The Patronage System
The cronyism involved in the Iraq reconstruction contracts goes much
deeper than big contractors like Halliburton and Bechtel (the number two
Iraq reconstruction contractor, Bechtel has big contracts to repair schools,
hospitals and the electricity grid).
News reports describe a "patronage system" comprised of an extensive
network of Bush family, friends and crony consultants ó many of whom are
tied to the Bush/Cheney 2000 and 2004 campaigns:
- In 2003, a few of Bush's closest political allies created New Bridge
Strategies to help corporations "evaluate and take advantage of business
opportunities in the Middle East following the conclusion of the U.S.-led
war." New Bridge shares its Washington, D.C. offices with Barbour, Griffith
& Rogers ó the high-powered Republican lobbying firm founded by Haley
Barbour, former head of the Republican National Committee and current
governor of Mississippi. The firm's CEO is Joe Allbaugh, the Bush/Cheney
2000 national campaign manager (and subsequent head of FEMA), Ed Rogers
(a top aide to Bush Sr.) and Lanny Griffith (who held several top advisory
positions under Bush senior, and is also a 2004 Pioneer).
- Neil Bush has been involved in the Iraq contract gravy train through
his association with John Howland and Jamal Daniel of New Bridge Strategies.
The President's brother has written letters to push businesses established
by Howland and Daniel, including Crest Investment Corporation, which
in turn employs Bush as co-chair. Bush receives $60,000 a year from
Crest for working an average of three or four hours a week, according
to the Financial Times.
- Former Representative Bob Livingston, R-Louisiana, now runs a lobbying
firm that represents well-placed Iraqi families seeking to form business
alliances with U.S. and foreign companies interested in setting up operations
in the country.
- Top GOP Strategist Charlie Black's consulting business clients include
Fluor (big public works contracts), Cummins Engine and AT&T. Black is
chair of BKSH, an affiliate of global PR giant Burson-Marsteller, which
was also a big backer of Ahmed Chalabi before the war.
- In 2003, Coalition Provisional Authority chief Paul Bremer issued
a decree that Iraq's 200 state-owned companies would be privatized and
that foreign owners would be allowed to expatriate 100 percent of the
profits. This looting of Iraq's state-owned businesses ó disguised as
"private-sector development" was slowed down by worker protests and
skepticism among wary investors concerned about the strength of the
insurgency. Thomas Foley ó a former Citigroup banker assigned by the
CPA to oversee the privatization process, returned to Greenwich, Connecticut
in early 2004, where he is the state co-chair for the Bush/Cheney reelection
- Three weeks after construction and engineering firm Washington Group
was awarded a contract to rebuild water projects in Iraq, 31 company
employees gave $27,750 to Bush. By the end of April 2004, CEO Stephen
Hanks had become a Bush campaign "Pioneer" (raised over $100,000).
Washington Group spokesperson Jack Hermann was unconcerned about any
appearance of impropriety. "You either participate in the system or you
don't," Hermann told a Bloomberg reporter. "People can draw ulterior motives.
We understand the baggage that comes with that."
- In its drive to develop a "competitive private sector" in Iraq, the
Agency for International Development (AID) allowed BearingPoint to help
write the specifications for a $240 million contract which in effect
knocked its competitors out of the running, according to AID's inspector
general. BearingPoint, formerly KPMG Consulting, and its employees have
given more than $117,000 to the 2000 and 2004 Bush election campaigns.
In 2003, an $80 million BearingPoint contract in Florida was withdrawn
after critics complained about the company's close ties to Governor
- In February, the Los Angeles Times reported that First Lady Laura
Bush was working with National Security Council staff to push the construction
of a high-end hospital in Baghdad by a Texas-based charity. Representative
Jim Kolbe, R-Arizona, who heads the House Appropriations Subcommittee
on Foreign Operations, raised significant doubts about the need for
the high-tech hospital when the country suffered from a significant
lack of basic healthcare. ó C.C.