The Profiteers

by Sally Denton

  By 2015, Bechtel, which had been active in the Middle East for more than seventy-five years, was ranked the largest contractor in the world, with awards swelling past $100 billion. Welch described the company as a true multinational, with forces deployed throughout the world.

  In an interview with an Egyptian newspaper, Welch announced that Bechtel was interested in assisting the Egyptian government with its infrastructure needs, including coal-fired plants and oil and gas facilities. Perhaps nowhere was the twenty-first-century iteration of international Bechtel more evident than in Kosovo, where the US ambassador there helped Bechtel win a contract to build a billion-dollar highway through neighboring Albania. Christopher Dell, a three-decade career diplomat, lobbied for the controversial project, dubbed the “Patriotic Highway,” before taking a lucrative position with Bechtel. Peter Feith, the senior European Union diplomat in Kosovo when Bechtel and its partner, the Turkish behemoth Enka, secured the contract, criticized the way Dell spoke out in support of the project and then pushed through the deal. Calling for an inquiry, Feith questioned “the logic of an impoverished, nascent country undertaking such a huge infrastructure project,” as the Guardian reported it. The highway project was mired in allegations of corruption on both sides of the border, as its estimated costs soared from $555 million to a final cost of $1.1 billion for a stretch of mountainous highway, costing $25 million per mile. Stretching across one of the poorest regions in southeastern Europe—where one in three Kosovars lives on less than $2.18 per day, and only one in seven owns a car—the completed state-of-the-art motorway was underused. “The highway’s black vein of asphalt now stands out against the Balkan countryside, as if mocking the surrounding poverty like a cruel Dickensian joke,” wrote journalist Matthew Brunwasser in Foreign Policy magazine.

  The Balkan Investigative Reporting Network raised questions about the propriety of Dell’s revolving door from the State Department to Bechtel after a one-year “cooling-off period” during which ambassadors are prohibited from lobbying the US government. Michelle Michael, a spokeswoman for Bechtel, said the suggestion that Dell “acted inappropriately or otherwise failed to meet his responsibility as a public servant is both unfair and offensive.” Charlene Wheeless, Bechtel’s vice president of global corporate affairs, went further, calling it “slanderous” to allege a conflict of interest between Dell’s work as ambassador and any business he generated for Bechtel.

  But the controversy didn’t end there. “It isn’t every day that a U.S. ambassador inspires a character in a comic strip,” as Brunwasser put it. But that is what happened to Dell, who was satirized as the “Chief Pimp” in “The Pimpsons”—a Balkan cartoon strip depicting “the local political elite commandeering Kosovo’s democracy and selling the country off to the highest bidder.”

  In one of the editions, published on Facebook, Dell the caricature was shown taking cash from Bechtel in exchange for helping the company get the billion-dollar contract for the forty-eight-mile, four-lane Kosovo Highway—the most expensive public works project in that country’s history. While there are no real-life reports of such direct payments, a six-month investigation by the Investigative Reporting Program at the University of California at Berkeley Graduate School of Journalism in 2015 found that the Bechtel-built highways in the region “were boondoggles for the countries in which they were constructed, and that members of governments and international institutions often saw problems coming before Bechtel . . . even began work on the roads.” And Dell the man had reportedly pressured the Kosovo government “not only to choose Bechtel but also to sign a contract with terms that were favorable to the corporation,” according to the investigation, even though a coalition including the World Bank, numerous European embassies, and the International Monetary Fund opposed Bechtel’s bid.

  Bechtel did not suffer from either the allegations or the controversy. Instead, it was rewarded with more and bigger contracts throughout America and across the globe. Long-standing devotees of interventionist government, Bechtel is “the case study that explains how business is done between multinational construction giants and the governments that approve and fund the projects those giants engineer and build,” according to SF Weekly.

  Depending on one’s interpretation, observers consider Bechtel either a brilliant triumph or an iconic symbol of grotesque capitalism. Driven by ideology as well as money, the Bechtel corporate insiders embrace a fixed perception of America—and the path that it needs to follow—as part of a particular worldview. “Bechtel plays politics because it cares about government,” William Greider once wrote. “Especially about who is running the government.” Veteran journalist Lisa Davis agreed. One could view the company “as either a shining success or a horrific monster,” she wrote. “But it can’t be seen as a rogue firm playing outside the rules. Bechtel is the textbook example of business as usual.” Indeed, in May 2015 Bechtel was named the top-ranked US contractor for the seventeenth year running by Engineering News-Record, the leading publication for the engineering and construction industry. In addition to ranking number one on the annual list of the top four hundred contractors, it ranked in the top twenty petroleum, transportation, power, industrial, and hazardous waste firms.

  The Bechtel family political philosophy tends toward conservative, in some respects libertarian, anti-big government even as their company made billions from government contracts. The company has a long history of taking taxpayer money for deals with governments of strategic interest to the United States. “Bechtel is a mighty component in this great industrial defense complex, which in effect has been determining policy for our country,” remarked a Texas congressman on the House floor. Even though it is an engineering and construction firm, “profits are reported as personal income by individual owners,” according to the Nation.

  Like the Koch brothers and others in their political milieu, the Bechtel Foundation and its individual family members contribute to the Heritage Foundation, the antienvironmentalist Pacific Legal Foundation, American Enterprise Institute, Georgetown University Center for Strategic and International Studies, and other conservative think tanks. The firm subscribes to former vice president Dick Cheney’s Energy Policy task force promoting energy policy to benefit the private sector. Its political contributions tilt more toward its business interests than its ideology, as do the foundation’s charitable gifts, “often going to the universities with engineering schools that accept and then graduate Bechtel employees,” according to one account. Philip M. Smith, one of the most experienced science policy professionals in the United States—and science advisor to four US presidents—described Bechtel’s political leanings as a continuation of the old energy paradigm that began with the Cold War. “Neither Steve Bechtel Sr. nor Steve Jr. had any interest in national affairs unless it benefitted their company.”

  Likewise, both the corporation and the Bechtel family philanthropy is “outside the realm of what might be considered business-related fraternizing,” according to SF Weekly. The Bechtels “remain virtually off the social radar” and are not among the regular benefactors of San Francisco’s charity fetes, galas, and balls. Stephen Bechtel Jr.’s favorite philanthropy is the $439 million Boy Scout camp—the Summit Bechtel Family National Scout Reserve—located in Mount Hope, West Virginia.

  The company’s public relations stance is aggressive, even hostile, toward critical news reporters and authors. “Bechtel has a three-point PR strategy,” according to one reporter. “Trashing journalists who report critically on the company, spinning financial institutions who lend the company money, and bending the truth.”

  When Ralph King, a former banking reporter for the Wall Street Journal, wrote a 4,700-word exposé of Bechtel that was published in a San Francisco–based magazine, “company spinmeisters promptly ran a background check on him,” searched internal phone and email records in an attempt to find who was leaking information to him, and charged that the story was inaccurate and unbalanced. After the Boston Globe’s explos
ive investigation of Bechtel’s cost overruns for the Big Dig, the company compiled and circulated an eighteen-page memo accusing the newspaper of failing to understand the construction trade. Following widespread national and international media criticism for how it landed the massive Iraq reconstruction contract, Bechtel compiled a point-by-point refutation of the allegations against it, which it distributed to the press and company partners and posted on the firm’s website. Among their refutations, Bechtel denied that politics played any role in procuring the contract, claiming the company “engages in the political process legally, openly, and appropriately,” and stating the company balanced its political campaign contributions more fairly between Republicans and Democrats than most other construction industry PACs. “The implication that Bechtel wins business or succeeds in a highly competitive marketplace through political connections is misguided and false.”

  When journalist and author Laton McCartney published Friends in High Places: The Bechtel Story—The Most Secret Corporation and How It Engineered the World in 1988—a book highly critical of Bechtel—corporate executives pressured his New York publisher with threats of litigation. “The first thing they did was get a copy of the book and demand corrections,” McCartney recalled. Caspar Weinberger called for all references to him to be omitted. When McCartney’s publisher, Simon & Schuster—also the publisher of this book—stood behind its author, Bechtel representatives then obtained a copy of McCartney’s publicity schedule for his book tour. McCartney said that every time he was on a live radio interview show, someone from Bechtel would call in to lambaste him. As a last resort, after the publisher refused to back down in response to the company’s threats, Bechtel published a fifteen-page alternative edition entitled “The Real Story,” which it distributed to the media and circulated among company employees. Bechtel accused McCartney of committing “errors on more than 100 pages” and making up events that never occurred, and asserted that McCartney’s book was full of fabrications, falsehoods, and innuendo.

  McCartney prevailed against the onslaught against his professionalism and factual accuracy. Bechtel did admit that it would be “preposterous for us to say we haven’t built good relationships with important people”—relationship building the company described as mere “networking.”

  In the New York Times review of the book, and the clash, Stephen Labaton wrote the obvious: By either Bechtel’s or McCartney’s standards, it was “corporate networking of unparalleled dimensions.”

  The Bechtel story is most important for how the company embodied the rise of a corporate capitalism forged in the American West that over the decades took the world by storm—a capitalism much more in line with cronyism than free market ideology. Bechtel pioneered the revolving door system that now pervades both US politics and the American economic system—a door that came to shape foreign policy not always in the interest of the nation and its citizens, but for the interests of multinational corporations.

  In the end, this is the ugly, untold story of America. A story not of the triumph of laissez faire capitalism, but of Profiteers whose sole client was government itself.

  (1) This vintage postcard from 1936 shows the construction of Hoover Dam in four different stages, with all views taken from the same point looking upstream. Called the “Eighth Wonder of the World,” it would be known as Bechtel’s historic, signature project.

  (2) The safety violations and labor unrest that characterized Hoover Dam’s construction site earned for Dad Bechtel the reputation of the “bête noire of American labor.” By 1931 more than two-thirds of the work force were threatening to strike. Bechtel and his partners blamed the labor unrest on outside Communist rabble-rousers.

  (3) Warren A. “Dad” Bechtel and a few of his business partners and engineers associated with the construction of Hoover Dam. Although they were the most powerful contractors in the West, none had the singular ability to take on the nation’s largest construction project. Calling themselves Six Companies, the men borrowed the name from the Six Tongs of San Francisco’s Chinatown. From left to right: Bechtel, Walker R. Young, Elwood Mead, Frank Crowe, and R.F. Walter.

  (4) In November 1980, Reagan was elected president in a landslide. In what would become known as the “Reagan Revolution,” the election marked a historic, conservative realignment with the American Southwest as the unmistakable new power center. The Bechtels were among the coalition of reactionary, antigovernment, rugged individualist western corporate titans that had made Reagan’s political victory possible.

  (5) President Reagan with Caspar Weinberger, George Shultz, Ed Meese, and Don Regan—the White House chief of staff—in the Oval Office discussing the president’s remarks on the Iran-Contra affair on November 25, 1986. Iran-Contra was a labyrinthine conspiracy to trade weapons to Iranian leaders in exchange for seven American hostages. Weinberger, a seasoned traveler through the Bechtel/government revolving door was later indicted for his role in Iran-Contra. Before he was tried, he received a pardon from president George H.W. Bush.

  (6) President Reagan leads a cabinet meeting flanked by two of his closest advisers, whom he had recruited from Bechtel—Secretary of State George Shultz and Defense Secretary Caspar Weinberger. March 13, 1987.

  (7) President Richard Nixon walking with his national security advisor, Henry Kissinger, on the White House lawn. The two were obsessed with political events in Chile, where socialist president Salvador Allende had threatened to nationalize utilities in which American corporations were heavily invested. Front and center in the machinations that led to the coup overthrowing Allende, was John McCone—former CIA director and Bechtel principal, now an ITT director.

  (8) An anti-Vietnam war protestor tied to a cross. The war spawned violent antiwar student protests throughout the country. Stephen Bechtel Sr. privately railed against the campus demonstrators as Communist rabble-rousers.

  (9) In July 1959 in Moscow, Soviet leader Nikita Khruschev and Vice President Richard Nixon engaged in a heated exchange about capitalism and communism. Tempers flared as the two men taunted each other. Dubbed the “Kitchen Debate,” the tense confrontation came to epitomize the Cold War and the fervent anticommunist sentiments of the Bechtel family.

  (10) Steve Bechtel Sr. had cultivated a close relationship with the Iranian shah, Mohammad Reza Pahlavi, seen here with President Nixon at a reviewing stand in Washington, DC. A US-backed coup had deposed the democratically elected prime minister of Iran, Mohammad Mossadegh, who had nationalized that country’s oil interests, and installed the pro-Western shah. The shah supported Bechtel’s Iranian projects, and was considering Bechtel’s proposal to build eight nuclear reactors and to invest in an Alabama nuclear plant to be built by a Bechtel consortium.

  (11) Bechtel employees install a power pole in Mississippi after the Category 5 Hurricane Katrina caused severe destruction in the Gulf of Mexico in August 2005. The very day the hurricane struck, the US government’s Federal Emergency Management Agency (FEMA) contracted with Bechtel to provide mobile homes for 100,000 people in the region who had been displaced by the storm.

  (12) The legendary, nationally syndicated columnist Drew Pearson, seen here in the White House garden with President Lyndon Baines Johnson in 1964, was the harshest critic of John McCone and Bechtel. Pearson, and then his equally legendary successor, Jack Anderson, drew repeated public attention to the crony capitalism and revolving door they thought McCone and Bechtel epitomized.

  (13) Greg Mello, executive director of the Los Alamos Study Group, thought Wen Ho Lee “was an invented crisis, not an intelligence operation.” As Mello saw it, the arrest of Lee as a spy set the stage for the nation’s nuclear laboratory to be transferred into private hands.

  (14) Oakland California attorney J. Gary Gwilliam. In May 2008, just months after Bechtel took over, Lawrence Livermore National Laboratory in California laid off 430 career employees. Gwilliam took on 130 as clients in a high-profile case against the Bechtel-led lab manager, calling the privatization of the lab
a “corporate takeover.”

  (15) Left to right: John McCone, Allen Dulles, and President John F. Kennedy after Kennedy’s announcement that McCone would replace Dulles as director of the Central Intelligence Agency. Kennedy blamed Dulles for bungling the attempted overthrow of Cuba’s Fidel Castro in the ill-fated Bay of Pigs invasion.

  (16) On November 21, 1985, Jonathan Pollard drove to the Israeli Embassy in Washington, DC, to seek asylum, since his Israeli handlers had assured him that they would protect him if his spy services were detected. Instead, embassy guards refused to let him enter, and an undercover FBI surveillance team placed him under arrest.