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BECHTEL:
jack of diamonds
($) (what
do these signs mean?)
In
March, Bechtel, one of the nation's largest construction
firms, was awarded one of the largest Iraq contracts
to date. According to the BBC, the contract was worth
some $680 million for 18 months of work. It covers infrastructure
repair work on power generators, electric grids, and
water and sewage treatment facilities. Like Enron
and Halliburton
before it, this company has made a name for itself not
solely for the work it does, but also it has reaped
multimillion dollar contracts with USAID because it
is a closely connected friend of Republican Administrations
past and present.
See:
http://news.bbc.co.uk/2/hi/business/2957875.stm
For
example, the CEO of the company, Riley Bechtel, sits
on the President's Export Council; Bechtel senior counsel
and board member George Shultz is chairman of the administration-connected
advisory board of the Committee for the Liberation of
Iraq and was Reagan's Secretary of State; Gen. Jack
Sheehan (ret.), a senior vice president at Bechtel is
on the Defense Policy Board; Daniel Chao, also a senior
vice president, serves on the advisory board of the
U.S. Export-Import Bank; and Ross Connelly, executive
president and COO of the US Overseas Private Investment
Corp, also is on Bechtel's payroll; and Andrew Natsios,
the administrator of USAID (which awards the contracts
for rebuilding Iraq, is a former project supervisor
for Bechtel! If that weren't enough, according to a
May 2003 report from the Sustainable Energy and Economy
Network/Institute for Policy Studies, as quoted in the
CorpWatch
article, Secretary of Defense Donald
Rumsfeld twice lobbied on behalf of Bechtel
on separate trips to Baghdad in the 1980s. Each of these
figures plays an important role in the administration,
particularly now which the US is involved in the "war
on terror." Perhaps this is why Iraqi firms tend
to be frozen out of the bidding.
Like
Halliburton, Bechtel's past dealings with rogue states
have been overlooked by the administration when it came
time to dole out lucrative contracts in Iraq. From 1983
to 1988, while Saddam Hussein was dropping thousands
of chemical bombs on the Kurds in the Northern part
of Iraq, Bechtel and the Reagan Administration was "aggressively
lobbying," according to CorpWatch.org, Saddam
Hussein to build an oil pipeline from Iraq to Jordan.
And while they ignored the Iraqi dictator's crimes against
the Kurds in the North, they even went to great lengths
ensure an official Congressional condemnation of said
crimes would not hurt the project. When the relationship
between Hussein and the company worsened, Bechtel and
its employees urged the invasion of Iraq. Like Halliburton,
Enron, and The Carlyle Group,
the Bechtel case provides further proof that these companies
place profits above all else, even when it results in
the enrichment of those who would cavort with terrorists.
The administration must have forgotten President Bush's
declaration that "you are either with us or the
terrorists" when these contracts were awarded.
See:
http://www.corpwatch.org/issues/PID.jsp?articleid=6975#108
In
the case of Bechtel, the administration similarly overlooked
Bechtel's record on the environment when it awarded
them their contract to rebuild the water and sewage
systems in the country. Here are just a couple case
studies which show that Bechtel, one of the top ten
water privatization companies in the world, has actually
caused more harm than good when performing work:
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In 2002, San Francisco, CA phased out a contract with
Bechtel after the Board of Supervisors found that
the company charged the city for tens of thousands
of dollars for work it did not actually perform on
behalf of the city. They were also charged with misusing
taxpayer funds for overpriced and unnecessary work,
and charging the city for tens of thousands of dollars
in personal expenses. Because of the intense opposition
to the company's involvement, Bechtel was eventually
forced out of the deal.
See: http://www.sfbg.com/News/35/50/50bech.html
-
In 1999, the Bolivian government awarded a Bechtel
subsidiary a contract to privatize the water systems
in Cochabamba. Immediately after the system was implemented,
the company raised prices to $20 a month, overnight!
That for a family in a country in which the minimum
is only $60 a month. Many users found the price of
water too expensive and had to do without. The citizens
finally resorted to rioting after the government and
the company would do nothing about it. When the demonstrations
became intolerable to the government, Bolivia finally
cancelled the contract. Bechtel responded with a $25
million suit for lost profits, which is still being
litigated in a World Bank court.
See: http://www.democracyctr.org/waterwar/
For
more information and to see several more case studies
which highlight Bechtel's consistent pattern of putting
profits over people, see:
http://www.corpwatch.org/issues/PID.jsp?articleid=6975
Bechtel's History of Abuse in Public Works Projects
BART
The San Francisco bay area is served by the Bay Area
Rapid Transit (BART) inter-urban railway system. In
1962, voters in the Bay Area passed a $792 million dollar
bond to construct the project by only 1.2%. The close
vote would have gone the other way if the full implications
of the BART project had been known.
See:
http://www.sfbg.com/News/32/06/Features/bart.html
Bechtel,
as head of the largest front groups for the project,
the Bay Area Council (BAC), was responsible for the
BART design and construction process. By 1972, the cost
of Bechtel's contract had increased by 152%, and the
construction approved by the 1962 bond had gone up 50%.
When the plan was originally proposed to voters, the
supporters of the project neglected to include things
like the cost of the actual trains ($115 million) or
the cost of the Transbay Tube ($160 million). The supporters
of the bond wrote these off as mere oversights. Bechtel
kept the profits from each of these two projects while
the voters ate up the costs.
See:
http://www.sfbg.com/News/32/06/Features/bart.html
BART
supporters spent lots of money to convince voters that
the plan would help alleviate congestion, provide transportation
for the poor, and reduce local air pollution in the
Bay Area. In actuality, the plan did none of these things.
Unlike a true mass transit system, BART stations are
few and far between, forcing almost everyone who uses
it to drive. For years after its construction, BART
was plagued with equipment breakdowns, often lasting
hours. Even today, over 30 years later, BART has never
performed to the standards voters were (barely) sold
on. The cost overruns and mistakes by the supporters
of the system like Bechtel cut off funds which would
have otherwise gone to making sure poorer communities
would have had access to the line. Instead, many of
these communities were passed altogether. In fact, to
help cover the costs of these overruns, BART pushed
through a regressive sales tax increase in the three
counties it was supposed to serve. This meant that lower-income
residents were geographically cut-off from the system,
but were disproportionately forced to pay for it anyway
through the regressive sales taxes.
See:
http://www.sfbg.com/News/32/06/Features/bart.html
In
1977, the tax was made permanent, effectively enriching
the company on the backs of the poor. In 2000, a necessary
seismic retrofitting was threatened to be blocked by
two BART board members if the contract were to be awarded
to Bechtel. The board members cited the company's poor
record on human rights, minority contracting and cost
overruns. Board member Tom Radulovich was primarily
concerned with the cost overruns of the BART extension
to the San Francisco Airport. He said that it "was
on Bechtel's watch that this project went $400 million
over budget."
See:
http://www.sfbg.com/News/34/35/bech2.html
Boston's
Big Dig
Bechtel's uncanny ability to turn mistakes into taxpayer-subsidized
profits really became an art form on this one. Bechtel
designed and now manages the Boston Central Artery tunnel
project, in which I-93 passes under the city. The project
is the largest civil engineering feat in US history,
at a cost reaching $14.6 billion in 2003.
In
a three-part expose of Bechtel's massive mistakes and
failures, the Boston Globe spotlighted some of
the company's more ludicrous mistakes. They remark that
"at least $1.1 billion in cost overruns, or two-thirds
of the cost growth to date, are tied to Bechtel mistakes."
Yet, instead of paying for these mistakes, the Globe
points out that the company is expected to receive more
than $264 million than it would have under the normal
terms of their contract, in part due to the money they
will make from fixing their own mistakes.
See:
http://www.boston.com/news/specials/bechtel/part_1/
Some
of the Globe's principal findings from their
one-year study of the project included:
-
Bechtel completely overlooked in its plans the FleetCenter,
a 19.600 foot arena that the Boston Celtics play in,
instead showing an obstacle-free zone for contractors
to lay utility lines. Bechtel again failed to fix
the problem before signing off on the deal, three
years after the plans were drawn. This little snafu
cost taxpayers close to a million dollars, which was
never repaid by the company.
-
In violation of Massachusetts law, the company initiated
construction based on incomplete designs, which cost
the taxpayers of the state $750 million.
-
Bechtel failed to heed design problems even after
warnings by its own engineers. In almost all of these
cases, Bechtel recommended to the state to pay contractors
hundreds of millions more to fix the problems.
- Bechtel
failed to detect or call attention to serious flaws
in construction work, leading to tens of millions
of dollars to fix these errors.
See:
http://www.boston.com/news/specials/bechtel/
One
of the most interesting things about the "Big Dig"
in Boston is this: the 2000-2001 chair of the Massachusetts
Turnpike Authority. Who is this official who, instead
of recommending legal action against Bechtel for its
blunders, fired the deputy general counsel who did?
This man is none other than Andrew Natsios, the head
of USAID, which awarded the $680 million Iraq contract
to Bechtel. What a tangled web we weave.
See:
http://www.corpwatch.org/issues/PID.jsp?articleid=6975#108
The
Bechtel corporation has on numerous occasions placed
profits above all else, showing a complete disregard
for the livelihood of those in the communities which
it works in. In case after case, Bechtel has demonstrated
a shameful track record of reaping human, environmental
and financial devastation in communities around the
world. In Iraq, Bechtel was making millions off of the
Saddam Hussein regime while he was slaughtering thousands
of his own people, ostensibly ignoring the possibility
that it was contributing to the proliferation of weapons
of mass destruction, and finally pushing for a war from
which it was sure to gain.
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