Rumsfeld's Old Flame
by Jim Vallette

Jim Vallette is the research director for the Sustainable Energy and
Economy Network, a project of the Institute for Policy Studies. He is the
author, with Steve Kretzmann and Daphne Wysham, of the report "Crude
Vision: How Oil Interests Obscured US Government Focus on Chemical
Weapons Use by Saddam Hussein."

Everyone's heard of Vice President Dick Cheney's ties to Halliburton, a
company standing on the brink of a bonanza as the government doles out
post-war reconstruction dollars. But not enough has been revealed about
Bechtel, a reported finalist for the first round of contracts, and its
connections to another of the war's architects: Defense Secretary Donald
Rumsfeld. It's a sordid little tale, and one that calls into question the
depth of Rumsfeld's virtuous claims about his intentions to liberate the

Bechtel has long been intertwined with Republican foreign policymakers,
globally and in Iraq. It turns out that many of today's war hawks spent a
couple years in the 1980s trying to get Saddam to sign an oil pipeline
contract. Even though Saddam was gassing Iranians at the same time, people
like Donald Rumsfeld had some quality face-time with the "evil dictator"
pitching a plan that would benefit, beyond all other interests, Bechtel --
and, potentially, Hussein.

Rumsfeld flew to Baghdad, twice, as Reagan's special envoy. According to
newly-available documents, a lot of his business was nothing more than
advancing Bechtel's business. Following a script crafted by then-Secretary
of State George Shultz -- who went directly from the CEO seat at Bechtel
into the Reagan team -- he pitched the idea of building an oil pipeline
from Iraq to Jordan in December 1983.

Saddam told Rumsfeld it sounded like a fine plan, but he was worried about
the possibility of Israeli attack. Rumsfeld wrote back to Shultz, "I said I
could understand that there would need to be some sort of arrangements that
would give those involved confidence that it would not be easily
vulnerable. (This may be an issue to raise with Israel at the appropriate

For the next two years, Reagan administration officials, Bechtel, and
pipeline promoters expended a lot of energy trying to placate Saddam's
concerns, even while publicly the U.S. government "condemned" the use of
chemical weapons in the Iran-Iraq War. Behind the scenes, State Department
officials forged ahead. Rumsfeld's second meeting in Baghdad, again to
press the pipeline scheme, occurred the same day that a United Nations team
confirmed that Saddam gassed Iranian troops.

The revolving door between the Reagan administration, Bechtel and other
pipeline agents produced a whirlwind of shady dealings. An agent promised
Israeli Prime Minister Shimon Peres a secret sluiceway of pipeline profits
into the Israeli Labor Party. Pipeline promoters and Reagan officials
pondered other magic formulas -- like committing, beyond congressional
view, existing Defense and foreign aid as collateral in case Israel did
attack the pipeline. All to placate Saddam's concerns.

But it was all for naught. Two years after Rumsfeld broached the plan with
Saddam, the dictator finally rejected Bechtel's proposal. He found better
pipeline deals involving Turkey and Saudi Arabia, and thought the U.S.
company doubled the actual construction cost.

While this signaled the end of U.S.-Iraqi oil diplomacy, the Reagan and
first Bush administrations settled into a constructive engagement routine
with Saddam. Bechtel signed contracts with Saddam in 1988, after "Chemical
Ali" gassed thousands of Kurds, to build a huge dual-use chemical plant on
the outskirts of Baghdad. Saddam named Bechtel as one of the corporate
suppliers of technology for chemical weapons in its U.N. declaration last
year. Construction stopped only after Saddam's troops invaded Kuwait, and
his police held Bechtel employees in confinement. The last Bechtel employee
left Iraq in December 1990.

U.S.-Iraqi relations -- business and political -- have never been the same.
Rumsfeld and other officials have seethed as they've watched lucrative oil
contracts signed between Baghdad and corporations from France, Russia and
China. And to cover their own jealousy, they've decried those who would
make a deal with a man possessing weapons of mass destruction.
The lesson to be drawn from Bechtel, the Aqaba pipeline and the present
conflict is that an "evil dictator" is a friend of the United States when
he is ready to do business, and a mortal enemy when he is not. Sadly, it is
our sons and daughters, brothers and sisters, who must pay the price when a
deal goes bad.

Published: Apr 10 2003