Bush administration is awarding Iraq contracts to companies with GOP ties

Before the war in Iraq even began, the White House had announced that post-war Iraq would be reconstructed by private U.S. companies that won lucrative government contracts. In fact, before a single bomb was dropped or a single shot fired, the Agency for International Development “invited” several corporations to bid on a $1 billion engineering project.

I say “invited” because the competition for this and other contracts would be limited to companies the administration carefully selected in advance. Though federal law requires an open, competitive bidding process, the administration was sidestepping that burden by declaring the Iraq rebuilding process an “emergency.”

Almost predictably, the first announced contract was a deal for a company called Halliburton to run an Iraqi oil field. Why did this raise eyebrows? Because up until the 2000 campaign, Vice President Dick Cheney was Halliburton’s CEO.

The idea that the administration would award a profitable contract to the Vice President’s former corporation through a non-competitive, closed bidding process seemed fairly outrageous. In fact, congressional Democrats have asked the General Accounting Office to begin an inquiry into the matter.

Yesterday’s news that a company named Bechtel was the next beneficiary of business contacts in Iraq is likely to be just as controversial.

As the Washington Post reported today, “The U.S. Agency for International Development yesterday awarded San Francisco-based Bechtel National Inc. a contract worth as much as $680 million to build and restore Iraq’s infrastructure, including roads and airports, sewage and irrigation systems, schools and power plants. The contract is the biggest single chunk of an initial $2.5 billion approved by Congress last week for Iraqi humanitarian aid and reconstruction.”

Like the Halliburton contract, Bechtel was awarded the job without having to compete in open bidding. And like Halliburton, Bechtel’s political ties make the government contract contentious. If anything, Bechtel is more involved with GOP politics than Halliburton, despite Cheney’s previous employment.

As the New York Times noted today, Bush selected Bechtel’s CEO Riley Bechtel to serve on the President’s Export Council on international trade earlier this year. In addition, George Shultz, Reagan’s Secretary of State, serves on the company’s Board of Directors, and Caspar Weinberger, Reagan’s Defense Secretary, also served as a Bechtel executive.

In addition, of the four companies selected by the administration to compete for the Iraqi contracts, the Wall Street Journal has said (no link available) that Bechtel is the biggest political contributor to the GOP, with $1.3 million in contributions.

The Times report also includes a juicy detail that Donald Rumsfeld, Bush’s Defense Secretary, negotiated with Saddam Hussein and Bechtel in 1983 to build an oil pipeline from Iraq to Jordan, when Rummy was a Mideast envoy for Reagan. The article said the project “drew scrutiny from a special prosecutor looking into allegations of impropriety involving Edwin A. Meese III, the former White House counsel and attorney general in the Reagan administration.”

Even worse, USA Today reported that Bechtel was even accused of selling Hussein technology that led to the development of Iraqi weapons, though the company has denied the accusations.

The Bush White House is already suspected of being too close to big business. I’m not saying the administration has necessarily broken any laws at this point with these questionable contracts, but once things with the war settle down a bit, I think the president is going to have some explaining to do.