The Profit’s Bodyguards


Donald Evans, secretary of commerce and one of the president’s pals, was in Iraq last week—before the Chinook went down—telling audiences to ignore isolated events and to go ahead and invest. But it’s not quite so simple. No one doubts Iraq is a giant pork barrel for Bush’s cronies in business, from Halliburton to Bechtel to SAIC. But for run-of-the-mill businesspeople who’d like to cash in on privatizing the Iraqi economy, two-thirds of which was state-owned under Saddam, the costs so far outweigh the benefits. Next Thursday, several hundred businesspeople will gather at the University of Maine at Portland for a conference on “Investing in Iraq.” The luncheon speaker will be Caspar Weinberger, a former Bechtel executive, Reagan’s secretary of defense, and now chairman of Forbes. The key to Iraq is oil, and so far the administration has been unclear whether it will expropriate the oil industry outright or arrange some kind of deal whereby Iraqis can nominally run the business with the U.S. pulling the strings from D.C.

But for all the string-pulling, the most important organization will be OPIC—not OPEC, but OPIC, the U.S.’s big insurance company that underwrites business in turbulent foreign countries. The Overseas Private Investment Corporation is currently under the direction of Ross Connelly, a Bechtel executive during the early ’90s who in 1998 ran for Congress from Maine and subsequently served as Maine state chairman for Bush’s 2000 campaign. The government’s business insurance outfit has begun offering political-violence insurance to companies wanting to do business in the Mideast, to mollify those who fear that another Bali might take out their investments. In addition, OPIC has been insuring assets of minimal value in Afghanistan (such as a machine costing $35,000). OPIC also has done some re-insuring in Afghanistan and is looking for similar situations in Iraq.

Another key government player is the U.S. Export-Import Bank, which has said it will stand behind letters of credit issued by the Iraq Governing Council, the civilian group that “runs” the government for the occupation. This will allow ministries and agencies to buy goods and services from abroad. Eventually the Ex-Im Bank wants to extend this service to private groups as well, and it wants to help finance U.S. subcontractors involved in Iraq rebuilding under U.S. Agency for International Development contracts.

As it stands, some 20,000 Americans—contractors, not troops—are in the region, waiting to enter Iraq. “Doing Business in Iraq: Kickstarting the Private Sector,” a conference a month ago in London that was sponsored by the U.S. and British governments, attracted 100 companies, including ExxonMobil, Delta Air, and banks. McDonald’s is expected to open in Baghdad next year.

Additional reporting: Sheelah Kolhatkar and Ashley Glacel