Berkeley Author Investigates Iraq War Profiteers: By JUDITH SCHERR

Special to the Planet
Tuesday November 30, 2004

Many of us come to understand the Iraq War through the lens of newspaper and TV journalists who track our forces on the battlefield and in Pentagon briefings. 

In Iraq, Inc: a Profitable Occupation, Pratap Chatterjee provides a view of the Iraq War that goes beyond Humvees, firefights and Pentagon spinmeisters, and reveals a complex and lucrative system of private enterprise, where billions of tax dollars are spent—and sometimes misspent—to support the warriors and rebuild Iraq.  

The 248-page paperback, just released by Seven Stories Press, looks at the army of privately contracted dishwashers, barbers, toilet cleaners, security guards, transporters of prisoners, intelligence gatherers and truck drivers, generally invisible to the public. The presence of these workers only comes to light when one among them gets kidnapped or killed or steps out of line and into the media spotlight, as the contract interrogators at Abu Ghraib did.  

At the core of Chatterjee’s research are the multinational corporations that get the contracts, deploy the workers, purchase the equipment and get rich in the process. A project director and managing editor at Oakland’s CorpWatch, Chatterjee, 40, has been tracking military spending for a decade.  

In an interview earlier this month in his downtown Oakland office, Chatterjee, a Berkeley resident and former member of the city’s Community Environmental Advisory Commission, said that since the first war with Iraq, the role of private enterprise in military contracting has changed dramatically. “In the first Gulf War one in 100 ‘boots on the ground,’ as they call it, was a private contractor.” When the U.S. invaded and occupied Iraq in 2003, one in 10 was a private contractor. “Today, as we speak and the U.S. is launching a war in Falluja, one in four ‘boots on the ground’ is a private contractor.” 

Chatterjee, whose well-documented information comes from investigation inside Iraq and from research in the U.S., begins Iraq, Inc. with a hard look at Houston-based Halliburton. The c orporate giant has profited from the war with some $18 billion in contracts to perform such tasks as meal preparation, mail delivery, base construction, and fixing Iraq’s oil industry. (Vice President Dick Cheney, the company’s former CEO, receives more than $150,000 in annual payments from Halliburton.)  

Employees are attracted by Halliburton salaries, which top what they could otherwise earn. The pay varies according to the worker’s home country: a South Asian kitchen worker might earn $300 each month, an Indian fabricator, $550 and an American truck driver can get $8,000.  

The corporation employs few Iraqis. The Iraqi Labor Ministry reported in October, 2003 that 70 percent of the labor force was unemployed. “…Halliburton and the occupation authorit i es simply do not trust Iraqi workers, fearing that they might kick out or kill their colonial bosses,” Chatterjee writes. 

When making purchases, Halliburton doesn’t skimp. Why should it? Its contracts guarantee costs plus 1 percent profit. So greater exp enditures—buying a $5 towel rather than one at $1.60—increase the company’s earnings. 

Should Halliburton be condemned as a war profiteer? Richard Dowling, spokesperson for the U.S. Army Corps of Engineers doesn’t think so: “Yes, it is a profit motive tha t brings companies into a dangerous location, but that is what capitalism is all about,” he told Chatterjee. “Halliburton employees are under fire and several have died, but (the companies) are still here. With all due respect to nonprofit organizatio ns l ike the United Nations and the Red Cross, they have pulled out. If it takes profit to motivate an organization to take a tough job, then that’s the only way to do it.”  

Because of the growing resistance and associated sabotage, security has become b ig bu siness in Iraq, with an estimated 20,000 private security guards on patrol. They work for a variety of contractors and earn anywhere from $60 to $200 per month for Iraqis, to $1,000 a day for Americans. The well-paid Yankees guard high-profile targets, tr ain police and have been known to engage in military combat. Several were implicated in the Abu Ghraib scandal where Iraqi prisoners were tortured.  

Chatterjee points out the irony. “I realized that the security for ordinary Iraqis had completely disappeared. I discovered that all the cinemas were closed, the children’s zoo and playgrounds were empty, the banks of the Tigris where musicians once performed on summer evenings had shut down. No, there was no ban on any of these activities, it was jus t fear of suicide bombs, American attacks, and street crime, the latter a hitherto unknown phenomenon under the dictator.” 

Another task the U.S. contracts out is that of bringing democracy to Iraq. Part of the plan is the creation of a “free” media, which, in f act, was designed to put a positive spin on the U.S. occupation. So the military funded the Iraqi Media Network radio and TV station, set up by Science Applications International Corporation of San Diego on a $15 million sole source contract. The group had no media experience. “The closest SAIC has gotten to running a television network is a contract to manage surveillance cameras at the Olympics,” Chatterjee says. 

And North Carolina-based Research Triangle Institute’s $167 million contract was t o bring democratic institutions to 180 Iraqi cities and towns. What was set up, in fact, were town councils chosen by a select group of people, something Chatterjee calls “appointocracy.” Because this top-down system was met with opposition in a number of instanc es, Chatterjee concludes: “Iraqis no longer believe that the Americans intend to allow them to choose for themselves…. (This) has in fact strengthened rejectionists like Moqtada al Sadr—the very opposite of what the occupation authorities wanted to achiev e in the first place.” 

On the economic front, the U.S. put in place new laws that allow foreign ownership of Iraqi banks and businesses. “The Iraqi banks that are able to avoid a foreign takeover now have to compete with foreign banks and their many subs idiaries that have an unlimited source of capital and lending abilities.” The new laws that facilitated foreign investment “sparked a little gold rush in Washington, D.C.” with companies rushing to acquire distribution rights ”for everything from grain or auto parts to shampoo.” 

While putting aside the question of whether we should be fighting in Iraq, this well-researched and thoroughly annotated book provides the reader with a broadened context in which to evaluate the ongoing war effort.  

Why did the author risk his life going several times to the dangerous battle-scarred country to research the book? “If I didn’t go there, the story wouldn’t be told,” he said. “My job as a journalist is to serve the public interest, to stand up and challenge the powers that be.”  

Pratap Chatterjee has done that well in Iraq, Inc. 


Judith Scherr is a former managing editor of the Berkeley Daily Planet. ?Í