Builders of the American Century: Bechtel and Crony Capitalism

SAN FRANCISCO - JUNE 5:  Demonstrators dressed as George Bush, Donald Rumsfeld and Condoleezza Rice rally outside the Bechtel
SAN FRANCISCO - JUNE 5: Demonstrators dressed as George Bush, Donald Rumsfeld and Condoleezza Rice rally outside the Bechtel corporate headquarters June 5, 2003 in San Francisco. Dozens were arrested as the group 'Direct Action to Stop the War' protested Bechtel's new involment in the rebuilding of Irag following the U.S.-led war in Iraq. (Photo by Justin Sullivan/Getty Images)

The Koch Brothers, Dick Cheney, and companies like Blackwater and Halliburton have become worldwide symbols of crony capitalism, war profiteering, environmental destruction and labor exploitation, which are driving the resurgence of social movements in the United States today.

Sally Denton's book The Profiteers: Bechtel and the Men Who Built the World (Simon & Schuster, 2016), demonstrates that Bechtel Corporation, which spent an estimated $6.2 million in political contributions and $6.2 million in lobbying during the last election cycles, should be in the same class of villains.

The San Francisco based construction giant has been at the forefront of what journalist Naomi Klein has called "disaster capitalism" as it has profited from the wreckage of failed wars and environmental disasters.

Building bases for the U.S. military around the world, Bechtel received the coveted contract for rebuilding Iraq's infrastructure following the Operation Iraqi Freedom, helped rebuild New Orleans after Hurricane Katrina and also gained lucrative contracts for cleaning up nuclear waste and for managing nuclear weapons laboratories which were privatized by the Bush administration.

Drawing off newspapers reports, declassified records and personal interviews, Denton's book follows Laton McCartney's Friends in High Places (1988) in showing how despite evangelizing for free-market, deregulatory policies, Bechtel built its empire on government contracts and the kind of crony capitalism that Occupy Wall Street, Bernie Sanders and the Democracy Spring movement have mobilized opposition to.

Former or current executives have served as ambassadors in countries such as Kosovo where they lobbied for Bechtel highway construction and pipeline projects and in other top government positions including CIA Director. Defense Secretary Caspar Weinberger and Secretary of State George Shultz constituted the so-called Bechtel Cabinet during the Reagan administration whose foreign policy, Denton shows, at times placed Bechtel ahead of the national interest.

The "Bechtel boys" for example helped secure the sale of F-15 jet bombers and a whopping $8.5 billion airborne warning and control system (AWACS) reconnaissance plane to Saudi Arabia at a time when Bechtel had $40 billion in contracts in the Kingdom. The sales helped strain American relations with Israel, whom Bechtel had long opposed because of their dealings across the Arab world. According to Denton, Weinberger and Shultz subsequently pursued a vendetta against the Israeli spy Jonathan Pollard, who was given a disproportionately long prison sentence thanks in part to their lobbying.

"The Bechtel boys" also helped ensure that the Reagan administration took Iraq off its list of countries that sponsored terrorism and allowed the sale of chemical weapons to Saddam Hussein, overlooking major human rights atrocities and his support for the Abu Nidal terrorist organization. Donald Rumsfeld, then CEO of G.D. Searle pharmaceutical, was sent as a special envoy to consolidate U.S.-Iraqi relations and secure an oil pipeline deal, serving in effect as Bechtel's chief lobbyist in Iraq.

When Saddam eventually spurned the pipeline along with a Bechtel proposal to build a petrochemical plant near Baghdad, the "ultimate insiders" became chief champions of wars against Saddam. Bechtel received the major contracts to repair the oilfields his troops had burned and to rebuild Kuwait following the 1991 Operation Desert Storm. Shultz later headed the neoconservative committee on Iraqi liberation, writing op-ed pieces supporting the 2003 invasion under the logic that "the more we gave Saddam, the more dangerous he got, and ultimately we had to go to war to destroy what we sold him." This Denton compares to the mafia dictum "create to alleviate."

Straight war profiteering was also at play, as Bechtel used its connections to the Republican Party to secure no-bid contracts in Iraq which helped reinvigorate the company's fortunes following its expulsion from Bolivia, where it had generated mass opposition by raising water prices by 300 percent after an ill-fated privatization scheme promoted by the World Bank.

Bechtel became famous in the 1930s as part of a consortium that built the Hoover Dam, a marvel of modern engineering whose construction was marred, Denton writes, by "flooded gorges, exploitative working conditions, racial bigotry and violent labor unrest." The company culture, she notes, from this period was rabidly anti-labor, anti-communist and anti-socialist.

In 1937, Steve Bechtel Sr. formed a partnership with John McCone, a top executive at Consolidated Steel who aided in the company's expansion into Saudi Arabia and the Middle East where it helped build the infrastructure for American strategic clients and was involved in at least one coup intrigue. A rightist Catholic and fanatical anticommunist, McCone was appointed by the Eisenhower administration in 1957 as head of the Atomic Energy Commission (AEC), where he cleared the way for federal subsidies to pay private utilities for the construction of nuclear plants. This enabled Bechtel to open a nuclear division and become a leading builder of the nation's nuclear power plants. Syndicated columnist Drew Pearson was one of the few journalists to challenge the "revolving door" between AEC and Bechtel, criticizing McCone for not selling his stock in private Bechtel-McCone enterprises that continued to do business for the government. Senator Abraham Ribicoff (D-Ill) suggested that it was "hard to tell where the public sector begins and the private one leaves off."

A similar incestuous relationship was apparent when McCone as CIA director in the 1960s supported Joseph Mobutu in Congo where Bechtel had investments in copper, gold and diamond mines and backed a coup against Indonesia's leftist president Ahmed Sukarno who had threatened an oil pipeline through the jungle of Sumatra. Under Sukarno's successor, the murderous General Suharto, Bechtel became the state owned oil company's chief contractor for oil and liquefied natural gas projects, and developed a telecommunications network in Papua New Guinea and copper mine on the Indonesian port of New Guinea.

The Indonesian coup exemplifies a pattern in U.S. foreign policy continuing through the Iraq War in which Bechtel's interests and those of other multi-national corporations have been assured while concern for human rights is thrust aside.

Proponents of privatization claim that private industry is more efficient than the state sector. Denton's history however, shows a long record by Bechtel of over-billing the government and engaging in cost-cutting practices, which resulted in mass layoffs and gross inefficiency.

A prime example is the Central Artery/Tunnel project in Boston known as the "Big Dig" which became subject of a criminal fraud investigation by the U.S. attorney in Boston for delays, leaks and the tragic death of a young mother whose car was struck by falling concrete slabs. The State Inspector found that "Bechtel engineers for years covered up $4 billion in costs by low-balling their projects" and were in collusion with top officials at the State Turnpike authority. This situation was reminiscent of Iraq, where Bechtel completed only 11 of 24 sewage, water treatment and electricity projects and less than half of its engineering and construction contracts.

Political lobbying by the company meanwhile helped to hijack President Obama's ambitious pledge to cut down the American nuclear arsenal. Obama caved to a plan pushed by Senate Majority Whip Jon Kyl in which the White House agreed to put up $85 million over ten years [since increased] to modernize the nation's nuclear weapons, to the benefit of Bechtel which had taken over management of the major nuclear weapons facilities.

Sally Denton has written an engaging book which casts light on the role played by powerful corporations in driving foreign and domestic policy in their interests. The story of Bechtel, as she suggests, is the story of the American Century writ large. It is one of ambition, technological ingenuity and material prosperity underlain by greed, exploitation and political cronyism and a disregard for human rights which lies at the heart of the discontent pervading the country and world today.

Jeremy Kuzmarov teaches at the University of Tulsa and is author of Modernizing Repression: Police Training and Nation Building in the American Century (Massachusetts, 2012) among other works.