Global Policy Forum

The Corporate Invasion of Iraq


By Rania Masri

International Socialist Review
July-August, 2003

We are regularly told, by our corporate–I mean, our "free" press–and by our "president," elected by this "free" nation in our functioning "democracy," that the "war" against Iraq is over, "liberation" for the Iraqis has begun and we are now working towards "reconstruction" efforts in that poor war-torn country.

Post-war? Or new phase of the war?

In this "post-war" Iraq, U.S. soldiers continue to be killed. As of June 25, more than 55 U.S. soldiers have died since George W. Bush declared major military operations were over on May 1. The press presents the deaths of the soldiers in a "we-don't-know-why-they-were-killed" tone, as if it is perfectly natural for foreign armed men (and women) to patrol and occupy another land and another people. And shoot at them. And kill them during protests. And destroy their homes. And arrest their men. And harass them at checkpoints. "By their own admission," reports Bob Graham of the London Evening Standard, "these American soldiers have killed civilians without hesitation, shot wounded fighters and left others to die in agony."[1] More and more, the U.S. occupying forces in Iraq are behaving like the Israeli occupying forces in the occupied Palestinian territories of the West Bank and Gaza.

The war is not over. The war has only gone into another phase. Phase I was the 1991 Gulf War. Phase II was the twelve-and-a-half years of sanctions. Phase III was the 2003 bombing and invasion of Iraq. Phase IV, this current war, is the occupation of Iraq and the invasion of the corporations. (We could also date it further back–with the occupation of Iraq by the British, then the support of the Baath Party by the U.S., and the U.S. support of both Iraq and Iran in the Iraq-Iran war.)

Liberation…_or economic liberalization?

The corporate press and the corporate government talk of the liberation of Iraq. Many of us recognize that this liberation is false; it never was intended and it is not in the plans. Here are just a few examples.

On April 28, the U.S. and Britain organized a meeting in Baghdad to start the political process. Many parties were not invited, and the two largest pre-Saddam Hussein parties–the Communist Party and the Islamic Da'wa Party–were excluded, while outside thousands protested.

On May 26, the new leader of the U.S. occupation forces, L. Paul Bremer III, decided to indefinitely postpone the formation of the Iraqi interim authority, even though this "interim authority" would still be subservient to Washington, since the White House would retain the crucial levers of power for an indefinite period.

And it is not only the U.S. forces. On May 26, the British forces, eager to stay in line with the U.S. forces, announced they would replace an Iraqi city council that had been hailed as a model of post-war cooperation with a committee of technocrats chaired by a British military commander. The decision provoked an angry reaction from the 30-member council, which is headed by a local tribal chief and has labored to reestablish civic order in the south.

Still not enough?

On May 29, U.S. forces set up a meeting in Baghdad with the chiefs of the local tribes. During this meeting, Arabic television network Al-Jazeera reported that U.S. officials were asked straight up by one Iraqi chief: "We need to understand. Are you here as liberators or as occupiers?" Bremer's representative responded in Arabic: "It is a difficult word, but, yes, we are here as occupiers."

If the present weren't proof enough, let us remember that the policies of Bush Jr. are an expansion of policies by previous administrations. Brent Scowcroft, the national security adviser to Bush Sr. clearly stated his opposition to free elections in Iraq. He said: "What's going to happen the first time we hold an election in Iraq and it turns out the radicals win? What do you do? We're surely not going to let them take over."

Much of this isn't new. The vast majority of justice activists in this country recognize that the U.S. government is not interested in any democracy in Iraq. Nor could one reasonably argue that this government–either the administration that disenfranchised African American voters (and not just in Florida) or the Democratic Party that silently allowed this theft–could even set up a democracy.

Nevertheless, all too often, activists and leftists (to name a few) parrot the government's phrase, and speak about "the reconstruction of Iraq."

Reconstruction or deconstruction?

What does reconstruction mean? Reconstruction is defined as "to construct again; to establish or assemble again." The key word here is "again." Reconstruction is thus akin to building a hospital in the place of a destroyed hospital. If one were to build a military facility in place of a hospital, or, in the case of Falluja, to convert a school into a military headquarters, then that would not be reconstruction. No rebuilding or reconstructing there.

Now, if the plan is to change the construct of the economy, change the design of the society, change the political views of the government, then how is it reconstruction? It would more accurately be called deconstruction. And the plans are definitely not to rebuild Iraq in the way it was before Phase III of this war.

Deconstruct Iraq into a "free market"

The (current) U.S. viceroy of Iraq, L. Paul Bremer III, has stated his intentions very clearly: Iraq is "open for business" (May 26, 2003). A major goal of the country's reconstruction, he says, would be to shift Iraq away from state-dominated economies (May 27, 2003, Chicago Tribune). Bremer and his bosses in the Pentagon envision a "free market" system in Iraq. The Chicago Tribune accurately referred to this plan as a "transformation of the country's economy." The Tribune also correctly assessed that "the establishment of a thriving, market-oriented economy in Iraq has been a key goal of a conservative camp in the Bush administration that hopes the changes will ripple through the Arab world and challenge the established order."

Such plans fit in line with Bush's U.S.-Middle East Free Trade Area proposal, which calls for a market open for Israeli and U.S. hegemony, thus demanding not only military occupation of Palestinian and Syrian lands (and the Cheba'a Farms of Lebanon), but also economic occupation of the region.

Privatize away…

On the ground, the occupation forces are quickly working towards selling the Iraqi governmental services to private companies. They are quite open about their plan.

In mid-April, U.S. officials stated that they want the World Bank to eventually act as the "neutral international body" that will be the accountant for oil revenues, replacing the United Nations, which had overseen the oil-for-food program (April 18, 2003, New York Times). The World Bank is definitely not a "neutral" body; quite the contrary, it has caused immense impoverishment in its agenda of privatization.[2] For example, as reported by the International Consortium of Investigative Journalists (ICIJ), "despite World Bank contentions that it does not force privatization on the poor, research by ICIJ and the bank itself showed that privatization is playing an ever-increasing role in bank lending policies."[3]

In mid-May, Bremer announced that, within weeks, the Central Bank of Iraq and a group of private banks would begin providing "substantial" trade credits to finance the sale of goods to Iraqi ministries, government-owned factories and private companies. Bremer did not say which "private banks" would provide these credits, or at what terms the credits would be made. He did reveal that U.S. and British companies were expected to be among the first to benefit.

Bremer further revealed that contracts are pending to sell everything from oilfield technology to transportation services and telecommunications to Iraqi ministries. The sell-off of Iraqi companies and ministries is to take place soon. Tim Carney,[4] the senior coalition adviser to the Iraqi ministry of industry and minerals–i.e. the U.S.-appointed ruler of the Iraqi ministry–said that dozens of Iraq's state-owned companies could be earmarked for privatization within a year (June 9, 2003, BBC). Previously, the U.S. occupying force had said it would wait until an elected Iraqi government had been appointed before it would start privatization.[5]

Carney's Iraqi industry ministry controls 48 state-owned enterprises that employ approximately 96,000 people in eight sectors including food, textiles, engineering and chemicals. Glass and ceramics firms are to be privatized within the year. Iraqi textile companies, viewed by the U.S. as "money-losing firms," would be "dissolved"–meaning workers will lose their jobs. Numerous other Iraqi firms would be sold to foreign companies; already, the occupying forces have received a "string of inquiries from overseas companies" (June 12, 2003, Agence France-Presse).

To create an optimum market place for U.S. corporations, U.S. officials plan to change Iraqi laws. The U.S. administration is working on changing economic laws and tax rates in Iraq (June 9, 2003, Star Telegram), and, as the power in charge of imports to and investments in Iraq, the U.S. has proposed a temporary "holiday" on customs and duties on imported goods (May 27, 2003, Chicago Tribune).

Bremer spells out the plan

On June 22, Bremer spoke at the World Economic Forum in Davos, Switzerland.[6] "Our strategic goal in the months ahead," Bremer said, "is to set in motion policies which will have the effect of reallocating people and resources from state enterprises to the more productive private firms. A fundamental component of this process will be to force state enterprises to face hard budget constraints by reducing subsidies and special deals." Bremer calls for lowering subsidies and opening Iraq's borders, which he recognizes will "increase competitive pressure on [Iraq's] domestic firms." He states that this "competition" will "raise productivity," although experience worldwide has revealed that such unprotected competition will result in an increase in unemployment and the rate of exploitation.

Bremer summarizes his priorities for this "economic transformation." Each of these acts makes the Iraqi economy more "welcoming" to foreign companies that will rush into the country to privatize and exploit.[7] (Author's comments on Bremer's priorities are in brackets.)

• Start a thoroughgoing reform of Iraq's financial sector in order to provide liquidity and credit for the Iraqi economy. [Liquidity for whom? What will be liquefied? Who will supply this credit and for whom?]

• Simplify the regulatory regime so as to lower barriers to entry for new firms, domestic and foreign. [Lower the barriers without providing any protection for the local industries, thus ensuring that the local industries will be unable to compete with foreign, highly-subsidized industries.]

• Review Iraq's body of commercial law to determine which changes are needed to encourage private investment. [For "private investment" read "foreign investment."]

• Lift unreasonable restrictions on property rights. [What is an "unreasonable restriction?" Are property laws that place more restriction on foreign ownership of Iraqi land and Iraqi resources regarded as "unreasonable?"]

• Develop anti-trust and competition laws. [This is quite an interesting recommendation considering that in the U.S., anti-trust laws are being removed or go unenforced.]

• Develop an open market trade policy providing for a level playing field with regional trade partners. [Regional trade partners? Does Bremer mean that Israel will be welcome in Iraq?]

• Encourage the adoption of laws and regulations to assure that Iraq has high standards of corporate governance. [Once again, how can the U.S. encourage laws for "corporate governance" when, more and more, it is the corporations that are influencing, if not running, the U.S. government, rather than the administration governing the corporations.]

• Develop accelerated training programs for business managers in best practices and business ethics. [And what better corporations to invite into Iraq as role models of business ethics than U.S. corporations who have committed fraud and have blatant anti-union practices?]

In other words, the aim is to transform Iraq's economy into one that is more hospitable to foreign corporations and strip the ground beneath the local industries and local businesses and public sectors.

Who is in charge of the Iraqi public sector?

The U.S. forces are appointing "advisers" for each major Iraqi industry.[8] The advisers chosen for the large, substantial industries need particular examination.

Oil: The U.S. government wants to run the Iraqi oil industry just like a corporation, complete with a U.S. CEO and a board of directors. The U.S.-appointed chair of the U.S.-established "advisory" committee for the Iraqi oil industry is Philip J. Carroll, former head of Shell Oil and Fluor (a firm invited to bid on Iraqi construction projects) and with substantial stock in both. He is also a major corporate player in Texas. Carroll has indicated that Iraq might "choose" not to remain within OPEC, which would serve the U.S. aim of breaking the oil cartel. The one near-certainty, said Carroll, is that the future expansion of Iraq's oil industry will be driven in part by foreign capital.

UN resolution 1472 (March 28, 2003) transfers "legal" control over Iraq's oil industry from the United Nations and Iraq to the United States and its allies. The oil proceeds would be used to finance the country's "construction," the costs of an Iraqi civilian administration, the completion of Iraq's disarmament (for those weapons that can't be found) and "other purposes benefiting the people of Iraq."

Carroll and his oil buddies will make sure that the Iraqi people receive their oil wealth. Just like they did in Nigeria. Keep in mind Shell's experience in Nigeria: They were in bed with the previous Nigerian dictatorship; they commit human rights violations against Nigerians; they pollute the region and withhold Nigerian oil profits from Nigerians.

Agriculture: Iraq's agricultural industry will be run primarily by Dan Amstutz, former senior executive of the Cargill Corporation, the biggest grain exporter in the world, and president of the North American Grain Export Association. As reported by Socialist Worker, "during the Reagan administration, Amstutz drafted the original text of the main international agreements governing the trade of agricultural goods. Amstutz's rules allow wealthy countries to dump their subsidy-backed agricultural surpluses on world markets, pushing down prices to levels that growers in developing nations can't compete with."[9] Bush Jr. is continuing this policy. As reported by the Guardian, Bush Jr. has stated that he wants U.S. farmers to feed the world.

"Putting Dan Amstutz in charge of agricultural reconstruction in Iraq is like putting Saddam Hussein in the chair of a human rights commission," said Oxfam, the British aid agency in June. "This guy is uniquely well placed to advance the commercial interests of American grain companies and bust open the Iraqi market, but singularly ill-equipped to lead a reconstruction effort in a developing country."

Media: The former director of Voice of America, Robert Reilly, has been "entrusted" by the occupiers to "overhaul" Iraq's radios, newspapers and television and manage Iraq's media, in order to sell U.S. policies in Iraq. This pro-war, conservative ideologue believes that "delivering the news is not enough.… We also have the duty to reveal the character of the American people in such a way that the underlying principles of American life are revealed." In other words, the plan is to continue to run the media in Iraq to favor the state; the only change is that the "state" is no longer Saddam Hussein's regime, but is now the Bush's administration and its free market dogma.

Bremer has imposed rules for press censorship. Newspapers that publish "wild stories," material deemed provocative or capable of inciting ethnic violence–or violence against the occupying forces–will be threatened or shut down.

Bremer's nine-point list of "Prohibited Activities" includes incitement to racial, ethnic or religious hatred, advocating support for the banned Baath Party and publishing material that "is patently false and is calculated to provoke opposition" to the occupying authority or "undermine legitimate processes towards self-government." All Iraqi media must now be registered. Licenses will be revoked and equipment confiscated from media sources that break the rules. Individual offenders "may be detained, arrested, prosecuted and, if convicted, sentenced by relevant authorities to up to one year in prison and a $1,000 fine." Appeal is to Bremer only, and his decision is final.

The newly named Iraqi Media Network (IMN)–created in April 2003, replacing the old Iraqi Ministry of Information, will be ruled by the occupying powers and "administered" by Reilly. Bremer will "reserve the power to advise" the IMN on any aspect of its performance, "including any matter of content," and have the power to hire and fire IMN staff.[10]

As Iraqi editor Ni'ma Abdulrazzaq explained, the press edict decreed by Bremer lays out restrictions similar to those under Saddam Hussein. Not long ago, a rebellious writer could easily be accused of being an agent for the U.S. or Israel. "Now they put plastic bags on our heads, throw us to the ground and accuse us of being agents of Saddam Hussein," his editorial reads. "In other words, if you're not with America, you're with Saddam."

Of course, none of these actions should be surprising, if we remember that the U.S. occupying forces deliberately targeted journalists in Iraq during their move into Baghdad. According to the "first detailed analysis of the coalition air campaign by the commander of U.S. air forces," the Pentagon used precision-guided weapons when it authorized 10 strikes against "media facilities," including the Baghdad office of al-Jazeera, in which a reporter was killed.[11]

Consequences of the economic plan

To understand the consequences of the plan for transforming Iraq's economy, we need to understand how Iraq is doing today. How equipped are the Iraqis to handle the changes planned for them by the U.S. occupiers?

In this Phase III of the war against Iraq, more than 240,000 cluster bombs were dropped on Iraq.[12] Cluster bombs are munitions, each containing approximately 200 bomblets; thus, 240,000 cluster bombs translate into potentially 48,000,000 unexploded bomblets–land mines. In addition, one-third of the bombs dropped on Iraq were old-style "dumb weapons"–despite suggestions from the Pentagon that 90 percent of munitions used would be precision guided.

If we regard the killing of almost 3,000 people on September 11 to be a massacre, then we need to admit that there were massacres in Iraq. Almost 7,000 Iraqi civilians–possibly 10,000–were killed in the bombing war of Iraq (according to[13] At least another 8,000 were injured–in Baghdad alone (May 18, 2003, Los Angeles Times). These figures do not include the thousands of Iraqi soldiers who died fighting to defend their country from invading forces.

Meanwhile, as the humanitarian organization CARE reports, "experts say conditions for a cholera epidemic are perfect. Meat is sold from stalls on the side of stagnant puddles and children play in groups around the dirty water. Baghdad, with a population of 5 million and temperatures now regularly 113 degrees and higher, an epidemic of cholera could sweep through the city."[14]

The UN World Food Program (WFP) reports that, in southern and central Iraq, "one in five Iraqis or 4.6 million people suffer from chronic poverty."[15] "If one in five Iraqis in the south and center was unable to secure basic needs before the recent war, it is most likely that this number could increase now with the economic uncertainty in the private and public sectors," warned WFP representative to Iraq, Torben Due.

All of this suffering is added to the 12-plus years of suffocating sanctions that the Iraqi people were forced to endure, sanctions–or economic warfare–that directly led to the deaths of at least 500,000 Iraqi children under the age of five (according to UNICEF). Frederick Barton, former deputy high commissioner for refugees at the UN, said the challenges of enduring the sanctions may have been good preparation for the flexibility that free markets demand (May 27, 2003, Chicago Tribune).

Flexibility of the free market?

In other words, the economic war continues

Already, 400,000 Iraqis became unemployed when Bremer dissolved the Iraqi army on May 23. On June 23, U.S.-led civil administrators announced the creation of a new Iraqi army, "hoping to contain Iraqi anger over desperate unemployment and to curb a rash of attacks against U.S. forces."[16] This army would employ 12,000 men within a year, and will grow to 40,000 within three years, leaving at least 360,000 men unemployed. Allegedly, "up to 250,000 ex-soldiers will be eligible for support payments of $50 to $150 per month" from the occupying powers. Allegedly. The U.S. occupying powers have previously made similar promises to Iraqi government employees and failed to live up to their word.

Bremer has also dissolved the Ministry of Information, and issued a decree preventing up to 30,000 upper level Baathists from retaining any job in a future Iraqi government.

How many more will lose their jobs with the further dissolving of companies, and when public services are privatized and employees are fired? Remember, contracts are pending to sell everything from oilfield technology, transportation services, telecommunications and even the Iraqi ministries.

As Humeira Iqtidar noted on Znet, "The horrendous assault on the lives of Iraqis by cluster bombs will pale in significance to the wholesale deprivation that is in the store for them through the privatization of not just their oil resources but health care, water, electricity, transport, education, drugs and phones."[17]

The corporate invasion of Iraq

The issue of the relationship between U.S. companies and the Pentagon has been much discussed and published.[18] More important than the glaring conflict of interest between the Pentagon and the companies invited to bid on the contracts, is what these companies will be doing in Iraq. What unites all these companies is their agenda of privatization.

Halliburton: Privatizing Iraq's oil resources

Halliburton was awarded by the Pentagon a secret, no-bid contract worth as much as $7 billion. Months before the U.S. military dropped bombs and missiles on Iraq, the War Department was secretly working with Vice President Dick Cheney's old company (Halliburton) on a deal that would give the world's second largest oil services company total control over Iraq's oilfields. The company has been given control of the Iraqi oil operations, including oil distribution.

Bechtel: Privatizing Iraq's water

Bechtel received a no-bid contract from U.S. Agency for International Development (USAID) on April 17, 2003. The contract provides for: emergency repair or rehabilitation of power generation facilities, electrical grids, municipal water systems, sewage systems, airport facilities, the dredging, repair and upgrading of the Umm Qasr seaport (before the seaport was even occupied by the U.S. military) and reconstruction of hospitals, schools, ministry buildings, irrigation structures and transportation links. Its declared goal is to repair or rehabilitate up to 100 hospitals, 6,000 schools (out of approximately 25,000), up to six airports and one southern seaport. The contract is for $34.6 million initially, up to $680 million over 18 months, and could eventually be worth up to $100 billion, thus making it potentially the largest Iraq reconstruction contract.

Quite odd–if one is to hire companies based on their track record–for Bechtel to have received this contract. Bechtel has botched past projects in the U.S. and elsewhere. In Boston, what promised to be a $2.5 billion job for the infamous tunnel project became $14.6 billion, costing taxpayers $1.8 million a mile. In California, Bechtel installed one of the nuclear power plant reactors backwards.

In Bolivia, Bechtel was part of a consortium which took control of the water supply and increased prices by an average of 35 percent. Many in the city of Cochabamba could not afford to pay and street protests led to several deaths. Bechtel pulled out, but is suing the Bolivian government for $25 million for canceling the contract. "Bechtel is not a company that has a sound social or environmental track record," said Juliette Beck of the public interest watchdog group Public Citizen. "It should not be involved in the humanitarian reconstruction effort in Iraq…. Bechtel and privatization go hand in hand."

"Their record depicts that trend–they privatize the service, they raise the price and only those who can afford it get it," said Antonia Juhasz, a project director at the International Forum on Globalization think tank in San Francisco. "If one were to define a core democratic decision a people could make, the treatment of things like water and power and media would be it," said Benjamin Barber, author of the newly released book Fear's Empire: War, Terrorism and Democracy. "It's a pretty basic part of government."[19]

Research Triangle Institute: Not so harmless[20]

The Research Triangle Institute (RTI) of North Carolina was awarded a contract by USAID on April 11, 2003. The contract is for $7.9 million initially, and up to $167.9 million over 12 months. RTI's contract provides for the "strengthening of management skills and capacity of local administrations and civic institutions to improve delivery of essential municipal services such as water, health, public sanitation and economic governance; includes training programs in communications, conflict resolution, leadership skills and political analysis." No uproar on this contract, though. RTI had given no money to the Republican partners. No RTI board members are tied to the Pentagon. Cheney is not on the RTI payroll. Seems rather innocent, right?

Not at all.

RTI's president and CEO, Victoria Franchetti Haynes, openly sees RTI as a vehicle for advancing corporate interests. Under her leadership, RTI has aggressively pursued relationships with pharmaceutical, health care and biotechnology industries, in addition to many, more benign, government and non-profit contracts. Let's look again at the RTI contract. One of the major overarching issues is RTI's work in building allegedly "strong, indigenous, democratic governments." Is this merely PR to smooth relations between the Iraqi people and the occupying power? Each step of RTI's project–"identifying indigenous leaders," "training administrators in political analysis"–opens a door for smuggling in pro-U.S. propaganda and generally making Iraq's political climate more hospitable to U.S. interests.

The second, related issue is whether, in the process of "designing and implementing programs to enhance or improve basic human services," RTI will advance the interests of the people or the interests of the business elite (foreign and domestic). RTI will likely push heavily for corporate control as opposed to public control of municipal services, just as they did in Eastern Europe. Furthermore, RTI has historically received lots of U.S. government contracts to work in "rebuilding" countries undergoing a major "transition." Internationally, some of RTI's biggest contracts over the last decade have been to assist former Soviet Bloc countries with "pro-market reforms" in their "transition to capitalism." The fact that those countries are now in economic shambles, with governments plagued by scandal and corruption, might be cause for concern.

Their basic policy is to push for privatization–turning over government programs and services to corporations. In South Africa, this privatization agenda has been a total disaster. For example, a huge French multinational took over the water services during the late 1990s, and quickly hiked up rates and turned off water supplies to entire poor townships, sparking riots and strikes. A recent report by the International Consortium of Investigative Journalists claims those efforts to privatize water systems in South Africa led to a cholera outbreak, as people unable to pay higher rates started drinking from polluted streams, ponds and lakes. The outbreak killed nearly 300 people.[21]

If RTI pushes for the same thing in Iraq–and there is no reason to believe that RTI will act differently there–then RTI will be ensuring U.S. (and to a lesser extent, European) control over Iraqi society long after the armies are gone. It is neoliberal occupation, but still occupation. Already, RTI is "identifying public water works specialists to provide short-term and long-term technical assistance in Iraqi water supply/distribution systems, and to provide Iraqi counterparts with the knowledge, skills and abilities to repair and sustain Iraqi water systems."

"The reason apartheid fell is because the whites didn't need it any more to maintain control," said one South African activist to Chris Kromm, executive director of the Institute for Southern Studies. "They just privatized everything, and who do you think runs the corporations? They didn't need apartheid anymore, they had capitalism." Iraq could be the next chapter in that story.

The context for all of this is the history of USAID, which contracted RTI. As an arm of the government, it largely engages in development projects that are in line with U.S. political and military interests. It has also long been criticized for having overly-close ties to corporate America, and its projects end up as tools to help businesses penetrate new markets.[22]

RTI also received a subcontract from USAID, via Creative Associates International in Washington, D.C., for "education system reform." This contract ignited much controversy when it was revealed that there were plans to rewrite Iraqi school textbooks–i.e., make them more pro-U.S. Reports conflict as to whether that aspect of the contract has now been cut or de-emphasized.

How RTI's activities play out on the ground should be closely monitored, and we need to not only focus on Bechtel and Halliburton and other large contracts, but vigilantly monitor RTI as well.

Other culprits to monitor:

DynCorp Aerospace Operations (UK), a subsidiary of Computer Sciences Corporation (CSC), awarded, by the U.S. State Department's Bureau of International Narcotics and Law Enforcement Affairs, a $22 million contract–that could grow to $500 million–to "re-establish police, justice and prison functions in post-conflict Iraq." As noted by the Observer, "by hiring military contractors such as DynCorp, the U.S. government has found an effective way to conduct foreign policy by proxy and in secret. These proxies cannot be monitored, are effectively immune from all criminal sanctions, and are dangerously hard to control since they answer to corporate bosses, not military officials," (April 13, 2003). In Bosnia, DynCorp personnel were involved in sex slave trading of young girls as well as a number of other fraudulent acts. In Ecuador, farmers filed a class action lawsuit and charged that DynCorp recklessly sprayed their homes and farms, causing illnesses and deaths, and destroying crops.

The viciously anti-union Stevedoring Services of America (SSA) was awarded, by USAID, an initial contract of $4.8 million for the "provision of initial assessment of the Umm Qasr port in order to facilitate timely delivery of humanitarian supplies and other needed materials for reconstruction; development of improvement plans to overcome port-imposed constraints; hiring of port pilots to guide ships up the channel; facilitation of cargo-handling services such as warehousing, shipment tracking, refrigerated and other cargo storage; and coordination of onward transport of shipments from the seaport at Umm Qasr." SSA got this contract before the U.S. forces had even occupied the city.

Deconstructing more than just the economy

In addition to transforming the economy into a free-for-all for corporations, the U.S. plans to build three permanent military bases in Iraq. Clearly, these military bases will significantly limit any real Iraqi sovereignty, ensure that the pro-U.S. leader remains in power and limit true democratic struggles in Iraq. In addition, the bases will have far-reaching regional consequences, and further develop the military reach of the U.S. Empire.

The U.S. government also plans to change Iraq's position towards the Palestinians. The new Iraqi government, whenever the U.S. appoints it, will have to acquiesce to Israel,[23] open an oil pipeline through Israel[24] and relinquish support for the Palestinians. It is no coincidence that the first (and thus far only) foreign diplomatic mission that the U.S. troops invaded and ransacked, the first diplomats arrested and the first legally licensed weapons confiscated, were Palestinian.

In addition, 90,000 Palestinians are threatened with eviction in Iraq. Most of the displaced and threatened Palestinians are families from Haifa who were displaced in 1948, when the exclusively Jewish state of Israel was built on the land of Palestine. They cannot go back to their homes and lands in what is now Israel because the Israeli government does not recognize their legal right of return. They are not welcome because they are Christian and Muslim, and not Jews.

The similarities between Iraq and Palestine grow daily. Both people have the same demands: an end to the occupation, no theft of their natural resources and full respect of international law (including the right of return for the 6.5 million Palestinians.)

What to do?

There are numerous ways to examine this occupation of Iraq: through the lens of military occupation and drive for empire; the racism that allows the dehumanization of people; or the driving force of increased corporate power. All are accurate. The first two angles have been discussed thoroughly; corporate power–and its influences on foreign and domestic people–needs to be brought further into the discussion of Iraq.

So, what can be done about corporate power? What has been done before?

After the First World War, a Senate committee was formed under the leadership of Gerald Nye to investigate the activities of the munitions industry during the war. Public hearings before the Munitions Investigating Committee began on September 4, 1934. In the reports published by the committee it was claimed that there was a strong link between the American government's decision to enter the war and the lobbying of the munitions industry.

A more powerful historical example, is the use of excess war profits tax. During the Civil War, there was a public outcry in Georgia against profiteering from the war. Georgia's General Assembly responded by enacting a special profits tax. In 1917, the U.S. federal government adopted an excess profits tax, which continued in various forms and at increasing rates until 1921. It was revived by federal legislation during the Second World War and during the Korean War. The tax was imposed on the excess over a firm's peacetime earnings or over an arbitrarily decreed earnings rate. Great Britain also levied an excess profits tax from 1915—21, with a rate varying from 40 to 80 percent. During the era of the Second World War, Britain's excess profits tax was revived, with tax rates increased to 100 percent.

Presently in Congress, several senators have introduced the Sunshine in the Iraq Reconstruction Contracting Act of 2003, to bring transparency to the awarding of contracts. The act is far from sufficient, but a start. More importantly, the Berkeley city council passed a resolution urging "our Congress members in the House and Senate to introduce legislation calling for a high percentage tax on all excess profits on every contract dealing with U.S. military action in Iraq and/or the "rebuilding" of Iraq, including renegotiation of all such contracts made to include this tax."[25]

It's a start.

The Institute for Southern Studies has launched a War Profiteers Campaign to highlight and attack the various ways corporations are profiting from the death and destruction of war in Iraq–from multi-million dollar reconstruction contracts to Bush-connected corporations, to the looming privatization of oil, water and other industries in Iraq that are designed to ensure U.S./European multinational control of the country well after the military occupation ends.[26]

No real change can occur to end corporate power, domestically here in the U.S. and abroad, without demands from the people, without organizing.

The only liberation in Iraq is the "liberation" of Iraq's resources to U.S companies. The same companies that are stealing Iraq's resources, are stealing U.S. taxpayers' money, and moving for privatization of everything abroad and at home, from water to prisons. Both countries–Iraq and the U.S. (and others)–are being cut open for corporations. Here in the U.S., our streets are not–yet–run by the military. We are not shot at checkpoints. We are not under threat of a civil war. And many of us remain, however much we may hate it, the guardians[27] of this very military-industrial-congressional-prison complex that is robbing and killing in Iraq, and elsewhere.

As the guardians, let's revolt against this system.


1 Bob Graham, "I just pulled the trigger," London Evening Standard, June 19, 2003, available online at . Also note that these same soldiers, when they come home to the U.S., are more prone to committing domestic violence than their civilian counterparts, see Jon Elliston and Catherine Lutz, "Hidden Casualties: An epidemic of domestic violence when troops return from war," Southern Exposure, available online at

2 See Arundhati Roy, Power Politics (Cambridge, MA: South End Press, 2001).

3 "Promoting privatization," February 3, 2003, International Consortium of Investigative Journalists, available online at .

4 Tim Carney was the U.S. ambassador to Sudan and Haiti.

5 The breakdown of Iraqi companies and ministries is planned in three stages: those that could be privatized early (fast-track), those that "should" be held back and those that "should" be dissolved, or merged before they are sold.

6 It is very ironic, by the way, for Bremer to criticize Saddam Hussein's regime for "expending at least one-third of GDP on the military" when the current U.S. federal budget sets aside about 20 percent–almost $400 billion–for military expenditure. Iraq's total military expenditure was a tiny fraction of U.S. expenditure.

7 Read Bremer's remarks at the World Economic Forum, available online at

8 A complete listing of the appointed "advisers" is available online on The Transnational Foundation for Peace and Future Research Web site . See Jan Oberg, "Profiles of the Americans really Running Iraq," May 18, 2003.

9 Elizabeth Schulte, "Bush and his corporate pals rob Iraq. The cronyest capitalists in the world," Socialist Worker, May 9, 2003.

10 See Rohan Jayasekera, "U.S. military and free speech: Gives with one hand, takes away with the other," June 11, 2003, Index on Censorship, available online at; and Robert Fisk, "Censorship of the press: A familiar story for Iraqis," Independent, June 11, 2003, available online at .

11 Mark Forbes, "‘Dumb' bombs used to topple Saddam," The Age (Melbourne, Australia), June 3, 2003.

12 Ibid.

13 Also see Simon Jeffery, "War may have killed 10,000 civilians, researchers say," Guardian, June 13, 2003.

14 "Iraqis living in limbo struggle to keep hope alive," CARE, June 22, 2003, available online at .

15 "One in five Iraqis suffers from chronic poverty: Survey," World Food Program, June 19, 2003, available at

16 Jim Krane, "U.S. announces creation of new Iraqi army," Associated Press, June 23, 2003.

17 Humeira Iqtidar, "Celebration in Iraqi streets," Znet, April 23, 2003, available online at

18 For example, see Stephen Shalom, "Iraq war quiz," Znet, March 26, 2003 and "The corporate invasion of Iraq: Profile of U.S. corporations awarded contracts in U.S./British-occupied Iraq," U.S. Labor Against the War, June 15, 2003, available online at .

19 David Baker, "Debate rages over who will run Iraq's utilities. Privatization vs. public control emerges as key issue in shaping future of country," San Francisco Chronicle, June 8, 2003.

20 Chris Kromm, executive director of the Institute for Southern Studies, contributed most significantly to this section on RTI.

21 Baker.

22 For good background on the history of USAID, see Communications for a Sustainable Future Web site.

23 "Sources at the State Department said that concluding a peace treaty with Israel is to be ‘top of the agenda' for a new Iraqi government, and Chalabi is known to have discussed Iraq's recognition of the state of Israel." Ed Vuillamy, "Israel seeks pipeline for Iraqi Oil,"Guardian, April 20, 2003.

24 See Hoomam Peimami, "In the pipeline: More regime change," Asia Times, April 4, 2003, available online at and Akiva Eldar, "The pipeline to Haifa: Israeli minister dreams of Iraqi oil," CounterPunch, April 1, 2003, available online at .

25 Read more about the Cities for Peace Campaign on their Web site at

26 Contact the Institute for Southern Studies for more information about the War Profiteers Campaign at their Web site or contact the author at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

27 This phrase–"guardians of the system"–is derived from Howard Zinn, who wrote in the conclusion of his book The Twentieth Century: A People's History: "The prisoners of the system will continue to rebel, as before, in ways that cannot be foreseen, at times that cannot be predicted. The new fact of our era is the chance that they may be joined by the guards. We readers and writers of books have been, for the most part, among the guards. If we understand that, and act on it, not only will our life be more satisfying, right off, but our grandchildren, or our great grandchildren, might possibly see a different and marvelous world."

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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.