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How a Well-Connected Texas Oil Company Revolutionized the Way America Makes War
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Pratap Chatterjee — one of the world’s leading authorities on corporate crime, fraud, and corruption — shows how Halliburton won and then lost its contracts in Iraq, what Dick Cheney and Donald Rumsfeld did for it, and who the company paid off in the U.S. Congress. He brings us inside the Pentagon meetings, where Cheney and Rumsfeld made the decision to send Halliburton to Iraq — as well as many other hot-spots, including Somalia, Yugoslavia, Uzbekistan, Afghanistan, GuantÃ¡mo Bay, and, most recently, New Orleans. He travels to Dubai, where Halliburton has recently moved its headquarters, and exposes the company’s freewheeling ways: executives leading the high life, bribes, graft, skimming, offshore subsidiaries, and the whole arsenal of fraud. Finally, Chatterjee reveals the human costs of the privatization of American military affairs, which is sustained almost entirely by low-paid unskilled Third World workers who work in incredibly dangerous conditions without any labor protection.
Halliburton’sArmy is a hair-raising exposÃ©f one of the world’s most lethal corporations, essential reading for anyone concerned about the nexus of private companies, government, and war.
ALSO BY PRATAP CHATTERJEE
Iraq, Inc.: A Profitable Occupation
The Earth Brokers: Power, Politics and World Development
To the cooks, cleaners, truck drivers,
and construction workers who make up
Halliburton’s army, as well as the whistle-blowers
who came forward to tell this story.
and construction workers who make up
Halliburton’s army, as well as the whistle-blowers
who came forward to tell this story.
A Revolution in Military Affairs
Early on the morning of March 18, 2008, some four thousand raucous U.S. troops gathered at Holt Stadium on Logistical Supply Area (LSA) Anaconda, a giant U.S. military base located a little more than forty miles northwest of Baghdad near the town of Balad.1 Named after the giant Amazonian river snake that is known for coiling its body around its victim and choking it to death, LSA Anaconda is really a small U.S. town in the middle of Iraq that houses the central command for all its military supply operations in the country. The soldiers who were gathered that cool spring morning were just a small fraction of the thirty thousand troops and contractors who work on the base.2
Some soldiers sat perched on top of the Humvees and Stryker fighting vehicles while others waved flags and chanted “USA, USA” when Brigadier General Gregory Couch, the commanding general of the 316th Expeditionary Sustainment Command, introduced the surprise guest who would mark the fifth anniversary of the 2003 invasion of Iraq.
Surrounded by plainclothes bodyguards, U.S. Vice President Dick Cheney strode in from the back of the stadium to meet and greet the troops, pin a Bronze Star on Staff Sergeant Shane Lindsey from Greenville, Texas, and Specialist Veronica Alfaro of Modesto, California, and give a speech. “The work that goes on at Balad and at Camp Anaconda, around the clock, seven days a week, is absolutely critical to the mission that America has undertaken here,” he told the cheering soldiers. “Balad is one of the busiest airports anywhere, and it’s the main staging area for the massive logistical operations we need in this theater.”3
After the event, Cheney was ushered into one of the four major dining facilities on the base where he helped himself at a hot breakfast buffet to bacon, sausage, eggs, and hash browns and took a seat next to Shubra Bhattacharya-Jones, an Asian American lieutenant in the U.S. Army and others at a special table draped in black. Nearby, dozens of South and Southeast Asian contract workers kept busy, cooking and serving up food to fill the buffet that was being rapidly emptied by the thousands of hungry troops filing in after Cheney’s speech.4
Later that day, Dick Cheney left Iraq the way he had come: holed up in a forty-foot silver trailer inside a C-17 aircraft, to continue his swing around the region—through Ankara, Jerusalem, Kabul, and Riyadh—before returning to Washington.5 On this trip he packed a collection of World War II histories into a green duffel bag: Washington Post reporter Rick Atkinson’s The Day of Battle, about the U.S. Army’s campaign to capture Sicily and mainland Italy, and a collection of essays.6
Yet the war that Cheney had just visited could not be more unlike the history he was perusing where soldiers subsisted on canned Spam, powdered eggs, powdered milk, and powdered coffee.7 The dining facility where he had just eaten (also known as DFAC), like most of the services on the sprawling nine-square-mile base—ranging from laundry to mail—are largely supplied and maintained not by soldiers, but by workers and subcontractors of Kellogg, Brown & Root (KBR), under a contract with the Pentagon called the Logistics Civilian Augmentation Program (LOGCAP).8 KBR is a former subsidiary of Halliburton, a Fortune 500 company based until early 2007 in Houston, Texas.
This LOGCAP contract has netted KBR more than $25 billion since the company won a ten-year contract in late 2001 to supply U.S. troops in combat situations around the world. As of April 2008, the company estimated that it had served more than 720 million meals, driven more than 400 million miles in various convoy missions, treated 12 billion gallons of potable water, and produced more than 267 million tons of ice.9 These staggering figures are testimony to the significant role that Halliburton/KBR has played in supporting the U.S. military in Iraq and other countries targeted in the Global War on Terror.
Cheney’s 2008 visit stands in marked contrast to his brief trip to Iraq in early May 1991 as secretary of defense, when he clambered on top of a sand-colored Abrams tank to give a speech to U.S. troops who were camped out in tents in the southern desert just five miles north of the Kuwaiti border.10 His visit was brief, just a few short minutes; he did not stay overnight nor could he expect to join the soldiers in a military mess similar to those back at home.
Most troops in Iraq at that time typically ate Meals Ready to Eat out of a pouch such as chicken stew, corned beef hash, and pork with rice and barbecue sauce washed down with a bottle of water, or the older-style A, B, or T rations that were prepared from semi-perishable or canned food by army cooks.11
Today’s menus at large bases in the Middle East and Central Asia, particularly on festive holidays, are a far cry from the 1943 or even the 1991 menus. A 2003 Thanksgiving menu in Bagram, Afghanistan, featured glazed ham, turkey, roast beef, corn bread stuffing, simmered corn, giblet gravy, ground gravy, pumpkin pie, sweet potato pie, cheese cake, chocolate cake, blueberry pie, and hot fresh rolls.12 Such menus have been possible only because of the unprecedented reliance on contractors: Approximately one in one hundred people on the Iraqi battlefield in the 1991 Operation Desert Storm were contractors, compared to today in Operation Enduring Freedom, where the numbers of contractors are roughly equal to those of military personnel.13
Much of this outsourcing was initiated by Dick Cheney himself when he was secretary of defense in the early 1990s to comply with U.S. Congressional demands to downsize the military and its bloated Cold War budgets.14 Then, as CEO of Halliburton for five years before he became vice president in 2000, Cheney also oversaw the first major deployment of contractors into support services for the military in active battlefields in former Yugoslavia.
It was not the first time Halliburton or its subsidiaries had been involved in battle; indeed Brown & Root, then an independent company, built 359 warships that were actively involved in the Second World War, including amphibious assault ships, destroyer escorts, and submarine chasers.15 During the Vietnam War, the company built most of the U.S. military bases in that country, but it was the first time that the contractors would allow soldiers to be wholly spared the dreadful monotony of cooking and cleaning up after themselves.
ENEMY NO. 1: PENTAGON BUREAUCRACY
Cheney was not alone—indeed the man who did most to implement the changes that he initiated after Operation Desert Storm, was one of his closest political allies and longtime friends—Donald Rumsfeld, who took over as secretary of defense under the new Bush-Cheney administration in 2001.
Rumsfeld heralded this little-noticed but seismic policy change in military logistics at a Pentagon event on the morning of September 10, 2001, precisely one day before three aircraft struck the Pentagon and the World Trade Center in New York. “The topic today is an adversary that poses a threat, a serious threat, to the security of the United States of America,” Rumsfeld told the assembled senior staff who had gathered for the kick-off of the annual Acquisition and Logistics Excellence week. “This adversary is one of the world’s last bastions of central planning. It governs by dictating five-year plans. From a single capital, it attempts to impose its demands across time zones, continents, oceans, and beyond. With brutal consistency, it stifles free thought and crushes new ideas. It disrupts the defense of the United States and places the lives of men and women in uniform at risk.16
“You may think I’m describing one of the last decrepit dictators of the world,” he thundered. “The adversary’s closer to home. It’s the Pentagon bureaucracy. The technology revolution has transformed organizations across the private sector, but not ours, not fully, not yet. We are, as they say, tangled in our anchor chain.”
Rumsfeld said that the Pentagon was wasting at least $3 billion a year. “We must ask tough questions. Why is DOD one of the last organizations around that still cuts its own checks? When an entire industry exists to run warehouses efficiently, why do we own and operate so many of our own? At bases around the world, why do we pick up our own garbage and mop our own floors, rather than contracting services out, as many businesses do?”
He outlined a series of steps to slash headquarter staffs by 15 percent in the next two years and promised even more dramatic changes in the years to come. “We will not complete this work in one year, or five years, or even eight years,” said Rumsfeld. “An institution built with trillions of dollars over decades of time does not turn on a dime. Some say it’s like turning a battle-ship. I suspect it’s more difficult.”
A little more than five years after Rumsfeld delivered that speech, he was asked to resign, but less than eight years down the road, when Cheney made his overnight stop at LSA Anaconda, Cheney would see that the transformation that Rumsfeld had demanded was complete.
No longer were U.S. soldiers picking up their own garbage and mopping their own floors, or cooking their own food or washing their laundry. Today, tasks like that are now done by an army of low wage contract laborers drawn largely from Third World countries. (Some senior Halliburton/KBR managers made considerably more money, particularly if they were willing to bend the rules.)
A HUNDRED TRIPS ACROSS IRAQ
A fortnight after Dick Cheney left Iraq, I visited the very same dining facilities and logistics operations at LSA Anaconda that he had toured. I flew south with the U.S. military to Kuwait city where I accepted an offer to meet with a group of Fijian truck drivers who worked for a local company named Public Warehousing Corporation (PWC) that was doing subcontract work for Halliburton/KBR.
My host was Titoko Savuwati from Totoya Lau (one of the Moala Islands in Fiji), who picked me up one evening in a small, white Toyota Corolla rental car. The sound system was cranked up to play country favorites and oldies.17 Savuwati was six feet tall, with broad, rangy shoulders, short-cropped hair, and a French beard. A former police officer in Suva, he was fifty years old and had six children back in Fiji, whom he had not seen in four years. When he got out of his car, I noticed he had a pronounced limp, dragging one foot ever so slightly behind him.
We joined his friends at his apartment for a simple Anglican prayer service. Deep baritone voices filled their tiny living room with Fijian hymns, before they sat down to a meal of cassava and curried chicken parts and told me their stories. Each of them had made at least one hundred trips to Iraq, driving the large eighteen-wheeler refrigeration trucks that carry all manner of goodies for the U.S. soldiers, from ice to frozen steak and lobster, from Kuwaiti ports to bases like LSA Anaconda. They sleep in their trucks (they are not allowed to sleep in the military tents or trailers) and have to pay for their own food on the road.
Savuwati had arrived in Kuwait on January 14, 2005, as one of four hundred drivers, hoping to earn $3,000 a month. Instead, he discovered his real pay would be 175 Kuwaiti dinar (KWD) a month (US$640) out of which he had to pay for all his food and sundries, as well as rent. They were paid an extra 50 dinar ($183) allowance per trip. “I came to Iraq because of the large amount of money [the labor recruiter from Fiji] promised me,” he says, sighing. “But they give us very little money. We’ve been crying for more money for many months; do you think my family can survive on 50 KWD?” He sends at least 100 dinar ($365) home a month, and has no savings to pay for a ticket home, which would cost him roughly US$2,500 round-trip.
I did a quick calculation. For every trip, if they worked the normal twelve-hour shift expected of them, the Fijians earned about $30 a day, or $2.50 an hour. I asked Savuwati about his limp, and he told me that in 2005, when he was on a trip to Nasariyah, his truck flipped, and he injured his foot. Did he get paid sick leave when he injured his foot? I asked. Savuwati looked incredulous. “The company didn’t give me any money. When we are injured, the company gives us nothing.” But he assured me that he had been lucky—a number of fellow drivers had been killed on the job.
The next day, I stopped by to see the Fijians again, and Savuwati gave me a ride home. I offered to pay for gasoline, and after waving me away, he quickly acquiesced. As he dropped me off, he looked at me a little sheepishly and said: “I’ve run out of money, do you think you could give me 1 KWD [$3.65] for lunch?” I dug into my pockets and handed over the requested money, but as I walked away I thought how ironic it was that the men who drove across a battle zone, dodging stones and bullets to bring fresh food and ammunition to the U.S. soldiers, had to beg for food themselves.
MILLION DOLLAR BRIBES?
The largest government-owned weapons manufacturing arsenal in the United States—the U.S. Army Rock Island Arsenal—is situated on Rock Island in western Illinois, the biggest island in the Mississippi River where Chief Black Hawk—the self-proclaimed political leader of the Sauk nation—was born.18 The arsenal’s modern stone buildings also house the offices of the Army Materiel Command from which Halliburton/KBR’s multibillion dollar LOGCAP contract has been managed for the last seven years.
A week after I left Iraq, and less than a month after Cheney made his appearance at LSA Anaconda, a parade of former Halliburton/KBR junior and senior procurement managers from Kuwait and Iraq appeared to testify before a jury at the Rock Island federal courthouse, less than two miles from the arsenal across the 24th Street Bridge. Several of the witnesses were military veterans who had served in the Vietnam War in the 1970s and had traveled to the Middle East as employees of Halliburton/KBR. They had been summoned under subpoena for the case of USA v. Mazon et al. before Joe Billy McDade, an African American Republican judge from Texas, who was appointed by George H.W. Bush in 1991.19
The case to be heard in front of the jury was as follows: A million-dollar check had changed hands between Jeff Alex Mazon, Halliburton/KBR’s procurement materials and property manager, and Ali Hijazi, a Kuwaiti-based businessman, in September 2003.The U.S. Department of Justice alleged that the check was a payoff for devising a scheme to defraud the taxpayers of more than $3.5 million related to the awarding of a subcontract to supply fuel tankers for military operations in Kuwait.
“The Department of Justice is committed to ensuring that hard-earned taxpayer dollars are not siphoned off or wasted in our defense procurement processes,” Assistant Attorney General Wray charged in a press release. “Especially in a time of war, the relentless pursuit of those who would fraudulently divert money for their own benefit must be a high priority.”20
J. Scott Arthur, Mazon’s attorney, claimed that his client had made a simple mathematical error in overpaying Hijazi, blaming instead his former employers at Halliburton/KBR for making a scapegoat out of his client. “The mother ship—KBR and Halliburton—isn’t going to take any responsibility,” said Arthur. “They have the nerve to throw stones at people like Jeff Mazon [who] built Guantánamo Bay for the U.S.”21
Mazon was the first of some thirty lower-ranked Halliburton/KBR managers, Pentagon procurement officials, and Middle Eastern contractors to go to jury trial. Almost every other person indicted has pled guilty to bribery charges.22
What was most astonishing was not the fact that Mazon accepted the million-dollar check, which is not in dispute, but that he claims that he did nothing wrong in accepting the money, which he says was a personal loan. The witnesses who were called to testify described similar offers of payoffs from local merchants as well as the tale of a party house where alcohol and women were made available to senior managers by a contractor. Robert Gatlin, the former project manager for all of Halliburton/KBR’s contracts in Iraq, Jordan, and Kuwait, admitted to ordering multiple bottles of complimentary liquor from the Pakistani-American representative of a Saudi contractor to provide to David Lesar, then CEO of Halliburton, on his monthly visits to a company-leased townhouse at the Hilton resort in Kuwait—despite the fact that alcohol is strictly illegal in that country.23
PROFITS AND LOSSES
The rewards and punishments for Cheney and Rumsfeld’s revolution in military affairs have been profound, not least for the soldiers who are now supplied with hot food and showers around the clock. For the Pentagon generals, it has meant that they can do far more with far fewer soldiers; the proverbial “tooth-to-tail” ratio has been reduced, so they can focus on training new recruits to engage primarily in warfare, instead of engaging in mundane logistics.
For military retirees, who take jobs with Halliburton/KBR, this new industry also represents a lucrative new career in which salaries and benefits far exceed what they might have made as public servants, while the profits for the company and its subcontractors run into the hundreds of millions of dollars.
Accompanying this new industry is the potential for bribery, corruption, and fraud. Dozens of Halliburton/KBR workers and their subcontractors have already been arrested and charged, and several are already serving jail terms for stealing millions of dollars, notably from Camp Arifjan in Kuwait.
The bulk of the workers like Savuwati, however, will not see anything close to that, as the pay for Asian workers starts at $300 and probably averages $1,000 a month, although this is still quite a bit greater than what they might have earned at home. Hardest hit are those who have been injured in the course of their work in the war and cast aside as noncombatants with no prospect of a medal, let alone medical care; or for those who have been killed and whose families have been left without a breadwinner.
These men and women make up Halliburton’s Army, which employs enough people to staff one hundred battalions, a total of more than fifty thousand personnel who work for KBR under a contract that is now projected to reach $150 billion. Together with the workers who are rebuilding Iraq’s infrastructure and the private security divisions of companies like Blackwater, Halliburton’s Army now outnumber the uniformed soldiers on the ground in Iraq.
But without this private army of low-wage labor and highly paid managers, the invasion and occupation of Iraq would have been impossible: The U.S. simply did not have enough soldiers and reservists to maintain the supply lines to keep the combat troops alive. This book traces the history of the evolution of military logistics contracting since the Vietnam War, in parallel with the careers of Dick Cheney and Donald Rumsfeld, to explain the crucial decisions that were taken to make it feasible to implement George W. Bush’s Global War on Terror.
Riding the Catfish to Anaconda
CATFISH AIR must be the oddest little privately run airline in the world: It has no planes or pilots, charges nothing, and has no official schedule. The only way to get a ride is to call a phone number and ask to be placed on a flight to one of the military base destinations in Iraq. Its headquarters are on the west side of LSA Anaconda in a nine thousand square feet, sanitized, K-Span building. Unlike most airlines, which discourage passengers carrying liquids, it supplies one-liter bottles of cold water in the terminal that you are strongly advised to take with you (to prevent heat exhaustion). Cots are also provided for those who get stuck there with no available flights (this happens frequently and can last for days, as space on the free flights is subject to the hierarchical priorities of the military chain of command).1
Catfish Air operators can get passengers on the flight manifest for a Space-A (space available or stand-by, in civilian language) seat on a helicopter, which is the quickest and easiest way to move around Iraq. At its disposal are a fleet of more than U.S. Army 130 UH-60 Black Hawks and CH-47 Chinooks that typically deploy in pairs flying a few hundred meters apart—low and fast, often at night with no lights on. The U.S. Army pilots, who shuttle the aircraft around the country, frequently fire a flare and a burst of aluminum chaff on take-off as a decoy for heat-seeking missiles.
To the right of the main arrival/check-in desk at LSA Anaconda hangs a plastic replica of a catfish, which was placed there by members of the Mississippi Army National Guard’s 185th Aviation Brigade, who set up the service back in 2004.2 Behind the desk sit a half-dozen men and women in civilian clothes, whose attire seem to share just one thing in common: a red lanyard worn around their necks that secures their identification badges. On closer inspection, the strap can be seen to bear the initials KBR.
Indeed, for casual visitors to Iraq, the easiest way to find out how things work is to look for someone wearing a red KBR lanyard; they are usually the people in charge of everything from food service, laundry, bathrooms, and shuttle buses, to loading baggage on to the “break-bulk” pallets that are stacked on the back of a cargo plane.
THE RHINO RUNNER
Another popular service operated by the men and women of Halliburton/ KBR is the Rhino Runner service, which is housed in a low, wooden building with a porch that looks like it has been plucked straight out of a cowboy-and-western movie set and then dropped into the maze of concrete barriers, barbed wire, and port-a-potties that make up Camp Stryker, which is next to Baghdad International Airport. Appropriately named Stables, inside is a large, cool room, with two big TVs tuned permanently to the Fox network. Behind the counter are the ubiquitous South Asian workers and a supervisor with a KBR badge slung around his neck.
The Rhino Runner, manufactured in Ashdod, Israel, is a thirteen-ton, all-armored vehicle that resembles a very large black refrigerator on wheels with a small picture of a rhinoceros emblazoned on the front.3 The windows are made of bullet-proof glass that is so tough it hurts one’s knuckles to even tap on them. The passenger windows, which are angled in streamlined fashion, remind one of an old-time Greyhound bus and are supposed to be blacked out, but there are chinks through which one can see. A small fleet of these ugly buses that make the regular forty-minute ride to the Green Zone is protected by a vehicle that looks like a Humvee on steroids (it is literally the size of a small tank). This vehicle is an MRAP Cougar (Mine Resistant Ambush Protected vehicle) with various extra antennas and what look like square satellite dishes attached. It looks like something out of an apocalyptic sci-fi future battle.
Driven by Halliburton/KBR drivers, the Rhino Runner has the distinction of ferrying both Donald Rumsfeld and Saddam Hussein. It is the only safe way—other than by helicopter—to move diplomats, contractors, and others working for the government between the Baghdad airport and the Green Zone along “Route Irish,” also known as “the Road of Death.” (When a Rhino took a direct hit from a rocket-propelled grenade, “Nobody was hurt except for some minor bumps and bruises,” said Army Major Sharon Smith of the Joint Area Support Group, who books the Rhino convoys.)4
Thirty minutes before midnight, every single night, three Ugandan men beckon forward a small cluster of U.S. soldiers at Camp Stryker just outside Baghdad’s military airport. A trickle of men and women surges through, streaming past the slim and rather youthful-looking former African soldiers, personnel of a private security company named EODT. Soon there is a steady river of hungry people who complete the routine magazine check on their M16 carbines and head inside looking for a late snack—at an all-you-can-eat American buffet in the middle of the Iraqi night.5
Inside the vast and brightly lit Falcon dining facility that can seat more than one thousand people at once in three sections of fifty eight-seater tables, dozens of South Asian men with brown uniforms emblazoned in the orange colors of the Gulf Catering Corporation, a Halliburton/KBR subcontractor, serve up unlimited supplies of food to those who qualify: soldiers, government employees, and the media.
For the late-night snack, there were made-to-order omelets and hamburgers, breakfast food such as waffles, hash browns, sausages, and bacon, heartier food like pasta and meatballs, and no shortage of desserts from carrot cake to chocolate cake and pecan pies.
- On Sale
- Mar 23, 2010
- Page Count
- 304 pages
- Bold Type Books