The New Carpetbaggers
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“A democratic
government is the
only one in which
those who vote for a
tax can escape the
obligation to pay it.”

-Alexix de Tocqueville

“Right now, our
awesome power is
deployed to defend
the rights of capital
and commerce, but
not human rights and
people exploited by
the global system.”

-William Greider

"America may have
bombed its way into
a whole new
free-trade zone."

-Naomi Klein

“Corporations rule
through the very men
elected to represent
the people.”

-Senator Robert La Follette

As you know, President Bush enjoys repeating his promise that Iraq’s oil belongs to the Iraqi people. What he neglects to mention, however, is that it will be American corporations which rebuild Iraq now that the Pentagon has blown it to pieces. As a result, Iraq’s oil will be pumped out of the ground, converted into U.S. dollars, and then those dollars will fly right past the Iraqi people and into the pockets of American businessmen. Now as long as those businessmen behave themselves, there’s probably nothing wrong with this arrangement. The money, after all, is supposed to be spent rebuilding Iraq’s demolished infrastructure. But how much do we really trust these corporations? Care to guess who they are?

bechtel.gif (16613 bytes)One is Bechtel Group, Inc. In 1998, this California-based conglomerate tried to privatize water utilities in parts of Bolivia, even going so far as to force the Bolivian government to forbid Bolivians to draw water from their own local wells. This resulted in skyrocketing water prices in a country that was already desperately poor. The people revolted against Bechtel, and so the Bolivian government shot hundreds of protesters in the streets to protect itself and its corporate benefactor. Bechtel eventually withdrew from Bolivia, but now it’s suing that nation for $25 million in lost potential profits. Bechtel is also currently facing allegations that it sold illegal weapons to Iraq during the 1980s.

Halliburton.gif (819 bytes)
Another corporation waiting in the wings to help rebuild Iraq is Kellogg, Brown & Root, a subsidiary of Dick Cheney’s old company, Halliburton. In 2000, Halliburton stock took a mysterious plunge just two months after Cheney made a cool $18 million by selling off his holdings as a prelude to his bid for the vice-presidency. Halliburton is currently under investigation by the Securities and Exchange Commission for cooking its accounting books, Enron-style, while Mr. Cheney was its top executive. In addition, Halliburton plead guilty in 1995 to criminal charges that some of its subsidiaries sold banned equipment to Libya that could have been used to make weapons of mass destruction. Two other Halliburton subsidiaries are also suspected (but have not yet been convicted) of doing the same with Iraq.

fluor.gif (1502 bytes)The Fluor Corporation, also on the list of potential rebuilders, has been cited by the Public Interest Research Group as being among the Top Ten repeat offenders who continue to get fat government contracts in spite of corporate misconduct resulting in fines, penalties, and court settlements.

Ready for the kicker? Each one of these deadbeat corporations is currently hiding millions of dollars of taxable income in offshore tax havens. Such tax shelters are also called “shell companies” because they aren’t real businesses; they’re just paper entities that give real U.S. corporations an excuse to send money out of the country where it eludes taxation. Shell companies are commonly set up on islands in the Caribbean, so you might say that the only thing disappearing in the Bermuda Triangle these days is taxable income.

BermudaTriangle.jpg (14221 bytes)This should be illegal, of course, but it isn’t. In fact, the Bush administration is actually protecting the tax loopholes that allow shell companies to exist. The only man in the Bush administration who has shown any interest in closing the loopholes was Secretary of the Treasury Paul O’Neill, and Bush recently fired him. Vice-president Dick Cheney is so enamored of offshore tax havens that while he was CEO of Halliburton that company nearly quintupled the number of shell companies it “owned” in the Atlantic. Is it any wonder that Bush, Inc. isn’t interested in fixing this problem?

According to Arianna Huffington, co-founder of The Bermuda Project, offshore tax havens steal over $70 billion per year from the federal treasury, and that is almost exactly the cost of Bush’s invasion of Iraq. Ironic, isn’t it? The very same companies that are going to make millions from the invasion are the ones who are not paying taxes to the government that rewards them. In fact, several of these companies didn’t even have to bid for the work. The Bush administration merely handed out the contracts to its favorite tax cheats. Most of these deals were made months before the war even started.

Carpetbagger.jpg (47942 bytes)These companies are modern versions of carpetbaggers, a term which dates back to the end of the American Civil War when thousands of northerners moved into the war-torn south claiming that they were going to help reconstruct it. Although some made good on that promise, many more were just crooks looking for ways to profit from the chaos and devastation. The crooked ones became known as carpetbaggers because they carried off their loot in suitcases called carpetbags.

So how can modern companies with such nefarious histories get awarded government contracts worth billions of dollars? They pay for them, of course.

According to the Center for Responsive Politics, the handful of corporations bidding for reconstruction contracts gave almost $3 million in campaign contributions since the 1998 elections, most of it to Republicans. Bechtel alone gave $1.3 million in that same period of time. Isn’t it nice to be able to insure the election of candidates who can do you favors once they’re in office?

Right now, European leaders are crying foul that bidding for reconstruction contracts was never opened to any companies outside the United States. This is violation of the rules of the World Trade Organization—not to mention good judgment. These leaders are saying that the Bush administration is turning Iraq into a U.S. protectorate. At the same time, even those Iraqis who are grateful for the ousting of Saddam Hussein are already urging Americans to get out of Iraq as quickly as possible. It seems that Bush could kill two birds with one stone by allowing several European companies to share in the reconstruction process. This would certainly reduce suspicion both in Europe and Iraq that America is stealing Iraq’s oil. It would also reduce the need for a large American presence in the region. But Bush, Inc. is taking a pass on this golden opportunity. It is instead clearing a direct path between its corporate benefactors and Iraq’s oil fields.

Rummy and Saddam.jpg (14215 bytes)Let it not be forgotten that Bechtel executives tried way back in 1983 to talk Saddam Hussein into letting them build an oil pipeline through Iraq. One of the men working to broker that deal was none other than Donald Rumsfeld, who was then a special envoy to the Middle East for the Reagan administration. These talks occurred during the Iran-Iraq War, at the very same time Iraq’s army was using banned chemical weapons against Iranian troops. Rumsfeld pretended not to notice. Hussein eventually decided against the pipeline, much to the ire of Bechtel executives, but is there really any doubt about that pipeline’s construction now? And is there really any doubt that Donald Rumsfeld is still working, at least in part, on behalf of the Bechtel Corporation?

The invasion of Iraq and the plans for its reconstruction lay bare the absolute corruption of the Bush administration in particular and the American political system in general. Giant corporations have purchased the allegiance of our government and are using its vast military power to steal resources from abroad and to create new markets for their products and services. That is fascism, not democracy.

Here’s what you can do to help.

First, direct everyone you know to this web page.

Second, support The Bermuda Project and its efforts to get Congress to close the tax loopholes that permit American corporations to hide taxable income.

Third, examine this list of leading tax cheats and boycott those companies. Be sure to also email the execs to let them know that you’re boycotting them and to make sure they know why you’re boycotting them.

Fourth, write your U.S. Senators and your representative in the House and demand that they support House Bill 737, the Corporate Patriot Enforcement Act. (If you don’t know how to get in touch with your elected representatives, visit our Getting Started page.) Here’s a sample letter that you can tailor to your needs or send as is. Since this message requests a written response from your elected representatives, we recommend that you send it in the mail rather than by email. We have found that few lawmakers will give written responses to email but nearly all of them will respond to a letter if specifically asked to do so.

Dear Senator (or Representative) __________________,

I am outraged to learn that the handful of corporations bidding for lucrative reconstruction contracts in Iraq are all guilty of exploiting loopholes in U.S. tax laws that allow them to hide millions of dollars of taxable income in offshore tax shelters. No American company should be able to do this, and certainly no company that is known to be hiding taxable income should be granted contracts to do business with the federal government. Please write to me at your earliest opportunity to explain how it is that such bad corporate citizens as Bechtel, Halliburton, and Fluor can be rewarded with lucrative government contracts in spite of their refusal to pay taxes to the government that supports them and in spite of their long histories of despicable corporate conduct.

I am also writing today to urge you throw your full support behind the Corporate Patriot Enforcement Act, which is an effort to shut down offshore corporate tax havens. The Republican leadership in Congress is currently blocking this bill from coming up for a vote. I expect you to do everything in your power to break this bill free and get is passed through Congress.

(Your name and address)

Fifth, write to Representatives Tom DeLay and Dennis Hastert. They’re the Republican leaders in the House of Representatives who are refusing to allow the Corporate Patriot Enforcement Act to come to the floor for a vote. Why would they do such a thing? Well, guess which companies have been financing their election campaigns? Here’s their contact information and a sample letter you can send them.

Representative Dennis Hastert
235 Cannon House Office Building
Washington, DC20515-1314
Phone: 202-225-2976
Fax: 202-225-0697

Representative Tom DeLay
242 Cannon House Office Building
Washington, DC20515
Phone: 202-225-5951
Fax: 202-225-5241

Dear Representative Hastert (and DeLay),

I am deeply distressed to learn that you are preventing the Corporate Patriot Enforcement Act from coming up for a vote in the House of Representatives. This bill is crucial, not only because it will bring desperately needed tax revenue into the U.S. Treasury, but also because it will restore confidence among average Americans that our tax system is fair and that we are not being asked to shoulder a heavy tax burden while wealthy corporations hide income right off the Atlantic coast. I expect that you will remedy this situation immediately by allowing the Corporate Patriot Enforcement Act to come to the floor of the House for an open debate and a fair vote.

(Your name and address)

Sixth, help to free our political system from the corrupting influence of corporate campaign contributions by supporting the public financing of all American elections. Find out how at our Clean Elections page.

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