The U.S. occupation regime in action:

Political dictate, privatization,
plunder and poverty

by Mark, Detroit


U.S. hand-picks Iraqi governing council
"Democracy" without elections
Imperialism and Islamic fundamentalism
Bloody repression and censorship
Free-market reforms and corporate profit-grabbing
The privatization of privatization
Economic ruin for the masses

. According to Bush, this was a war to liberate the Iraqis. But the first months of the occupation show that it's not the Iraqi populace, but U.S. generals and bureaucrats who are calling the shots in Iraq today. Their plans for the new Iraq are not based on the will of the Iraqi people, but the desires of the imperial conquerors. The basic political and economic agenda for Iraq has already been decided in Washington, D.C. and is moving ahead regardless of what the Iraqi populace wants. Their main activity toward establishing a future Iraqi government is finding members of the Iraqi elite who will not get in the way of U.S. plans.

U.S. hand-picks Iraqi governing council

. All across Iraq there are cries for elections. Instead, the U.S. recently appointed a pseudo-governmental body called the Iraqi Governing Council. It consists of a hodgepodge of forces representing the interests of different sections of the Iraqi bourgeoisie who were anti-Hussein. No Iraqi voted for this body to exist or for any of its members. But that doesn't stop the CPA and Bush from hailing it as the representative of all facets of the Iraqi population. Nor does it have any real power. All final decisions rest with CPA leader L. Paul Bremer. So the Iraqi Governing Council will have the right to do whatever it wants, so long as it's acceptable to the military occupation regime.

. The Iraqi Governing Council provides a convenient cover for the military occupation. Yet the U.S. government was hoping to delay the creation of even this fig leaf for several more months. They were forced to move up the date only because of the growing protests against the occupation. In fact, the Bush regime has been forced to adjust their plans for an interim puppet regime several times.

. Originally the plan was to install Ahmed Chalabi, a favorite of Vice-President Cheney and Secretary of Defense Rumsfeld, as the leader of an interim government. Several problems soon developed with this. First, Chalabi, a rich banker with a criminal record, had no support in Iraq and was seen as a U.S. puppet. Chalabi's actual main base of support historically was the CIA, which financed him and his 700-man militia, even though the CIA itself came to have their own doubts about him. No sooner did Chalabi enter Iraq from over four decades of exile, then he was the subject of assassination attempts. Moreover, Chalabi's forces tried to grab more power than the U.S. was willing to grant him, and eventually Bremer was forced to disband Chalabi's militia.

Following Hussein's fall, other groups the U.S. was trying to deal with also were attempting to give themselves a degree of defacto governmental powers. The main Kurdish bourgeois nationalist parties, which already had a government in Kurdish northern Iraq, attempted to take on governmental functions in Baghdad. The leaders of the fundamentalist Supreme Council for the Islamic Revolution in Iraq (SCIRI) established themselves as a power in several cities. The U.S. had developed ties to the SCIRI some years ago to use them against Hussein, but it has always feared their coming to power. Thus when Hussein was finished, the U.S. initially tried to freeze them out of meetings with those Iraqi forces it wanted to be part of post-war governance. In contrast, Chalabi and the Kurdish bourgeois nationalist groups figured in these U.S. plans. But with both the groups the U.S. favored, and those it didn't, scrambling to carve out their own power bases irrespective of U.S. wishes, the U.S. had to establish that they, not the Iraqi groups, were in charge. So plans to quickly rig up an interim government with these forces were scrapped. While these forces wanted the U.S. to set them up as a interim authority with significant power, Bremer decided to put off setting up any Iraqi body, and that such a body should have a purely advisory role. Bremer also wanted to bring more people into the governing body, hoping to co-opt a wider array of bourgeois political trends. But this failed to quell the demands of the Iraqi people for self-government so Bremer was forced to move up the timetable for the interim authority, including Chalabi, the SCIRI and Sunni clerics and the Kurdish bourgeois nationalists. Apparently there was even some minor decision-making powers granted to this new body, though Bremer will have the final say.

. Despite the fact that the U.S. picked the interim council, there are frictions between it and occupation officials. For example, in order to deflect criticism by the Iraqi masses away from the CPA, the U.S. wants the interim council to take on more of a public face. After the bombing of UN headquarters in late August, Bremer chastised the Iraqi council, telling them to "take responsibility for their own security" and to hold "town hall meetings" to assure the public. This forced even U.S. -friendly members of the council to fire back "We don't have any responsibility". True enough! And they might have added that they don't hold town hall meetings because the Iraqi masses have disdain for, and have sometimes tried to assassinate, their unelected "representatives". A New York Times article of August 24 summed up the farcical situation well: "Iraqi officials said the Council had responded by saying it lacked authority to convince Iraqis it was effective or relevant. "

"Democracy" without elections

. With opposition mounting to the U.S. occupation, the U.S. authorities keep promising they will have elections, and then Iraqis will run things. Recently Bremer estimated this would happen in about a year, after a larger unelected Iraqi assembly agrees on a new constitution for Iraq. But nothing is definite. The U.S. military authorities will decide when and if elections are held based on their own whims. On June 28, U.S. military commanders stopped local elections in a number of cities and towns across Iraq, instead installing their own hand-picked officials. To add insult to injury, many of these officials were former military officers under Hussein.

. Occupation leader Bremer explained the decision to cancel the local elections. He stated there was "no blanket prohibition" against them "but I want to do it in a way that takes care of our concerns. Elections that are held too early can be destructive. It's got to be done very carefully. " So Bremer's for some elections, provided they take care of the concerns of the imperialist overlords. Bremer left no doubt what those "concerns" were. He stated "In a postwar situation like this, if you start holding elections, the people who are rejectionists tend to win. It's often the best-organized who win, and the best-organized right now are the former Baathists and to some extent the Islamists. " In other words, since Bremer thinks the outcome of the elections will not be acceptable to U.S. imperialism, he has the right to cancel them.

Imperialism and Islamic fundamentalism

. But what about the ex-Baathists and Islamic fundamentalists? True, they are not democratic. But this can't justify the CPA military occupation. This is also a tyrannical force. It isn't democratic to enforce one dictatorship in the name of avoiding another. A democratic outcome in Iraq today depends on the masses fighting both the occupation and the reactionary Iraqi trends.

. Indeed, U.S. imperialism has shown they have no consistent or principled opposition toward either the Baathists remnants or the fundamentalist clerics. The occupation regime has shown it will maneuver with these dregs when it suits their interests, despite the contradictions with them and the fact that it may later turn on them when they no longer suit imperialism's needs of the moment. Thus, the U.S. and British military authorities installed discredited ex-Baathists in power in various cities, much to the anger of the population. This was not just a sudden impulse, either. For years the U.S. idea of change in Iraq was to replace Hussein not with democracy, but with a regime of Baathist generals more friendly to the U.S.

. Likewise, while Bremer frets about Islamic fundamentalists taking over, the U.S. is wheeling and dealing with the Islamic clerics as well. A number of Shia and Sunni clerics were appointed to the Iraqi governing council. And this includes some who favor an Islamic theocratic state, if not now, at least when the opportunity presents itself. While U.S. imperialism does fear an Islamic state in Iraq, it also has no real commitment to secularism, as demonstrated by its support for various Islamic fundamentalist states and forces around the world. Thus, for the moment at least, the U.S. is trying to co-opt, among others, the leaders of the Supreme Council for Islamic Revolution in Iraq, a trend with sympathies for the hard-line ayatollah's running Iran. The U.S. is well aware of their desire for Islamic rule but has brought them into the Iraqi governing council in order to have another influential reactionary voice in Iraq lend credibility to the occupation. So while the U.S. lectures against Islamic fundamentalism, so long as the clerics go along with their schemes they'll promote them as part of the democratic forces.

. The car bomb attack at the end of August which killed Ayatollah Muhammad Bakr al-Hakim and scores of others again tested the love-hate relationship between the SCIRI and the U.S. The SCIRI isn't abandoning the Governing Council. But the ayatollah's brother, Abdel-Aziz al-Hakim, who represents the SCIRI on the Iraqi Governing Council, denounced the U.S. as "primarily responsible" for the bloodshed and emphasized the need for the U.S. to leave Iraq. Meanwhile, another Shia cleric on the Governing Council temporarily suspended himself from the Council to protest the occupation regime's security failures.

. The games U.S. imperialism is playing with the Iraqi clerics is reminiscent of their dealings with the Islamic fundamentalists in Afghanistan like Osama bin Laden. When bin Laden was being supported by the U.S. against the Soviet Union's occupation of Afghanistan, the U.S. called him a freedom fighter though he was an Islamic fanatic then too. The fact is that U.S. alliances are based on whatever serves imperialism's needs of the moment, not whether it's partners are democratic. In Iraq today too, whether a fundamentalist cleric is deemed democratic by the U.S. depends not on his stand toward the people, but his stand toward U.S. imperialism.

. While at times U.S. imperialism has found it convenient to directly back Islamic fanatics, Islamic fundamentalism has grown in strength largely due to the crimes of imperialism and repressive secular regimes (e. g. , Egypt and Turkey) and theocratic Israel, which are backed by the U.S. The military occupation, with its callous attitude to the problems of the masses, has furthered played into the hands of the Islamic clerics. They have swept into the vacuum created by Hussein's downfall to provide certain services and administration that the occupying forces failed to do. The battle against the clerics can only be successfully carried out by the masses. What's needed is a revolutionary trend based on the working people that fights for their needs against their class enemies, whether they be imperialist occupiers or local religious or secular oppressors.

Bloody repression and censorship

. Of course while Bremer calls attention to Baathists and Islamists, the occupation regime considers resistance to its occupation from any quarter to be criminal. For example, in early June, Bremer issued "order no. 7" to censor opposition media and protests. Under this decree, the commander of the coalition military forces is designated the "media monitoring authority" and all private media operators are required to be licensed by this authority. The decree bans not only promotion of the Baathists, but "gatherings, pronouncement or publications" that potentially incite violence against the CPA and civil disorder or that give views that are "patently false and calculated to promote opposition to the CPA. " What's considered false or inciting is left solely to the discretion of the military commander. Violators can be raided and shut down. Already a radio station and a newspaper have been shut down and a number of foreign reporters have had their film of anti-occupation demonstrations confiscated and have been prevented from covering anti-occupation actions.

. While mouthing platitudes about freedom, U.S. forces have carried out several massacres against unarmed demonstrators. Meanwhile, in early August they arrested 55 members of an organization of unemployed workers who dared to ask for relief from their miserable condition. And they have responded to the guerrilla attacks with indiscriminate violence against the population. A typical example took place in the Mansur district of Iraq on July 27. Five innocent civilians were shot when they unwittingly wandered into a cordon set up around a house where U.S. troops were allegedly searching for Saddam Hussein. Such atrocities are an everyday occurrence. Heavily-armed U.S. patrols sweep into a town, smash down the doors of residences, make mass arrests of anyone who happens to be in the area and set up free-fire zones where they can shoot anyone they like. In addition to the mounting casualties of unarmed civilians, several thousand have been jailed without charges or the ability to see a lawyer. In tacit admission of these atrocities, U.S. forces began offering $1,500 to the families of their murdered victims and $500 for the wounded. For "civilized" U.S. imperialism, Iraqi life is cheap not only figuratively but literally.

. Naturally all this has preyed on the minds of many U.S. soldiers. In interviews some admit that if they can't tell who the guerrillas are, they try to kill everyone that gets near them. More and more the GIs are expressing resentment with the role they are forced to play. Some have bitterly denounced the Bush administration. Though the military brass moved quickly to squelch dissent, reports of their disgruntlement with their mission and conditions keeps filtering out.

. Democracy is missing in action under the occupation authority.

Free-market reforms and corporate profit-grabbing

. While the U.S. goes through it parody of democracy, the real decisions are being made behind the scenes by the imperialists. They are shaping the economy in their own image regardless of what the Iraqi people want.

. The imperialists have decided that Iraq should follow the neo-liberal dogma of privatization and worship of free-market capitalism. Secretary of Defense Rumsfeld spelled this out in May, stating that the new economic policies in Iraq will "favor market systems" and "encourage moves to privatize state enterprises. " Although privatization was under way even under Hussein's tyranny, Iraq still had a sizable state sector which controlled key sectors of the economy. Thus, privatization is potentially a big profit bonanza to the multinational corporations who would replace the old state sector. In order to attract foreign companies, U.S. imperialism wants Iraqi law written to safeguard their profiteering. According to the U.S. Treasury Department's undersecretary for international affairs, John Taylor, it's "very important to get a good system of rule [of] law, and property rights, in a way very conducive to foreign investment. " (May 1 speech at Center for Strategic and International Studies)

. The U.S./British regime has taken over the formerly nationalized oil industry, the lifeline of the economy, as well as banking. The occupation regime would like to privatize these sectors though at this point this process is just beginning. Indeed, until the occupation regime can provide a stable investment climate, the influx of private capital will be limited. Nevertheless, the occupation regime is using their control of the key sectors of the economy to benefit the corporate moneybags. A number of lucrative contracts have been handed out to rebuild infrastructure and enterprises. The takeover of oil/gas and banking plays the key role in assuring the multinationals make a windfall during the rebuilding process. The former Iraqi state bank is now being run by former Department of Treasury secretary, Peter McPherson. Revenues from oil and gas are to go to the bank as a so-called "Iraqi Assistance Fund". The Fund's advisory board includes international capitalist bloodsuckers like the IMF and World Bank, although how the money is spent will mainly be up to the U.S. and Britain. All this has been sanctioned by United Nations resolution 1483, proving once again that the UN is a tool of the most powerful capitalist nations, not a means to oppose imperialist adventures.

. Naturally then, the first who will be assisted by the fund will be the corporate giants. They know oil sales bring hard currency and that the money garnered through oil sales will wind up in their pockets as they scramble for contracts to rebuild the shattered economy. It's reported that the U.S. Export-Import Bank as well as lobbyists for oil and construction giants like Halliburton, Bechtel, Chevron and Texaco have pushed for oil money to be spent on infrastructure and industrial projects they want to undertake. At the same time, some officials in the U.S. State and Treasury Departments are reportedly a bit nervous that committing future Iraqi oil funds to pay for the projects undertaken by the multinational corporations ignores that Iraq already is saddled with massive international debt. Their concern is that oil funds may not be able to pay off loans from the U.S. Export-Import bank to finance the new reconstruction projects, leaving U.S. taxpayers saddled with the bill.

. Bush and his oil industry buddies portray their takeover of the Iraqi oil industry as a means to help the suffering Iraqi people. Really they hope to use Iraqi oil to finance an invasion of U.S. companies. The Iraqi oil will be used to leverage U.S. government-backed loans to pay for U.S. reconstruction projects. Part of this involves Iraqi oil serving as collateral for loans from the Export-Import Bank to U.S. corporations who want to set up shop in Iraq but can't get financing elsewhere due to the unstable political climate. The Export-Import Bank is not in the business of uplifting the downtrodden, but is a vehicle for helping U.S. companies spread around the world.

. The big U.S. banks also are looking to profit from the U.S. conquest by taking over the financial sector. To this end some of the biggest financiers (Citigroup, JP Morgan Chase, Bank of America Corp. ) have been meeting with Treasury Department officials. Already the occupation regime has created a Trade Bank that replaces the UN-administered "food for oil" program. At the end of August it was announced this bank will be run by a consortium of international banks led by the U.S. financial giant, J. P. Morgan Chase and Co. Initially at least, the banks are to facilitate importation of such things as expensive equipment purchases by guaranteeing payment obligations of the Iraqi Governing Council to the multinationals firms involved in reconstruction. The initial funding of $100 million for this comes from oil revenues formerly controlled by the UN. The CPA's Peter McPherson envisions that as more oil money is available for purchases, "the winning consortium also will benefit from billions of dollars in anticipated business that will eventually flow through the facility" because of "the trade credit that will go through the trade bank. " While initially the Trade Bank will be involved in governmental purchases, it is expected to eventually expand into private-sector purchases.

The privatization of privatization

. Meanwhile overseeing the privatization process has become a lucrative industry unto itself. Bremer has solicited the aid of a number of U.S. banks for proposals on how to carry out privatization. As well, the Pentagon has assembled its own consultants to advise on privatization, led by a defense contractor pal of Rumsfeld and a former Enron executive. Assisting them is the conservative demagogue, Newt Gingrich. What they are pushing for could be called the privatization of privatization. They don't think government agencies like USAID (the U.S. Agency for International Development) should manage the privatization process. They want the private sector to do this. Actually it turns out that USAID itself is subcontracting out its responsibilities for the economy as on its web site it's seeking a contractor to "change policies, laws, and regulations that impede private sector development, trade and investment". In any case, the Pentagon advisors boast that if their recommendation is followed, Iraq will be a haven for the capitalist monopolies. As advisor Michael Bleyzer, the former Enron executive, put it, Iraq needs a "market economy" because there "would be a much better business environment if BP or Exxon-Mobil or Shell could invest. We want to set up a business environment where global companies like Coca Cola and McDonald's could come in and create a diversified economy not dependent on oil. " In other words, the economic priority of the occupation should be economic domination of the multinationals, not the needs of the Iraqi people.

. Thus, the race of the corporations lining up for lucrative contracts has begun. Not surprisingly, companies with close ties to the Bush administration have the advantage here. Indeed, it turns out that these companies have been put in charge of who gets government contracts. Take the example of Halliburton, where Vice President Dick Cheney was the CEO before entering the Bush administration. It seems Halliburton's subsidiary, Kellogg Brown & Root (KBR) was awarded a contract by the U.S. Army worth potentially $7 billion to rebuild the Iraqi oil fields without any other companies being allowed to bid on it. How did this happen? The Army had already decided in a classified contingency plan that KBR was the only company capable of carrying out the repair of Iraq's infrastructure. As it turns out, the Army contingency plan was written by KBR. Thus, KBR decided that KBR should get the contract! And who was responsible for KBR being in the position of awarding itself government contracts? It was Dick Cheney, who, as Defense Secretary under Bush I, hired KBR to write classified reports on how private business could take over certain logistics from the military and awarded them an expansive contract to do so. In 1995, Cheney was rewarded by being named CEO of KBR's parent company, Halliburton. During his five-year reign at Halliburton, Cheney also used his connections to get the Export-Import Bank to provide $1. 5 billion in loans to foreign customers to pay for Halliburton's services. In other words, KBR didn't have to rely on Cheney using his position as Vice-President, because when Cheney was Defense Secretary and later Halliburton CEO, he had already assured KBR would get the contract.

. The revelations about the no-bid KBR contract have led to a Congressional investigation. And it appears that the military is grudgingly putting some of the contracts for rebuilding the oil industry up for bid. Of course, the basic crime, the U.S. takeover of the most important sector of Iraq's economy, isn't effected by the number of companies that take it over.

. The crony capitalism between the military contractors and top Bush administration officials and advisors goes well beyond Cheney. For example, about a third of Rumsfeld's 30-member Defense Policy Board advisory body are executives of companies that won $76 billion in defense contracts in 2001 and 2002. Revelations of such ties are what forced notorious warmonger Richard Perle to resign from the Board. Retired Admiral William Owens is a member of the Board and currently a vice-chairman of Scientific Applications International Corporation (SAIC), a major Pentagon contractor which among other things ran the Iraqi Reconstruction and Development Council, a group of 150 mostly-expatriate Iraqis sent in by the U.S. to be part of the "Iraqi face" for the occupation. Senior members of this group have been installed in posts in all 23 Iraqi ministries. SAIC also was put in charge of establishing the so-called Iraqi Media Network, a fiasco whose role was described by one of its former top advisors as "just rubber-stamp flacking for the CPA". Other SAIC executives include retired army general Wayne Downing, who served as a lobbyist for Ahmed Chalabi's Iraqi National Council and David Kay, a former UN weapons inspector who built up war hysteria by campaigning against relying on UN inspections. In June the CIA hired Kay to head the thus far failed efforts to find WMDs in Iraq. Also grabbing a piece of the action is a company called L-3 communications, which makes missile systems used in the war. It just so happens that the first U.S. chief administrator over Iraq, General Jay Garner, was the former head of that firm.

. Incidentally, under Cheney, Halliburton subsidiaries sold $73 million in oil-field supplies to the Hussein regime. Cheney used a loophole in the sanctions against Iraq which allowed his foreign subsidiaries to do business with the butcher of Baghdad. Bush and his pro-war crowd revved up the war machine by denouncing the German and French imperialists' opposition to a unilateral U.S. war as secret support for Hussein since they had economic ties to Iraq. But the U.S. too played this game until at least 2000. In fact, Rumsfeld doesn't have clean hands here either. In 1983, former president of the huge construction firm Bechtel and then Secretary of State George Shultz sent Rumsfeld on several visits to woo Hussein, in part to push an oil pipeline project. During this time, Hussein used poison gas on the Iranian army. The State Department told Hussein this wasn't good, but since they thought American firms might have supplied the poison gas and since they were still courting Hussein, the State Department issued a memo pointing out the need "to avoid unpleasantly surprising Iraq" by publicly exposing Hussein.

Economic ruin for the masses

. Imperialism doesn't care about the Iraqi people, only profit and plunder. With such priorities, it's little wonder that several months into the occupation, even the simplest emergency relief measures crawl along at a snail's pace. While the U.S. government's official propaganda boasts of all the remarkable progress they're making, Iraq's economy is a shambles and a huge section of the masses have no means to earn a living. The masses suffered under Hussein. But U.S. sanctions and wars have contributed mightily to the destruction of the economy. The old state sector, which provided jobs to about 30% of the workforce, has collapsed, and the private sector isn't doing much better. Overall over half the workforce is unemployed with not much hope in sight. The occupation authority took some token measures to pay some sections of workers and some soldiers of the disbanded Iraqi army, but even then there's often little to buy. For the working masses life is miserable, and the situation is fueling a huge upsurge in crime. Even Iraqi administrators who are trying to work with the occupation authorities to restore infrastructure are reportedly upset with the empty proclamations their new overlords make from comfort of the air-conditioned palaces taken over from the Hussein regime.

. U.S. privatization plans will further ruin the Iraqi masses. They aim at wiping out the state economy. Undoubtedly this will mean certain governmental services or benefits will not return, nor the jobs associated with them. As well, even where public services return in privatized form, this process always goes hand-in-hand with slashing workforces and worsening service to the public so that profits can be maximized. The Bush administration touts opening up Iraq to the multinationals as a panacea. But they are only going to trickle in for now. Even if they arrive in large numbers later on, the multinationals themselves are busy slashing their workforces, cutting wages and benefits, etc. They are not going to solve the unemployment problem. Indeed they may well make it worse depending on how much of the local economy they wipe out.

. The lack of progress in alleviating the plight of the masses is no accident. It's not simply incompetence and bumbling, but reflects the neo-liberal agenda applied to Iraq. For several decades the idea that the market will solve every problem has become the dominant trend in bourgeois politics, Republican and Democratic alike. If the masses are suffering, the solution is relief for the corporations. Richard Perle, advisor to Bush, has expressed the neo-liberal doctrine as it relates to Iraq. According to Perle it's important "not to turn [Iraq] over to institutions incapable of seeing this through to a successful conclusion .  .  . the last thing the Iraqis need is French statism or German labor practices. " What Perle is targeting is clearly the social welfare measures which exist in these countries, though in fact the bourgeoisie in France and Germany is doing its best to erode these measures. For Perle, the worst thing would be if the Iraqi workers and poor had some protections. Why, that would interfere with using them as slave labor. This is a clear admission that the U.S. vision for the economy of Iraq is tailored for the capitalists, not the impoverished Iraqis.

. Meanwhile, in May, Bush issued Executive Order 13303. This essentially provides U.S. companies immunity from any U.S. or international laws in their activities connected to Iraqi oil and gas. This is a free pass to commit environmental crimes, abuse the workforce, defraud, etc. It's a dream come true for capitalist investors, but further shows the U.S. takeover of the economy is about profits, not the welfare of the masses. <>

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Last modified: October 15, 2003.