The Top 10 Contractors in Iraq (FYI)

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2003 2004 2005 2006 Total

1. KBR Inc. (KBR, news, msgs) and Halliburton (HAL, news, msgs)
$2,550 $5,809 $4,505 $4,362 $17,226 (billions)

2. Veritas Capital Fund
0.7 208 850 386 1,444

3. Washington Group International (WNG, news, msgs)
111 205 533 82 931

4. Environmental Chemical
0 192 360 326 878

5. International American Products
58 283 310 108 759

6. Fluor (FLR, news, msgs)
116 413 123 105 757

7. Perini (PCR, news, msgs)
72 312 185 81 650

8. Parsons
0 248 120 172 540

9. First Kuwaiti General Trading & Contracting
0 7 469 24 500

10. L-3 Communications (LLL, news, msgs)
1 9 148 201 359

The Top 10

By Michael Brush, MSN.com

It's no surprise that KBR Inc. (KBR, news, msgs), a division of Halliburton (HAL, news, msgs) during the years we examined, tops the first list, compiled by Eagle Eye, with $17.2 billion in Iraq-related war revenue for 2003-2006. KBR is one of the largest construction and energy field-service companies in the world. It has a long history of collaborating with the U.S. government on war-related construction.

In Iraq, KBR has been working on base construction and maintenance, oil-field repairs, infrastructure projects and logistics support. KBR got about a fifth of its revenue from the Iraq war in 2006, according to our calculations.

"We are proud to serve the troops," says a KBR spokeswoman. "We are providing the troops with essential services and the comforts of home that allow them to stay focused on the dangerous and important missions they face daily."

But why does a private-equity shop called Veritas Capital Fund take the No. 2 slot? That's easy. It specializes in investing in defense and aerospace companies. So Veritas owns a portfolio of companies -- and has a stake in others -- that pull down big Iraq-related contracts.

DynCorp International (DCP, news, msgs), which Veritas bought in 2005 and spun out last year, offers security services and police training, as well as logistical services. Veritas' McNeil Technologies provides interpreter and translation services to the military and U.S. government agencies in Iraq. Another of its companies, Wornick, supplies military rations.

It's also no big surprise that U.S.-based companies like Washington Group International (WNG, news, msgs), Fluor (FLR, news, msgs), Perini (PCR, news, msgs) and Parsons are on our top 10 list. They've landed many of the contracts to restore, repair and maintain oil fields, power plants, schools, public water systems and military bases. But the award of contracts to build the U.S. Embassy in Baghdad to First Kuwaiti General Trading & Contracting left many analysts scratching their heads.

Environmental Chemical does munitions disposal, while International American Products sets up systems that deliver electricity to military camps. L3 Communications (LLL, news, msgs) offers security screening services, linguists, training and law-enforcement services, and some equipment replacement.

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But the award of contracts to build the U.S. Embassy in Baghdad to First Kuwaiti General Trading & Contracting left many analysts scratching their heads.

It did? Why?...I wondered. Did they think an American company should get the contract...or an Iraqi company...or was something else going on??? So I went online.

There is a charge of "war slavery," "forced labor," and "human trafficing" against the Kuwaiti company which they deny. Investigations are ongoing in the Philipines and the US. In the mean time organizations like the AFL-CIO, a freelance journalist, David Phinney, and weblogs huffingtonpost, MotherJones, and uslaboragainstwar are hyping the story with sensational titles:

* US Labor Against the War : 'Kidnapped' Filipinos build US embassy

* WarSlavery.org | Stop taxpayer-sponsored trafficking in Iraq.

* AFL-CIO Weblog | Iraqi Workers Fight Intimidation, Forced Labor

* Human Trafficking in Iraq: Exploiting People to Supply Our Soldiers

A premature congressional committee hearing found one lawmaker, Tom Davis saying:

Based on media reports alone, the Committee scheduled today’s testimony before completing a thorough investigation of thinly sourced, sensationalized charges of shoddy construction and labor abuses. In what has become an unfortunate modus operandi, the Committee’s politically charged allegations are marching miles ahead of the proven facts. Whenever a news story jumps to a convenient conclusion about suspected Administration malfeasance or misconduct, the Majority rushes to see how high they can elevate mere questions, concerns and speculation over real fact finding. As I’ve said before, it’s oversight by firing squad: Ready, Fire, Aim! The most significant waste, fraud and abuse we’re likely to uncover today may be our own.

Allegations about labor abuses and human trafficking violations are far more serious, and it appears State took them seriously. We can be proud of U.S. labor protections, but shouldn’t be naïve about their application elsewhere. Nevertheless, complaints about working and living conditions were referred to the State Department Inspector General who, in conjunction with the IG for the Multi-National Forces – Iraq, conducted on-site inspection and interviews with foreign workers and U.S. personnel. The State IG team found “nothing that caused us to believe that TIP [trafficking in persons] violations” had occurred at the site. The military IG did find illegal and deceptive hiring practices by recruiting agencies. But he found no evidence of the alleged abduction, abuse, overcrowding or unsanitary facilities. In fact, the MNF-IG concluded of the 58 living areas inspected, the State Department facility “rated in the top third with above average quality of life conditions.”

He also revealed the following:

First Kuwaiti got the work only after no U.S. contractor offered to meet the ambitious twenty-four month schedule while facing substantial financial and logistical risks building in a war zone on those terms. They wanted a cost reimbursement arrangement. Under the fixed price contract vehicle, disputes over electrical wiring loads and dripping pipes can have little impact on ultimate cost. In effect, we’re here litigating a punch list, the usual inventory of fixes and finishing touches generated by any project of this size. http://republicans.oversight.house.gov/news/PRArticle.aspx?NewsID=211

First Kuwaiti General Trading & Contracting was founded in 1996. The US Marines gave the company a citation for the work they did in support of our troops in Iraq.

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This page contains a single entry by Post Scripts published on August 31, 2007 10:55 AM.

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