Bechtel, One of the 10 Most Brazen War Profiteers, Extorts $9.5 Million from Maryland Taxpayers

Maryland Lawmakers Approve $9.5 Million Grant to Bechtel

Bechtel, one of the 10 most brazen war profiteers, extorts $9.5 Million from Maryland taxpayers

October 20, 2011

AP - A panel of Maryland lawmakers voted 19-4 on Thursday to approve a $9.5 million grant to keep Bechtel Power Corp. from moving out of Frederick.

The Maryland Department of Business and Economic Development made the request at a meeting of the state’s Legislative Policy Committee in Annapolis to retain 1,250 full-time jobs with an average salary of $125,000 in the state for seven years. The money will come from the state’s Sunny Day Fund, an economic development fund.

“Our number one job is supporting private sector investment and building private sector confidence in Maryland’s economy,” House Speaker Michael Busch, D-Anne Arundel, said in a statement. “The Sunny Day Fund was created for extraordinary economic development opportunities, like Bechtel. I am pleased that we can make this strategic investment in a growing area of our state to retain 1,250 jobs.”

Christian Johansson, secretary of the Maryland Department of Business and Economic Development, said the company wanted to be closer to customers in Washington. He said the company also considered proximity to Washington Dulles International Airport in Virginia.

Johansson said the money will be recouped in 16 months through money that would have been lost in taxes.

But Delegate Anthony O’Donnell, a Calvert County Republican on the panel, said Maryland’s tax system is really at the root of the problem, because it scares away businesses to more tax-friendly Virginia.

“We’re not fixing anything,” O’Donnell said. “We’re just papering it over with taxpayer money and giving it away to corporations.”

Under the grant, Bechtel has agreed to keep 1,250 full-time jobs in Frederick for seven years. There are another 625 jobs that could still move. The company provides design and construction for energy generation.

“We are pleased to retain our Power business in Frederick,” said Bill Dudley, Bechtel’s president and chief operating officer. “We first moved to Frederick in 1999 and have found it to be a welcome community to locate our Power business’ headquarters.”

The company also announced that is has not yet finalized plans for the location of its non-power-related operations.

Bechtel Awarded Iraq Contract: War Profits and the U.S. 'Military-industrial Complex'

The unsavory prospects of war profiteering in the U.S.-led occupation of Iraq, and its alleged 'reconstruction,' were proclaimed in a January 21, 2004 press release by the Institute for Southern Studies: A New Investigation Reveals 'Reconstruction Racket' in Iraq. The latest issue of the Institute's publication Southern Exposure provides an "in-depth report by Pratap Chatterjee and Herbert Docena ... one of the first on-the-ground accounts of how U.S. taxpayer money given to Bechtel, Halliburton and other companies is being spent."

An investigative team spent three weeks in Iraq visiting project sites, analyzing contracts, and interviewing dozens of administrators, contract workers, and U.S. officials. Among the findings:

• Despite over eight months of work and billions of dollars spent, key pieces of Iraq's infrastructure - power plants, telephone exchanges, and sewage and sanitation systems - have either not been repaired, or have been fixed so poorly that they don't function.


• San Francisco-based Bechtel has been given tens of millions to repair Iraq's schools. Yet many haven't been touched, and several schools that Bechtel claims to have repaired are in shambles. One 'repaired' school was overflowing with unflushed sewage; a teacher at the school also reported that 'the American contractors took away our Japanese fans and replaced them with Syrian fans that don't work' -- billing the U.S. government for the work.


• Inflated overhead costs and a byzantine maze of sub-contracts have left little money for the everyday workers carrying out projects. In one contract for police operations, Iraqi guards received only 10% of the money allotted for their salaries; Indian cooks for Halliburton subsidiary Kellogg Brown and Root reported making just three dollars a day. [Source]
  

Bechtel's 2003 revenue broke company record; Iraq rebuilding contracts help S.F. firm reverse a 3-year slump

April 29, 2003

WSWS - On April 17 the US Agency for International Development (USAID) awarded a contract worth $680 million to Bechtel Corp., a private company with close ties to the Republican Party and the Bush administration.

The outcome of a secretive bidding process open only to a select group of American corporations, the contract is the latest and largest in a series of windfalls for corporate America following the overthrow of the Saddam Hussein regime.

The areas covered by the contract include the rehabilitation of Iraq’s power, water and sewage systems that were destroyed in the bombing campaign, rehabilitation of airports, and the dredging of the Umm Qasr port. Bechtel’s future work in the country will also likely include repair and reconstruction of hospitals, schools, government buildings and irrigation and transportation systems.

Bechtel stands to gain much more than the initial contract. USAID officials have indicated that the final price tag will run into the tens of billions of dollars. Much of this work—which includes operations in nearly every important area of the country’s infrastructure—will go to Bechtel and its subcontractors.

“This has never been done before—an American corporation rebuilding an entire foreign country,” noted Daniel Brian, Executive director of Project of Government Oversight, which is based in Washington DC.

Previous contracts included a multi-billion dollar deal secured by Halliburton, a company previously headed by Vice President Dick Cheney. The cost-plus-profit contract was awarded without competition to Halliburton’s subsidiary, Brown & Root, which was also one of the six original contenders for the contract awarded to Bechtel. Brown & Root eventually opted out of the bidding process after charges of favoritism were raised. Cheney still receives up to $1 million a year from Halliburton as part of his severance package.

Other American corporations that have won contracts include Research Triangle Institute, which will receive up to $167 million for work in local governance services, and Creative Associates International, which won a $62.2 million contract to rebuild Iraq’s devastated educational system.

All of these costs will initially be paid by American taxpayers, who will also pay for the bombs used to destroy Iraqi infrastructure in the first place. The rest of the burden will fall on the Iraqi people, as the US loots the country’s oil resources to pay off the huge corporate contracts...

Water Privatization Conflicts: Bechtel in Cochabamba, Bolivia

Water is Life - Probably the most well known example of the global conflict over water privatization is the case of Cochabamba, Bolivia. It is a shining example of the conflict over the privatization of water services, a victory for the people opposing privatization, and the persistence of the water giants to make money any way they can.

Cochabamba lies in a semidesert region of Bolivia, making water a scarce and precious resource. However, in 1999 the World Bank recommended privatization of Cochabamba's municipal water supply company, Servicio Municipal del Agua Potable y Alcantarillado (SENIAPA).

"Bank officials directly threatened to withhold $600 million in international debt relief if Bolivia didn't privatize Cochabamba's public water system."

This was to be done through a concession to one of Bechtel’s subsidiaries -- International Water. Bechtel is a U.S. corporation based in San Francisco. This corporate giant is not even welcome in its hometown of San Francisco.

In June, 2002 the Board of Supervisors in San Francisco voted to cancel a $45 million program management contract awarded to Bechtel for the reconstruction of the Hetch Hetchy public water system. This vote took place after an investigation by the San Francisco Bay Guardian, a local alternative weekly newspaper, exposed that at least $5 million dollars of nearly $8 million payed out to Bechtel for its first year of service was a complete waste of money. In one case, Bechtel took a city database of projects, resorted the information, changed the data into a different format, and sold it back to the city for almost $500,000.