Privatization of Iraq - worse than you think.

Front paged at Booman Tribune and ePluribus Media. Recommended at Daily Kos

For starters, I want to give a hat tip to nyceve for sending me the LA Times article from yesterday titled Private contractors outnumber US troops in Iraq, and also to theyrereal for pointing this out earlier today I recommend reading that diary (it isn’t too long) for some background.

When I first read the LA Times article, I was thinking something along the lines of Blackwater/private militia/2nd amendment angle would be one to take. But then as I read through the article, I noticed a few other items that jump out as even bigger – things that deal with the overall privatization of Iraq – mainly to the benefit of republican party supporters ( not that this is new), and what can only be described as the real willful goal of the Bush administration on many levels and the tremendous negative impact it has had in nearly every metric that can be measured.

Well, duh – you may think. But I don’t just mean the information that we have all known about in terms of “opportunities” presented prior to the invasion. Or the oil law that would presumably be the big goal of this administration as (another) payback to the big oil companies here in the US (all while they of course claim that we need to reduce our dependence on foreign oil). Or even the recent announcement by the Iraq Minister of Industry recently announced the privatization of all non-oil assets

There is more, once you look deeper. Much more.

Towards the end of the LA Times article, there is the following blurb that piqued my interest (please note that this does not include any private security contractors, whom I will discuss in a bit. The listing of contractors and employees is much longer, but I only focused on the top 3 here, as they are the ones with more than 6,000 employees):

Contractors in Iraq

There are more U.S.-paid private contractors than there are American combat troops in Iraq.

Contractors: 180,000
U.S. troops: 160,000
--

Nationality of contractors*

118,000 Iraqis
43,000 non-U.S. foreigners
21,000 Americans
--

Top contractors

Company: Kulak Construction Co.
Description: Based in Turkey, supplies construction workers to U.S. bases
Total employees: 30,301
--

Company: KBR
Description: Based in Houston, supplies logistics support to U.S. troops
Total employees: 15,336
--

Company: Prime Projects International
Description: Based in Dubai, supplies labor for logistics support
Total employees: 10,560

Now, KBR was an obvious one, and one that we know much about. We know about the no-bid contracts, we know about the ties to Halliburton, to Dick Cheney, and the overwhelming contributions to the republican party by Halliburton and its’ employees. We know about the GAO studies that resulted in lost money, overbillings and other waste. However, when you look at the relationship between KBR and other “subcontractors” as well as what has been going on in Iraq (in general), a picture of even more subtle pillaging unfolds.

Even though the LA Times article notes that there are 118,000 Iraqi contractors now working in their own country, this is pretty misleading. A few months back, a Newsweek article indicated (emphasis mine):

Of the original 193 state enterprises, 143 could be restarted soon, says Brinkley. Management and workers are desperate to get jobs. The problem is money. Brinkley points out that his next target, a ceramics factory in Ramadi, is only waiting for two generators before it can reopen. They cost $1 million each. But funds for this purpose are hard to find. Washington has pledged more than $18 billion to fund "reconstruction" in Iraq but will not appropriate a cent to start up state-owned Iraqi companies. The Iraqi government has billions in oil revenue of its own but is so dysfunctional that it cannot move a new project through the system. So the factory is idle. A major global consulting firm has reviewed Iraq's state-owned enterprises and estimated that it would cost $100 million to restart all of them and employ more than 150,000 Iraqis—$100 million.

Now, in terms of sheer gross numbers, the $100 million is a drop in the bucket, and 150,000 Iraqis may not seem to be that many. However, that is something that could have a ripple effect in terms of people actually starting to take pride in their country to a small degree. However, we see that the Iraq Minister of Industry isn’t looking to do anything of the sort (and it makes one wonder what else is behind this). Back to the LA Times article and the private contractors in Iraq:

The companies with the largest number of employees are foreign firms in the Middle East that subcontract to KBR, the Houston-based oil services company, according to the Central Command database. KBR, once a subsidiary of Halliburton Co., provides logistics support to troops, the single largest contract in Iraq.

Middle Eastern companies, including Kulak Construction Co. of Turkey and Projects International of Dubai, supply labor from Third World countries to KBR and other U.S. companies for menial work on U.S. bases and rebuilding projects. Foreigners are used instead of Iraqis because of fears that insurgents could infiltrate projects.

So Iraqis aren’t used for projects due to “fears that insurgents could infiltrate”. But that means there is no incentive for Iraqis to take part in the rebuilding process, especially since cheap (and in some instances, forced) labor is being used – corners are being cut, and pockets of companies aligned with the republican party or the Bush administration are being lined. Which of course likely means more money going back to the republican party in terms of “donations” as the cycle continues. Lather, rinse, repeat.

Back to some of these “contractors”. Both Kulak and Prime Projects International are subcontractors of KBR – keeping up the incestuous relationships. Kulak (and KBR) had a “bit of an issue” back in 2004 with the Philippines government over a deployment ban based on security fears and injuries to Filipino workers. Prime Ports International was first linked as a subcontractor to Halliburton when it supplied cheap Filipino labor to help build the prison system at Guantanamo. And when it came to Iraq, PPI was awarded another subcontract in Iraq, and there have been numerous issues of human trafficking or mistreatment of employees. Per the CorpWatch link:

But their workers who have made it into Iraq complain that they have been treated badly. "TCNs (Third Country Nationals) had a lot of problems with overtime and things," recalls Sharon Reynolds of Kirbyville, Texas, who was employed as an administrator by Halliburton . "I remember one time that they didn't get paid for four months."

"They don't get sick pay and if PPI had insurance, they sure didn't talk about it much," Reynolds recalls. "TCNs had a lot of problems with overtime and things. ...I had to go to bat for them to get shoes and proper clothing."

"(They) had to stand in line with plates and were served something like be curry and fish heads from big old pots," Reynolds says incredulously. "It looked like a concentration camp."

PPI officials have refused to talk to the media at all but CorpWatch has learned that the company is being monitored by the State department for "human trafficking" of workers into Iraq.

One thing is certain - Helliwell and O'Connell [PPI owners] have made good money in this business. In May 2005 the two men bought a yacht named "Pacific 50, Yo!" that they raced off the coast of Thailand on the island of Koh Samui.

This, despite the State Department knowing about and tracking these issues.

One more contractor to note (not listed above) is First Kuwaiti General Trading & Contracting. They were awarded a contract for $600 million related to the embassy being built in Baghdad, despite other more qualified firms bidding less money.

”It's stunning what First Kuwaiti has been able to get from the State Department,” one contractor said.

Several other contractors that competed for the embassy contracts shared similar reactions and believe that a high-level decision at the State Department was made to favor a Kuwait-based firm in appreciation for Kuwait's support of the invasion and occupation of Iraq.

“It was political,” said one contractor.

Mohammad I. H. Marafie, chairman and co-owner of FKTC, is a member of one of the most powerful mercantile families in Kuwait.

Again, none of this considers the “outsourcing of the military”, which I will also touch on briefly. A few weeks ago, I did a diary that noted the links between Blackwater USA owners and the republican party as well as the money trail that accompanied these links, the no-bid contracts and the boasting on the Blackwater USA website that it was:

We are a professional military, law enforcement, security, peacekeeping, and stability operations firm who provides turnkey solutions. We assist with the development of national and global security policies and military transformation plans. We can train, equip and deploy public safety and military professionals, build live-fire indoor/outdoor ranges, MOUT facilities and shoot houses, create ground and aviation operations and logistics support packages, develop and execute canine solutions for patrol and explosive detection, and can design and build facilities both domestically and in austere environments abroad.

Now there are approximately 10,000 – 30,000 people in the “private security industry” in Iraq, depending on whose estimates are being used. Blackwater also has around $110 million in contracts in Iraq and has been involved in a number of incidents where either their employees were killed, or they have killed Iraqis. Per the Washington Post article linked above, there have been complaints about the Blackwater employees’ tactics, their use of force and their overall lack of accountability.

Of course, we also know that Rumsfeld and the “war planners” ignored all people who indicated that there needed to be at least 400,000 troops in Iraq, and you can infer that there are a number of reasons why this was ignored. Certainly not out of ignorance – more out of greed and arrogance. However, when contractors themselves are unaccountable, paid multiples of what our soldiers are being paid AND the contracting companies (again, pretty much all linked to the Bush administration and republican party) get to make hundreds of millions off of our tax dollars, you can bet that the troops themselves aren’t too happy with this arrangement, nor are We the People.

But those who benefit richly are very happy – the contractors who just happen to be aligned with companies associated with the Bush administration, the republican party and their causes. Hundreds of thousands of Iraqis – Iraqi citizens – could be put back to work with the amount of money that is spent in half a day in Iraq by this government. Instead, we see the entire country moving towards privatization, and contractors – a number that now is far in excess of the number of US troops.

Some level of pillaging was already obvious. The “private militia” that is now sanctioned under US contract via Blackwater USA has become a bigger issue over the past year. The forced labor and poor treatment of other foreigners brought into Iraq by companies associated with this administration and the republican party not only completes the cycle, but also accomplishes other objectives:

To keep work out of the hands of Iraqi citizens, under the guise of “they may be insurgents”, and in the hands of foreign nationals who are exploited and put in dangerous situations – all to enrich those who are ensuring that the system stays rigged against Iraqis, basic labor standards and practices to their (and their cronies’) benefit.

Not unexpected, but that doesn’t make it any less inexcusable. Iraq is NOT the 51st state of the United States of America. Nor should it be another tool for enriching the republican party and its main donors.