Halliburton's Army
How A Well-Connected Texas Oil Company Revolutionized The Way America Makes WarNew book releasedOn September 10, 2001, precisely one day before the 9/11 terrorist attacks, Secretary of Defense Donald Rumsfeld told senior staff that the Pentagon was wasting $3 billion a year by not outsourcing many non-combat duties to the private sector. “At bases around the world, why do we pick up our own garbage and mop our own floors?” he asked. Soon after, this fortuitously-timed shift in the way the military wages war would bring immense profits to Texas-based military contractor Halliburton, an oil industry service company whose former CEO was Vice President Dick Cheney. Armed with lucrative no-bid contracts, Halliburton/KBR, its affiliates, and sub-contractors would soon provide most of the infrastructure that supports the war in Iraq. Ultimately, the company would face allegations of corruption, negligence, fraud, and corporate crime.
In HALLIBURTON’S ARMY: How a Well-Connected Texas Oil Company Revolutionized the Way America Makes War (Nation Books; February 9, 2009; $26.95), muckraking journalist Pratap Chatterjee conducts a highly detailed investigation into Halliburton and its former subsidiary KBR’s activities in Kuwait and Iraq, uncovering much new information about its questionable practices and extraordinary profits. Becoming a Halliburton and a KBR shareholder in order to gain access to as much inside information as possible, Chatterjee also moved to Dubai, where the company recently relocated its headquarters. This Middle Eastern base also afforded him access to interviews with many Halliburton/KBR workers, subcontractors, suppliers, and military liaisons, including Texas engineers and Filipino day laborers, who each played a part in Halliburton’s enterprise.
“The rewards and punishments of Cheney and Rumsfeld’s revolution in military affairs have been profound,” Chatterjee writes, “not least for the soldiers who are now supplied with hot food and showers around the clock. For the Pentagon generals, it has meant that they can do far more with far fewer soldiers….Accompanying this new industry is the potential for bribery, corruption, and fraud. Dozens of Halliburton/KBR workers and their subcontractors have already been arrested and charged, and several are already serving jail terms for stealing millions of dollars….The bulk of workers, however, will not see anything close to that, as the pay for Asian workers probably averages $1000 a month…. These men and women make up Halliburton’s Army, which employs enough people to staff one hundred battalions, a total of more than fifty thousand personnel who work for KBR under a contract that is now projected to reach $150 billion. Together with the workers who are rebuilding Iraq’s infrastructure and the private security divisions of companies like Blackwater, Halliburton’s Army now outnumbers the uniformed soldiers on the ground in Iraq.”
Chatterjee traces the history of Halliburton’s government contracts to the mutually beneficial relationship of its subsidiary, Kellogg, Brown & Root (KBR) with Texan President Lyndon Baines Johnson. Brown & Root would become a major U.S. government contractor in Vietnam. Two decade later, when Dick Cheney became Halliburton CEO, despite no prior experience in the oil business, he used his Washington connections to orchestrate lucrative Halliburton
In HALLIBURTON’S ARMY, Chatterjee delves deeply into the controversies spawned by the company’s near-monopoly in providing the services that have made the war in Iraq possible, including: contracts in such trouble spots as Angola, Azerbaijan, Iran and Nigeria. But it was the birth of LOGCAP (the Logistics Civilian Augmentation Program) that would find Halliburton/KBR well-positioned to reap the rewards of the shift of services to the private sector. With the Bush Administration’s War on Terror, Halliburton/KBR easily landed highly profitable contracts without the need to bid, allegedly because of the urgency of the situation.
• The network of kickbacks, bribes and fraud involving employees and subcontractors of Halliburton/KBR in Kuwait and Iraq.
• The inordinate number of no-bid government contracts that Halliburton/KBR has secured.
• How Halliburton/KBR botched the repair of Iraq’s oil fields using Iraq’s own money.
• The role Halliburton/KBR’s negligence has played in the deaths of American civilians and foreign workers, and the company’s subsequent refusal to acknowledge responsibility.
• The “human trafficking” that Halliburton/KBR subcontractors use to lure foreign workers to Iraq with false promises.
• Labor exploitation and an unofficial “caste system” perpetrated by Halliburton/KBR and its subcontractors, with sliding pay scales based on workers’ nationalities.
• Free-flowing alcohol among high-level Halliburton/KBR executives in Muslim countries with strict legal prohibitions against these vices.
• How U.S. government employees and military personnel have been disgraced and demoted when daring to blow the whistle on Halliburton/KBR’s questionable practices and accounting.
• Halliburton/KBR’s dealings with corrupt subcontractors and others with questionable reputations.
• The squandering of U.S. taxpayers’ money through gross overcharges on the part of Halliburton/KBR and its subcontractors.
When Dick Cheney was inaugurated as Vice President of the United States in January 2001, the shares of his former employer were beginning a long slide from a healthy $40 per share to $10 a share a year later. By January 2006, thanks to the company’s profits from the “war on terror,” Halliburton’s stock had skyrocketed to a historic high of $80 per share. As Pratap Chatterjee demonstrates, the company’s fortunes are irrevocably linked to the war in Iraq. And even as it answers its critics and faces government audits, Halliburton/KBR continues to be the predominant U.S. government contractor in the Iraq.
HALLIBURTON’S ARMY is a long-overdue, meticulously researched exposé by one of the world’s leading experts on corporate malfeasance.
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