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New Report Exposes Contractor Bechtel as Threat to Iraqi Environment, Human Rights and Basic Services

Global Exchange * CorpWatch * Public Citizen

June 5, 2003

New Report Exposes Contractor Bechtel as Threat to Iraqi Environment, Human Rights and Basic Services


U.S. Taxpayers Blindly Funding Post-War Corporate Profiteering and Cronyism, Public Interest Groups Say

SAN FRANCISCO, Calif. — Bechtel Group Inc., one of the lead contractors in the reconstruction of Iraq, has a 100-year history of capitalizing on environmentally unsustainable technologies and reaping immense profits at the expense of societies and the environment, said a report released today by Public Citizen, Global Exchange and CorpWatch. Its release was timed to coincide with a day of direct actions around the country to protest Bechtel’s presence in Iraq, the report concludes that the Bush administration must be stopped from doling out contracts to undeserving firms with which it has close ties, including Bechtel and Halliburton.

The report, Bechtel: Profiting from Destruction, provides case studies from Bechtel’s history of operations in the water, nuclear, energy and public works sectors. It documents a track record by Bechtel of environmental destruction, disregard for human rights and financial mismanagement of projects that has affected communities all over the world and does not bode well for the people of Iraq.


“If environmental and consumer protection violations had been taken into account, Bechtel would not have been awarded such an important contract in Iraq,” said Sara Grusky, senior organizer with Public Citizen. “The American people are funding this contract through their tax dollars but are being denied the right to see what their money is supporting.”

On April 17, Bechtel was awarded $34.6 million of an 18-month Iraq reconstruction contract worth up to $680 million, including the rehabilitation, reconstruction and expansion covering all key elements of Iraq’s infrastructure, including electrical grids, water and wastewater systems. The contract was part of a limited bidding process that forbade public review and was kept secret even from Congress.

“This contract is about profit-making, not humanitarian efforts,” said Maria Elena Martinez, executive director of CorpWatch. “The Iraqi people are in desperate straits thanks to the U.S. government, and now a U.S. company stands to make hundreds of millions of dollars. It exemplifies the typical revolving door between big business and government – in this case, Bechtel’s board members and our high-ranking government officials.”

A historical look at Bechtel’s wrongdoings includes:

• In Papua New Guinea, Bechtel partnered in constructing the world’s largest gold mine in 1970. The mine daily dumps hundreds of thousands of tons of toxic waste from the mining operations directly into local rivers. In 2000, a waste dump accident resulted in four deaths.

• Environmental and human rights groups have charged that Bechtel, in a partnership with Shell called InterGen, circumvented U.S. environmental laws by building a power plant on the Mexican border for the sole purpose of exporting energy to the United States. The La Rosita InterGen plant located in Mexicali, Baja Calif., and partly owned by Bechtel, was the subject of a May 6, 2003, court ruling that found that the U.S. Department of Energy and Bureau of Land Management had acted illegally in granting permits to InterGen to build this power plant.

• In Cochabamba, Bolivia, in 1999, Aguas del Tunari, a subsidiary of Bechtel, provoked protests that shut down the city when it privatized the city’s water system, then implemented massive price hikes that left many people unable to afford water. The United Nations has formally declared water to be a human right – Bechtel violated this international resolution when it deprived people of their right to water. The outcry forced the Bolivian government to cancel Bechtel’s contract; Bechtel is now suing the country in a World Bank court for $25 million in lost profits.

• At nuclear power plants in Palisades, Mich.; Humboldt Bay, Calif.; Three Mile Island, Penn.; San Onofre, Calif., and Davis-Besse, Ohio, Bechtel was involved in some of the U.S. commercial nuclear industry’s more notable mishaps.

• In Nevada, Bechtel was awarded the management contract for a proposed nuclear waste repository at Yucca Mountain, a site considered sacred by the Western Shoshone people and part of a decades-long land dispute between the United States government and the Native Americans.  On these same lands, Bechtel manages a Nevada test site and counterterrorism facility where nuclear, biological and chemical weapons construction and testing are carried out. The operation of the facility and its environmental and health effects have prompted ongoing protests from Native Americans, environmental and disarmament advocates.

• In Boston, Bechtel’s mismanagement and cost overruns have been unprecedented. Bechtel designed and manages the Boston Central Artery tunnel project, also known as “the Big Dig.” This federally funded project is the most costly civil engineering undertaking in U.S. history; estimated at $2.5 billion in 1985, it reached $14.6 billion in 2003.

· In San Francisco in 2002, the Board of Supervisors phased out a contract with Bechtel for the management of the upgrade of the city’s water systems before its completion date. Bechtel was charged with doing unnecessary and overpriced work and charging the city for tens of thousands of dollars’ worth of personal expenses.

The report also documents Bechtel’s history in Iraq, where the company was pushing for an oil pipeline deal in the 1980s at the same time that Saddam Hussein was committing his worst atrocities against the Iraqi people. Bechtel was named by Hussein’s government as one of the U.S. companies that provided it with materials that could be used to make weaponry.

“Bechtel has demonstrated brazen moral corruption by first contributing to the development of Iraq’s weapons, then pushing for a war against Iraq, and finally profiting from the tragedy and destruction wrought by that war,” said Andrea Buffa, peace campaign coordinator at Global Exchange. “It is a textbook example of what war profiteering looks like. This report answers the question – ‘What’s wrong with Bechtel?’ “

The report’s recommendations include:

• Implementing a democratic reconstruction in Iraq, led by the Iraqi people with the help of international institutions like the United Nations.

• Opening up and making transparent the bidding process for U.S. government contracts in Iraq and elsewhere.

• Companies bidding for U.S. government contracts should have satisfactory records of integrity and business ethics.

Click here to read the full report.

Click here for a translation of this release into French.