War Profiteering in IraqAreen, Gilmer, SchwartzEDGE Final PaperWar Profiteering in IraqCorporate Contracts, Private Military Companies,and the National Resource Curse Graham GilmerEric SchwartzMichael AreenEDGE Final PaperProfessor Bruce LusignanJune 1st, 20041Areen, Gilmer, SchwartzEDGE Final PaperIntroductionThe general feeling among U.S. citizens about the war in Iraq and its aftermath isone of confusion and betrayal. Fingers point at the Bush administration, whichapparently lied to the American public. No weapons of mass destruction were everfound, as originally promised. Instead of a quick and clean victory, hundreds oftroops have been killed. The occupation has been long, violent, and largelyunsuccessful. Terrorism has not stopped, or even been slowed. Just last month, AlQaeda released a video from within Iraq depicting the beheading of Nick Berg, afellow countryman. The horror of violent conflict has made everyone wonder howthis whole war got started in the first place.The answer to this question delves deeply into the history of colonialism,politics, and war on which this country was built. America’s invasion of Iraq isjust the latest example of a long tradition of colonialism and self-preservation thatdates back to our founding. America fights when there is a profit to be had, whichis why most of our recent military actions have occurred in oil rich countries suchas Colombia, Venezuela, Kuwait, and now Iraq. While the motivation for2Areen, Gilmer, SchwartzEDGE Final Paperbecoming involved in Iraq follows from the traditional American doctrines ofhegemony, the specific dynamic of the war and wealth plundering has changed toreflect the modern era.Iraq presents itself as a case study on the new methods of war profiteeringand subcontracting. We investigate these trends below, outlining the connectionbetween political doctrine, government favors, corporate contracts, privatemilitary companies, and Iraqi oil. We conclude by discussing how these elementswill affect the future of Iraq and its people on the eve of its regaining ofgovernmental control. War Profiteering and U.S. Corporate Contracts in IraqWhen the Texas construction company Brown and Root, now a subsidiary ofHalliburton Corporation, was awarded a contract to rebuild a war-torn country, itdid not surprise many people. After all, the President was also a Texan, and hisadministration had past ties to the massive company. The contract was extensive,signing over billions of dollars to the company to rebuild virtually the entireinfrastructure of the country. The deal was “no-bid” as well, meaning Brown andRoot won the contract without competition, and without a ceiling on the price ofthis lucrative offering. Not surprisingly, the United States Congress began toquestion where the money was going, and whether ties to the administration were3Areen, Gilmer, SchwartzEDGE Final Paperdirectly responsible for awarding contracts. Although this may sound like theBush administration of 2004, it is rather an account of the war profiteering scandalof the 1960s, involving the Lyndon B. Johnson administration and the VietnamWar (Carter 2003). The US Congressman leading the charge in the investigationwas, in fact, Illinois Representative Donald Rumsfeld.War profiteering is the exploitation of government contracts duringwartime, usually by private sector companies that win deals to perform servicesduring or after the conflict. In almost every conflict in the United States’ history,war profiteering has existed in some form. This statement is drawn from the basicprinciple that wartime boosts the economy, and this increased production of goodsand services is reflected in US industry profits. In addition, this hectic time isalmost always coupled with a loosening of control on the contracts that are givento companies. Frequently, companies with close ties to the administration arepresented with lucrative contracts to simplify the selection process. When thecompanies vying for these deals find themselves with no competition, there islittle incentive to cut costs and lower the bids. In reality, the companies presentswollen proposals, and often pocket the leftover cash at the end of the workproject. President Franklin D. Roosevelt was one of the first political figures to takean aggressive stance against war profiteers. During World War II, he was outraged4Areen, Gilmer, SchwartzEDGE Final Paperto hear that individuals were profiting because of the booming defense industryand said, “I don’t want to see a single war millionaire created in the United Statesas a result of this world disaster” (thenation.com 2003). This strong stance was acatalyst in the early fight against war profiteering, calling other politicians to takenotice of the domestic wartime atrocities. Future President Harry S. Trumanshared FDR’s tough stance on war profiteers. His tenacious effort to eliminateinefficiencies and corruptions in US war industry involved driving 30,000 miles inhis Dodge around the country to drop in “unannounced on corporate offices andworksites” (thenation.com 2003). Senator Truman chaired a subcommittee thatwould eventually find countless acts of “waste, inefficiency, mismanagement, andprofiteering.” Truman’s committee was ruthless, hunting down profiteers andreferring to their egregious crimes as “treason.” Armed with news of theexploitation, the FDR administration hiked the corporate “excess-profits tax” to 90percent, leaving little or no room for profiteering in the World War II years(thenation.com 2003).Corporate contracts picked up quickly in Southeast Asia even before theVietnam War. In 1954, the United States began a process of “nation building”below the 17th parallel of Vietnam. The objective was to create a solid militaryinfrastructure in Southern Vietnam so it could sustain a strong Communistpresence to the north. The US created the “largest construction entity ever”5Areen, Gilmer, SchwartzEDGE Final Paper(which included Brown and Root) for the appointed tasks in Southern Vietnam,and over the next ten years, constructed over $2 billion in military projects. Theconglomerate created naval ports, airfields, hospitals, and an enormous