”The U.S reconstruction push in Iraq is winding down,” wrote David Baker in Wednesday’s San Francisco Chronicle.  --  As for Bechtel, the gargantuan but secretive engineering and construction firm, it’s all over, for now at any rate.[1]  --  “The San Francisco engineering company's last government contract to rebuild power, water, and sewage plants across Iraq expired on Tuesday.”  --  The Los Angeles Times also reported on Bechel’s exit from Iraq.[2]  --  Neither paper was able to report how much money Bechtel made from the $2.3 billion the U.S. government gave the company, because, both reported, the profit of the privately held company in Iraq was “undisclosed.”  --  Neither the S.F. Chronicle nor the L.A. Times bothered to mention that it is only a slight exaggeration to say that Bechtel is a branch of the U.S. national security state.  --  Associated Press’s Michael Liedtke did better in that regard, noting Bechtel’s “deep political connections, particularly to the Republican Party.”[3]  --  “Rarely does a big Pentagon construction project surface that doesn't have role set aside especially for Bechtel,” Jeffrey St. Clair noted in a 2005 piece about Bechtel entitled “Straight to Bechtel.”  --  As Steve Bechtel Sr. reportedly said, "We are not in the construction and engineering business.  We are in the business of making money" (Laton McCartney, Friends in High Places: The Bechtel Story: The Most Secret Corporation and How it Engineered the World [Simon & Schuster, 1998], p. 80; quoted here).  --  Bechtel also made money in Iraq under Saddam Hussein: Emad Mekay observed in a Jan. 9, 2004, article on Bechtel in Asia Times Online that the company “has a history of profiteering after wars and of disregarding human rights conditions in Iraq.  Last month, newly declassified official documents from the U.S. State Department showed the company planned in 1988 to continue to build a petrochemical plant for the Saddam Hussein regime despite a U.S. congressional ban to stop American companies from working in Iraq.” ...

1.

BECHTEL ENDS IRAQ REBUILDING AFTER A ROUGH 3 YEARS
By David R. Baker

San Francisco Chronicle
November 1, 2006

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/11/01/BECHTEL.TMP

Bechtel Corp. went to Iraq three years ago to help rebuild a nation torn by war. Since then, 52 of its people have been killed and much of its work sabotaged as Iraq dissolved into insurgency and sectarian violence.

Now Bechtel is leaving.

The San Francisco engineering company's last government contract to rebuild power, water, and sewage plants across Iraq expired on Tuesday. Some employees remain to finish the paperwork, but essentially, the company's job is done.

Bechtel's contracts were part of an enormous U.S. effort to put Iraq back on its feet after decades of wars and sanctions. That rebuilding campaign, once touted as the Marshall Plan of modern times, was supposed to win the hearts of skeptical Iraqis by giving them clean water, dependable power, telephones that worked and modern sanitation. President Bush said he wanted the country's infrastructure to be the very best in the Middle East.

But Bechtel -- which charged into Iraq with American "can-do" fervor -- found it tough to keep its engineers and workers alive, much less make progress in piecing Iraq back together.

"Did Iraq come out the way you hoped it would?" asked Cliff Mumm, Bechtel's president for infrastructure work. "I would say, emphatically, no. And it's heartbreaking."

The violence that has gripped Iraq drove up costs and hamstrung the engineers who poured into the country after the U.S.-led invasion.

Bechtel's first reconstruction contract, awarded shortly after Saddam Hussein's overthrow in April 2003, assured the company that it would have a safe environment for its workers. But, by the end, dozens of Bechtel's employees and subcontractors had been killed, some of them kidnapped, others marched out of their office and shot. Forty-nine others were wounded.

Bechtel responded by hiring more guards, driving armored cars, and fortifying its camps. Those steps ate up money that otherwise would have brought electricity and clean water to Iraqis.

The size of Bechtel's contracts also shrank over time, as U.S. officials diverted money from reconstruction and toward security. Instead of the nearly $3 billion originally budgeted, Bechtel finally received about $2.3 billion, a figure that includes money the company spent on projects as well as its undisclosed profit.

Mumm directed Bechtel's work from a bare-bones trailer in Baghdad. He is proud of his people for finding ways to work despite the threat of imminent death. Of 99 projects that the U.S. government directed Bechtel to complete, the company finished 97, abandoning only two for security reasons, the company says.

But Mumm's pride is mixed with frustration. Many of those completed projects later fell victim to collapsing security, which made maintenance dangerous and, in some cases, resulting in damage to plants and equipment.

He once hoped the new Iraqi government would turn into a steady Bechtel client, bringing the company lucrative new contracts in a country where virtually every road, power plant and waterworks needs repair.

"Had Iraq been a calmer place while we were there, amazing things could have been done," he said.

The U.S reconstruction push in Iraq is winding down. About $18 billion in funding that Congress approved three years ago was supposed to be spent or committed to specific projects by the end of September. Two of the U.S. government agencies that have overseen the work are scheduled to close shop early next year. The United States and other countries are discussing another round of aid, but if it comes, Iraqi ministries are supposed to take the lead on rebuilding.

"That's really an under-told story -- we've stopped the reconstruction," said Frederick Barton, co-director of the Post-Conflict Reconstruction Project at the Center for Strategic & International Studies think tank. "There are some things we're still finishing up, but we're wrapping up, and we're stepping back. It's really a tragedy."

What exactly did Bechtel accomplish in its three years in Iraq?

-- The company helped repair 14 electrical generation units, built four new ones, and created 25 substations around Baghdad.

-- It restored eight sewage plants and built one.

-- A canal bringing drinking water to Basra, Iraq's second largest city, was dredged and its pumps restored. Seventy small water treatment plants were installed in rural areas.

-- Airports in Baghdad and Basra were repaired to handle civilian flights. The country's international shipping port -- Umm Qasr -- was dredged and its grain elevator refurbished.

-- Baghdad telephone switching stations knocked out during the war were restored, and the country's phone network was reconnected to the outside world.

-- War-damaged bridges on key highways were rebuilt.

-- Almost 1,240 schools were refurbished with new paint, fans, and in many cases new windows and doors to replace those looters had stolen.

But many of these accomplishments were undone as security evaporated.

For example, Bechtel added 1,280 megawatts to the nation's power grid and improved the reliability of another 480 megawatts. In the United States, that much energy could light more than 1.3 million homes.

But Iraq's entire power system this summer produced 4,400 megawatts, just 442 megawatts more than before the invasion. The country needs about 9,000 megawatts to satisfy demand.

In some cases, the power plants have had trouble getting stable fuel supplies. In others, repaired plants were cut off from the national grid by sabotaged power lines. A series of coordinated attacks [on] Oct. 20, for example, severed Baghdad from power generated in the rest of the country, leaving the city's 7 million residents with only a few hours of electricity each day.

"Infrastructure is assumed by the terrorists, correctly, to be a target," said Michael Izady, a professor at Pace University who has trained U.S. forces in Iraq. "They're not stupid. You just hit the power grid, and you have 120 degrees outside. Ask any American what they'd do after two days of that. Tempers run really high."

Making matters worse, Iraqi workers haven't maintained some of the repaired electrical plants.

U.S. government auditors blame the problem on a lack of funding and the attitudes of Iraqi workers, who in the past rarely did maintenance unless something broke. Auditors visited one plant where new control systems had been bypassed, the blades of new turbines already had oil residue building up on them, and a fire had broken out -- a problem, since the fire extinguishing system was missing key parts.

Similar problems plagued water and sewage projects.

At Baghdad's Kerkh sewage plant, Bechtel spent $5.7 million repairing equipment that hadn't worked in months, maybe years. But the plant's location, on the edge of the city, became increasingly dangerous -- turf for Saddam loyalists and criminal gangs. In November 2004, insurgents issued flyers telling the plant's Iraqi workers to stay home or die, according to Bechtel. Not long after, a power failure hit the plant, and the staff didn't turn on the backup generator. The plant stopped working.

"We'd get it completed, and then the Iraqis would all flee, and it'd get mortared," Mumm said. "It would operate for awhile, then the same thing would happen. . . . As we sit here today, I don't know if Kerkh is running or not."

Some places became too dangerous for Western and Iraqi employees alike. One of the projects Bechtel couldn't complete was a water treatment plant in Baghdad's Sadr City, a poor, crowded neighborhood dominated by Shiite militias. Bechtel's top project supervisors and the project's subcontractor fled to avoid assassination.

Violent intimidation also stopped another project -- a state-of-the-art children's hospital in which First Lady Laura Bush had taken a personal interest.

The project, in Basra, was supposed to cost $50 million. The U.S. Agency for International Development assigned Bechtel the job in August 2004, with a completion date of Dec. 31, 2005. But Bechtel later warned its government supervisors that the hospital would take far more money and time to complete. The project was suspended this summer. Bechtel says the hospital now would cost $98 million. Federal auditors, who blamed USAID for not reporting the project delays and costs to Congress, say the figure is probably higher.

Basra had been quiet immediately after Hussein's fall. Its Shiite population suffered greatly under Hussein and was happy to be rid of him. But the calm was short-lived, as Shiite militias started to exert more and more control over the city.

Bechtel's hospital site security manager was murdered. The site manager received death threats and resigned. Bechtel's senior Iraqi engineer quit after his daughter was kidnapped. Twelve employees of a subcontractor in charge of the hospital's electricity and plumbing were killed in their offices. Eleven workers of another company supplying the project's concrete also died.

As the human cost of reconstruction rose, why didn't Bechtel pull out?

Mumm said the company constantly reviewed security and was convinced that it could keep its people safe.

"We didn't stay under duress," he said. "I think all of our people got in it, got involved in it, and no one wants to leave a job half-done."

He says the work hasn't been for naught. Even electrical or sewage plants that have broken down after Bechtel left can be revived if the country finds a way to quell the violence. If Iraq eventually stabilizes, the people Bechtel worked with may provide another opportunity to work in the country.

"Those people will be there, and I think they'll think favorably of us," Mumm said.

2.

BECHTEL CALLS IT QUITS AFTER MORE THAN 3 YEARS IN IRAQ
By David Streitfeld

** Violence has left few of the company's infrastructure projects in the war-torn country operating as planned. **

Los Angeles Times
November 3, 2006

Original source: Los Angeles Times

SAN FRANCISCO -- Bechtel Corp. helped build the Bay Area subway system, Hoover Dam, and a city for 200,000 in the desert of Saudi Arabia. It likes to boast that it can go anywhere, under any conditions, and build anything.

In Iraq, Bechtel met its match.

A firm that prides itself on its safety record saw dozens of its workers killed. And a company that celebrates achievement won't know for a long time, if ever, exactly what it accomplished.

The assignment Bechtel won from the U.S. government in early 2003 was unique: Apply the brick and mortar needed to restart the long-starved and war-damaged Iraqi economy, allowing the country to blossom into a modern and free industrial state. Rarely had a single corporation been given so much power to affect so many so quickly.

More than three years later, Bechtel says its work on Iraq's water and electrical plants, its bridges, schools and port, is done.

The company said this week at its headquarters here that it had completed 97 of 99 projects for a total of $2.3 billion, a sum that included its undisclosed fee. Only two Bechtel employees are left in the country. At its peak, there were 200 people from Bechtel supervising tens of thousands of Iraqis.

If the story for Bechtel is drawing to a close, this isn't anything like the happy ending it once expected.

The company went to Iraq with a good deal of well-earned swagger. Chairman Riley Bechtel told the firm's employees in April 2003 that Bechtel's record was one "that few, if any, companies in the world can match." The tasks it would undertake in Iraq, he added, were "the kind of work we do best."

The company expected Iraq to develop from an aid recipient to a customer. The biggest U.S. engineering firm would help one of the world's most distressed countries into the 21st century.

That hope receded with each suicide bombing.

"We were told it would be a permissive environment. But to the horror of everyone, it never stabilized. It just went down, down, down, and to this day it continues to go down," said Cliff Mumm, who ran Bechtel's Iraq operation. "I'm proud of what we did, but had law and order prevailed, it would be a different situation."

At one Bechtel project, in the southern city of Basra, the company recorded this toll: The site security manager was murdered; the site manager resigned after receiving death threats; a senior engineer resigned after his daughter was kidnapped; 12 employees of the electrical-plumbing subcontractor were assassinated in their offices; and 11 employees of the concrete supplier were murdered.

All told, 52 workers associated with Bechtel projects were killed, most of them Iraqi. Forty-nine others were wounded.

Bechtel says it completed nearly all its assigned projects, but that doesn't mean they are necessarily operating as planned.

"Once projects were complete, the plant operating crews we trained often lacked the leadership, resources or motivation needed to run and maintain their facilities," Mumm said in September testimony to the House committee on government reform.

If Bechtel gives itself high grades under the circumstances, others aren't so generous.

"They thought, 'We're the world's best, and we can go in and make this happen,'" said Rick Barton, a reconstruction specialist at the Center for Strategic and International Studies, a Washington think tank.

"After all the money that's been invested, the Iraqi people should be able to make it on their own. But we're nowhere near that, let alone creating a shining city on a hill," Barton added.

The looting and vandalism outpaced the rebuilding from the beginning.

In May 2003, the supposed end of open warfare, a survey of Iraq's dilapidated electrical system showed 13 downed transmission towers. Four months later, the total had grown to 623.

"We were trying to hold the infrastructure together and at the same time build a platform to go forward and at the same time cope with a deteriorating security situation," said Mumm, who recently returned to the U.S. "There were a lot of moving parts."

The company's critics give it points for remaining free of corruption, unlike some Iraq contractors. But they say it was too slow in restoring the power grid.

"In the critical years of 2003 and 2004, part of the growing sense in the Iraqi population that Americans were incompetent occupiers rather than effective liberators came because Bechtel hadn't gotten the power grid on in the scorching hot summers," said Charles Tiefer, a professor at the University of Baltimore School of Law and an expert on government contracting. "American corporate reconstruction efforts like Bechtel's failed worse in Iraq than American arms."

The lack of an infrastructure fed the insurgency, which made it its goal to destroy the infrastructure. As time went on, Bechtel spent increasing amounts not on rebuilding but on protecting its workers.

Now that the reconstruction funds are running out, the fate of the Iraq infrastructure, like so much else in the country, is uncertain.

"Bechtel is putting a 'Mission Accomplished' banner over their work in Iraq and then coming home," said Steve Ellis of Taxpayers for Common Sense, a watchdog group. "But the mission has not been accomplished. Iraq still doesn't have enough power, hospitals, clean water."

Most of the bridges and roads and other projects built by Bechtel in the last century are still in use. Mumm hopes that the work the firm did in Iraq will survive.

"All that stuff is there, and available, should the Iraqis find themselves in a stable enough position to use them and take advantage of them," he said. "I believe eventually that will happen."

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3.

BECHTEL ENDS PERILOUS IRAQ WORK
By Michael Liedtke

Associated Press
November 1, 2006

http://www.chron.com/disp/story.mpl/ap/fn/4304135.html

SAN FRANCISCO -- Wrapping up more than three years of work that cost the U.S. government $2.3 billion, Bechtel Corp. is leaving Iraq with a subdued sense of accomplishment after suffering through a spree of violence that killed 52 workers.

The departure of the San Francisco-based engineering firm serves as another sobering reminder of how the carnage in Iraq has scrambled the United States' once-grand ambitions to rebuild the devastated country.

The U.S. government hired Bechtel in April 2003, hoping the company behind manmade marvels like the Hoover Dam would be able to bring Iraq into the 21st century as it repaired much of the damage caused by the invasion that overthrew Saddam Hussein.

The daunting task required rebuilding roads and bridges, expanding the power grid, cleaning up the water supply and adding telephone lines.

Although some progress has been made, the efforts of Bechtel and other government contractors have been repeatedly beset by sabotage, corruption and lawlessness that made it difficult to retain workers frightened for their lives.

Bechtel said it completed all but two of the 99 projects on its Iraq to-do list, but at a horrible cost: 52 dead workers and another 49 wounded. At peak times, Bechtel employed more than 40,000 workers -- mostly Iraqi subcontractors -- on the various projects.

Most of the Bechtel workers were killed while off duty, said company spokesman Jonathan Marshall. It's among the greatest losses of life that Bechtel has suffered during any job in the company's 108-year history, possibly exceeded only by the company's Depression-era work on the Hoover Dam, Marshall said.

Bechtel has completed more than 22,000 projects in 140 countries, including perilous jobs like the Channel Tunnel that connects England to France.

Counting bodies was something that Bechtel never envisioned when the company went to Iraq. Within just a few months of arriving in Iraq, Bechtel had started to evacuate some of its workers from Baghdad to Amman, Jordan, for safety reasons.

Despite the adversity, Bechtel said it finished all its jobs except a water treatment plant in Baghdad and a two-story children's hospital in Basra that had been championed by first lady Laura Bush.

The government suspended work on the hospital last summer amid rising security expenses that drove the project well above its original $50 million cost. Bechtel estimated it would have taken at least $98 million to finish the hospital.

Before the hospital was abandoned, Bechtel's onsite security manager was murdered, another manager resigned because of death threats and a senior engineer quit after his daughter was kidnapped. Another 23 workers employed by a subcontractor and a concrete supplier were murdered.

When the government first picked Bechtel for the Iraq work, the decision was blasted by some critics who believed the company benefited from its deep political connections, particularly to the Republican Party.

Bechtel's leadership at various times has included George Shultz, a former cabinet member in the Nixon and Reagan administrations, and Casper Weinberger, the Secretary of Defense in the Reagan administration. Other employees, including Bechtel CEO Riley Bechtel, have connections to the current Bush administration.

The company maintains it won the Iraq business through a competitive bidding process that recognized its vast expertise. The Iraq contracts represented a relatively small portion of Bechtel's revenue, which totaled $51.8 billion from 2003 through 2005. The privately held company doesn't disclose its profits.

Bechtel's exit comes as Kroll, the risk consulting and technology division of Marsh & McLennan Companies Inc., announced it would sell a subsidiary that provides security services in Iraq and Afghanistan.