Emad Mekay

WASHINGTON, Dec 19 2003 (IPS) — U.S. construction giant Bechtel, a firm with a major contract to help rebuild Iraq, planned to hire "non-U.S. suppliers of technology" so it could evade economic sanctions imposed by Washington after Saddam Hussein used poison gas against Iraq’s Kurdish minority, according to a newly declassified document.

In April 2003 Bechtel was awarded one of the largest contracts to date by the U.S. Agency for International Development (USAID) for infrastructure repair work in U.S.-occupied Iraq. The deal is worth an initial payment of 34.6 million dollars and up to 680 million dollars in total.

Bechtel maintains that it has always respected and complied with U.S. government prohibitions in Iraq, but the uncovered document shows how its officials were prepared to challenge even its Washington allies to retain its business.

According to a 1988 confidential State Department cable, obtained under the Freedom of Information Act by the non-profit National Security Archive (NSA), U.S. Ambassador to Iraq April Glaspie wrote that Bechtel officials threatened to bypass the sanctions, passed by the Senate in 1988.

"Bechtel representatives said that if economic sanctions contained in the Senate act are signed into law, Bechtel will turn to non-U.S. suppliers of technology and continue to do business in Iraq," the cable said.

The document also shows further behind-the-scenes particulars of how the U.S. corporation, now part of President George W. Bush’s project to bring democracy to post-Saddam Iraq, courted the dictatorial regime with full knowledge of Saddam’s use of chemical weapons against Iranian troops and the Kurds – with the approval of U.S. diplomats.

"They (Bechtel) were certainly well aware of what was going on in Iraq and had no qualms about making a buck there," said Jim Vallette, research director at the Washington-based Sustainable Energy and Economy Network.

"So they had no concerns over what Saddam was doing to his own people."

NSA Executive Director Tom Blanton said his organisation is trying to shed light on the context of the current U.S. occupation of Iraq by looking at the history of the relationship between the nations.

"What we are doing with these documents is to try to provide some missing context to current political decisions and current contracting decisions," Blanton said.

Washington has been accused of cronyism after USAID awarded contracts to U.S. corporations to help rebuild Iraq after the U.S.-led invasion – some with close ties to the Bush administration – on a no-bid basis.

U.S. allies like France, Germany and Russia, have also complained about Washington’s recent decision to allow only countries that backed the war in Iraq to bid for the lucrative contracts.

Another high-profile firm – Halliburton, once run by Vice President Dick Cheney – is being accused by Pentagon auditors of refusing to hand over internal documents that could shed light on accounting problems related to an Iraq fuel contract that has allegedly overcharged U.S. taxpayers by as much as 61 million dollars.

In the 1980s Bechtel signed a technical services contract to manage the implementation of Iraq’s two-billion-dollar petrochemical project II. U.S. firms, including Bechtel, won 300 million dollars in contracts to build the plant.

But the deal was jeopardised when the U.S. Senate wanted to penalise Baghdad for using chemical weapons against the Kurds, although it was well documented that Saddam had employed such weapons against Iran for at least four years before he used them on the Kurds.

The Senate initiative came on the heels of a series of Iraqi chemical weapons assaults against Kurds – most notably in Halabja in March 1988 – and called for strict economic sanctions against Baghdad, including blocking all international loans, credits and other types of assistance.

The government’s then minister of industry, and Saddam’s son-in-law, Husayn Kamil, told Bechtel officials he was angry the Senate passed the ‘Prevention of Genocide Act of 1988′, according to the cable.

It says Kamil "vented his spleen for one and a half hours", saying the move "caught his government completely by surprise" because it came at a time of "improving relations with the U.S."

Kamil, the report says, insisted Washington would wrongly "mix politics with business".

Glaspie noted that as "one of Saddam Hussein’s closest advisors, some say his closest … we take Kamil’s angry reaction … to be an accurate reflection of Saddam’s own reaction".

Two days later, representatives of Bechtel met with Glaspie to describe Kamil’s eruption, a meeting she described in the cable.

Fearing to lose the contract, Bechtel officials threatened then to use non-U.S. suppliers and technology to keep the lucrative deal, in spite of the Senate’s decision.

The incident, says Vallette, clearly shows how the company bordered on blackmailing Washington, even on the rare occasion when corporate profit conflicted with a decision of Congress.

"The cable uncovered by NSA certainly shows that Bechtel’s true practice is to go foreign policy shopping, shifting business overseas when Washington does not cooperate," he said.

"That’s the stick that the companies wield against Washington if Washington acts against their bottom line," he added.

Blanton described the document as evidence of the complexity of the relationship between the Saddam Hussein regime and the United States.

"The whole war in Iraq is being presented in very stark moralistic black and white terms. But the reality of history, the reality of the relationship between the U.S. and Iraq, has never been in black and white terms," he said.

"It’s been very realpolitik, and concerns about Iraq’s chemical weapons are later bloomers in the list of U.S. worries related to Iraq."

Vallette said the document also brings into question whether Bechtel, a company that chose to do business with Saddam despite well-documented evidence he was using banned weapons, should be allowed to continue to profit from rebuilding Iraq.

"I think any company that profits from dictators’ brutalities should not be in charge of allegedly helping build a democracy in Iraq or anywhere else," Vallette said.