BUILDING THE WORLD
( WITH THE GOVERNMENT’S HELP)
The Bechtel Corporation may have mastered the art of oiling the proverbial revolving door so that it just keeps on swinging. For instance, in the early ’70s, George P. Shultz was the U. S. Secretary of the Treasury. After he left government office, for the next few years, he was a high-ranking Bechtel employee. During the Reagan administration, Shultz was Secretary of State, after which he returned to Bechtel. Others who have walked through this gilded door are Casper Weinberger, U.S. Secretary of Defense during the Reagan era, and John McCone, director of the CIA during the height of the Cold War.
In her new book, The Profiteers: Bechtel and the Men Who Built the World (Simon & Schuster), investigative reporter Sally Denton details how, over the past century, the Bechtel family grew an upstart business into a global leader in construction, energy, and technology. She also tells the story of Bechtel’s machinations to land substantial government contracts — from the reconstruction of Iraq to the management of the Lawrence Livermore National Laboratory and the Los Alamos National Laboratory — and of the company’s golden-child status when feeding from the public trough. Denton is the co-author of The Money and the Power and author of The Plots Against the President, among other books.
For its first major project, the construction of the Hoover Dam, Bechtel helmed a consortium called Six Companies. Tons of concrete were poured in to tame the Colorado River while workers toiled in sweltering heat and were denied basics such as free ice, Denton writes. Ambulance sirens were a frequent sound at the work site as workers suffered from dehydration and overheating, among other problems; more than a hundred men died. Labor practices come up in a different guise in a later chapter, “The Hydra-Headed American Giant.” In a presentation to its aspiring subcontractors (for the reconstruction of Iraq), Bechtel informed them to arrange for their own security and their own protective vests, basically suggesting that they fend for themselves in a high-risk zone.
Speaking of Bechtel’s labor practices, Denton told Pasatiempo: “I don’t know how one could examine the 2008 massive layoff of 440 career employees at Lawrence Livermore Lab and find evidence of significant improvement in labor relations. Bechtel’s long history of questionable labor practices cannot all be written off to the laissez-faire oversight of previous generations or Depression-era conditions. Although it can always be argued that accidents will happen and problems arise on the most disciplined construction projects, the fact remains that Bechtel has been — and continues to be — a leader in scoring gargantuan government projects but has often lagged behind when its come to worker safety.”
As construction projects go, Bechtel has had some massively expensive failures, including its $1.6 billion cost overruns on Boston’s Central Artery/ Tunnel Project, known as the Big Dig, Denton writes. During the postwar reconstruction of Iraq, Bechtel was able to complete less than half of its $2 billion worth of contracts — but the Iraq projects nonetheless turned around the fortunes of Bechtel at a time when the company was reeling from the dot-com bust. An audit by the Office of the Special Inspector General for Iraq Reconstruction (SIGIR) called the reconstruction effort “a legacy of waste.” A maternal and children’s hospital in Basra, initially a $50 million contract to Bechtel, was mired in cost overruns until the price tag “had swelled to a final cost of $171 million, and even though Laura Bush had officially ‘opened’ it in 2004, by decade’s end, it had never seen a patient.” And yet, as Denton illustrates, the secretive and privately owned company was able to evade public protests or major media scrutiny over its closed-bid reconstruction contract. As The Profiteers makes clear, Bechtel’s honeymoon with the government never seems to end — which raises the question of how Bechtel is able to brush off some very public failures and go on to land even more multiyear, multibilliondollar contracts.
“After four years of research, I’ve concluded that Bechtel is all but immune to the debilitating effects of government oversight for its flaws and shortcomings due to its long- established and firmly entrenched relationship with government decisionmakers at the highest level,” Denton said. “That kind of clout transcends simple politics and has carried over from one generation to the next.”
Many companies have enriched themselves with the increasing amount of work the U. S. government subcontracts to the private sector, including t he management of prisons and even some operations of our National Parks. Election season is rife with talk about reducing government size, but many areas of the government may already be fairly small. (Denton writes that by 2007, out of the Department of Energy’s 200,000 employees, fewer than 15,000 were government employees.) Is it the subcontracting that is out of control?
“I do not think the general public has a clue about how much of government has been outsourced to private industry — from the nation’s nuclear-weapons complex to prisons to the judicial system to transportation to military to homeland security to natural resources to electric utilities to infrastructure and on and on,” Denton said. “Look at it this way: How often do you hear right-wing radio talk show hosts vilify government contractors? Government employees, yes, all the time. But their private-sector counterparts? Rarely. The sacred 20th- century notion that government should own the nation’s most vital industries in the economy was thrown on its head during the Reagan Revolution, which was the apogee of Bechtel’s modern rise. A lot of the transfer from public to private has occurred with sleight of hand. As MIT professor and social critic Noam Chomsky once put it, the standard technique of privatization is to ‘ defund, make sure things don’t work, people get angry, you hand it over to private capital.’ ”
While t he Iraq War was ongoing, t he Bush administration also decided to subcontract the U.S. nuclear-warhead complex, including LANL and Lawrence Livermore Labs. Denton argues that the spy case against Chinese-American LANL scientist Wen Ho Lee was “trumped up,” in part to justify the government’s decision to privatize the labs’ operations. “Many things surprised me during my research, but a couple of things really stung,” Denton said. “One is the cruelty with which Los Alamos scientist Wen Ho Lee was treated — shackled and in solitary confinement for 278 days without facing trial before being exonerated — and how his case was used to justify the privatization of the nuclear labs. In that same vein I was stunned at the stealth and alacrity with which the nation’s nuclear warhead complex was privatized under the George W. Bush administration, almost
Bechtel is all but immune to the debilitating effects of government oversight for its flaws and shortcomings due to its long- established and firmly entrenched relationship with government decision-makers at the highest level. — Sally Denton
completely away from the spotlight. Which goes to the largest surprise to me: the ability of Bechtel to march across American history with barely a flicker of public scrutiny. I was astonished by the damage that can be done on the world stage when a corporation becomes so powerful and so closely associated with our public officials that it essentially wears the stars and stripes wherever it goes.”
The Santa Fe New Mexican recently reported that Los Alamos National Security, a consortium in which Bechtel is one of the “primary players,” lost the “lucrative $2.2 billion-a-year contract to manage the lab that it has held for nearly a decade.” Among the causes were an electrical accident in which nine workers were injured, improper hazardous waste management, and missing enriched uranium. “The most costly incident occurred in 2014, when a container of radioactive waste repackaged at the lab later ruptured in the nation’s only underground nuclear waste repository, contaminating workers and costing hundreds of millions of taxpayer dollars to clean up.”
In the past, only Bechtel’s expensive missteps at the taxpayers’ expense at, say, LANL or the Big Dig in Boston have brought the company to the media’s and the public’s attention. But this kind of attention tends to fade as headlines do. “The daily press has always had difficulty covering complex issues and ‘big picture’ stories,” Denton said. “In fairness, much of what Bechtel does winds up off the radar, whether in Washington or in Baghdad. Its private corporate status, coupled with its historic tradition of secrecy, only added another layer of opacity that publicly traded companies don’t share. The role of Bechtel and other multinational corporations in events leading up to, throughout, and after the Iraq War embodies Dwight Eisenhower’s famous warning against the military-industrial complex and ‘ the potential for the disastrous rise of misplaced power.’ Still, such a rise could only occur if society’s watchdogs — the press and Congress — were asleep on the job. When one considers the conspicuous absence of legal or public relations challenges between what one would think would be competitive ‘rivals’ in this complex — the multinational behemoths that are also thriving at the public trough — the depth and breadth of this rigged system is palpable.”
When Laton McCartney published Friends in High Places: The Bechtel Story — The Most Secret Corporation and How It Engineered the World, Bechtel executives threatened to litigate against McCartney’s publisher. Casper Weinberger wanted to be erased out of the book. If McCartney went on a live radio interview during his book tour, some Bechtel official would call in to attack him.
When Pasatiempo contacted Bechtel, Charlene Wheeless, principal vicepresident of global corporate affairs, made this statement about Denton’s book: “Based on our limited review of a galley of the book, it contains many factual misstatements and significant errors. Fundamentally flawed, the galley said we did things we never did in places where we never worked. The author made no serious attempt to get input from Bechtel or to check facts.” Asked to point to specific errors, Wheeless did not provide any, instead offering an additional statement: “We take on the world’s toughest projects and deliver them collaboratively and respectfully for the benefit of our customers and the communities where we work and live.”
Denton called Bechtel’s criticism nonsense. “I gave them an advance galley four months ago out of an abundance of fairness. I then took every comment from the company into full consideration and gave them a month to provide any clarification.” She said she also sought interviews with company principals Stephen, Riley, and Brendan Bechtel, who all declined.
Given the company’s response to McCartney’s book, Denton said she expects similar attacks, but isn’t worried.
“To use a hackneyed expression, this is not my first rodeo,” she said. “The Profiteers is my eighth published book, all of which have dealt with what I call uncomfortable truths. If I began worrying about critical response at this late stage of the game, I wouldn’t be doing what I do.”
“The Profiteers: Bechtel and the Men Who Built the World” by Sally Denton is published in March by Simon & Schuster. Denton talks about her book on Tuesday, March 8, at Collected Works Bookstore.
ON THE BECHTEL CORPORATION