Global Policy Forum

By Jim Vallette

Everyone's heard of Vice President Dick Cheney's ties to Halliburton, a company standing on the brink of a bonanza as the government doles out post-war reconstruction dollars. But not enough has been revealed about Bechtel, a reported finalist for the first round of contracts, and its connections to another of the war's architects: Defense Secretary Donald Rumsfeld. It's a sordid little tale, and one that calls into question the depth of Rumsfeld's virtuous claims about his intentions to liberate the Iraqis.

Bechtel has long been intertwined with Republican foreign policymakers, globally and in Iraq. It turns out that many of today's war hawks spent a couple years in the 1980s trying to get Saddam to sign an oil pipeline contract. Even though Saddam was gassing Iranians at the same time, people like Donald Rumsfeld had some quality face-time with the "evil dictator" pitching a plan that would benefit, beyond all other interests, Bechtel -- and, potentially, Hussein.

Rumsfeld flew to Baghdad, twice, as Reagan's special envoy. According to newly-available documents, a lot of his business was nothing more than advancing Bechtel's business. Following a script crafted by then-Secretary of State George Shultz -- who went directly from the CEO seat at Bechtel into the Reagan team -- he pitched the idea of building an oil pipeline from Iraq to Jordan in December 1983.

Saddam told Rumsfeld it sounded like a fine plan, but he was worried about the possibility of Israeli attack. Rumsfeld wrote back to Shultz, "I said I could understand that there would need to be some sort of arrangements that would give those involved confidence that it would not be easily vulnerable. (This may be an issue to raise with Israel at the appropriate time.)"

For the next two years, Reagan administration officials, Bechtel, and pipeline promoters expended a lot of energy trying to placate Saddam's concerns, even while publicly the U.S. government "condemned" the use of chemical weapons in the Iran-Iraq War. Behind the scenes, State Department officials forged ahead. Rumsfeld's second meeting in Baghdad, again to press the pipeline scheme, occurred the same day that a United Nations team confirmed that Saddam gassed Iranian troops.

The revolving door between the Reagan administration, Bechtel and other pipeline agents produced a whirlwind of shady dealings. An agent promised Israeli Prime Minister Shimon Peres a secret sluiceway of pipeline profits into the Israeli Labor Party. Pipeline promoters and Reagan officials pondered other magic formulas -- like committing, beyond congressional view, existing Defense and foreign aid as collateral in case Israel did attack the pipeline. All to placate Saddam's concerns.

But it was all for naught. Two years after Rumsfeld broached the plan with Saddam, the dictator finally rejected Bechtel's proposal. He found better pipeline deals involving Turkey and Saudi Arabia, and thought the U.S. company doubled the actual construction cost.

While this signaled the end of U.S.-Iraqi oil diplomacy, the Reagan and first Bush administrations settled into a constructive engagement routine with Saddam. Bechtel signed contracts with Saddam in 1988, after "Chemical Ali" gassed thousands of Kurds, to build a huge dual-use chemical plant on the outskirts of Baghdad. Saddam named Bechtel as one of the corporate suppliers of technology for chemical weapons in its U.N. declaration last year. Construction stopped only after Saddam's troops invaded Kuwait, and his police held Bechtel employees in confinement. The last Bechtel employee left Iraq in December 1990.

U.S.-Iraqi relations -- business and political -- have never been the same. Rumsfeld and other officials have seethed as they've watched lucrative oil contracts signed between Baghdad and corporations from France, Russia and China. And to cover their own jealousy, they've decried those who would make a deal with a man possessing weapons of mass destruction.

The lesson to be drawn from Bechtel, the Aqaba pipeline and the present conflict is that an "evil dictator" is a friend of the United States when he is ready to do business, and a mortal enemy when he is not. Sadly, it is our sons and daughters, brothers and sisters, who must pay the price when a deal goes bad.

Jim Vallette is the research director for the Sustainable Energy and Economy Network, a project of the Institute for Policy Studies. He is the author, with Steve Kretzmann and Daphne Wysham, of the report "Crude Vision: How Oil Interests Obscured US Government Focus on Chemical Weapons Use by Saddam Hussein."