Corporations Get Iraq Rebuilding Money

— Paul Bremer, the U.S. civil administrator in Iraq, has said the reconstruction there would require "several tens of billions of dollars" in just the next year.

Americans may think this cash is all going to U.S. soldiers or the Iraqi people.

Guess again.

"Much of it is going to big companies like Halliburton and Bechtel, which are doing extremely well in terms of their own profitability," Chellie Pingree, president of the citizens' activist group Common Cause, told ABCNEWS. "Much of that money is just coming back to their stockholders in the company and their CEO."

More Lucrative Than Thought

Apparently, it is an ever-increasing amount.

Army documents show Halliburton will make more than previously thought — $1.7 billion for contracts ranging from hot meals to hunting for weapons of mass destruction, with much of the money generated by an exclusive, no-bid contract.

Bechtel's contract to rebuild Iraqi infrastructure such as airports and schools had been capped at $680 million. But now it may exceed $1 billion.

The Pentagon argues that the military is stretched thin and needs the help.

"We're trying to get some rules changed the way the Department of Homeland Security did and the way some other departments have some flexibility so that people can make rational decisions," Secretary of Defense Donald Rumsfeld said Aug. 20 during a trip to Honduras.

The degree to which private contractors are being used in Iraq is unprecedented. But there are questions about employee safety, cost savings and favoritism in bidding.

"From England to other countries around the world, you have nations who say, 'Why weren't we allowed to participate in this process?' " Pingree said. "Perhaps if [they] were, [they would] also be sending in troops to support the effort. It doesn't seem like it's cost-effective and doesn't seem like it's good policy."

Army of Halliburton, Bechtel?

Some question the entire policy of privatization.

"At the end of the day you're turning over national security and soldiers' lives to private companies that you can't always depend on, because they're only responsible to the marketplace," said P.W. Singer, author of the book Corporate Warriors: The Rise of the Privatized Military Industry.

But already pending are $2 billion worth of new contracts — more potential cash for a small number of well-connected American companies.

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