Bush Clears the Way for Corporate Domination

Antonia Juhasz, author of 'The Bush Agenda,' explains what Bush really means when he says he wants to spread freedom around the world.

Joshua Holland at Alternet interviews Antonia Juhasz:

When George W. Bush says that he wants to spread freedom to every corner of the earth, he means it.

But of course the president that turned Soviet-era gulags into secret CIA prisons in order to do God-knows-what to God-knows-whom isn't talking about individual freedom. He means corporate freedom -- freedom for the great multinationals to extract everything they can from the world's resources and labor without the hindrance of public interest laws, environmental regulations or worker protections.

Bush's vision of a free world actually looks just like the corporate globalization agenda pushed by a succession of American presidents in institutions like the World Trade Organization.

But this administration yearns for freedom too much to leave it up to trade negotiators. Unlike his predecessors, Bush isn't content to use carrots and sticks and a liberal dose of arm twisting to advance that agenda. His administration has made the neoliberal policies euphemistically referred to as "free-trade" a centerpiece of its national security policy.

Bush is willing to use the awesome force of the United States military to guarantee the freedom of the world's largest multinationals.

In her new book, The Bush Agenda, Antonia Juhasz peels the veils away from Bush's agenda -- imperialism, militarism and corporate globalization -- and exposes who drives it: a group of hawkish ideologues with an unprecedented relationship to major defense and energy companies.

Juhasz shows that the invasion of Iraq -- an invasion that was as much economic as military -- was the centerpiece of a larger project: the creation a New American Century in which the end-goal of American foreign policy is to enrich the corporate elites, and dissent at home will not be tolerated. Juhasz is a wonk -- she got her start as a staffer for Rep. John Conyers -- but the book is as readable as it is deeply researched.

I caught up with Juhasz last week at Washington's Union Station, just blocks away from the White House, to chat about The Bush Agenda.

Joshua Holland: [19th century Prussian military philosopher Carl von] Clausewitz said that war is an extension of politics by other means. You suggest that for the Bush administration, war is an extension of corporate globalization by other means. Run down your basic premise.

Antonia Juhasz: The Bush administration has implemented a particularly radical model of corporate globalization by which it has teamed overt military might -- full-scale invasion -- with the advancement of its corporate globalization agenda. And this model is particularly imperial -- that's one of the things that makes it different from, for example, the Reagan or Bush Sr. regimes. As opposed to simply replacing the head of a regime that is no longer serving the interests of the administration, the Bush team has gone further -- using a military invasion to fundamentally transform a country's political and economic structure.

It is also using an occupation to maintain that altered structure, which is the definition of imperialism in my mind: spreading the empire by changing the very laws of foreign nations to service the empire's needs. And, as Bush is repeatedly saying, "Iraq is only the beginning." I detail the rest of the empire's pursuits across the Middle East in the chapter on the U.S.-Middle East Free Trade Area.

The fundamental purpose of the book was to determine how this model came to be, where its advocates hope it will go and who its advocates are so that we can better dismantle it.

JH: But Bush isn't the first to use a full-scale invasion -- unilaterally -- in furtherance of those goals. I think of Reagan's invasion of Grenada to knock off Maurice Bishop, a moderate socialist.

AJ: There was no occupation, and it wasn't done the same way that the Bush administration -- using its own tools, its own people, its own policies -- to explicitly restructure the entire functioning of the country's economy to serve its own ends. Reagan wanted a different leader, a leader that would meet his needs and that was enough. Bush has locked in an entirely new economic and political structure. I'm certainly not justifying the invasion of Grenada, but for me that was quantitatively different.

JH: What is Pax Americana -- the "American Peace" -- and what is it about the original Roman version, Pax Romana, that makes it a poor model to emulate?

AJ: I talk about Pax Americana because that's what members of the administration talk about -- Cheney, Rumsfeld, Wolfowitz, Libby, Khalilzad, Perle, Zoellick, Bolton. … In fact, there are 16 members of the Bush administration that were also participants in the Project for the New American Century, which was very clear that the U.S. not only has a Pax Americana but should seek to maintain it.

This is problematic because it seeks to achieve the Roman model, with an all-powerful emperor who ran his kingdom on 50 percent slave labor, who eliminated all guarantees of civil liberties and eliminated all civic participation, but maintained the fallacy of public institutions and participatory government to keep the elites at bay -- to make elites feel like they had the presence and prestige of serving in government.

So there were senators and there were "representatives of the people," but of course the emperor appointed those he wanted to sit in the senate, and he chose those who would serve his interests. And then he appointed regional overlords to oversee the rest of the empire. In addition, the idea that Rome generated peace -- that it really was in fact a Pax Romana that guaranteed peace for the rest of the world -- is false. To create the empire, there was an enormous amount of war and bloodshed, and also to maintain the empire there was continued fighting as nations and peoples were forced to acquiesce.

However, there was a period of about 200 years where there was relatively less struggle within Rome over who would rule. But one key reason Rome was able to maintain that internal peace was all the money that the empire poured into public services -- building aqueducts, providing services, supporting intellectual thought and -- as I say in the book -- creating the Western Canon.

The Bush administration has chosen all the worst elements of the Roman Empire: the lack of civil liberties and the movement towards a nonrepresentative government run by a dictator. Even the most conservative Republican columnist will admit that Bush has consolidated more and more power in the executive branch than any president in modern history. And he's increased the proportion of people in the United States in the lower income sphere, people who have to work day in and day out in order to meet basic needs like health care, and who often aren't able to meet those needs. I argue that that is a modern form of slavery.

And while the administration is explicitly imperial -- it is trying to annex other nations through its military and its economic policy -- its not putting any of that attention to public education, public resources and public services. So we are getting the worst of the worst. And just as it was a myth that the Pax Romana created world peace, the Pax Americana clearly generates more global insecurity. Acts of deadly terror have increased every year of the Bush administration; they increased more than three-fold between 2003 and 2004.

JH: So he's not just the worst president ever, he's also the worst …

AJ: … Yes, he's also the worst emperor ever.

JH: You're blunt about calling Iraq an economic invasion. Most analyses are geopolitical, but you put it together with the long-standing wish list of the corporate globalists. Can you tell me about Bremer's100 rules and what Bearing Point is?

AJ: If you look at the corporations that have profited most from the invasion -- Bechtel, Halliburton, Lockheed Martin and Chevron -- these are all corporations that have decades of operations and activities trying to increase their economic engagement in Iraq -- lobbying the U.S. government to increase their access to Iraq. And they've done so successfully -- first with Saddam Hussein and later with the coalition authorities and now with the new government of Iraq. They have participated with or guided -- you can choose the word you want -- the Bush administration in its invasion. Through their executives, they played key roles in advocating for war. George Shultz is the perfect example and one I focus on in the book.

I emphasize that it's an absolute fallacy that there was no post-war plan. The plan was written two months before the invasion of Iraq by a company, Bearing Point Inc., which is based in Virginia -- it was KPMG Consulting until it changed its name in the wake of the Arthur Anderson-Enron corruption scandals. The company is not well-known. It works behind the scenes for every branch of government, and it provides all kinds of consulting services.

Bearing point received a $250 million contract from USAID to write a remodeled structure for the Iraqi economy. It was to transition Iraq from a state-controlled economy to a market economy, but I argue that the new model was more a state-controlled economy that is controlled on behalf of multinational corporations, and heavily regulated in fact on behalf of multinational corporations. It just no longer serves the public interest.

Bearing point's plan was implemented to a T by L. Paul Bremer, the administrator of Iraq's coalition government. The U.N.'s special envoy to Iraq, Lakhdar Brahimi, called him the "Dictator of Iraq," and he was. He ruled Iraq for 14 months, and he implemented Bearing Point's plan; he rewrote Iraq's entire economic and political structure by implementing his 100 orders. The orders had the force of law, and any Iraqi laws that contradicted the orders were overridden.

The 100 orders put into place a standard set of corporate globalization policies. Instead of having to wait for Iraq to become a member of the World Trade Organization, for example, or to fulfill requirements of the International Monetary Fund or World Bank, or worrying about whether the policies they most wanted would be accepted, the administration was able to simply invade, occupy and impose those provisions itself. And many of those provisions have been long opposed at institutions like the WTO -- for example the investments provisions -- but they were implemented overnight in Iraq with a stroke of the pen by Paul Bremer.

Probably the most important order in terms of what happened with the occupation was the very first order. Bremer fired 120,000 key bureaucrats in every government ministry in Iraq. That meant that ministries that had been functioning very well for decades lost their bureaucracies almost overnight. The excuse that was given was that they were Ba'ath Party members, but nobody could hold those positions unless they belonged to the Ba'ath Party, so it wasn't an indication that they were a party to Saddam Hussein's crimes. They were fired because they could have stood in the way of the economic transformation.

Then there was the firing of the entire Iraqi military, and I think that problem is well-known. Less well-known is how that played out in relation to the rest of the orders. Order number 39 was the foreign investment order. There were several provisions which I detail in the book, but the most important may be national treatment, which meant that Iraqis could not preference Iraqi companies and Iraqi workers in the reconstruction.

So 150 United States corporations have received $50 billion for work in Iraq, $33 billion of which was exclusively for standard reconstruction -- building bridges, repairing electricity and repairing water. But originally the plan was to use the soldiers -- the Iraqi military -- for the reconstruction. Instead of taking a half a million men and canceling their salaries and sending them home with guns, they were going to go to work and get money, and provide for their families and be part of the reconstruction.

Even worse is that those American companies failed. Miserably. And it's not just because of the insurgency -- the insurgency didn't begin immediately. They failed because they went in to maximize their profit, to build the most expensive state-of-the-art systems they could and to get their feet firmly in Iraq so they would be able to profit long term. But what Iraq needed was just to get the systems up and running. It was summer in the desert.

JH: How long did it take for Iraq to get those systems up after the first invasion?

AJ: Three months. The Iraqi workers and companies rebuilt their systems in three months.

JH: OK, so Bremer imposed these rules under the Coalition Provisional Authority. Explain how rules set up by a provisional government ended up codified in Iraq's new constitution?

AJ: Bremer appointed an interim government for Iraq when the occupation formally ended. The interim government, together with Bremer, threw out the existing Iraqi Constitution. And I think at the time there was this idea that it was a nation being molded out of the dirt -- that it didn't have a government, didn't have a structure -- and here was the United States helping them form a constitutional convention. But they had a government, they had a constitution -- they've had a constitution since 1922. We didn't have to create a constitutional government for them.

The first constitution that was written had all of Bremer's orders, and it could only be changed by a very complicated process -- it essentially locked the orders in. Then the new constitution for Iraq was supposed to be "of the people." It was drafted by the interim government and put to a popular vote. But it was crafted so that it locked into place the occupation, the economic transformation, the constitutionality of the new oil law -- which the United States had drafted -- and all of the Bremer orders.

The only public discussion of the constitution was the few things people were gleaning from the press and what their religious leaders -- who were themselves gleaning it from the press -- told them. Five days before the constitution was to be voted on, the paper copies were released. They made 5 million copies for 15 million voters. And on that same day, the U.S. ambassador to Iraq, Zalmay Khalilzad, was meeting with influential Iraqi leaders to rewrite fundamental aspects of that very constitution. There was absolutely no way that the vast majority of the Iraqi people had any idea what was in the constitution. They were voting for hope, and they risked their lives to do so. But there's no way they knew that they were voting to maintain the Bremer orders.

JH: What's the Hague Convention of 1907?

AJ: Under international law an occupying government has one set of responsibilities, and they're very clear. An occupying government must provide security and basic services. An occupying government explicitly cannot fundamentally rewrite the laws of the country they're occupying. The United States did exactly the opposite; we rewrote the laws, and we didn't provide basic services or security for the people.

JH: Did we ratify the Hague Conventions?

AJ: We certainly did.

JH: You focus on four firms that pushed the policy and have profited handsomely from the invasion: Bechtel, Chevron, Lockheed Martin and Halliburton. But there are many other multinational corporations that have both made a killing in Iraq and have close ties to both the administration and to the conservative movement more generally. Why those four and, playing devil's advocate, is there a danger focusing on a small number of firms when the issues are militarism and corporate globalization more broadly?

AJ: These four companies have the longest relationship to Iraq. Through their executives, they lobbied on behalf of an invasion of Iraq, and they have profited more than almost all other companies from that invasion. And they have intimate interlocking relationships with this administration. They demonstrate very clearly how, in the Bush administration, there essentially is no distinction between corporate characters and government characters. They also are companies that because of their corporate behavior around the world have preexisting and longstanding movements -- social movements -- that are organized against their harmful actions, which readers of the book support and become a part of.

JH: That's a great segue. In your final chapter, you discuss ways that people can oppose the Bush agenda, and you suggest that another agenda is possible. I think that's very important because so many books bash Bush and then leave readers feeling dispirited. Name just one thing that needs to be done to reverse this agenda?

AJ: There are so many alternatives, and I give concrete examples of solutions -- for how to end the economic invasion of Iraq. What I hoped to do in the last chapter was to present the movements and many of the ideas generating fundamental change already. I wanted to empower people -- to show that the information in the book can be used as a tool for these movements and a tool for change.

So I give examples of not only different policies, but I also give examples of organizations and communities that have been successfully mobilizing against the full Bush agenda -- that means corporate globalization, war and imperialism. To me that's more important than any one of the alternatives that I present. The whole point of the chapter is that there are, thankfully, millions of alternatives to choose from. And we're already seeing successful transformation -- there are real movements that we can join and in which we can have an impact.

The Handover That Wasn't

Before his departure, CPA chief Paul Bremer issued 100 Orders to dramatically restructure Iraq's economy to fit free-market ideals. And no Iraqi, including future elected officials, can undo them

In Foreign Policy in Focus, Antonia Juhasz writes:

The U.S. occupation of Iraq officially ended on June 28, 2004 , in a secret ceremony in Baghdad. Officially, "full sovereignty" was handed from the Americans to the Iraqi Interim Government. But it was clear from the start that this was sovereignty in name, not in deed. First, there is the continued military occupation: 138,000 U.S. soldiers and Marines, plus 20,000 troops from other countries and an estimated 20,000 contractors, all fully under U.S. control and immune to Iraqi laws. Equally debilitating, however significantly less well reported upon, is the continued political and economic occupation by the Bush administration and its corporate allies.

The most important tools being used by the Bush administration to maintain varying degrees of economic and political control in Iraq are the 100 Orders enacted by L. Paul Bremer, III, head of the now defunct Coalition Provisional Authority (CPA) before his departure. It was thought that the "end" of the occupation would also mean the end of the Orders. Instead, in his final Order enacted on his last day in the country, Bremer simply transferred authority for the Orders over to the new Prime Minister, Iyad Allawi. For his part, Allawi – a thirty-year exile of Iraq with close ties to both the CIA and British Intelligence Services – is considered America 's new man in charge of Iraq .

Bremer also ensured the implementation of the Orders by stacking every Ministry with U.S.-appointed authorities with five-year terms – well into the period of the new, elected government, which is to take office by the end of this year.

The Orders are exercised pursuant to the Iraqi interim constitution, the Transitional Administration Law (TAL). The Annex to the TAL states that the Orders can only be overturned with the approval of the president, the two vice presidents and a majority of the ministers.

But the Annex also denies the interim government from taking "any actions affecting Iraq 's destiny" beyond the election of an Iraqi government. The identical sentence appears in UN Security Council Resolution 1546, which outlines Iraq's transition to "sovereignty." Thus, while Allawi may succeed in overturning a few less far-reaching Orders if for no other reason than to demonstrate his independence from the Americans, it is beyond his authority to change any fundamental laws.

And, as Bremer said about the Orders, "You set up these things and they begin to develop a certain life and momentum on their own – and it's harder to reverse course."

It is difficult to over-state how far-reaching the Orders are. As described in Order #39 on Foreign Investment, the Orders are intended to do no less than "transition [ Iraq ] from a ... centrally planned economy to a market economy." This goal is explained in greater detail by BearingPoint, Inc., the Virginia based corporation that received the $250 million contract to facilitate this transition. The contract states:

"It should be clearly understood that the efforts undertaken will be designed to establish the basic legal framework for a functioning market economy; taking appropriate advantage of the unique opportunity for rapid progress in this area presented by the current configuration of political circumstances... Reforms are envisioned in the areas of fiscal reform, financial sector reform, trade, legal and regulatory, and privatization."

The (New and Improved) Bremer Orders

A sampling of the most important Orders demonstrates the economic imprint left behind by Bremer:

Order #39 allows for the following: (1) privatization of Iraq's 200 state-owned enterprises; (2) 100 percent foreign ownership of Iraqi businesses; (3) "national treatment" of foreign firms; (4) unrestricted, tax-free remittance of all profits and other funds; and (5) 40-year ownership licenses. Thus, it allows the U.S. corporations operating in Iraq to own every business, do all of the work, and send all of their money home. Nothing needs to be reinvested locally to service the Iraqi economy, no Iraqi need be hired, no public services need be guaranteed, and workers' rights can easily be ignored. And corporations can take out their investments at any time.

Order #40 turns the banking sector from a state-run to a market-driven system overnight by allowing foreign banks to enter the Iraqi market and to purchase up to 50 percent of Iraqi banks.

Order #49 drops the tax rate on corporations from a high of 40 percent to a flat rate of 15 percent. The income tax rate is also capped at 15 percent.

Order #12 enacted on June 7, 2003 and renewed on February 24, 2004, suspends "all tariffs, customs duties, import taxes, licensing fees and similar surcharges for goods entering or leaving Iraq, and all other trade restrictions that may apply to such goods." This led to an immediate and dramatic inflow of cheap consumer products, which has essentially wiped out all local providers of the same products. This could have significant long-term implications for domestic production as well.

Order #17 grants foreign contractors, including private security firms, full immunity from Iraq 's laws. Even if they do injure a third party by killing someone or causing environmental damage such as dumping toxic chemicals or poisoning drinking water, the injured third party can not turn to the Iraqi legal system, rather, the charges must be brought to U.S. courts under U.S. laws.

Order #77 established the Board of Supreme Audit and named its president and his two deputies. The Board oversees inspectors in every Ministry with wide-ranging authority to review government contracts, audit classified programs, and prescribe regulations and procedures.

Order #57 created and appointed an inspector within every Iraqi Ministry with five-year terms who can perform audits, write policies, and have full access to all offices, materials, and employees of the Ministries.

Then there are the approximately 200 mostly U.S. and other international advisers who will remain embedded as consultants in every Iraqi Ministry well after the official occupation has ended.

Clearly, the Bremer Orders fundamentally altered Iraq's existing laws. For this reason, the Bremer Orders are also illegal. Transformation of an occupied country's laws violates the Hague regulations of 1907 (the companion to the 1949 Geneva conventions, both ratified by the United States), and the U.S. Army's Law of Land Warfare. Indeed, in a leaked memo, British attorney general, Lord Goldsmith, warned Tony Blair that "the imposition of major structural economic reforms would not be authorized by international law."

Following the Money

The U.S. will also exert significant control over Iraq by holding the strings to the largest purse in the country for the foreseeable future.

In June 2004, the U.S. General Accounting Office reported that the CPA had spent virtually all of Iraq's money but relatively little of its own since the end of "active engagement."

There are two primary pots of money earmarked for Iraq's reconstruction. The largest is the approximately $24 billion of U.S. taxpayer money appropriated by Congress last year. The second is known as the Development Fund for Iraq (DFI) worth about $18 billion. This is primarily money from Iraq's oil revenues and was controlled by the CPA until authority for the fund was handed over to the new Interim Government on June 28.

While the CPA controlled the DFI, it spent approximately $13 billion from the fund. On the other hand, it only spent about $8.2 billion of the U.S. appropriation. Thus, the DFI is almost out of money, while the U.S. appropriation has hardly been touched. Control of this money now shifts to John Negroponte, the new U.S. Ambassador to Iraq . In addition to the largest pot of money in Iraq , Negroponte will exercise control over one of the largest embassies in the entire world with some 1,500 employees with offices throughout Iraq .

Pay for the Reconstruction

Reconstruction is the one thing that the U.S. is obligated under international law to do in Iraq . U.S. taxpayers have pledged billions of dollars toward this effort. However, the New York Times reported on June 30, 2004 , that fewer than 140 of 2,300 promised construction projects are even under way in Iraq and there have been widespread reports about waste, fraud, and abuse in the projects that have started.

Supplies of electricity and water are no better for most Iraqis, and in some cases are far worse than they were before the invasion. In fact, UN special envoy Brahimi said upon leaving Iraq that after security, the lack of reliable electricity is the number one problem facing Iraq today. Drinking water throughout the country is in a crisis state, with some villages having no access to water while larger cities receive water approximately 50 percent of the time – leading to vast outbreaks of cholera, diarrhea, nausea, kidney stones, and death. Destroyed bridges continue to create monstrous bottlenecks in many parts of the country. Iraq 's horribly overburdened hospitals need electricity, water, and sewage to function. Hospitals also need the medicines and medical supplies that are in woefully inadequate supply.

With few reconstruction projects underway, and with Bremer's rules favoring U.S. corporations, there has been little opportunity for Iraqis to go back to work, leaving nearly two million unemployed one and a half years after the invasion. Attempts by the Bush administration to reverse this have been minimal, at best. Only three months after Bremer pledged that 50,000 Iraqis would find jobs at construction sites before the formal transfer of sovereignty, fewer than 20,000 local workers are employed.

Compounding these problems is the ongoing security situation, which has slowed reconstruction and vastly increased the costs. Even Iraqis who may have initially welcomed the ouster of Hussein have become enemies of an occupation that increasingly reveals its true objectives: U.S. political and economic exploitation and dominance. This is one reason why U.S. contractors report that as much as one out of every three reconstruction dollars is going toward security costs rather than rebuilding.

End the Occupation

The Bremer Orders are both immoral and illegal and must be repealed to allow Iraqis to govern their own economic and political future. Given the Bush administration's failure to quickly, fairly, or transparently allocate U.S. reconstruction funds, and the complete lack of oversight of the CPA's depletion of nearly all of the DFI, the remainder of U.S. reconstruction funds should be turned over to full UN authority until free and democratic elections are held in Iraq, at which time the money should be turned over to the Iraqis themselves.

Reconstruction of Iraq should be based on rebuilding the economy to maximize fulfilling the long-term needs of Iraqis. All contract processes should be completely transparent and accessible to Iraqis. The awarding of contracts should be done with preference given first to Iraqi companies, experts, and workers. If no Iraqi company is capable of performing necessary work, preference should be given to international humanitarian organizations. If non-Iraqi companies are necessary, contracts must be open to global competition and profit margins held as low as possible by using fixed fees. Oversight must be immediate, independent, transparent, and thorough.

The U.S. needs to extricate itself from Iraq in every way other than the provision of money to pay for the reconstruction – done by and for Iraqis – and to pay for a truly multinational (non-U.S.) peacekeeping force to bring the stability required both for reconstruction and for truly free and democratic elections. The occupation must end.