, confirmed his client’s participation: “That is correct. But it is my understanding that he won’t be dealing with Iraq or the military for a year” (to comply with government ethics rules). Asked how Kemp and Franks had joined forces, Edelman said, “It seems like everyone on that level knows each other.” Edelman himself is now on the advisory board of Free Market Global.
Kemp’s second project, in which he said he would play an advisory role, is something called al-Ruba’yia. He describes it as a two-hundred-million-dollar fund to be invested in various ventures in Iraq, from energy to education. He is trying to attract American investors. Kemp is well positioned for this task: his political organization, Empower America, counts among its supporters some of the current Bush Administration’s top figures. Donald Rumsfeld, for example, is a former board member. “It’s like Russia,” the businessman said. “This is how corruption is done these days. It’s not about bribes. You just help your friends to get access. Cheney doesn’t call the Defense Department and tell them, ‘Pick Halliburton.’ It’s just having dinner with the right people.”
So far, other than the irregularities at Halliburton, there has been no evidence of large-scale corruption in the rebuilding of Iraq. But a number of friends of the Administration have landed important positions, and others have obtained large contracts. For instance, Peter McPherson, who took a leave from his job as president of Michigan State University to serve as Paul Bremer’s economic deputy in Iraq, has been friends with Cheney since they both served in Gerald Ford’s White House. The head of private-sector development at the C.P.A., one of the most powerful posts in Iraq, is Thomas Foley, a Connecticut-based business-school classmate of President Bush, who later became finance chairman for Bush’s Presidential campaign in Connecticut. Foley was a “pioneer,” meaning that he raised more than a hundred thousand dollars for Bush.
Last month, an inspector general was appointed for the C.P.A., as required by Congress when it approved the President’s eighty-seven-billion-dollar supplemental budget for Iraq last year. Rather than choosing a nonpartisan outsider for this watchdog role, as most government agencies do, the Administration selected Stuart Bowen, Jr., who spent two years as White House counsel in the Bush Administration. According to The Hill, a Washington newspaper, L. Marc Zell, a former law partner of Douglas Feith, the Under-Secretary of Defense for Policy, is helping with international marketing for a concern called the Iraqi International Law Group. Billing itself as a group of lawyers and businessmen interested in helping investors in Iraq, the venture is run by Ahmed Chalabi’s nephew Salem, who doubles as a legal adviser to Iraq’s governing council, of which his uncle is a member.
Tom Korologos, a well-connected Republican lobbyist in Washington, recently took a temporary assignment as a senior counsellor to Bremer. Korologos acknowledged that Washington lobbyists are scrambling to solicit business in Iraq. “By definition, it’s going to boom, because of the numbers,” he said. “The question is who’s going to get the contracts. There’s a lot of money. Somebody’s got to build the bridges and roads.” He added that talk of political influence over the process was “bullshit.”
Yet a look at one prominent defense contractor, Science Applications International Corporation, based in San Diego, suggests the importance of connections. One of its board members is Army General Wayne Downing, who commanded the Special Forces in the first Gulf War and ran counterterrorism in the Bush White House for the better part of a year after September 11th. During that time, he accompanied Cheney on visits to the C.I.A. to discuss U.S. intelligence on Iraq. For years, Downing has been an unpaid adviser to Ahmed Chalabi and the Iraqi National Congress, and he was an early advocate of armed insurrection against the old Iraqi regime. S.A.I.C.’s seven Iraq contracts are worth fifty million dollars.
It is unclear what special expertise S.A.I.C. brings to several of its contracts. One company executive, who asked not to be named, said that its chief credential for setting up what was supposed to be an independent media for Iraq, modelled on the BBC, was military work in “informational warfare”—signal jamming, “perception management,” and the like. Some of S.A.I.C.’s government contracts require that specific individuals—referred to as “executive management consultants”—be paid more than two hundred dollars an hour. One contract cites a man named Owen Kirby as someone who will advise Iraqis on the process of building democracy. Kirby is a program director of the International Republican Institute, an organization devoted to promoting democracy abroad. In October, 2001, the group gave its Freedom Award to Dick Cheney. Before that, it gave the award to Lynne Cheney.
It is not surprising that Cheney, after five years of running Halliburton, a company that considers war as providing “growth opportunities,” regards winning the peace in Iraq as a challenge for private enterprise as well as for government. Yet it is reasonable to ask if Cheney’s faith in companies like Halliburton contributed to his conviction that the occupation of Iraq would be a tidy, easily managed affair. Now that Cheney’s vision has been shown to be overly optimistic, and Iraqis and American soldiers are still getting killed ten months after Saddam’s overthrow, critics are questioning the propriety of a reconstruction effort that is fuelled by the profit motive. “I’m appalled that the war is being used by people close to the Bush Administration to make money for themselves,” Waxman said. “At a time when we’re asking young men and women to make perhaps the ultimate sacrifice, it’s just unseemly.” Many of those involved, however, see themselves as part of a democratic vanguard. Jack Kemp’s spokesman, P. J. Johnson, told me, “We’re doing good by doing well.” Joe Allbaugh, Bush’s former campaign manager, who has established New Bridge Strategies, a firm aimed specifically at setting up for-profit ventures in Iraq, makes no apologies. “We are proud of the leadership the American private sector is taking in the reconstruction of Iraq,” he said.
Another top Republican lobbyist in Washington, Charlie Black, told me that his firm, BKSH & Associates, has plans to help Iraqis set up their own affiliated public-relations and government-relations firm; the company would become perhaps the first lobbying shop in Baghdad. Black is excited by the opportunities in Iraq, but he, too, has complaints. “The problem in Iraq so far is it’s slow, and very confusing for people to figure out how to do business there,” he said. “One week you go to Baghdad, and they say the decisions are being made at the Pentagon. Then you go to the Pentagon, and they say the decisions are being made in Baghdad. Only Halliburton is making money now!” He laughed. “Is there too much cronyism? I just wish I could find the cronies.” |
