In the waning days of the Gulf War, estimates for the cost of rebuilding Kuwait, which had been plundered by Iraq's occupying forces, ranged in the hundreds of billions of dollars. Construction and oil-services firms saw the country as a bonanza. Even before the exiled Kuwaiti government had been fully restored, it was welcoming reconstruction bids from foreign companies. American executives were the most assiduous deal makers, visiting Kuwaiti royals at their base in Taif, Saudi Arabia, and beating European firms to multibillion-dollar deals.
It turned out that Kuwait was a smaller prize than businesses had initially anticipated -- reconstruction cost tens, not hundreds, of billions of dollars. But U.S. firms got the lion's share of the work, with one company, Bechtel Corp., a private, family-owned and very secretive firm based in San Francisco, ending up with the main rebuilding contract, worth an estimated $2.5 billion.
Bechtel has a legendary history of setting its sights on large projects and successfully networking with influential people who can bring those projects to the company. The firm built the Hoover Dam, the subway systems in San Francisco and Washington, D.C., the tunnel under the English Channel, and many U.S. nuclear power plants. In his book "Friends in High Places: The Bechtel Story: The Most Secret Corporation and How It Engineered the World," the journalist Laton McCartney outlines Bechtel's ties to powerful people, many of them Republicans. Caspar Weinberger, Ronald Reagan's defense secretary, was once Bechtel's general counsel; Reagan's secretary of state, George Schultz, is a former Bechtel president. "Gerald Ford had also lent a hand, as Richard Nixon had before him, and Ronald Reagan after him, by trying to give Bechtel commercial access to the nation's most secret nuclear technology," McCartney writes, citing one example of Bechtel's reach. And Bechtel is no stranger to the current Bush administration. In February, the company's CEO, Riley Bechtel, was named, along with dozens of other executives, to the president's Export Council, a White House trade advisory group.
Not surprisingly, Bechtel was one of the companies selected by USAID to bid for a contract in Iraq. "We are one of the world's leading engineering and construction firms, so if there's infrastructure work to be done in Iraq, we have extensive experience in doing that," Jonathan Marshall, a spokesman for Bechtel, said. But Marshall was wary of Bechtel being seen as pushing for a war. "We do hope for a peaceful resolution here," he said. "If there's work to be done it should be done in an atmosphere of peace and not war. We're not trying to take advantage of anything here."
Parsons, a construction company based in Irvine, Calif., is another of the major firms contacted by USAID. Parsons also did well in Kuwait, landing a contract worth hundreds of millions to expand the country's refining capacity. But when asked what kind of work the company might do in Iraq, Erin Kuhlman, a spokeswoman, said that any Iraq contract would be similar to the rebuilding efforts Parsons headed in Bosnia and Kosovo in the 1990s. Such a contract would, in Kuhlman's description, have little to do with oil.
"The bulk of the aid money that went to Bosnia and Kosovo was to firms that provided labor and equipment to make repairs," she said. "We went in and we cleared areas for mines, and then we organized construction teams to restore water supplies, rebuild roads, hospitals, schools, all sorts of infrastructure that had been damaged in the war."
Kuhlman added that if American firms get rebuilding contracts in Iraq, they would likely employ Iraqis to do the work. "What we did [in Bosnia and Kosovo] is we were the program managers and we hired local groups," Kuhlman said. "People are saying that all the money is going to be coming to American firms, but in fact that's not the way it works. The money goes to the local firm."
The other main contender for business in Iraq is Kellogg Brown & Root, owned by Halliburton. As the New York Times reported last summer, the war on terrorism has been good to KBR. After the Sept. 11 attacks, the company was selected to build a permanent base for detainees held at Guantanamo Bay, Cuba. KBR was also awarded a 10-year, open-ended contract to provide logistics supplies -- managing everything from dining operations to power generation -- to the Army.
But Halliburton has recently been going through a rough period, too. The company has been dogged by a host of class-action lawsuits seeking damages stemming from asbestos-containing products made by some of its subsidiaries. As part of a $4 billion settlement it reached in 2002, KBR, the unit likely to do work in Iraq, is expected to file for bankruptcy later this year.