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The Merchants of Blood War Profiteering from Vietnam to Iraq

War Profiteering from Vietnam to Iraq

by JAMES M. CARTER

While campaigning for President in 2000, George W. Bush made clear his position on nation building saying, "I don’t think our troops ought to be used for what’s called nation building" adding that, if elected, he would "absolutely not" engage in such open-ended commitments. He was sharply critical of his predecessor’s use of American troops in Haiti, Somalia and Kosovo to "restore order," to bring about "stable governments," all objectives of nation building. Nevertheless, Bush and company find themselves scrambling to otherwise define and control a conflict that looks increasingly open-ended, costly and bent on building a very different Iraq. What the Bush foreign policy team seems loath to consider are the remarkable parallels between the circumstances they now face in trying to remake a war-torn Iraq and the efforts of confident, well-heeled American officials of the 1960s who believed they too had history on their side in trying to remake the southern half of Vietnam.

The United States began waging a war in the Southeast Asian nation of Vietnam in the early-1960s and continued well into the 1970s, unleashing an unprecedented barrage of firepower on the southern half of that country, below the seventeenth parallel. What is perhaps less well known is that the war in fact followed an equally enormous and failed nation building project. Beginning in 1954, the United States attempted to invent a nation below the 17th parallel, the dividing line decided at the Geneva Conference that same year.

Immediately, the United States began pouring money and expertise into Vietnam to bring off this transformation. A staggering array of specialists and technicians, from civil police, public administration, public finance, military, counterespionage, propaganda, industry, agriculture, education and more immediately descended upon Saigon, the southern city made the capital of the whole project. These experts, along with the U.S. government and military installed Ngo Dinh Diem, removed all viable opponents, began a crackdown on dissidents killing tens of thousands and jailing as many or more, and began to physically transform southern Vietnam. United States government contractors, such as Michigan State University and the construction firm Johnson, Drake and Piper, went to work on the creation of a national communications, transportation and police network. This "mission" built or rebuilt hundreds of miles of roadways and dozens of bridges, dredged hundreds of miles of canals, built airfields and deep draft ports to receive a continuing and growing volume of economic and military aid. They built roads connecting all parts of Vietnam to Saigon, which they promised would result in greater access for both government officials and peasants to sell their crops to a larger market. They trained and equipped a rapidly expanding military force to keep Diem in power and they began to piece together a para-military security force and a Vietnam Bureau of Investigation (VBI) modeled on the American FBI. They even inaugurated an identity card program to catalog the identity and keep track of every Vietnamese in the interest of maintaining security. Nothing would be left to chance; no rogue force would tip the expensive American apple cart. By 1960, the United States had poured into this project over $1.4 billion.

The project failed. Ordinary Vietnamese in concert with northern Viet Minh cadre began to openly resist the whole campaign. By the early 1960s, the United States came to rely almost exclusively on military solutions to put down the growing opposition, soon a broad-based and popular insurgency opposed to continued occupation and Diem’s rule, now referred to as My-Diem or American Diem. John Kennedy increased direct American involvement from around 680 to over 16,000 troops as "advisors" who, despite their title, participated in combat. The administration, at the same time, vastly expanded the military forces built earlier to defend Diem and insure he remained in power. Opposition to the occupation grew at a steady pace. The whole project continued to unravel. By late 1963, a coup de tat finally removed Diem and his influential family from power.

From 1964 into 1965, the experiment was vastly militarized. From around 23,000 troops in Vietnam by the end of 1964, the next year there were 185,000, and the next there were over 385,000. American force levels peaked at around 542,000. By all accounts a traditional society, southern Vietnam needed an infrastructure to receive this influx of military aid. Responsibility for building that necessary infrastructure was given over to the largest construction entity ever, the RMK-BRJ (Raymond International, Morrison-Knudsen, Brown & Root, and J.A. Jones Construction). Calling itself "The Vietnam Builders" and receiving highly lucrative "no bid" contracts, this consortium of private corporations was to turn southern Vietnam into a modern, integrated military installation that would enable the United States to properly defend its client. The Vietnam Builders entered into a contract with the federal government, via the U.S. Navy, as the exclusive contractor for the huge military buildup that was to come; there would be no open bidding or otherwise competitive process.

Brushing aside the messy reality that the nation of "South" Vietnam had yet to be created, U.S. officials ordered a staggering volume of military projects be begun immediately. The congress granted to the administration of Lyndon Baines Johnson for 1965 $700 million for the expected ramping up of a direct American military role. Of that sum, $100 million was earmarked for the Defense Department’s construction projects already begun. Soon, the figures ballooned far beyond anyone’s expectation. Initially contracted for around $15 million prior to 1965, the lead corporation, MK, was shocked by the magnitude of orders for rapid construction. As one MK executive said early in 1965, "all we knew was that they wanted a lotta roads, a lotta airfields, a lotta bridges, and a lotta ports, and that they probably would want it all finished by yesterday." (Fortune, Sept., 1966)

These demands outstripped the capacity of any one of the corporations. Equipment requirements alone for the Vietnam project far exceeded all equipment owned by MK for all of its worldwide operations and all subsidiary companies. The value of the project leapt from its 1964 starting point of $15 million of work in place per month to over $67 million of work in place per month within two years. The Builders could hardly keep pace with the demand for more projects, which numbered over one hundred concurrently at the peak of construction. Suppliers in the US could hardly keep up either and backlogs of three to six months became commonplace. Caterpillar Tractor Company’s annual report to shareholders intoned, "1965 was another recording-breaking year and only the physical limitations of production capacity kept sales and profits from being higher." (ENR, Feb., 17, 1966; ENR, May, 19, 1966) Three of the four firms making up the Vietnam Builders ranked in the top ten of four hundred U.S. corporation doing business abroad for 1966. Collectively, and individually, they gobbled up hundreds of millions in profits for their efforts. In the process, Vietnam Builders employed 8,600 Americans and over 51,000 Vietnamese. They built six ports with 29 deep-draft berths, six naval bases, eight jet airstrips 10,000 feet in length, twelve airfields, just under twenty hospitals, fourteen million square feet of covered storage, and twenty base camps including housing for 450,000 servicemen and family. In short, they put on the ground in southern Vietnam nearly $2 billion in construction of various kinds of facilities and infrastructure. Military commanders called it the "construction miracle of the decade." (Jones Construction Centennial)

In deciding to go to war rather than withdraw from Vietnam, the Johnson administration had stepped onto a slippery slope where foreign policy crises meet domestic politics. At home just as in Vietnam, Johnson fought to control inflationary pressures. Now, those pressures mounted as the war in Southeast increased in scope and intensity. The soaring demands on the construction industry certainly meant rising profits, but it also threatened rising prices. Republicans in congress began to criticize Johnson’s handling of the Vietnam situation, warning his policies threatened to over-heat the domestic economy and drive prices up. Some also specifically criticized the way in which aid, both construction/military and economic, was being sent to Vietnam. In 1966, Illinois Representative Donald H. Rumsfeld went perhaps further than most when he charged the administration with letting contracts which "are illegal by statute." He urged investigation into the relationship between the private consortium working in Vietnam and the Johnson administration, in particular the infamous "President’s Club," to which Brown & Root, one of the principle Vietnam contractors, had given tens of thousands of dollars in campaign contributions. Rumsfeld argued on behalf of serious inquiry into the whole affair saying, "under one contract, between the U.S. Government and this combine, [RMK-BRJ] it is officially estimated that obligations will reach at least $900 million by November 1967…why this huge contract has not been and is not now being adequately audited is beyond me. The potential for waste and profiteering under such a contract is substantial." (Cong. Rec., August 30, 1966) Rumsfeld’s alarm was echoed by others in the congress and in the press as well, although will little affect. All the while, the war in southern Vietnam continued to spiral out of control despite the dramatic increases in firepower and troops and military construction. The government’s contract with the Vietnam Builders ended only in 1972 shortly before the Nixon administration itself quit the commitment to the long failed project.

In Vietnam, this process took years to unfold. In Iraq, the time table seems dramatically sped up. Following the rapid invasion and removal of Saddam Hussein, U.S. forces quickly occupied key areas of Iraq. Officials and "embedded" reporters gleefully trumpeted American successes after meeting what was described as only token opposition. Postwar planners and experts had been quickly flown into neighboring countries to await a modicum of safety before entering Baghdad to begin their work in stabilizing and rebuilding a ravaged country.

Twelve years of ruinous sanctions had reduced Iraq to a traditional state in terms of its agricultural, communications, transportation, public health and educational infrastructure. Years of neglect as a desperate regime clung to power and funneled its limited resources toward maintaining itself and away from maintenance of the nation also contributed to the erosion and decay of a modern state. (Iraq Under Siege, ch. 2) This otherwise nightmare situation for the people of Iraq actually aided the American military by reducing all kinds of unseemly obstacles to invasion, conquest and occupation that was to follow.

Within weeks, the federal government began its bread line for business by handing out sweet deals to American corporations to "rebuild" Iraq’s infrastructure. And, just as in Vietnam, those with the best relationship to government officials quickly found themselves on an inside track with greater access to the enormous sums of money pouring into Iraq. Vice President Dick Cheney’s own Halliburton began riding this "gravy train" even before the invasion was over, building tent cities just outside of Iraq. Once the President declared an end to combat, the big money quickly began to flow.

As of September, Halliburton had received almost one quarter billion dollars in payment for work done so far, with much more to follow. Kellogg, Brown & Root, a Halliburton subsidiary, is also in the pipeline, having signed lucrative federal contracts, reportedly worth $2.3 billion, to help in the rebuilding of Iraq’s oil producing infrastructure. Bechtel Group, another corporation with solid government connections, has lapped up another $1.03 billion. Even Morrison-Knudsen, now calling itself Washington Group International following a merger, has signed on for around $500,000,000 of the lucre. The contracts through which these deals are codified are those old familiar, certainly to Defense Secretary Rumsfeld, "cost-plus-award-fee" types that were used to give away huge sums of money to the Vietnam Builders. The Center for Public Integrity’s recently published investigation into private contractors and the war on "terror" reveals that over 70 American companies have secured close to $8 billion in government contracts to rebuild Afghanistan and Iraq. They also shared ongoing and close relations with the federal government and provided more in campaign contributions to George Bush than any other official over a twelve year period. Those companies are currently building and rebuilding all of the infrastructure destroyed over the past dozen years, and then some. They are working on a police network, a military force, a communications grid, transportation system, an integrated media system, the oil production and transportation system, water and sewage treatment systems, and so on. (<Aljazeera.net>, <CorpWatch.org>, The Center for Public Integrity)

Meanwhile, the situation on the ground inside Iraq has steadily deteriorated since the President’s proclamation of the "end of combat." A recent CIA analysis finds that ordinary Iraqis are fast losing hope that the Americans have come to help them. The Iraqi Governing Council is no closer to legitimacy and yet remains hamstrung by occupation officials. The war and its aftermath have now taken the lives of some 8,000 innocent civilians. Looking eerily like the situation in Vietnam, albeit after several years of failure there, an insurgency now flourishes in Iraq and the chaos and episodes of heavy-handed American military actions have created fertile ground for greater anti-American violence. President Bush has now called L. Paul Bremer III, the top American official overseeing post-war Iraq, hurriedly back to Washington to hasten the turning over of power to the Iraqis themselves in response to the growing resentment of and attacks on occupation forces. That may now happen as early June, 2004. The situation is bad and getting worse, the congress is now criticizing and investigating the money deals, and the Bush administration wants desperately to distance itself from the whole mess in the run up to the presidential election. (The Philadelphia Inquirer, The New York Times) Ordinary Iraqis are fast learning what ordinary Vietnamese peasants learned all those years ago; namely, the United States, as George Bush says, does not do nation building.

Rather than avoiding the lessons of such disasters as the "nation building" war in Vietnam, Americans, if not America’s elected leaders, should look to that tragic episode to explain the "quagmire" unfolding in Iraq. This is not a humanitarian mission any more than was the American mission to Southeast Asia forty years ago. It is a fraudulent war that is now perpetuated by political ideologues and war profiteers with much to lose. Without legitimacy among the people, the whole project, including whatever "government" is put in place, is doomed to failure. Iraqi resistance will only grow. The cycle of answering that resistance with greater levels of force is perpetual. It should come as no surprise that the Iraqi people are no less impressed with this version of "nation building" than were the Vietnamese people with the earlier version.

JAMES M. CARTER is a PhD. candidate at the University of Houston. He can be reached at: jmcarter@ev1.net