The Center for Public Integrity

While the Defense and State Departments have granted the lion's share of contracts in Iraq and Afghanistan directly from Washington, a few U.S. companies have made their deals directly with local governing authorities that have emerged with U.S. support or direction.

The companies do not appear on the lists of contracts the Center for Public Integrity obtained under the Freedom of Information Act; their direct dealings with the provisional authorities in Iraq and Afghanistan demonstrate the complexity of tracking the role of private companies in the post-war countries.

Three U.S. companies—banking and brokerage powerhouse J.P. Morgan Chase, oil giant Chevron/Texaco and global telecommunications provider MCI—have won contracts from the Coalition Provisional Authority in Iraq, the Iraq State Oil Marketing Organization, and the Afghanistan provisional government.

In Iraq, Peter McPherson, director of economic development for the Coalition Provisional Authority—whose members were appointed by Coalition Provisional Authority Administrator L. Paul Bremer on July 13, 2003—told reporters in an Aug. 29, 2003, teleconference from Baghdad that CPA will pay J.P. Morgan Chase $2 million over an up-to-three-year period to run an operating consortium of 13 banks from 13 countries that will constitute the Trade Bank of Iraq. The temporary bank's role is to issue and confirm credit letters to facilitate and encourage immediate importation of items like food, electrical equipment, and oil refinery machinery, and later that will allow for trade in oil and heavy machinery, worth hundreds of millions of dollars and effectively phasing out the UN oil-for-food program.

More than 70 American companies and individuals have won up to $8 billion in contracts for work in postwar Iraq and Afghanistan over the last two years, according to a new study by the Center for Public Integrity. Those companies donated more money to the presidential campaigns of George W. Bush—a little over $500,000—than to any other politician over the last dozen years, the Center found.

Kellogg, Brown & Root, the subsidiary of Halliburton—which Vice President Dick Cheney led prior to being chosen as Bush's running mate in August 2000—was the top recipient of federal contracts for the two countries, with more than $2.3 billion awarded to the company. Bechtel Group, a major government contractor with similarly high-ranking ties, was second at around $1.03 billion.

However, dozens of lower-profile, but well-connected, companies shared in the reconstruction bounty. Their tasks ranged from rebuilding Iraq's government, police, military and media to providing translators for use in interrogations and psychological operations. There are even contractors to evaluate the contractors. 

Nearly 60 percent of the companies had employees or board members who either served in or had close ties to the executive branch for Republican and Democratic administrations, for members of Congress of both parties, or at the highest levels of the military.

The results of the Center's six-month investigation provide the most comprehensive list to date of American contractors in the two nations that were attacked in Washington's war on terror. Based on the findings, it did not appear that any one government agency knew the total number of contractors or what they were doing. Congressional sources said they hoped such a full picture would emerge from the General Accounting Office, which has begun investigating the postwar contracting process amid allegations of fraud and cronyism.

Raytheon Aerospace, which changed its name to Vertex Aerospace in June 2003, and its related companies have received more than $2.7 billion in U.S. government contracts since 1990, and the company is currently in Afghanistan with a contract from the Defense Department worth at least $7.4 million involving aircraft repair and maintenance.

If Raytheon had its way, that might be all that is known about its work for the Pentagon.

Under a presidential directive signed by Ronald Reagan on June 23, 1987, known as Executive Order 12600, companies have potential veto power over Freedom of Information Act requests for copies of their contracts with the U.S. government.

To comply with the Executive Order, before releasing any contract, a FOIA officer must contact the company to ask whether there is any information that should be withheld because it constitutes confidential commercial information that could cause competitive harm if released. Withholding this information is allowed under Exemption 4 of the Freedom of Information Act, which states that records cannot be obtained if they contain "trade secrets and commercial or financial information obtained from a person and (are) privileged or confidential."

In trying to determine which U.S. companies received government contracts for work in post-war Iraq and Afghanistan, the Center for Public Integrity filed 73 FOIA requests and appeals with the State Department, the U.S. Agency for International Development and the Pentagon and its related uniformed services.

In an initial response in May, the Pentagon listed a $7,382,194 contract with Raytheon for work in Afghanistan. But requests for a copy of the actual taxpayer-funded contract remain pending.