The Shock Doctrine

Disaster Capitalism in Action: iraq

Peter Galbraith, U.S. Adviser to Kurds, Stands to Reap Oil Profits

James Glanz and Walter Gibbs, New York Times, November 12, 2009

"Now Mr. [Peter] Galbraith, 58, son of the renowned economist John Kenneth Galbraith, stands to earn perhaps a hundred million or more dollars as a result of his closeness to the Kurds, his relations with a Norwegian oil company and constitutional provisions he helped the Kurds extract.

"In the constitutional negotiations, he helped the Kurds ram through provisions that gave their region — rather than the central Baghdad government — sole authority over many of their internal affairs, including clauses that he maintains will give the Kurds virtually complete control over all new oil finds on their territory....

"Some officials say that his financial ties could raise serious questions about the integrity of the constitutional negotiations themselves. 'The idea that an oil company was participating in the drafting of the Iraqi Constitution leaves me speechless,' said Feisal Amin al-Istrabadi, a principal drafter of the law that governed Iraq after the United States ceded control to an Iraqi government on June 28, 2004. In effect, he said, the company 'has a representative in the room, drafting.'"

See Also:

An Inside Iraq panel about the Galbraith scandal on Al Jazeera English

An interview with Peter Galbraith on National Public Radio

Bush officials lead Iraq business push

Roula Khalaf, Financial Times, November 9, 2009

"Senior Bush administration figures including Zalmay Khalilzad, former US ambassador to Baghdad, and Jay Garner, the retired general who led reconstruction efforts immediately after the war, are leading a new business push into Iraq.

"The two one-time senior officials are among a raft of former US soldiers and diplomats either leveraging their war experience helping foreign companies to enter the Iraqi market or starting businesses there themselves."

US To Spend Nearly $1 Billion on Private Security Guards in Iraq

Walter Pincus, Washington Post, September 8, 2009

"As the United States withdraws its combat forces from Iraq, the government is hiring more private guards to protect U.S. installations at a cost that could near $1 billion, according to the special inspector general for Iraq reconstruction....

"The inspector general for reconstruction predicted that costs for private security at U.S. facilities in Iraq 'will grow in size to a potential $935 million.' The inspector general's report, issued this year, said the MNF-I planned to switch to private guards for Victory Base Camp, one of its largest installations. That facility alone would require 'approximately 2,600 security personnel,' the report said....

"The inspector general's report shows that government estimates of the total cost of replacing soldiers with contractors are hidden in public accounting. The report notes that government services provided to the private guard force -- food, housing and other benefits -- are not considered, only payments going directly to the contractors. The report estimated that such services provided to private security personnel in the 12 months ending in March cost 'more than $250 million,' at a time when listed outlays to the contractor firms in that period totaled $155 million.

"In the new contracts, private contractors will continue to be allowed to use government dining facilities, living quarters, barber services, some transportation within Iraq and emergency medical care."

US Extends Blackwater's Iraq Contract

Matthew Lee, Associated Press, September 2, 2009

"State Department officials said Wednesday they have extended a contract with a subsidiary of the security firm once known as Blackwater USA despite the fact the company is not allowed to work in the country.

"Three officials said the contract with Presidential Airways to provide air support for U.S. diplomats was temporarily extended because the firm chosen to replace it is not yet ready to take over. The contract was due to expire on Sept. 3 and be taken over a day later by Dyncorp International....

"The State Department had informed Blackwater in January that it would not renew its contracts to provide security for U.S. diplomats in Iraq because of the Iraqi government's refusal to grant it an operating license. The Presidential Airways contract was the last of those contracts to expire. Blackwater guards stopped protecting American diplomats in al Hillah, Najaf and Karbala, all south of Baghdad, in August."

Iraq Auctioning Off Contracts to Big Oil

Gina Chon, Wall Street Journal, June 25, 2009

"Next week, Iraqi officials plan a welcome-back party for Big Oil. The government intends to auction off oil contracts to foreign companies for the first time since Iraq nationalized its oil industry more than three decades ago. If all goes according to plan in the first round, foreign oil companies will move in to help Iraq revive production at six developed fields that have suffered from years of war and neglect....

"Some 120 companies expressed interest in bidding for the contracts at the June 29 and 30 auction, according to the oil ministry. Thirty-five companies qualified to bid, including Exxon Mobil Corp., Royal Dutch Shell PLC, Italy's Eni SpA, Russia's Lukoil and China Petroleum & Chemical Corp., or Sinopec. The six oil fields at stake are believed to hold reserves of more than 43 billion barrels. Foreigners won't get the most prized piece of the action -- ownership stakes in the reserves -- but will be paid fees for ramping up output.

Ex-Blackwater Workers May Return to Iraq Jobs

Rod Nordland, New York Times, April 4, 2009

“Late last month Blackwater Worldwide lost its billion-dollar contract to protect American diplomats here, but by next month many if not most of its private security guards will be back on the job in Iraq.

“The same individuals will just be wearing new uniforms, working for Triple Canopy, the firm that won the State Department's contract after Iraqi officials refused to renew Blackwater's operating license, according to American diplomats, private security industry officials and Iraqi officials. Blackwater - viewed in Iraq as a symbol of American violence and impunity - lost the contract after being accused of excessive force in several instances, particularly an apparently unprovoked shooting in downtown Baghdad in 2007 in which 17 civilians were killed….

“Critics of Blackwater said they worried that the same people might perpetuate what they believed was a corporate culture that disregarded Iraqis' lives. ‘They're really all still there, and it's back to business as usual,’ said Susan Burke, an American lawyer who has filed three civil rights lawsuits against Blackwater on behalf of Iraqi civilians alleged to be victims of it.”

Jay Garner, Former Administrator for Iraq, Now Helping Canadian Companies Secure Oil Deals in Kurdistan

Anthony Fenton, Mother Jones, November 24, 2008

"In the history of the Iraq War, one name is perhaps synonymous with the collapse of the Bush administration's hopes for a post-Saddam world: Retired Lt. General Jay M. Garner. It was Garner who served as the first post-war administrator for Iraq, running the country during the fateful two months immediately following the invasion before being replaced by L. Paul Bremer III.

"However, Garner's frustrating tenure in Iraq wasn't entirely wasted. This year, he and a small group of former US military leaders, officials, and lobbyists have quietly used their deep connections in Kurdistan to help Canadian companies access some of the region's richest oil fields....

"As for Garner, the success of the Vast deal has evidently encouraged him and his associates to pursue more opportunities in Iraq. He and Hite are on the board of Eurocontrol, a company that designs oil theft technology. Eurocontrol's CEO, Bruce Rowlands, says the company is exploring opportunities in Iraq, and that Garner and Hite are helping to facilitate contracts there. Garner and Hite's ability to interpret Iraq's 'political sub-plots' and their understanding of the 'U.S. industrial military complex' is, Rowlands says, 'invaluable.'"

Neocon Richard Perle Linked to Iraqi Oil Deal

Susan Schmidt and Glenn R. Simpson, Wall Street Journal, July 29, 2008

"Influential former Pentagon official Richard Perle has been exploring going into the oil business in Iraq and Kazakhstan, according to people with knowledge of the matter and documents outlining possible deals.

Mr. Perle, one of a group of security experts who began pushing the case for toppling Iraqi dictator Saddam Hussein about a decade ago, has been discussing a possible deal with officials of northern Iraq’s Kurdistan regional government, including its Washington envoy, according to these people and the documents....

"Mr. Perle, who was an assistant Defense secretary in the Reagan administration, is known for his strong support of Israel and hawkish views on arms control. In the early days of the Bush administration, he was one of the most influential proponents of U.S. military action to oust Iraq’s President Hussein. Mr. Perle was chairman of the Defense Policy Board, which advises the Pentagon, but resigned in March 2003 amid criticism of his role as an adviser to a telecom company that was seeking U.S. government approval for a sale to Asian investors."

Big Oil to Sign No-Bid Contracts in Iraq

Andrew E. Kramer, New York Times, June 19, 2008

"ExxonMobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and an American diplomat.

"The deals, expected to be announced on June 30, lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations....

See also:

* "The Real Significance of the Oil Ministry's Bid Round," by Greg Muttitt at Carbonweb, July 1, 2008

* "Iraq to Award Oil Contracts to Foreign Firms," Agence France Presse, June 22, 2008

* "Big Oil Firms Ready to Sign Agreements With Iraq," Washington Post, June 20, 2008

Luxury Hotels, Malls and Amusement Parks Planned for Green Zone

Michael Howard, Guardian, May 6, 2008

"A $5bn (£2.5bn) tourism and development scheme for the Green Zone being hatched by the Pentagon and an international investment consortium would give the heavily fortified area on the banks of the Tigris a 'dream' makeover that will become a magnet for Iraqis, tourists, business people and investors....

"Marriott International has already signed a deal to build a hotel in the Green Zone, according to Navy Captain Thomas Karnowski, the chief US liaison. Also in the pipeline is a possible $1bn investment from MBI International, a hotel and resorts specialist led by Saudi sheikh, Mohamed Bin Issa Al Jaber. One Los Angeles-based firm, C3, has said it wants to build an amusement park on the Green Zone's outskirts. As part of the first phase, a skateboard park is due to open this summer."

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