by Sally Denton
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CONTENTS
Epigraph
Preface: Mission Accomplished
Prologue: The Spy with a Fan Club
PART ONE We Were Ambassadors with Bulldozers 1872–1972
ONE Go West!
TWO Follow the Water
THREE Hobo Jungle
FOUR That Hellhole
FIVE Wartime Socialists
SIX Patriot Capitalists
SEVEN The Largest American Colony
EIGHT Going Nuclear
NINE McConey Island
TEN Weaving Spiders
ELEVEN Covert Corporate Collaboration
TWELVE The Energy-Industrial Complex
PART TWO The Bechtel Cabinet 1973–1988
THIRTEEN Bechtel’s Superstar
FOURTEEN Cap the Knife
FIFTEEN The Arab Boycott
SIXTEEN The Pacific Republic
SEVENTEEN The Bechtel Babies
EIGHTEEN The Reaganauts
NINETEEN A World Awash in Plutonium
TWENTY It Would Be a Terrible Mess
TWENTY-ONE Ultimate Insiders
TWENTY-TWO A Witch’s Brew
TWENTY-THREE The Territory of Lies
TWENTY-FOUR A Tangled Scheme
PART THREE Dividing the Spoils 1989–2008
TWENTY-FIVE A Deal with the Devil
TWENTY-SIX The Giant Land of Bechtel
TWENTY-SEVEN Some Found the Company Arrogant
TWENTY-EIGHT Global Reach with a Local Touch
TWENTY-NINE A License to Make Money
THIRTY More Powerful Than the US Army
THIRTY-ONE The Hydra-Headed American Giant
THIRTY-TWO Profiting from Destruction
PART FOUR From Muleskinner to Sovereign State 2009–2015
THIRTY-THREE A Convenient Spy
THIRTY-FOUR Privatize the Apocalypse
THIRTY-FIVE Nukes for Profit
THIRTY-SIX The Buddhist and the Bomb
THIRTY-SEVEN The Four Horsemen of the Apocalypse
THIRTY-EIGHT The Captain Ahab of Nuclear Weapons
THIRTY-NINE A Trial Lawyer Goes to Battle
FORTY The Exxon of Space
FORTY-ONE A Nasty Piece of Work
FORTY-TWO The Kingdom of Bechtelistan
Photographs
Acknowledgments
About Sally Denton
Notes
Bibliography
Index
For John L. Smith, let me count the ways.
And for Kathy Kinsella and Ed James, whose generosity knows no bounds.
The author wishes to thank the Black Mountain Institute for making this book possible.
These capitalists generally act harmoniously and in concert, to fleece the people.
—ABRAHAM LINCOLN
If you can’t trust a man’s word, you can’t trust his signature.
—WARREN A. BECHTEL
We’re more about making money than making things.
—STEPHEN D. BECHTEL
There’s no reason for people to hear of us. We’re not selling to the public.
—STEVEN BECHTEL JR.
We will never be a conglomerate. At least not on my watch.
—RILEY P. BECHTEL
The company’s goal has always been to be the best.
—BRENDAN BECHTEL
PREFACE
Mission Accomplished
APRIL 2003
American soldiers had seized Saddam Hussein’s opulent Republican Palace in some of the fiercest fighting of the entire Iraq War. Iraq was smoldering in ruins, “conquered” by President George W. Bush. Its cities bombed out. Baghdad’s museums and shopping centers, villas and military bases, looted, its hospitals torched. Aerial bombardment of the colossal royal palace—the official headquarters of the Iraqi presidency—was tactical as well as symbolic. Under a turquoise dome considered an architectural wonder of the world, the palace held valuable Iraqi government documents in addition to priceless art and furnishings.
Overlooking the Tigris River, the palace had been built in 1958 by the US-sponsored monarch King Faisal II, who was assassinated in a bloody coup before he could take up residence. Its capture by US-led troops, forty-five years later, was emblematic of the victorious return of American influence in the Persian empire—an oil-rich region that had eluded the West since its puppet Faisal was overthrown.
Joining American Special Forces as they sorted through the rubble of the fortress—once the sex and porn parlor of one of Saddam’s two sadistic sons, Uday—was a select group of employees of the San Francisco–based construction company Bechtel. “This place is surreal,” Bechtel’s Thor Christiansen said of the sumptuousness of the grounds now occupied by the “Bechtelians,” who were overseeing the US government’s $3 billion job to rebuild war-torn Iraq.
Saddam, Uday, and his other son, Qusay, had fled during the final air strikes on the palace, but evidence of the debauchery remained, from gold-plated Russian Kalashnikovs, to mirrored beds, to photos of Uday beating naked women. Uday called one room that served as a torture chamber his Tower of Babylon. “Saddam’s ‘I’m-on-crack’ decorating style had been left untouched,” is how a State Department official described the scene. Strewn throughout the sprawling complex were pornography, designer wardrobes, fine wines, liquor, Cuban cigars, heroin, swords and submachine guns, and boxes of handguns amid piles of Guns & Ammo magazines. Hundreds of photos of nude Playboy magazine “Playmates” donned the bedroom walls, along with portraits of President Bush’s twin twenty-one-year-old daughters, Jenna and Barbara, and posters of Iraqi university coeds whom Saddam’s sons trolled for sexual encounters.
Outside bronze gilded gates and white marble colonnades was a network of manmade lakes and the remnants of Uday’s personal zoo. Abandoned and starving lions and cheetahs paced in cages as American soldiers fed them whole live donkeys and sheep from adjacent pens. The luxurious presidential compound encompassed some 1.7 square miles of the wealthy Karada district of Baghdad. A small city, it had six-lane avenues, swimming pools, a hospital, a gymnasium, a fleet of hundreds of European sports cars, and a cloistered dormitory that housed the Hussein men’s harem. Peacocks and gazelles roamed the pine and eucalyptus forest surrounding swan-laden ponds. An American diplomat found it reminiscent of “Sinatra’s Vegas for all the red velvet and brass.”
An ironic shrine to American culture and excess—from the stockpile of Kentucky bourbon to the Playboy Mansion–inspired pleasure palace—Saddam’s headquarters was an emulation of Western greed and imperialism. Most mocking of all was that Bechtel—the privately held, secretive American corporation that epitomized the extreme and unfettered capitalism that Saddam claimed to loathe—was now rooted in the heart of his kingdom.
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A month earlier, on March 19, 2003, Americans had awakened to learn that the United States had invaded Iraq. After the terrorist attacks of September 11, 2001, on the World Trade Center and the Pentagon, the Bush administration determined to wage war against Saddam, claiming he was harboring Al Qaeda terrorists and hiding weapons of mass destruction—allegations that turned out to be false. Iraqis, who would rush in to overthrow their tyrannical dictator, as Bush officials described the projected bombardment, would welcome the so-called shock and awe campaign. The thousands of American soldiers would be greeted as liberators. The assault, called Operation Iraqi Freedom, would cost $50 billion, Bush assured the
public, and would end with Iraq a democratic jewel and strategic US ally in the turbulent Middle East. The “script,” as a US foreign service officer on the ground later described it, “imagined Americans being greeted as liberators like in post D-day France, with cheerful natives rushing out to offer our spunky troops bottles of wine and frisky daughters.”
It didn’t work out that way.
“My fellow Americans: Major combat operations in Iraq have ended,” Bush told the country on May 1, 2003, just forty-two days after the invasion began. The president addressed the nation from the aircraft carrier USS Abraham Lincoln, appearing under a dramatic banner stating “Mission Accomplished”—a premature assessment. Twelve years later—after the loss of nearly five thousand American and more than a hundred thousand Iraqi lives and with a cost of $2 trillion and rising—the US military was still mired in the country, while Al Qaeda’s splinter group, the barbaric ISIS, was seizing Iraqi territory and trying to establish a caliphate.
“What did work out was a luxurious compound in the heart of Baghdad on the banks of the Tigris where the thousands of Americans who would remain behind could work, shop, eat, and relax in a palatial, $750 million embassy,” as one account described it. The transformation of the Republican Palace into the base of the American occupation provoked the Iraqi people. “The World’s Largest Public Relations Failure,” a government official depicted the arrogance and insensitivity of the subjugation. “We placed our new seat of power right on top of his old one, just as the ancient Sumerians built their strongholds on top of fallen ones out in the desert.” The world’s largest embassy on the 104-acre campus known as the Green Zone was the size of Vatican City—the equivalent of eighty football fields, six times larger than the United Nations in New York City, and two-thirds the acreage of Washington’s National Mall. As with the lights of Las Vegas, astronauts can see the vast compound from outer space.
The construction of the fortress-like embassy, with its fifteen-foot-thick walls guarded by US Marines and the private security firm Blackwater, was shrouded, as was the cost to American taxpayers that would swell to more than $1.3 billion. The identity of the companies working on the compound was largely secret. The classified undertaking was part of the sensitive transition from military to civilian control. All construction workers had to have US security clearances in order to be cleared to work on the building. A number of sources report that Bechtel was one of the contractors, though the company denies that it was.
A world unto itself, the top secret, self-sufficient project was comprised of twenty-one buildings including a central utility power plant, a domestic water and sanitary sewer system, and its own telecommunication system and defense force. Six apartment buildings housed thousands of American contractors, military personnel, diplomats, and staff from eleven government agencies, whose recreation options included tennis courts, movie theaters, swimming pools, gymnasiums, a food court, and what one resident described as “the world’s worst bar scene” at a place named Baghdaddy’s. All of it starkly out of context in Mesopotamia, after all, “the biblical Eden.”
A “hideous modernist bunker,” as a British journalist characterized it, the building “scowls at the world” and is “an insult to a city of great historic visual culture.” Few of the thousands of Americans dared venture beyond the fortified “bubble,” also called Emerald City, into the violence beyond its walls. More than a concrete bunker, the bastion symbolized the labyrinthine trail from 1950s CIA assassinations and coups in the region to the twenty-first-century Arab Spring. Even more shadowy than Bechtel’s role in building of the super-embassy was its role nearly half a century earlier in building the original palace for King Faisal II—Stephen D. Bechtel’s coveted ally and client in the Middle East.
* * *
US construction giant Bechtel National Inc. arrived in Iraq in April 2003, along with US troops, even before President Bush had declared the war over, and with the first lucrative government contract to rebuild the country. The influx of Bechtel engineers into Baghdad came immediately after the bombing of Saddam’s palace. Bush had launched the reconstruction of Iraq a week after the invasion, and Bechtel was the primary recipient of hundreds of millions of dollars of government contracts with its profits guaranteed. The company was among a handful of American firms that had made sizeable political contributions to Bush’s Republican Party before receiving a secret invitation to bid on the lucrative postwar government reconstruction contract. The largest nation-building program in history, it dwarfed even the post–World War II Marshall Plan to rebuild Germany and Japan. “War began last week. Reconstruction starts this week,” the New York Times reported. Even before asking the UN Security Council to authorize military action against Iraq, the Bush administration had been quietly soliciting proposals for peacetime rebuilding. “We were the ones who famously helped paste together feathers year after year, hoping for a duck,” wrote a former State Department official of the reconstruction undertaking.
Bechtel received the coveted contract as the principal vehicle to fix the entire Iraqi infrastructure: the power grid, water supply, sewage system, roads, bridges, seaport, airports, hospitals, and schools. The government’s decision to waive competitive bidding under the aegis of “national security” provoked little attention among lawmakers or the media in the United States, though European allies criticized as “exceptionally maladroit” the unseemliness of inviting bids from “only well-connected domestic companies.” For Bechtel, it was business as usual. Due to its relationship with Dick Cheney, Halliburton received most of the “contractor” and conflict of interest attention during the war. This, ironically, on the whole, left Bechtel overlooked by the media.
Priding itself as the company that can “build anything, any place, any time,” Bechtel grew from a scrappy Nevada road-grading operation at the dawn of the twentieth century to the world’s largest construction company. Initially established in a geography inhospitable to humans, Bechtel became the prototype for taming remote and forbidding landscapes as exemplified by its historic signature project, Hoover Dam. “The bigger, the tougher the job, the better we like it,” company president Stephen Bechtel once bragged to Fortune.
Claiming to have worked on more than twenty-five thousand projects on all seven continents, Bechtel’s far-flung enterprise has always been obscured by its privately held structure and paternalistic family dynasty. Bechtel claims to be able to handle any project, no matter how challenging or how remote its location. As the leading engineering and construction firm in America, Bechtel has reaped billions in profits, thanks to its quasi-government posture, an unprecedented revolving door between its San Francisco headquarters and Washington’s inner sanctums, and a business model based on federal contracts that are antithetical to the company’s free-enterprise espousals.
Bechtel has had closer ties to the US government than any other private corporation in modern memory. No other corporation has been so manifestly linked to the presidency, with close relationships to every chief of state from Dwight Eisenhower forward. For nearly a hundred years, Bechtel has operated behind a wall of secrecy with its continually evolving military-industrial prototype. Newsweek once attributed the company’s success to its “wheeling and dealing not only in private operations but with governments themselves.”
* * *
The Profiteers is not a business biography but an empire biography—the story of how a dynastic line of rulers from the same American family conducts its business. European and Asian dynasties go back hundreds of years. In a nation as young as the United States, the Bechtel family is a rarity as one of a handful of American industrial giants that have continued to dominate through five successive generations.
This book is a portrait of an American corporation so potent, and with such a global reach, that it has its own foreign policy that has often been at odds with US foreign policy. Bechtel is “an entity so powerful, so international in scope, that its officers . . . could move to the CIA, the Depar
tment of Defense, and the Department of State respectively as if they were merely shifting assignments at Bechtel,” wrote the California historian Kevin Starr.
Its wielding of unelected power is a cautionary tale, although unheeded by a nation that in recent decades embraced private concentration over public distribution of wealth. Still, for all its outsize ambitions and profits, the family empire has been ruled by stunningly prosaic figures.
To comprehend this system of revolving-door capitalism and the part the Bechtel family has played in it, one must go back to the company’s regional western beginnings. It is a classic American story of money and power, bootstraps and courage, brawn and genius.
Or at least that’s the myth of the Bechtel family dynasty.
Wild West Capitalism
Like all stories of empire building, the rise of Bechtel—one of the first megacompanies born and bred in the American West—is a complex tale of technological ingenuity and corporate craving. “Wild West capitalism at its most earnest,” a Nobel physicist described one of Bechtel’s gigantic twentieth-century construction projects located in the Mojave Desert. In their century-long quest, five generations of Bechtel men have harnessed and distributed much of the planet’s natural resources—hydroelectricity, oil, coal, water, nuclear power, natural gas, and now solar geothermal power and asteroids.
Bechtel’s position as the fourth-largest private company in America in 2013—after the Cargill food-processing company, Koch Industries, and Dell computers, according to Forbes—must be taken at face value since its voluntarily reported revenues that year of $37.9 billion are not subject to federal Securities and Exchange [SEC] regulation. “What appears to an outsider as an almost paranoiac preoccupation with privacy is instead a strategic business policy with several motives,” as one account depicted the company’s historic resistance to public scrutiny. Bechtel family members and a select group of top executives and their spouses hold its stock, and guard financial as well as personal details. One of the world’s wealthiest families, the Bechtels are preoccupied with security and the need for personal bodyguards. The family once petitioned a California court to have their voter registration records sealed, and family members’ personal assets are held in the name of a private corporation. “In fact, if they had their way, they would be known only by their customers, a few key Cabinet members and perhaps a dozen bankers,” wrote journalist Mark Dowie. Since many of the company’s activities have long been concealed by a shield of privacy, journalists and historians face unusual challenges in piercing that shield.