Large amounts of war profits were recycled as campaign contributions. “According to The New York Times, ‘the top 20 service contractors have spent nearly $300 million since 2000 on lobbying and have donated $23 million to political campaigns.’ The Bush administration, in turn, increased the amount spent on contractors by roughly $200 billion between 2000 and 2006” (Klein, 2007, p. 412). To take just one example, the rise of the mercenary force Blackwater (now called Xe Services) and others can be credited to the Iraq War (Bryer, 2008).
The connections between Vice President Cheney and his former employer Halliburton almost exceed the historically brazen corruption expected during wartime. For the first five years of his vice presidency, Cheney received not only deferred compensation of approximately $200,000 per year (more than his government salary), but also held 433,000 Halliburton shares, or about $10 million worth, in a form of stock options (Chatterjee, 2004, p. 43). During the period of the war, KBR, which was spun off from Halliburton in 2007, received more in war contracts than any other company, an astonishing $38.4 billion (Feinstein, 2011, p. 404). In one example of the sort of leadership this money bought, a GAO investigation discovered a “$700 million ‘discrepancy’ between Halliburton’s estimate of $2.7 billion to provide food and other logistics services to the government, and the company’s own line-by-line breakdown of the estimated expenses. After the Defense Department’s questioning, the company slashed its estimate for the work to $2 billion” (Chatterjee, 2004, p. 55). If this is not a conflict of interest, then nothing is.
Feinstein (2011, p. 404) summarizes a fifty year-old Vietnam veteran’s report on the corporate pep talk he received as a newly hired KBR contractor being sent to Iraq:
"The recruits were told they were going to Iraq ‘for the money.’ The trainer told them they were not going to help the troops, not going to help the Iraqi people, not going for America, but ‘FOR THE MONEY,’ a slogan they had to chant repeatedly."
At least they were honest.
Halliburton/KBR is far from an isolated case. Hogan, et al. (2006, p. 284) found that there was a statistically significant relationship between campaign finance activities and the awarding of contracts in Iraq and Afghanistan. In particular, “campaign donations, donation amounts, and corporate political connections in the form of lobbyists and political action committees are positively associated with the likelihood that a company will receive a post-war [sic] contract.”
It is not that this tremendous corruption went unnoticed. A 2010 audit by the Office of the Special Inspector General for Iraq Reconstruction found that the Pentagon could not account for an astonishing 96% of $9.1 billion it has received from Iraqi oil revenues for reconstruction (Chwastiak, 2011). And of the 185,000 AK-47s, 170,000 pistols, 215,000 body armor pieces and 140,000 helmets that the US delivered to the Iraqi army from 2003-2005, the majority could not be accounted for by 2007 (Feinstein, 2011, p. 419). Chwastiak (2011) reviews fourteen additional audits from the Office of the Special Inspector General for Iraq Reconstruction and found the audits variously shift the blame from political and corporate corruption to: incompetence; low-level employees; the fog of war; government regulators; Iraqis. Though the number of war contracts increased by 328% from 2001-2009, audit staff levels remained the same (Feinstein, 2011, p. 406). Of all of the billions in fraud, only one company has been convicted: Raman International, which has two employees and revenues of $170,000 (Chwastiak, 2011).
One of the reasons the victors and victims of the war were not articulated to the American people was a six year-long Pentagon information campaign that paid retired military officers, who themselves were often on the payroll of contractors, to appear on television networks and other media with administration talking points (Barstow, 2008). This group of more than 75 retired officers was extremely prolific in orchestrated media appearances on ABC, CBS, CNN, Fox, NBC, NPR and influential print media. Many were paid by the number of times they could appear on TV. While their paymasters were not revealed to viewers, the program was micromanaged by Donald Rumsfeld and the purposes of the financial arrangements appeared clear to those involved. As retired Marine colonel and Fox News ‘analyst’ John Garrett put it in an email to Pentagon staffers in 2007, “Please let me know if you have any specific points you want covered or that you would prefer to downplay.” By contrast, William Cowan, another former Marine colonel and Fox analyst, was fired from the information program after he criticized the war on Fox in August, 2005. The Pentagon provided its “surrogates” (their wording) not only media talking points, but also frequent access to Cabinet officials and supervised trips to Cuba and Iraq. Columnists were also paid to write themselves or submit ghost-written columns (nine of them for the New York Times, which exposed the story). Canned segments were provided for free to local TV news stations. The type of viewpoints that would emerge from this information campaign serve to hide the nature of the propagandists – and war (Herman and Chomsky, 2002, pp. 1-2).
Aside from the corporate-political connections, the Bush administration also used the Iraqi occupation to reward domestic and foreign political allies. Chandrasekaran (2006, pp. 91-92) recounts a CPA staffer lamentation that he “watched résumés of immensely talented individuals who had sought out CPA to help the country thrown in the trash because their adherence to ‘the President’s vision for Iraq’ (a frequently heard phrase at CPA) was ‘uncertain.’ I saw senior civil servants from agencies like Treasury, Energy… and Commerce denied advisory positions in Baghdad that were instead handed to prominent [Republic National Committee] contributors.”
This favoritism also extended to foreign political allies, as the United States excluded from lucrative reconstruction contracts companies from those countries – like Russia, Germany and France – that had opposed the initial invasion. Unfortunately for Iraqi citizens and US taxpayers, 3/4 of the power plants in Iraq had been built by manufacturers in those three countries (Chatterjee 2004, p. 62). At the World Bank, the short-lived presidency of Bush hawk Paul Wolfowitz saw him appoint five officials, three of whom were conservative politicos from governments supporting the war rather than qualified economists (Peet, 2009, pp. 175-176).
Barstow, David. April 20, 2008. “Message Machine – Behind TV Analysts, Pentagon’s Hidden Hand.” New York Times.
Bryer, Thomas A. 2008. “Warning: The Hollow State Can Be Deadly.” Public Administration Review 68(3), pp. 587-590.
Chandrasekaran, Rajiv. 2006. Imperial Life in the Emerald City: Inside Iraq’s Green Zone. Knopf.
Chatterjee, Pratap. 2004. Iraq, Inc.: A Profitable Occupation. Seven Stories Press.
Chwastiak M. 2011. “Profiting from Destruction: The Iraq Reconstruction, Auditing and the Management of Fraud.” Critical Perspectives on Accounting. In press.
Feinstein, Andrew. 2011. The Shadow World: Inside the Global Arms Trade. Farrar, Straus and Giroux.
Herman, Edward and Noam Chomsky. 2002. Manufacturing Consent: The Political Economy of the Mass Media. Pantheon.
Hogan, Michael, Michael A. Long, Paul B. Stretesky & Michael J. Lynch. 2006. “Campaign Contributions, Post-War Reconstruction Contracts, and State Crime.” Deviant Behavior, 27:3, pp. 269-297.
Klein, Naomi. 2007. The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books.
Peet, Richard. 2009. Unholy Trinity: The IMF, World Bank and WTO. 2nd ed. Zed Books.