KMC Forums - The News Reel

The company's proximity to the White House may also not be as much of an asset as one would expect. Last year, when corporate accounting scandals were making headlines, the news that Halliburton was being investigated by the Securities and Exchange Commission for alleged accounting improprieties during Cheney's tenure caused much unwanted press for the firm. Now, according to some industry analysts and political experts, the government may be reluctant to award Halliburton a contract precisely because it would appear unseemly.

"It certainly wouldn't be ideal if they gave the first contract to Halliburton," says Bathsheba Crocker, an expert on postwar reconstruction at the Center for Strategic & International Studies. "There are certainly many people out there who already think this is all about the Bush administration getting access to Iraqi oil in the first place."

Still, says Crocker, if Halliburton is indeed passed over in the first round, that won't be the end of the story. "Brown & Root often does work for the government, and I have no doubt there would be enough to go around" in Iraq, she says.

As many academics, pundits and lawmakers have noted during the past year's war debate, ousting Saddam Hussein could turn out to be the easy part of regime change in Iraq -- the difficult part would be rebuilding a nation suffering from two decades of warfare and sanctions.

"It's not going to be cheap," says Patrick Garrett, an associate analyst at GlobalSecurity.org. "There's going to be a cleanup after the military, because some of those things -- say if cluster munitions are used -- could have a long-term effect on the country. But it's not just cleaning up after the war, it's essentially rebuilding the whole country. There will be school reconstruction, roads, and helping to rebuild the economy that was there before the Gulf War, before the sanctions."

But the biggest prize for American firms like Bechtel and Halliburton will be a contract to repair Iraq's oil industry. On March 6, the Pentagon announced that it had "reliable reports" indicating that Saddam Hussein may be planning "to damage or destroy Iraq's oil fields, potentially causing a crisis for both Iraq's people and its neighbors."

The government said that "Iraq has received 24 railroad boxcars full of pentolite explosives" that would be used to blow up the country's oil facilities, similar to what Iraqi forces did to Kuwait's oil industry in their retreat during the Gulf War. The destruction of Kuwaiti fields caused enormous environmental damage -- 5 million barrels of oil were dumped into the sea, an "impact twenty times larger than that of the Exxon Valdez disaster," according to the government. (Seeking to label Saddam Hussein a "terrorist" any way it can, the Pentagon described the Kuwaiti fires as an act of "eco-terrorism," an incorrect use of the term. According to the FBI, "eco-terrorism" is done with the intention of saving the environment, not damaging it.)

Mike Miller, the CEO of Safety Boss, a Canadian oil-well firefighting company that helped fight the Kuwaiti fires, expects that oil fires in Iraq -- which he thinks are very likely to be set -- will be the biggest event his industry has ever seen. Iraq has more oil fields spread out over a larger area than Kuwait, "so it would be much bigger, and cause potentially much more environmental damage," Miller says.

But Miller fears his firm will be shut out of the bid process. "Whoever gets this firefighting contract has got to have a huge political contact," he says, "and we're a little concerned because as a Canadian company we don't have access to the American government. I guess I would say that once the fires start it would be hard to ignore us -- we did have the best record in Kuwait and the world will ask why we're being left out." But so far, he has had little contact with American officials, and he worries that because Canada has been somewhat noncommittal on a war -- officially, the government wants to give Saddam Hussein until the end of March to comply with inspections -- his company will be left out of the initial plans.

Miller's situation raises an interesting question. If the war in Iraq turns out to be an almost entirely American affair, with foreign governments refusing to go along with the effort, and American troops doing much of the fighting, and American taxpayers bearing much of the cost, does the White House have any obligation to see that foreign firms take part in efforts to rebuild Iraq, enjoying a fair shot at the billions that will be spent upgrading the country's oil infrastructure? Some people in government, the kind of people who want to replace the word "French" with "freedom," may have already concluded that once the U.S. military secures the peace in Iraq, U.S. companies would be justified in securing the dollars. But experts warn of obvious political fallout from such shortsightedness.

If the White House is seen as favoring American firms, especially American firms close to the Bush administration, it could serve as just the proof antiwar critics need to conclude that the U.S. is invading Iraq for the basest reasons -- money and oil.

In the Middle East, the United States is vulnerable to the charge that it is an imperialist power; Saddam Hussein's government regularly accuses the Bush administration of seeking to enslave Iraqis. "It is very politically incorrect to do this," a Saudi Arabian contractor recently told the Middle East Economic Digest. "Look at the Gulf war. Bechtel said that because the Saudis had been good to Kuwait it would source everything locally. Then it had everything flown in from Houston. A lot of Saudis remember that, and Bechtel is not flavor of the month here because of that."

Michael Renner, a researcher at the Worldwatch Institute, wonders whether the Bush administration might be trying to send some not-so-subtle political cues to governments that are now on the fence in the war. "It seems to me that the way it comes across, whether intended or not, is you're sending a signal that if the rest of the world is not going along with this, your companies aren't going to get all the contracts," he says. "They're saying, 'Anybody out there, if you want to get on the bandwagon, this is a good time.' Maybe we should take George Bush at his word when he says, 'If you're not with us, you're against us.' He may mean that not only in political terms, but also in business terms."

But Renner predicts a huge international outcry to American profiteering from war. "If that's what plays out, if there's a sense that this carries a commercial side to it as well, then given the fact that public opinion is very much up in arms against the current policy, that there's a rather unprecedented groundswell of opinion against this, I wouldn't be surprised if people react very angrily to it."