In 1917, at the height of World War I, Wisconsin Sen. Robert M. La Follette caused quite a stir when he suggested that one of the best ways to support the US troops fighting in Europe was to expose and challenge American corporations that engage in all forms of war profiteering. Even as attention is focused abroad on battles still raging, La Follette said, it is important to remain ever mindful "that there are enemies of democracy in the homeland."
"These," the Senator continued, "are the powers of special privilege that take advantage of the opportunity which war affords to more firmly entrench themselves in their control of government and industry. These interests are amassing enormous fortunes out of the world's misery."
More than 85 years later, America finds itself embedded in a very different conflict, yet La Follette's words still ring true. No matter what Americans think about the Bush Administration's preemptive invasion of Iraq, there should be broad agreement on the need to ensure that corporations do not turn the war and its aftermath into a bonanza for their bottom lines and a boondoggle for US taxpayers. In other words: Now that the statues of Saddam Hussein have been toppled, it is time to topple the war profiteers. But where to begin?
Recent days have brought news of the awarding of a contract worth up to $680 million to rebuild Iraqi roads, schools, sewers and hospitals damaged in the war. Bechtel, which is jokingly referred to in business circles as Bushtel, donated $1.3 million to political candidates during the last two election cycles -- with most of it going into the coffers of Republican campaigns, including the 2000 Bush for President effort. Surely, Bechtel is an attractive target for a Congressional investigation of war profiteering--like those begun after World War I and during World War II.
But if Congress is going to get serious about war profiteering, there is no better place to begin than the Texas-based Halliburton Corp. energy conglomerate that Vice-President Dick Cheney once headed. According to a letter from the Army Corps of Engineers released this week, a Pentagon contract given without competition to a Halliburton subsidiary to fight oil well fires in Iraq is worth as much as $7 billion over two years.
The contract allows Kellogg Brown & Root, the Halliburton subsidiary, to collect as much as a 7 percent profit. That could amount to $490 million.
Cheney, who collected more than $33 million in compensation from Halliburton when he quit to become vice president--and who still receives deferred compensation from the company of about $180,000 a year--says that he has not intervened on behalf of his old company. And National Security Council spokesman Michael Anton says, "The White House has no role in selecting individual contractors."
But Kellogg Brown & Root has had quite a run of luck since the Bush Administration took over. The federal government and the Pentagon have paid the firm tens of millions of dollars to build cells for detainees at Guantanamo Bay in Cuba. And the company is earning hundreds of millions as the exclusive logistics supplier for the Navy and the Army, providing services like cooking, construction, power generation and fuel transportation. The best accounting so far available suggests that, between October 2000 and March 2002, the government awarded Kellogg Brown & Root work worth more than $624 million.
Two senior members of the US House--Henry Waxman, D-Calif., and John Dingell, D-Mich.--have asked the General Accounting Office, the investigative arm of Congress, to review contracts received over the last two years by Halliburton and its subsidiaries. "The ties between the vice president and Halliburton have raised concerns about whether the company has received favorable treatment from the Administration," Waxman and Dingell bluntly declared in their letter to the GAO.
The investigation of Halliburton should coincide with congressional action to tighten procedures for awarding government contracts and with steps to ensure that corporations are prevented from profiteering in wartime or its aftermath--as in World War II, when the chair of the Senate's Special Committee to Investigate the National Defense Program referred to war profiteering as "treason." That Senator was Harry Truman.