DUBAI, United Arab Emirates -- Mac McClelland did some quick math as he steered his Lincoln Navigator through chaotic Dubai traffic.
He'd just learned of a contract to supply food to 12,500 U.S. soldiers in Iraq. If he won it, he'd be a subcontractor to a subcontractor on a deal that originally went to Kellogg, Brown & Root, which provides support services to the military overseas.
"Twelve thousand five hundred mouths," he mused. "That's about 40,000 meals a day." He figured if he could clear 10 cents profit on each meal, he could make as much as $4,000 a day. "That's real money," he said to himself.
[...]
Mr. McClelland, a retired Marine Corps major, figures he's got three dozen deals cooking right now related to Iraq reconstruction. In the past month, he's rounded up local companies to bid on a contract to supply automobiles to the new Iraqi police force. He's signed on as a consultant to help 3M Co. and a company that makes X-ray-scanning equipment break into the Iraq market. And he's set up a deal with a scrap-metal company based in Houston that wants to bid for the remains of Iraqi tanks blown up by U.S. bombs. On the side, the 47-year-old Mr. McClelland is trying to persuade some key members of the royal family here to let him organize a Dubai jazz festival -- the U.A.E.'s first.
Mr. McClelland describes himself as a "bit player" in the Iraq gold rush. But even for the bit players, there's the potential for big money. "If 10% of the projects come through, I'll have made enough to retire twice over," he says. A couple of big ones, such as the food contract, could make his year.
Middlemen and go-betweens with strong military contacts always appear wherever there's a war and wherever there's money to be made supplying the U.S. armed forces. What makes Iraq different is the size of the rebuilding effort the U.S. has taken on and the huge number of U.S. troops involved. The U.S. government is spending several billion dollars a month on troop support, fuel, equipment and, to a lesser extent, reconstruction.
Rather than bid out each individual project, the U.S. government has awarded large contracts to a handful of corporations, including Bechtel Group Inc. -- which won a $680 million deal to coordinate the rebuilding effort -- and Halliburton Corp.'s Kellogg, Brown & Root, which has taken in about $425 million of U.S. Army work, much of it related to supporting troops with food and housing in Iraq and the Gulf. Those big players then offer hundreds of subcontracts to other companies. Bechtel, for instance, is subcontracting about 90% of its work.
[...]
Mr. McClelland supplied the company [3M] with the names of 15 senior military contracting officers in Kuwait, the U.A.E., Oman and Qatar. Mr. McClelland also gave 3M a list of names of local executives from companies such as Bechtel; Kellogg, Brown & Root and military-supply firm DynCorp, many of whom are former officers Mr. McClelland served with in the Gulf. Soon after Dr. Hoeller arrived in Kuwait for the Bechtel conference, he met a senior military officer, one of Mr. McClelland's contacts, who complained about a lack of Post-It notes in Iraq. Within days, the military had put in an order for Post-Its, electrical tape and multimedia projectors.
It's reassuring to know that American taxpayers are doing their part to address the devastating Post-It note and multimedia projector shortages in Iraq. Chalk it up to our philosophy of global humanitarianism.
The title of the above article by Greg Jaffe is "Rebuilding Iraq Proves to Be A Gold Mine for Middlemen," which only goes to show that there's more than one way for crony capitalists to loot a country without WMDs.
UPDATE: In a freak blogging coincidence, Nathan Newman cites the same article as above, but rightly calls attention to the connection between Mac McClelland and Enron.
