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Iraq contracts close to bush { May 24 2003 }

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Fears contracts in Iraq too close to Bush
By Vikram Dodd in London
May 24 2003

Every contract awarded by the United States government agency for international development, USAid, for reconstruction work in Iraq, are to be reviewed by two official watchdogs.

The awards have been criticised because foreign firms are not allowed to bid, leading to allegations of a US carve-up.

British newspaper The Guardian has learnt that the general accounting office (GAO) is due to examine how eight contracts came to be handed out.

USAid's office of the inspector general (OIG) has begun its own investigation and has already interviewed the officials involved.

The award of the biggest contract, potentially worth $US680 million ($1 billion), to the Bechtel conglomerate is the most controversial. Bechtel has close ties to the Bush Administration, making big donations to the Republican party and its candidates.

It is understood that the OIG will examine whether USAid took account of Bechtel's alleged past failings in the developing world.

Criticism by Democrats has prompted the investigations. Bill Allison of the Centre for Public Integrity in Washington said: "It is an indication that internally they do feel a good deal of heat."

Under President George Bush the vice-president of Bechtel, Jack Sheehan, has a place on the Pentagon's defence policy board, and its chairman, Riley Bechtel, was appointed to the President's export council. Its contract for Iraq covers work on power stations, electricity grids and water and sewerage systems.

The company has been trying to play down the significance of the recent revelation that it tried to build a $US1 billion oil pipeline from Iraq to the Red sea port of Aqaba in Jordan in 1983, at a time when Saddam Hussein was regularly using chemical weapons.

It was able to get the Defence Secretary, Donald Rumsfeld - then president Ronald Reagan's special envoy to the Middle East - to raise the matter with Saddam and his foreign minister, Tariq Aziz.

Critics say that Bechtel is a poor choice for the crucial job of reviving the shattered country because it has botched past projects in the developing world.

In Bolivia it was part of a consortium which took control of the water supply and increased prices by 35 per cent.

Many in the city of Cochabamba could not afford to pay, and street protests led to several deaths. Bechtel pulled out, but is seeking $US25 million from the Bolivian Government.

Bechtel said it had not tried to exploit the poor in Bolivia, and the consortium it belonged to had "sought to expand the availability and improve the quality of affordable drinking water in Cochabamba".

Juliette Beck of the public interest watchdog Public Citizen said: "Bechtel is not a company that has a sound social or environmental track record. It should not be involved in the humanitarian reconstruction effort in Iraq."

The Guardian, Agence France-Presse

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