Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Spring Fund Drive: Keep CounterPunch Afloat
CounterPunch is a lifeboat of sanity in today’s turbulent political seas. Please make a tax-deductible donation and help us continue to fight Trump and his enablers on both sides of the aisle. Every dollar counts!
FacebookTwitterGoogle+RedditEmail

Tax the War Profiteers

Basking in his high ratings from the Iraq war, George W. Bush turned his attention on April 15 to selling his tax-cut plan. Bush’s proposal to cut taxes by $550 billion over the next decade has been roundly criticized as corporate welfare at its best.

Bush’s timing could scarcely be labeled serendipitous. His tax-cut campaign coincides with USAID and Army Corps of Engineers awards of massive reconstruction contracts to corporations that have filled Republican Party coffers with hefty campaign donations. The most egregious aspect of these contracts is that they will result in windfall profits for the corporations that have landed them.

The list of companies that will profit handsomely from the contracts reads like a Who’s Who of Republican loyalists. Topping the list is Kellogg Brown & Root, a subsidiary of Halliburton Co., headed by Dick Cheney before he was tapped for vice president, which was initially awarded the most lucrative Iraq reconstruction contract. The pact for emergency oil-field services may be worth $7 billion over the next two years. It could earn as much as 7 percent profit, or $490 million.

Strikingly, this contract was bestowed upon Kellogg Brown & Root without sending it out for bids, to the consternation of many in Congress. After the General Accounting Office, Congress’s investigative arm, launched a wide-ranging inquiry into the award, the Army Corps of Engineers announced it would send the Halliburton contract out for competitive bids. It remains to be seen whether the Corps’ about-face is simply a perfunctory move to forestall criticism, in which Halliburton will walk away with the contract in the end. Months before the Iraq war, Kellogg Brown & Root had been granted a separate Army logistics contract, which has the unprecedented distinction of carrying no price tag.

Another fat Iraq reconstruction contract for $680 million was awarded to Bechtel Group, which donated most of its $1.3 million worth of political campaign contributions since 1999 to the Republican Party. Bechtel has close ties to the Bush administration.

Donald Rumsfeld once served as a liaison between Bechtel and the Iraqi government to finesse the building of an oil pipeline. And former Secretary of State George Shultz, a member of the board of directors of Bechtel, is also chairman of the advisory board of the Committee for the Liberation of Iraq, a strongly pro-war organization with influence in the White House.

An accused human rights violator, DynCorp, a firm which provides security services and which has donated nearly $70,000 to the Republican Party, won a multi-million dollar contract to police post-war Iraq. DynCorp has been accused of engaging in the prostitution business in Bosnia, and it is being sued in a class action by a group of Ecuadorean peasants for spraying herbicides in Colombia that drifted across the border, killing children and crops.

Many in Congress are miffed because the bidding process for these reconstruction contracts has taken place in secret. Sens. Susan Collins (R-Maine), Hillary Rodham Clinton (<D-N.Y>.) and Ron Wyden (D-Ore.) have cosponsored the Sunshine in the Iraq Reconstruction Contracting Act of 2003, to bring transparency to the awarding of these contracts.

Tony Blair must also be seething. Notwithstanding Blair’s unwavering loyalty to Bush, Iraq reconstruction contracts will go exclusively to U.S. firms. Foreign corporations can only subcontract for these lucrative jobs.

Moreover, after the Bush administration succeeds in privatizing Iraq’s oil, U.S. corporations will likely be first in line to do business. The hundreds of protestors chanting “No blood for oil” at ChevronTexaco’s world headquarters in San Ramon the day before Bush launched his tax-cut campaign understood this well.

Defense contractors are also profiting handily from the war. SY Coleman, a key company connected to the U.S. Patriot missile system, is headed by Lt. Gen. Jay Garner, the new “sheriff of Baghdad.” And Northrop Grumman, which won $8.5 billion in contracts last year, has ties with the neoconservatives who provided the blueprint for Bush’s doctrine of preemptive war, beginning with Iraq.

It is wrong for huge corporations to profit from war. During the Civil War, there was a public outcry in Georgia against profiteering from that national tragedy. Georgia’s General Assembly responded by enacting a special profits tax.

Congress itself enacted “excess-profits taxes” during World Wars I and II and the Korean War, to prevent firms from making windfall profits from these conflicts. Democratic Rep. Clement C. Dickinson of Missouri eloquently stated the rationale for an excess-profits tax on the floor of Congress in 1917. He said that “those who reap large war profits in times of distress should help to bear the burdens of government, increased by reason of the very conditions that add to the wealth of those who flourish and fatten on the misfortunes of the country.”

President Franklin D. Roosevelt, in his first radio address following the outbreak of World War II, declared that “no American has the moral right to profiteer at the expense either of his fellow-citizens or of the men, women and children who are living and dying in the midst of war in Europe.” The U.S. had not yet entered the war at that point.

In a message to Congress in 1940, Roosevelt sought “a steeply graduated excess-profits tax” to ensure “that a few do not gain from the sacrifices of the many.” The members of the U.S. armed forces who have served in the war on Iraq are not making excess wages for their sacrifices. Many will suffer for the rest of their lives with injuries and, likely, with Gulf War II Syndrome.

On Feb. 13, 2003, former Sen. George McGovern suggested on MSNBC’s “Buchanan & Press” that Congress impose an excess-profits tax. “I don’t think people ought to be making money out of young American blood in Iraq,” McGovern said.

Excess-profits taxes are generally calculated in one of two ways. Any return on capital over a fixed percent may be considered excess profits. Or they might be defined as net income in excess of prewar levels.

In his farewell speech to America in 1961, President Dwight D. Eisenhower warned: “In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex.”

George W. Bush has cited the lofty ideal of bringing freedom to the Iraqi people as justification for this war. He should not then oppose the imposition of an excess-profits tax on corporations that have secured contracts to rebuild Iraq.

MARJORIE COHN, a professor of law at Thomas Jefferson School of Law in San Diego, is executive vice president of the National Lawyers Guild. She can be reached at: cohn@counterpunch.org

 

More articles by:

Marjorie Cohn is professor emerita at Thomas Jefferson School of Law and former president of the National Lawyers Guild. She writes, speaks and does media about human rights and U.S. foreign policy. Her most recent book is “Drones and Targeted Killing: Legal, Moral, and Geopolitical Issues.” Visit her website at http://marjoriecohn.com/ and follow her on Twitter at @marjoriecohn.

May 21, 2018
Ron Jacobs
Gina Haspell: She’s Certainly Qualified for the Job
Uri Avnery
The Day of Shame
Amitai Ben-Abba
Israel’s New Ideology of Genocide
Patrick Cockburn
Israel is at the Height of Its Power, But the Palestinians are Still There
Frank Stricker
Can We Finally Stop Worrying About Unemployment?
Binoy Kampmark
Royal Wedding Madness
Roy Morrison
Middle East War Clouds Gather
Edward Curtin
Gina Haspel and Pinocchio From Rome
Juana Carrasco Martin
The United States is a Country Addicted to Violence
Dean Baker
Wealth Inequality: It’s Not Clear What It Means
Robert Dodge
At the Brink of Nuclear War, Who Will Lead?
Vern Loomis
If I’m Lying, I’m Dying
Valerie Reynoso
How LBJ initiated the Military Coup in the Dominican Republic
Weekend Edition
May 18, 2018
Friday - Sunday
Andrew Levine
The Donald, Vlad, and Bibi
Robert Fisk
How Long Will We Pretend Palestinians Aren’t People?
Jeffrey St. Clair
Wild at Heart: Keeping Up With Margie Kidder
Roger Harris
Venezuela on the Eve of Presidential Elections: The US Empire Isn’t Sitting by Idly
Michael Slager
Criminalizing Victims: the Fate of Honduran Refugees 
John Laforge
Don’t Call It an Explosion: Gaseous Ignition Events with Radioactive Waste
Carlo Filice
The First “Fake News” Story (or, What the Serpent Would Have Said)
Dave Lindorff
Israel Crosses a Line as IDF Snipers Murder Unarmed Protesters in the Ghetto of Gaza
Gary Leupp
The McCain Cult
Robert Fantina
What’s Wrong With the United States?
Jill Richardson
The Lesson I Learned Growing Up Jewish
David Orenstein
A Call to Secular Humanist Resistance
W. T. Whitney
The U.S. Role in Removing a Revolutionary and in Restoring War to Colombia
Rev. William Alberts
The Danger of Praying Truth to Power
Alan Macleod
A Primer on the Venezuelan Elections
John W. Whitehead
The Age of Petty Tyrannies
Franklin Lamb
Have Recent Events Sounded the Death Knell for Iran’s Regional Project?
Brian Saady
How the “Cocaine Mitch” Saga Deflected the Spotlight on Corruption
David Swanson
Tim Kaine’s War Scam Hits a Speed Bump
Norah Vawter
Pipeline Outrage is a Human Issue, Not a Political Issue
Mel Gurtov
Who’s to Blame If the US-North Korea Summit Isn’t Held?
Patrick Bobilin
When Outrage is Capital
Jessicah Pierre
The Moral Revolution America Needs
Binoy Kampmark
Big Dead Place: Remembering Antarctica
John Carroll Md
What Does It Mean to be a Physician Advocate in Haiti?
George Ochenski
Saving Sage Grouse: Another Collaborative Failure
Sam Husseini
To the US Government, Israel is, Again, Totally Off The Hook
Brian Wakamo
Sick of Shady Banks? Get a Loan from the Post Office!
Colin Todhunter
Dangerous Liaison: Industrial Agriculture and the Reductionist Mindset
Ralph Nader
Trump: Making America Dread Again
George Capaccio
Bloody Monday, Every Day of the Week
Barbara Nimri Aziz
Swing Status, Be Gone
FacebookTwitterGoogle+RedditEmail